CONSENT AND SECOND OMNIBUS AMENDMENT
This CONSENT AND SECOND OMNIBUS AMENDMENT (the “Amendment”), dated as of August 27, 2025, is executed by Natixis, New York Branch, in its capacity as the administrative agent for the Lenders (as defined below) (together with its successors, designees and assigns in such capacity, “Administrative Agent”), Natixis, New York Branch, in its capacity as the collateral agent for the Secured Parties (together with its successors, designees and assigns in such capacity, “Collateral Agent”), MN8 DevCo 3 LLC, a Delaware limited liability company (the “Devco Borrower”), MN8 FMG Class B LLC, a Delaware limited liability company (the “Opco Borrower 1”), MN8 Bleeker 2 LLC, a Delaware limited liability company, (the “Opco Borrower 2”, and together with the Devco Borrower and the Opco Borrower 1, the “Borrowers”), American Beech Solar LLC, a North Carolina limited liability company (the “American Beech Project Company”), American Beech Solar Holdings LLC, a Delaware limited liability company (the “American Beech TE Partnership”), Bluebird Solar LLC, a Kentucky limited liability company (the “Bluebird Project Company”), Bluebird Solar Investments LLC, a Kentucky limited liability company (“Bluebird Solar Investments”), Prairie Solar Holdings LLC, a Delaware limited liability company (“Prairie Solar Holdings”), Prairie Solar 1, LLC, a Delaware limited liability company (the “Prairie Project Company”) MN8 FMG LLC, a Delaware limited liability company (the “HoldCo (Bluebird)”), American Beech Class B LLC, a Delaware limited liability company (the “Class B Member (American Beech)”) and Prairie Class B LLC, a Delaware limited liability company (the “Class B Member (Prairie)”, and collectively with the Borrowers, American Beech Project Company, American Beech TE Partnership, Bluebird Project Company, Bluebird Solar Investments, Prairie Solar Holdings, Prairie Project Company, HoldCo (Bluebird) and Class B Member (American Beech), the “Borrower Entities”), and the Lenders party hereto. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Credit Agreement (as defined below).
RECITALS
A. WHEREAS, the Borrowers have entered into that certain Credit Agreement, dated as of December 31, 2024, as amended by that certain First Amendment to Credit Agreement, dated as of May 6, 2025, that certain Second Amendment to Credit Agreement, dated June 12, 2025, that certain Consent and Omnibus Amendment, dated as of June 13, 2025, that certain Consent and Amendment, dated as of June 23, 2025, and that certain Release, Joinder, Consent and Fifth Amendment, dated as of July 9, 2025 (the “Existing Credit Agreement” and the Existing Credit Agreement, as amended by this Amendment and as may be further amended, amended and restated, modified or supplemented from time to time, the “Credit Agreement”), with the financial institutions from time to time party thereto as lenders (the “Lenders”) and as issuers of letters of credit, Administrative Agent, Collateral Agent, and the other agents and persons from time to time party thereto.
B. WHEREAS, the Borrower Entities have entered into that certain Amended and Restated Guaranty, Pledge and Security Agreement (the “Existing Security Agreement”), dated as of July 9, 2025, with the Collateral Agent and the other persons from time to time party thereto.
C. WHEREAS, the applicable Project Group Members wish to enter into (or cause their Affiliates to enter into) (i) that certain Membership Interest Purchase Agreement, by and between Devco Borrower and American Beech TE Partnership, substantially in the form attached hereto as Exhibit A (the “MIPA”), (ii) that certain Amended and Restated Limited Liability Company Agreement of American Beech TE Partnership by and between Tenaska American Beech Holdings, LLC, a Delaware Limited Liability Company (the “Tax Equity Investor”) Class B Member (American Beech), substantially in the form attached hereto as Exhibit B (the “LLCA”), (iii) that certain Equity Capital Contribution Agreement, by and among American Beech TE Partnership, Tax Equity Investor and Class B Member (American Beech), substantially in the form attached hereto as Exhibit C (the “ECCA”), (iv) that certain Class A Guaranty by Tenaska Energy, Inc., a Delaware corporation, and Tenaska Energy Holdings, LLC, a Delaware limited liability company, in favor of Class B Member (American Beech), substantially in the form attached hereto as Exhibit D (the “Class A Guaranty”), (v) that certain Sponsor Guaranty by MN8 Energy LLC, a Delaware limited liability company (the “Sponsor”), in favor of the Tax Equity Investor, substantially in the form attached hereto as Exhibit E (the “Sponsor Guaranty”), (vi) that certain Sponsor MIPA Guaranty in favor of the American Beech TE Partnership, substantially in the form attached hereto as Exhibit F (the “Sponsor MIPA Guaranty”), and (vii) that certain Consent and Agreement by and among the Tax Equity Investor, American Beech TE Partnership, Class B Member (American Beech) and the Collateral Agent, substantially in the form attached hereto as Exhibit G (the “Interparty Agreement” and together with the MIPA, the LLCA, the ECCA, the Class A Guaranty, the Sponsor Guaranty and the Sponsor MIPA Guaranty, the “American Beech Tax Equity Documents”).
D. WHEREAS, Sponsor has entered into that certain Equity Contribution Agreement with the Administrative Agent and Collateral Agent (the “Equity Contribution Agreement”).
E. WHEREAS, in connection with the execution of the American Beech Tax Equity Documents, the Borrowers wish to amend certain provisions of the Existing Credit Agreement.
F. WHEREAS, pursuant to Section 7.24 and Section 8.18 of the Existing Credit Agreement the consent of all Lenders is required for the applicable Project Group Members to enter into the American Beech Tax Equity Documents.
G. WHEREAS, subject to certain exceptions, Section 12.20 of the Existing Credit Agreement permits any provision of the Credit Documents to be amended or waived if such amendment or waiver is in writing and signed by the Borrower and the Required Lenders.
H. WHEREAS, Section 7.02 of the Existing Security Agreement permits any provision of the Security Agreement to be amended if such amendment is in writing and signed by the Borrower Entities and the Collateral Agent.
I. WHEREAS, the Borrowers request that (i) the Lenders consent to the execution and delivery by the parties thereto of the American Beech Tax Equity Documents on the Amendment Effective Date and (ii) the Lenders, the Issuing Banks, the Administrative Agent and the Collateral Agent agree to amend the Existing Credit Agreement and the Existing Security Agreement as set forth below.
J. WHEREAS, the undersigned Lenders constituting all Lenders have agreed to such consents and amendments to the Existing Credit Agreement and the Existing Security Agreement, subject to the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto agree as follows:
CONSENT AND AMENDMENT
1. Consent and Agreement.
(a) Effective as of the Amendment Effective Date, the undersigned Lenders (constituting all Lenders) consent to the applicable Project Group Members (and their Affiliates) entering into the American Beech Tax Equity Documents, and (ii) approve the updated Base Case Model.
(b) Effective as of the Amendment Effective Date, the Borrowers and the undersigned Lenders (constituting all Lenders) agree that (i) upon the execution of the American Beech Tax Equity Documents, (x) the Tax Equity Effective Date under the Credit Agreement has occurred with respect to the American Beech Project, (y) without limitation of the definition of Tax Equity Documents, the American Beech Tax Equity Documents shall constitute Tax Equity Documents with respect to the American Beech Project and (z) the Maximum Amount (American Beech) (as defined in the Equity Contribution Agreement) has been adjusted to $69,076,758 and (ii) the Updated Base Case Model shall constitute the Base Case Model.
(c) Effective as of the HoldCo Effective Date in connection with the American Beech Project, automatically and without any further action of DevCo Borrower or OpCo Borrowers, the undersigned Lenders (constituting all Lenders) and the Borrower Entities agree that (x) DevCo Borrower shall be deemed to have assigned, and OpCo Borrowers shall be deemed to have assumed, jointly and severally, all Obligations of DevCo Borrower under the Credit Agreement and the other Credit Documents with respect to the American Beech Project, including all Loans or Reimbursement Obligations with respect to the American Beech Project, (y) DevCo Borrower shall no longer be a borrower under the Credit Agreement and the other Credit Documents with respect to the American Beech Project, and (z) the DevCo Borrower’s aggregate liability with respect to the Obligations under the Credit Agreement and the other Credit Documents shall be reduced by an amount equal to the Obligations so assigned to the OpCo Borrowers.
(d) The parties hereto hereby agree that, based on the Updated Base Case Model (as defined below) delivered pursuant to Section 7.24(d) of the Credit Agreement in connection with the American Beech Tax Equity Documents, the adjusted Upsize Bridge Loan Commitment is $170,328,273.14 and the Upsize Bridge Loan Amount (American Beech) is $69,076,758.
2. Amendment. Effective as of the Amendment Effective Date, the Borrower Entities, the Administrative Agent, the Collateral Agent, the Issuing Banks, and the undersigned Lenders constituting all Lenders hereby agree as follows:
(a) Article 8 of the Existing Credit Agreement is amended by adding the following as Section 8.22 immediately after Section 8.21:
“Section 8.22. ITC Transfer Indemnity (American Beech). With respect to the American Beech Project, the Borrower shall not, and shall cause each applicable Project Group Member not to, (a) indemnify any ITC Transferee (as defined in the HoldCo LLCA with respect to the American Beech Project) or (b) other than as provided in the HoldCo LLCA as of the execution date thereof with respect to the American Beech Project, indemnify the Class A Member (as defined in the HoldCo LLCA with respect to the American Beech Project) in connection with any ITC Transfer (as defined in the HoldCo LLCA with respect to the American Beech Project).”
(b) Schedule 6.1(d) (Consents to Collateral Assignment) to the Existing Credit Agreement is hereby amended and restated in its entirety as set forth in Exhibit H hereto.
(c) The Existing Security Agreement is amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the pages of the Security Agreement attached as Exhibit I hereto (the Existing Security Agreement, as so amended and as may be further amended, amended and restated, modified or supplemented from time to time, the “Security Agreement”).
3. Representations and Warranties. Each Borrower Entity hereby represents and warrants that:
(a) No Default or Event of Default has occurred and is continuing as of the date hereof or would result from the execution, delivery of performance of the Amendment.
(b) Each representation and warranty set forth in Article 5 of the Credit Agreement and in Article III of the Security Agreement is true and correct in all material respects as of the Amendment Effective Date (or, if stated to have been made on or as of an earlier date, were true and correct in all material respects on or as of such earlier date); provided that, to the extent that any such representations and warranties are qualified by materiality, such representations and warranties are true and correct in all respects on and as of the Amendment Effective Date (or, if stated to have been made on or as of an earlier date, were true and correct in all respects on or as of such earlier date).
(c) Each Borrower Entity is duly organized and validly existing, has all requisite corporate, limited liability company or partnership (as applicable) power and authority to execute, deliver and perform this Amendment, the Credit Agreement and the Security Agreement. Each Borrower Entity is qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
(d) Each of this Amendment, the Credit Agreement and the Security Agreement (a) has been duly authorized, executed and delivered by each Borrower Entity; and (b) when executed and delivered by each Borrower Entity and each of the other parties thereto will be the legal, valid and binding obligation of such Borrower Entity, enforceable against such Borrower Entity in accordance with its terms, except as the enforceability thereof may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
(e) The execution, delivery and performance by each Borrower Entity of each of this Amendment, the Credit Agreement and the Security Agreement do not and, to the Knowledge of such Borrower Entity, will not (a) violate any Applicable Law or Governmental Approval in any material respect, (b) violate any provision of the Organizational Documents of such Borrower Entity, (c) violate or result in a material default under any material Project Document or material indenture, agreement or other instrument binding upon such Borrower Entity or such Borrower Entity’s assets, or give rise to a right thereunder to require any material payment to be made by such Borrower Entity or (d) except for the Liens created pursuant to the Credit Documents, result in the creation or imposition of any Lien on any asset of such Borrower Entity.
4. Effectiveness. This Amendment shall be effective on the date (the “Amendment Effective Date”) on which each of the following conditions shall have been satisfied to the satisfaction of the Administrative Agent and all the Lenders:
(a) Receipt by the Administrative Agent of an executed counterpart of this Amendment from each of the Borrower Entities, all Lenders, the Administrative Agent and the Collateral Agent (which may include a copy transmitted by facsimile or PDF or other electronic method).
(b) Delivery to the Administrative Agent of copies of certified true, complete and correct executed copies of the American Beech Tax Equity Documents substantially in the applicable forms attached hereto as Exhibit A, Exhibit B, Exhibit C, Exhibit D, Exhibit E, Exhibit F, and Exhibit G all of which shall be in full force and effect on the Amendment Effective Date, as certified by the Borrowers.
(c) Each of the “Effective Date” under and as defined in the MIPA, the ECCA and the LLCA shall have occurred, as certified by the Borrowers.
(d) The “MC Funding Date” under and as defined in the ECCA shall have occurred or will occur concurrently with the Amendment Effective Date.
(e) Delivery to the Administrative Agent of an officer’s certificate from each of the Borrowers, the American Beech Project Company, the Class B Member (American Beech)
and American Beech TE Partnership, dated as of the Amendment Effective Date, certifying as to (A) each entity’s certificate of good standing in its state of incorporation or formation, dated as of a recent date, (B) each entity’s certificate of formation and operating agreement as then in effect, and (C) a certificate of another responsible officer as to the incumbency and specimen signature of the natural persons authorized to execute and deliver each American Beech Tax Equity Document to which such entity is a party and, with respect to the Borrowers, this Amendment.
(f) Delivery to the Administrative Agent of a certificate of status, good standing or equivalent, as applicable, for the jurisdiction of formation of each Borrower, the American Beech Project Company, the Class B Member (American Beech), American Beech TE Partnership and the Tax Equity Investor as of the Amendment Effective Date.
(g) Delivery to the Administrative Agent of the following opinions, in form and substance reasonably satisfactory to the Lenders: (i) an opinion of Holland & Knight LLP, as special New York counsel to the American Beech TE Partnership, American Beech Project Company and Class B Member (American Beech) addressing customary corporate and enforceability matters with respect to the MIPA, the ECCA, the Sponsor Guaranty, the Sponsor MIPA Guaranty, the Interparty Agreement and this Amendment, (ii) an opinion of Fox Rothschild LLP, as special North Carolina counsel to the American Beech Project Company addressing customary corporate matters, (iii) a legal opinion of Morris James LLP, as Delaware counsel to the Class B Member (American Beech) addressing customary matters relating to the LLCA, (iv) an opinion of Abrahams Kaslow & Cassman LLP, as counsel to the Tax Equity Investor, Tenaska Energy, Inc. and Tenaska Energy Holdings, LLC, addressing customary corporate matters with respect to the ECCA, the LLCA, the Class A Guaranty and the Interparty Agreement, and (v) an opinion of Latham & Watkins LLP, as counsel to the Tax Equity Investor, Tenaska Energy, Inc. and Tenaska Energy Holdings, LLC, addressing customary enforceability matters with respect to the ECCA, the Class A Guaranty and the Interparty Agreement, which, in each case, will include the Administrative Agent as an addressee.
(h) Delivery to the Administrative Agent of the Appraisal and Cost Segregation Report (each as defined in the ECCA) in form and substance reasonably acceptable to the Administrative Agent and all Lenders.
(i) Delivery to the Administrative Agent of the Title Policy and the then-current draft ALTA Survey (each as defined in the ECCA) in form and substance reasonably acceptable to the Administrative Agent and all Lenders.
(j) Delivery to the Administrative Agent of an updated Base Case Model (the “Updated Base Case Model”), in form and substance reasonably acceptable to the Administrative Agent and all Lenders.
(k) Payment of all fees, costs and other expenses (including all reasonably out-of-pocket costs, fees and expenses (including legal expenses)) and all other amounts then due and payable by the Borrowers pursuant to the Credit Agreement.
(l) The representations and warranties set forth in Section 3 are true and correct in all material respects as of the Amendment Effective Date; provided that, to the extent that any such representations and warranties are qualified by materiality, such representations and warranties are true and correct in all respects on and as of the Amendment Effective Date.
(m) No Default or Event of Default has occurred and is continuing as of the date hereof or would result from the execution, deliver and performance of this Amendment.
5. Post-Amendment Effective Date Covenant. No later than thirty (30) days following the Amendment Effective Date, the Borrowers shall cause the Sponsor to deliver a cash diversion guaranty in favor of the Administrative Agent for and on behalf of the Lenders, which shall be in form and substance reasonably satisfactory to all Lenders (the “Cash Diversion Guaranty”). The parties hereto hereby agree that, notwithstanding anything to the contrary in the Credit Agreement, the failure to deliver the Cash Diversion Guaranty to the Administrative Agent within thirty (30) days following the Amendment Effective Date shall be an immediate Event of Default under the Credit Agreement.
6. Reaffirmation of Security. Each Loan Party party hereto hereby (a) acknowledges and agrees that each of the Credit Documents to which it is a party or otherwise bound shall continue in full force and effect and that all of its payment obligations, guarantees, pledges, grants of security interests and other obligations, as applicable, under and subject to the terms of such Credit Documents shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment or any of the transactions contemplated hereby and (b) confirms the security interests in the Collateral granted by it pursuant to the applicable Security Documents in favor of the Collateral Agent for the benefit of the Secured Parties pursuant to the Security Documents.
7. Credit Document. This Amendment constitutes a “Credit Document” for purposes of the Credit Agreement. From and after the Amendment Effective Date, all references to the Credit Agreement in the Credit Documents shall be deemed to refer to the Credit Agreement as amended by this Amendment. From and after the Amendment Effective Date, all references to the Security Agreement in the Credit Documents shall be deemed to refer to the Security Agreement as amended by this Amendment.
8. Governing Law. This Amendment, and the rights and duties of the parties hereto, shall be construed and governed in accordance with the laws of the State of New York.
9. Miscellaneous. Sections 12.27 (Governing Law), Sections 12.28 (Severability of Provisions), 12.35 (Limitation on Liability), 12.31 (Submission to Jurisdiction; Waiver of Jury Trial), 12.33 (Confidentiality) and 1.2 (Interpretation) of the Credit Agreement are hereby incorporated herein by reference, mutatis mutandis.
10. Headings. All headings in this Amendment are included only for convenience and ease of reference and shall not be considered in the construction and interpretation of any provision hereof.
11. Binding Nature and Effect. This Amendment shall be binding upon and inure to the benefit of each party hereto and their respective successors and permitted assigns.
12. Counterparts. This Amendment may be executed in multiple counterparts, each of which shall be deemed an original for all purposes, but all of which together shall constitute one and the same instrument.
13. Electronic Execution. This Amendment shall be valid, binding, and enforceable against a party only when executed and delivered by an authorized individual on behalf of the party by means of (i) any electronic signature permitted by the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, and/or any other relevant electronic signatures law, including relevant provisions of the UCC (collectively, “Signature Law”); (ii) an original manual signature; or (iii) a faxed, scanned, or photocopied manual signature. Each electronic signature or faxed, scanned, or photocopied manual signature shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Each party hereto shall be entitled to conclusively rely upon, and shall have no liability with respect to, any faxed, scanned, or photocopied manual signature, or other electronic signature, of any party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof. For avoidance of doubt, original manual signatures shall be used for execution or indorsement of writings when required under the UCC or other Signature Law due to the character or intended character of the writings.
14. No Modification; No Other Matters. Except as expressly provided for herein, the terms and conditions of the Operative Documents shall continue unchanged and shall remain in full force and effect. The consent and amendment granted herein shall apply solely to the matters set forth herein and to the extent expressly set forth herein and such consent and amendment shall not be deemed or construed as an amendment, waiver or consent of any other matters, nor shall such consent and amendment apply to any other matters. Except as expressly provided herein, nothing herein shall be construed as or deemed to be a waiver or consent by the Administrative Agent or any Lender of any past, present or future breach or non-compliance with any terms or provisions contained in any Credit Document, and nothing herein shall abrogate, prejudice, diminish or otherwise affect any powers, rights, remedies or obligations of any Person arising before the date of this Amendment.
15. Direction to Administrative Agent. Each of the undersigned Lenders hereby directs the Administrative Agent to, on the Amendment Effective Date, execute this Amendment. The Administrative Agent shall have all of the rights, privileges and immunities afforded to it as Administrative Agent under the Credit Agreement.
16. Direction to the Collateral Agent. Each of the undersigned Lenders and the Administrative Agent hereby directs the Collateral Agent to, on the Amendment Effective Date, execute this Amendment and the Interparty Agreement. The Collateral Agent shall have all of the rights, privileges and immunities afforded to it as Collateral Agent under the Credit Agreement.
[SIGNATURE PAGES TO FOLLOW]
IN WITNESS WHEREOF, the undersigned, by their officers thereunto duly authorized, have duly executed this Amendment as of the date first written above.
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| MN8 DEVCO 3 LLC, |
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| By: | /s/ David Callen |
| Name: David Callen |
| Title: Authorized Signatory |
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| MN8 FMG CLASS B LLC, |
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| By: | /s/ David Callen |
| Name: David Callen |
| Title: Authorized Signatory |
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| MN8 BLEEKER 2 LLC, |
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| By: | /s/ David Callen |
| Name: David Callen |
| Title: Authorized Signatory |
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| AMERICAN BEECH SOLAR LLC, |
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| By: | /s/ David Callen |
| Name: David Callen |
| Title: Authorized Signatory |
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| AMERICAN BEECH SOLAR HOLDINGS LLC, |
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| By: | /s/ David Callen |
| Name: David Callen |
| Title: Authorized Signatory |
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| BLUEBIRD SOLAR LLC, |
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| By: | /s/ David Callen |
| Name: David Callen |
SIGNATURE PAGE TO MN8 CONSENT AND SECOND OMNIBUS AMENDMENT TO CREDIT AGREEMENT
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| Title: Authorized Signatory |
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| BLUEBIRD SOLAR INVESTMENTS LLC, |
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| By: | /s/ David Callen |
| Name: David Callen |
| Title: Authorized Signatory |
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| PRAIRIE SOLAR HOLDINGS LLC, |
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| By: | /s/ David Callen |
| Name: David Callen |
| Title: Authorized Signatory |
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| PRAIRIE SOLAR 1 LLC, |
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| By: | /s/ David Callen |
| Name: David Callen |
| Title: Authorized Signatory |
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| MN8 FMG LLC, |
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| By: | /s/ David Callen |
| Name: David Callen |
| Title: Authorized Signatory |
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| AMERICAN BEECH CLASS B LLC, |
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| By: | /s/ David Callen |
| Name: David Callen |
| Title: Authorized Signatory |
SIGNATURE PAGE TO MN8 CONSENT AND SECOND OMNIBUS AMENDMENT TO CREDIT AGREEMENT
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| PRAIRIE CLASS B LLC, |
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| By: | /s/ David Callen |
| Name: David Callen |
| Title: Authorized Signatory |
SIGNATURE PAGE TO MN8 CONSENT AND SECOND OMNIBUS AMENDMENT TO CREDIT AGREEMENT
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| NATIXIS, NEW YORK BRANCH, as Administrative Agent | |
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| By: | /s/ Nancy Kui | |
| Name: Nancy Kui | |
| Title: Director | |
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| By: | /s/ Hana Beckles | |
| Name: Hana Beckles | |
| Title: Director | |
SIGNATURE PAGE TO MN8 CONSENT AND SECOND OMNIBUS AMENDMENT TO CREDIT AGREEMENT
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| NATIXIS, NEW YORK BRANCH, as Collateral Agent | |
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| By: | /s/ Nancy Kui | |
| Name: Nancy Kui | |
| Title: Director | |
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| By: | /s/ Hana Beckles | |
| Name: Hana Beckles | |
| Title: Director | |
SIGNATURE PAGE TO MN8 CONSENT AND SECOND OMNIBUS AMENDMENT TO CREDIT AGREEMENT
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| NATIXIS, NEW YORK BRANCH, as a Lender | |
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| By: | /s/ James B. Kaiser | |
| Name: James B. Kaiser | |
| Title: Managing Director | |
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| By: | /s/ Arlind Aliaj | |
| Name: Arlind Aliaj | |
| Title: Vice President | |
SIGNATURE PAGE TO MN8 CONSENT AND SECOND OMNIBUS AMENDMENT TO CREDIT AGREEMENT
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| HSBC BANK USA N.A., as a Lender | |
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SIGNATURE PAGE TO MN8 CONSENT AND SECOND OMNIBUS 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 MN8 CONSENT AND SECOND OMNIBUS AMENDMENT TO CREDIT AGREEMENT
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| ZIONS BANCORPORATION, as a Lender | |
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| By: | /s/ Jack Scanlon | |
| Name: Jack Scanlon | |
| Title: Authorized Signatory | |
SIGNATURE PAGE TO MN8 CONSENT AND SECOND OMNIBUS AMENDMENT TO CREDIT AGREEMENT
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| TEXAS CAPITAL BANK, as a Lender | |
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| By: | /s/ Leila Aloi | |
| Name: Leila Aloi | |
| Title: Managing Director | |
SIGNATURE PAGE TO MN8 CONSENT AND SECOND OMNIBUS AMENDMENT TO CREDIT AGREEMENT
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| BANCO DE SABADELL, S.A. MIAMI BRANCH, as a Lender | |
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| By: | /s/ Enrique Castillo | |
| Name: Enrique Castillo | |
| Title: Head of Corporate Banking | |
SIGNATURE PAGE TO MN8 CONSENT AND SECOND OMNIBUS AMENDMENT TO CREDIT AGREEMENT
EXHIBIT A
MIPA
MEMBERSHIP INTEREST PURCHASE AGREEMENT
between
MN8 DEVCO 3 LLC
and
AMERICAN BEECH SOLAR HOLDINGS LLC
August 27, 2025
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| ARTICLE ONE DEFINED TERMS AND INTERPRETATION | 1 |
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| 1.1 | Definitions | 1 |
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| 1.2 | Principles of Interpretation | 1 |
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| ARTICLE TWO PURCHASE AND SALE OF PROJECT COMPANY | 2 |
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| 2.1 | Purchase and Sale | 2 |
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| 2.2 | Purchase Price | 2 |
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| 2.3 | Purchase Price Allocation and Tax Treatment | 3 |
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| 2.4 | Withholding | 3 |
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| ARTICLE THREE REPRESENTATIONS AND WARRANTIES | 3 |
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| 3.1 | Representations and Warranties of Seller | 3 |
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| 3.2 | Representations and Warranties of the Company | 19 |
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| ARTICLE FOUR CONDITIONS PRECEDENT | 20 |
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| 4.1 | Closing Date Deliverables | 20 |
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| ARTICLE FIVE TAXES | 21 |
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| 5.1 | Transfer Taxes | 21 |
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| 5.2 | Tax Matters | 22 |
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| ARTICLE SIX INDEMNIFICATION AND REMEDIES | 22 |
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| 6.1 | General | 22 |
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| 6.2 | Limitations on Liability | 22 |
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| 6.3 | Procedure for Indemnification | 23 |
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| 6.4 | Tax Treatment of Indemnification Payments | 24 |
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| 6.5 | RESERVED. | 24 |
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| 6.6 | No Duplication | 24 |
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| 6.7 | Sole Remedy | 24 |
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| ARTICLE SEVEN GENERAL PROVISIONS | 25 |
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| 7.1 | Notices | 25 |
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| 7.2 | Amendment and Waiver | 26 |
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| 7.3 | Binding Nature; Assignment | 26 |
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| 7.4 | GOVERNING LAW | 26 |
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| 7.5 | Submission to Jurisdiction | 26 |
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| 7.6 | Entire Agreement | 27 |
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| 7.7 | Counterparts; Electronic Signatures | 27 |
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| 7.8 | No Third Party Beneficiaries | 27 |
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| 7.9 | Confidentiality | 27 |
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| 7.10 | Further Assurances | 27 |
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| 7.11 | Equitable Remedies | 28 |
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| 7.12 | Consequential Damages | 28 |
LIST OF EXHIBITS AND SCHEDULES TO
MEMBERSHIP INTEREST PURCHASE AGREEMENT
| | | | | |
| Exhibit A | Definitions |
| Exhibit B | Form of Assignment Agreement |
| Exhibit C | Warranties |
| Exhibit D | Beginning of Construction Certificate |
| |
| Schedule 1 | Responsible Persons |
| Schedule 2 | Real Property Documents |
| Schedule 3 | Support Obligations |
| Schedule 3.1(g) | Governmental Approvals |
| Schedule 3.1(i) | Project Documents |
| Schedule 3.1(i)(v) | Force Majeure |
| Schedule 3.1(p) | Environmental Matters |
| Schedule 3.1(q) | Insurance |
| Schedule 3.1(z) | Bank Accounts |
MEMBERSHIP INTEREST PURCHASE AGREEMENT
This MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “MIPA”), dated as of August 27, 2025 (the “Effective Date”), is entered into between MN8 DevCo 3 LLC, a Delaware limited liability company (“Seller”), and American Beech Solar Holdings LLC, a Delaware limited liability company (the “Company”).
RECITALS:
1. American Beech Solar LLC, a North Carolina limited liability company (“Project Company”) is developing an approximately 196 MW(dc) photovoltaic power generation project located in Halifax County, North Carolina known as the American Beech Project (the “Project”);
2. Seller directly owns 100% of the outstanding Membership Interests in Project Company and is an Affiliate of American Beech Class B LLC, a Delaware limited liability company (“Class B Member”);
3. Class B Member directly owns 100% of the outstanding Membership Interests in the Company;
4. On the Effective Date and prior to the execution and delivery of this MIPA, the Company, Tenaska American Beech Holdings, LLC, a Delaware limited liability company (“Investor”) and Class B Member have executed and delivered an Equity Capital Contribution Agreement (the “ECCA”) and on the MC Funding Date (as defined in the ECCA), the Investor and Class B Member will execute and deliver an Amended and Restated Limited Liability Company Agreement of the Company (the “LLCA”) to, among other things, admit Investor as a member of the Company and define the respective interests, rights and obligations of Investor and Class B Member in the Company; and
5. Subject to the terms and conditions set forth herein, the Company desires to purchase from Seller, and Seller desires to sell to and irrevocably and unconditionally transfer to Company, 100% of the Membership Interests in Project Company in exchange for the consideration described in Section 2.2. NOW, THEREFORE, in consideration of the mutual agreements, covenants, representations and warranties set forth herein and intending to be legally bound hereby, Seller and the Company agree as follows:
ARTICLE ONE
DEFINED TERMS AND INTERPRETATION
1.1 Definitions. Capitalized terms not otherwise defined in this MIPA are defined in Exhibit A.
1.2 Principles of Interpretation. All the agreements, contracts or documents defined or referred to in this MIPA will mean such agreements, contracts or documents as the same may
from time to time be supplemented or amended or their terms waived or modified, except as otherwise provided herein. Defined terms in this MIPA will include, in the singular number, the plural, and in the plural number, the singular. Wherever from the context it appears appropriate, pronouns stated in the masculine, feminine or neuter gender will include the masculine, feminine and neuter genders. All references to Articles, Sections, Schedules and Exhibits will be references to Articles, Sections, Schedules and Exhibits of this MIPA, unless otherwise specified. The words “will” and “shall” have the same meaning. The words “include,” “includes” and “including” are not limiting, and are in all cases to be construed as followed by the words “without limitation” (whether or not expressly so followed); the word “or” is not exclusive; references to Persons include their respective successors and assigns or, in the case of Governmental Authorities, Persons succeeding to the relevant functions of such Persons; and all references to statutes and related regulations will include any amendments of the same and any successor statutes and regulations. The words “herein,” “hereof” and “hereunder” will refer to this MIPA as a whole and not to any particular section or subsection of this MIPA. Documents, files and materials that are posted to the Data Site or otherwise delivered in writing to the Company will be deemed delivered for purposes of this MIPA.
ARTICLE TWO
PURCHASE AND SALE OF PROJECT COMPANY
2.1 Purchase and Sale. On the Closing Date and on the terms and subject to the conditions set forth in this MIPA, Seller shall sell, convey, transfer, assign and deliver to the Company, and the Company shall purchase and accept from Seller, all of Seller’s right, title and interest in and to 100% of the Membership Interests in Project Company, free and clear of all Encumbrances (except for Permitted Equity Encumbrances), as evidenced by the execution and delivery by the Parties of the Assignment Agreement.
2.2 Purchase Price.
(a) In consideration of the purchase and sale of 100% of the Membership Interests in Project Company described in Section 2.1, the Company shall pay to Seller in cash in immediately available funds into an account of Seller a purchase price equal to the Appraised Value (the “Purchase Price”). The Purchase Price shall be paid by a payment in an amount (the “Cash Purchase Price”) equal to (i) the Purchase Price less (ii) the amount of Liabilities of Project Company as of the Closing Date less (iii) the Remaining Costs (Estimated), which amount will be payable on the Closing Date to the account specified in writing by Seller. (b) The Cash Purchase Price shall be paid in the following installments:
(i) The first installment, consisting of $24,690,228.60 (the “First Installment”), shall be due and payable and shall be paid on the Closing Date by wire transfer of immediately available funds to an account that Seller designates by written notice to the Company.
(ii) The second installment, consisting of the Cash Purchase Price as updated on the SC Funding Date (as defined in the ECCA) to reflect the final Appraisal delivered pursuant to Section 4.3(e) of the ECCA, reduced by the First Installment (the “Second Installment”), shall be due and payable and shall be paid on the earlier of (A) the SC Funding Date (as defined in the ECCA) and (B) April 30, 2026, by wire transfer of immediately available funds to an account that Seller designates by written notice to the Company.
2.3 Purchase Price Allocation and Tax Treatment. The Parties agree and acknowledge that the transfer of the Membership Interests pursuant to this MIPA will be treated for federal income and other applicable Tax purposes as a sale by Seller and as a purchase by the Company of all of the assets owned by Project Company for a total consideration equal to the Appraised Value (which, for the avoidance of doubt, shall include the assumption by the Company of all of the Liabilities of Project Company as of the Closing Date and the obligation to pay the Remaining Costs (Estimated)). The Parties agree and acknowledge that such consideration shall be allocated among the assets of Project Company consistently with the allocation set forth in the Cost Segregation Report as of the Closing Date. Project Company, the Company and Seller agree to file all federal, state and local Tax Returns in accordance with the provisions of this Section 2.3, and such agreed allocation. Neither Party shall take any position, on any Tax Return or otherwise, that is inconsistent with such allocation unless specifically required pursuant to Applicable Law. 2.4 Withholding. The Company shall be entitled to deduct and withhold from all payments of the Cash Purchase Price, or any other amounts (or any portion thereof) payable pursuant to this MIPA, such amounts as are required to be deducted and withheld with respect to the making of such payment under the Code or any other Applicable Law; provided that the Company will, prior to any deduction or withholding, use commercially reasonable efforts to notify Seller of any anticipated withholding, and reasonably cooperate with Seller to minimize the amount of any applicable withholding to Seller. To the extent that amounts are so withheld, such withheld amounts shall be paid by such withholding party to the relevant Governmental Authority and shall be treated for all purposes of this MIPA as having been paid to the Party to whom such amounts would otherwise have been paid.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Seller. The following representations and warranties are made by Seller to the Company on the Effective Date, unless specifically limited to only certain dates:
(a) Organization, Good Standing, Etc.; Officers. Each of Seller and the Project Company (i) is a limited liability company that is duly organized and existing under the laws of the state of its formation and is in good standing under such laws; (ii) has the requisite power and authority to own, lease and operate its properties and Assets and to carry on its business and (iii) is duly qualified and in good standing in each jurisdiction where such qualification is necessary. The Company has received true and correct copies of the charter documents and operating agreement
of the Seller and the Project Company currently in effect. The persons listed on Schedule 1 are the individuals who have primary responsibility for all day-to-day operations and management of the Project and the matters to which representations and warranties are made in this MIPA.
(b) Company Membership Interests. On the Effective Date prior to the transactions contemplated in Section 2.1, Seller is the sole member of the Project Company and holds 100% of the ownership interests in the Project Company (subject to no Encumbrances other than those granted pursuant to the Construction Financing Documents and Permitted Encumbrances set forth in clause (e) of the definition thereof), which are validly issued and duly authorized. Other than pursuant to the ECCA, this MIPA, the LLCA or the Construction Financing Documents, there is no agreement or other arrangement to issue, sell, transfer, convert or dispose of any ownership interest in the Project Company. (c) Sole Purpose. Since the date of acquisition by Seller or one of its Affiliates of the Project Company, the Project Company has been engaged solely in the development, construction and ownership of the Project and has incurred no Liabilities except those incurred under the Project Documents, the Construction Financing Documents and Governmental Approvals and Liabilities incidental to the development, construction and ownership of the Project that are not material. The Project Company is not a party to any agreement or contract having a value over its term in excess of $250,000 other than the Project Documents and the Construction Financing Documents to which it is a party.
(d) Authority; Enforceability. Each of Seller and the Project Company has the requisite power and authority to execute, deliver and enter into the Transaction Documents and Project Documents to which it is a party and to perform its obligations thereunder and consummate the Transaction. The execution and delivery by each of Seller and the Project Company of the Transaction Documents and Project Documents to which it is a party, and the consummation by such persons of the Transaction, have been duly authorized by all necessary entity action. Each Transaction Document and Project Document to which Seller or the Project Company is a party has been duly authorized, validly executed and delivered and constitutes the legal, valid and binding obligations of Seller or the Project Company, as applicable, enforceable against such person in accordance with its terms, except as its enforceability may be limited by Bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and general equitable principles (whether in a proceeding in equity or at law).
(e) No Conflicts. The execution and delivery of the Transaction Documents and the Project Documents to which Seller or the Project Company is a party do not, and the consummation of the transactions contemplated thereby will not, (i) violate or require any filing or notice under any Applicable Law (other than filings or notices that have been made or can reasonably be expected to be made in the ordinary course of business when needed); (ii) conflict with or cause a breach of any provision in such person’s organizational documents; (iii) violate in any material respect, cause a material breach or default, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel (except to the extent that such acceleration, termination, modification or cancellation is not material), or require any authorization or approval (other than those already obtained or made, those to be obtained or made in the
ordinary course of business or those that are not required to be obtained or made prior to such date) under, any contract to which Seller or the Project Company is a party or by which it is bound or to which any of its Assets are subject; or (iv) result in the creation of an Encumbrance upon any of the Assets of Seller or the Project Company (other than Permitted Encumbrances), except (in the case of clauses (i), (ii), (iii), and (iv)) for any such event that would not reasonably be expected to have a Material Adverse Effect.
(f) Title; Assets; Indebtedness. (i) The Project Company has good and marketable title to and is the sole owner of the Project and the Assets comprising the Project free and clear of all Encumbrances other than Permitted Encumbrances (other than title to any Assets for which title only transfers from the applicable EPC Contractor to the Project Company at Substantial Completion); and (ii) except for any services that are required to be performed or parts that are required to be provided in accordance with a Project Document in order to achieve Final Completion or are reasonably expected to be available when required on commercially reasonable terms, no additional parts or services from any other Persons are required in order to (A) install the Project and place it in service for U.S. federal income tax purposes in accordance with each of the Project Documents for the Project and all Applicable Law and Governmental Approvals and (B) operate and maintain the Project in accordance in all material respects with Prudent Industry Practice. On and as of the Effective Date, neither the Project Company nor, to the Knowledge of Seller, the AC Subsidiary have Indebtedness other than (1) under the Construction Financing Documents and (2) amounts not yet due under Material Project Documents which may be construed as Indebtedness.
(g) Governmental Approvals.
(i) Neither Seller nor the Project Company is, or will be, required under Applicable Law to give any notice, make any filing, or obtain any consent or approval from any Governmental Authority to execute, deliver or perform any of the Transaction Documents to which it is a party or to consummate the transactions contemplated thereby other than any Governmental Approvals that (A) have been obtained or made as of the Effective Date, each of which is set forth on Part I of Schedule 3.1(g) (or can reasonably be expected to be obtained or made when required, each of which is set forth on Part II or III of Schedule 3.1(g)) or (B) are ministerial in nature, can reasonably be expected to be obtained or made in the ordinary course of business on commercially reasonable terms and conditions when needed and the absence of which could not be reasonably expected to adversely affect the consummation of the transactions contemplated by this MIPA or any of the Transaction Documents or result in a Material Adverse Effect (collectively, “Ministerial Approvals and Filings”). (ii) True and correct copies of each Governmental Approval that is necessary under Applicable Law for the execution, delivery or, except those Governmental Approvals which relate solely to the construction or operation of the Project that are not required until a later date and are reasonably expected to be obtained in the ordinary course on commercially reasonable terms as and when required, performance of the Transaction Documents to which Seller or the Project Company is a party and the consummation of the
transactions thereunder that have been directly obtained by or for the benefit of Seller or the Project Company, as applicable, and copies thereof have been delivered to the Company, other than Ministerial Approvals and Filings.
(iii) As of the Effective Date, all Governmental Approvals necessary for the construction, development, ownership and operation of the Project are set forth in Part I of Schedule 3.1(g) and have been obtained and are held by the Project Company, its Affiliates, other contractors hired by or on behalf of the Project Company or any EPC Contractor, as applicable, except Ministerial Approvals and Filings or Governmental Approvals that are not required as of the Effective Date, which are, as of the Effective Date, set forth in Part II and Part III of Schedule 3.1(g). There are no proceedings pending or, to the Knowledge of Seller, threatened (in writing), which would reasonably be expected to result in the material adverse modification, revocation or termination of any such Governmental Approval or the imposition of any material penalty thereunder. None of the Project Company or any of its Affiliates is in violation of a material requirement of any such Governmental Approval that is or could reasonably be expected to have a Material Adverse Effect. To the Knowledge of Seller, no event has occurred and is continuing that, after notice or lapse of time or both would reasonably be expected to constitute, a material violation of any such Governmental Approval, or would reasonably be expected to result in a material adverse modification (including the imposition of any new material adverse conditions, but not including any new compliance conditions that generally apply on an industry-wide basis), revocation or termination of, or any other material adverse change in, any such Governmental Approval. To the Knowledge of Seller, no Governmental Authority intends to cancel, revoke, terminate, suspend, deny or not renew any such Governmental Approval or application for any such Governmental Approval. No Proceeding is pending or, to the Knowledge of Seller, threatened, by or before any Governmental Authority regarding any revocation, withdrawal, suspension, cancellation or termination of any such Governmental Approval or any actual, alleged, possible or potential violation of, or failure to comply with, any such Governmental Approval. (iv) Notwithstanding anything herein to the contrary, the Seller may, with the written consent of the Company (not to be unreasonably withheld or delayed), update Schedule 3.1(g) between the MC Funding Date and the SC Funding Date as required to reflect the development of the Project during such time period, however no such update to Schedule 3.1(g) shall be deemed to cure any breach of this Section 3.1(g) that has occurred prior to the MC Funding Date.
(h) Absence of Litigation.
(i) There is no pending or, to the Knowledge of Seller, threatened (A) Proceeding involving Seller or to which Seller is a party or that adversely affects the Project, (B) Proceeding involving the Project Company, to which the Project Company is a party or that adversely affects the Project, or (C) Proceeding that could reasonably be expected to adversely affect its ability to complete the Transaction. None of Seller nor the Project Company is subject to any Order adversely affecting the Project, Seller, the Project
Company or the Transaction. To the Knowledge of Seller, the Seller has delivered to the Company a true, correct and complete copy of each material contract to which the AC Subsidiary is a party.
(ii) To the Knowledge of Seller, no Bankruptcy has occurred with respect to any Material Contract Party.
(i) Transaction Documents and Project Documents.
(i) Schedule 3.1(i) lists each Material Project Document, and Seller has delivered a true, correct, and complete copy of each such Material Project Document and each Construction Financing Document to the Company. (ii) None of Seller nor the Project Company has materially breached or is in material default under any Transaction Document, Construction Financing Document or Material Project Document, which breach or default remains uncured. To the Knowledge of Seller, no event or circumstance has occurred that would, with the passage of time or notice, reasonably be expected to result in such a material breach or default. To the Knowledge of Seller, no other party to a Transaction Document, Construction Financing Document or Material Project Document (other than the Investor, Tenaska Energy, Inc. or Tenaska Energy Holdings, LLC) has materially breached or is in material default under any Transaction Document, Construction Financing Document or Material Project Document, which breach or default remains uncured, and, to the Knowledge of Seller, no event or circumstance has occurred that would, with the passage of time, be expected to result in such a material breach or material default.
(iii) The materials to be supplied and the interests and other rights granted pursuant to the Material Project Documents comprise all of the interests necessary to secure any right that is material to the acquisition, development, construction, installation, completion, operation, maintenance or replacement or removal of the Project (including the interconnection and transmission of electricity therefrom), in accordance with all Applicable Law, Prudent Industry Practice, the Material Project Documents and in accordance with the schedule for construction and completion of the Project, other than those rights which are reasonably expected to be obtained in due course and on commercially reasonable terms at or before the time when such rights are reasonably necessary to be so obtained.
(iv) No Project Party has, except as set forth on Part I of Schedule 3.1(i)(iv) (A) provided written notice to the Project Company or Seller or any of their respective Affiliates of its intention to amend or terminate a Material Project Document or (B) made any claims against, or sought indemnification from, the Project Company or Seller or any of their respective Affiliates pursuant to a Material Project Document that is not otherwise the subject of a reasonable reserve or otherwise accounted for with reasonable credit support, and none of Seller nor the Project Company or any of their respective directors, managers, members or officers has been advised in writing that any such claims may be asserted or initiated. No Person party to a Construction Financing
Document has, except as set forth on Part II of Schedule 3.1(i)(iv), (A) provided written notice to the Project Company, or Seller or any of their respective Affiliates of its intention to amend or terminate a Construction Financing Document (other than in connection with Term Conversion (as defined in the Construction Financing Agreement)) or (B) made any claims against, or sought indemnification from, the Project Company, Seller or any of their respective Affiliates pursuant to a Construction Financing Document that is not otherwise the subject of a reasonable reserve or otherwise accounted for with reasonable credit support, and none of Seller, the Project Company or any of their respective directors, managers, members or officers has been advised in writing that any such claims may be asserted or initiated. Notwithstanding anything herein to the contrary, the Seller may, with the written consent of the Company (not to be unreasonably withheld or delayed), update Schedule 3.1(i)(iv) between the MC Funding Date and the SC Funding Date as required to reflect the development of the Project during such time period, however no such update to Schedule 3.1(i)(iv) shall be deemed to cure any breach of this Section 3.1(i)(iv) that occurred prior to the MC Funding Date.
(v) Except as set forth on Schedule 3.1(i)(v), to the Knowledge of Seller, no event, act, circumstance or condition exists that constitutes or could reasonably be expected to constitute a force majeure event under any Material Project Document. (vi) All representations, warranties and other material factual statements made by the Project Company in each of the Material Project Documents to which it is a party are true and correct in all material respects as of the date made (except for representations and warranties or other factual statements that refer only to an earlier date).
(vii) Other than the Transaction Documents, the Assignment Agreement, the Construction Financing Documents, the O&M Agreement, and the Asset Management Agreement, there are no Affiliate Contracts.
(viii) Other than as disclosed in Schedule 3, there are no Support Obligations with respect to the Project.
(ix) All utility services (including electricity and telecommunications) reasonably necessary and sufficient, in quality and quantity, for the construction, development, ownership, operation and maintenance of the Project for its intended purposes are currently available at the Site or can reasonably be expected to be commercially available as and when required upon commercially reasonable terms and consistent with the schedule for the Project.
(x) To the Knowledge of Seller and solely with respect to the Project and the Project Company, no event or condition exists that would either immediately or with the passage of any applicable grace period or giving of notice, or otherwise, enable either Seller or PSA Seller to terminate or suspend its applicable obligations under the PSA or entitle PSA Seller to any claim, counterclaim, offset or defense against Seller in respect of the PSA (provided, for purposes of clarity, there are non-Project and non-Project Company assets and operations that were sold under the PSA and nothing in this Section
3.1(i) shall take any such non-Project or non-Project Company assets or operations into account).
(xi) As of the Effective Date and solely with respect to the Project and the Project Company, all amounts then due and payable by each of Seller and PSA Seller under the PSA have been paid (subject to any offset payments and bona fide disputes and claims made thereunder), and the Project Company does not has any obligations or liabilities (including contingent obligations) to Seller, PSA Seller or any of their respective Affiliates in connection with the purchase of a direct or indirect ownership interest in the Project Company or any of its Affiliates, and PSA Seller does not own any direct or indirect ownership interest in the Project Company.
(xii) Neither Seller nor PSA Seller under the PSA, have or have granted to any other person, any outstanding option, lien, warrant, put, call, buy-back, repurchase right, right of first refusal, right of first offer or other agreement to acquire any equity interest in Project Company or ownership of any assets of the Project.
(xiii) PSA Seller has no right under the PSA which, if exercised, would be reasonably likely to result in (x) the reduction, loss disallowance or recapture of the ITC claimed or projected to be claimed with respect to the Project or any component thereof within the meaning of Section 50(a) of the Internal Revenue Code of 1986, as amended or (y) the Investor failing to satisfy any of the Target Parameters shown in the Base Case Model.
(xiv) As of the Effective Date, all amounts then due and payable by each of “Buyer” and “Seller”, in each case, under and as defined in the PSA, have been paid.
(j) Consents and Approvals. No filings, consents, waivers, authorizations or approvals are required for the Project Company or Seller to execute, deliver and perform its obligations under the Transaction Documents or the Project Documents to which it is a party, or for the consummation of the Transaction, other than those already obtained or made, those to be obtained or made in the ordinary course of business, those that are not required to be obtained or made prior to such date.
(k) Taxes.
(i) (A) All Tax Returns required to be filed with any Tax authority by, or with respect to, the Project Company have been duly and timely filed, and all such Tax Returns were prepared in compliance with all Applicable Laws and are true, correct and complete in all material respects, (B) all Taxes due and payable by, or with respect to, the Project Company and its assets or activities (whether or not shown as due on any Tax Return) have been timely paid to the applicable Governmental Authority, (C) all unpaid taxes that have accrued, but are not yet due and payable, by the Project Company on or before the Effective Date are reflected in the Base Case Model, (D) no written claim, and no other claim to the Knowledge of Seller, has been made by a Tax authority in a jurisdiction where the Project Company does not file a Tax Return that the Project
Company is or may be subject to taxation by that jurisdiction, (E) there are no liens for Taxes upon any of the Assets of the Project Company, other than Permitted Encumbrances, (F) there are no agreements or consents currently in effect for the extension or waiver of the time for the filing of any Tax Return or the assessment or collection of any Taxes relating to the Project Company or the Project, and no Person has been asked to enter into any such agreement or consent, (G) the Project Company is not a party to any Tax sharing or allocation agreement, Tax indemnity agreement or similar agreement or arrangement regarding Taxes, other than agreements entered into in the ordinary course of business that do not have as their principal purpose the allocation of liabilities for Taxes and under which any liability of Project Company for Taxes is pursuant only to customary tax gross-up, tax indemnity or tax allocation provisions contained therein, (H) there are no audits, examinations, claims, assessments, levies, administrative proceedings or lawsuits with respect to Taxes or Tax Returns in progress, pending or threatened in writing against the Project Company or the Assets of the Project Company, (I) none of the Project Company or any of its Affiliates has had a pre-submission conference with the IRS or applied to the IRS for a private letter ruling, pre-filing agreement or determination letter with respect to the Project, including any application for a private letter ruling that has been withdrawn, (J) the Project Company has no liability for the Taxes of any other Person as a result of having been a member of an affiliated, consolidated, combined, unitary or similar group, succeeding to such liability as a result of a merger, conversion or asset transfer, or otherwise as a transferee or successor (by contract or otherwise), (K) all material amounts required to be withheld or collected by the Project Company have been duly withheld, collected and paid to the appropriate Tax authorities within the time and in the manner required under Applicable Law and (L) no power of attorney currently in force has been granted by the Project Company in respect of Taxes;
(ii) The Project Company and the AC Subsidiary has been treated as either a “partnership” for U.S. federal income tax purposes under Treasury Regulations § 301.7701-3(b)(1)(i) (and for applicable state, and local income tax purposes) or a “disregarded entity” for U.S. federal income tax purposes under Treasury Regulations § 301.7701-3(b)(1)(ii) and for applicable state, and local income tax purposes at all times since its formation. No election has been filed with the IRS or any state or other jurisdiction to treat the Project Company or the AC Subsidiary as an association taxable as a corporation.
(iii) Seller is and has since its formation been treated as a disregarded entity for U.S. federal income tax purposes and as a separate taxpayer from the Class B Member for federal income tax purposes. Seller does not own, directly or indirectly, any interest in the Class B Member or the Company for U.S. federal income tax purposes.
(iv) Each contract, agreement, or other arrangement entered into between the Company or the Project Company, on the one hand, and the Class B Member (or its affiliates) on the other hand, if any, is on arm’s length terms and conditions.
(v) The aggregate tax basis of the ITC Eligible Property included in the Project will be equal to the eligible basis shown in the Appraisal, Cost Segregation Report and Base Case Model, each as of the SC Funding Date, and the aggregate tax basis of the Assets included in the Project will be allocated for depreciation purposes among the Project assets as specified in the Appraisal, Cost Segregation Report and Base Case Model, each as of the SC Funding Date (as reduced, for depreciation purposes, by one-half of the ITC).
(vi) All equipment comprising the Project will be considered new equipment for which the Company will be considered the original user. None of the equipment is imported property covered by an executive order described in section 168(g)(6) of the Code. No preliminary application was filed with the U.S. Department of the Treasury for a section 1603 payment, and no such payment will be claimed on the Project. No Person has claimed on any Tax Return any depreciation or amortization deductions, ITCs, renewable energy production tax credits pursuant to Section 45 of the Code or any other tax credits or deductions that are available with respect to ownership or operation of the Project or any property that is part of the Project. No portion of the assets comprising the Project has benefited from the proceeds of any grant or rebate program that would cause a reduction in the amount of the ITC for the Project, and no application with respect to any such grant or rebate has been filed or submitted. No Person has made the election under Section 6417 or 6418 of the Code (or entered into an agreement to make such an election) with respect to the Project.
(vii) All state and local sales, use and property taxes with respect to the Transaction and the Project, including such taxes for which the Project Company is responsible under the EPC Contracts, are reflected properly in the Base Case Model.
(viii) The Project will not be used to generate electricity for the purpose of heating a swimming pool within the meaning of section 48(a)(3)(A)(i) of the Code.
(ix) As of the Effective Date, no Block nor the Project has been Placed In Service and none of the factors in clauses (B), (C), (D) or (E) in the definition of “Placed in Service Factors” have occurred for any such Blocks or the Project.
(x) Seller (or, if it is a disregarded entity for U.S. federal income tax purposes, the Person treated for U.S. federal income tax purposes as the owner of the assets of Seller) is not a Disqualified Entity or a Related Person.
(xi) None of the property included in the Project is leased to a “tax-exempt entity” within the meaning of Section 168(h)(2)(A) of the Code, is “tax-exempt bond financed property” within the meaning of Section 168 of the Code, imported property of the kind described in Section 168(g)(6) of the Code, or “public utility property” within the meaning of Section 168(f)(2) of the Code or Treasury Regulations Section 1.46-3(g). No election has been made to cause the “alternative depreciation system” described in Section 168(g) of the Code to apply to any of the property included in the Project. The Project is located in its entirety in the United States.
(xii) Either (x)(a) for purposes of Section 48(a)(9)(B)(ii) of the Code, construction of the Project began before January 29, 2023, (b) the Project is exempt from the prevailing wage and apprenticeship requirements of Section 48(b)(9)-(10), and (c) all property included in the Project has been or will be Placed In Service by December 31, 2025 or (y)(a) for purposes of Section 48(a) of the Code, construction of the Project began before December 31, 2024 by complying with the Five Percent Safe Harbor (as defined in IRS Notice 2018-59) as of such date, and (b) the Project has complied or is in the process of complying with the PWA Requirements (and such compliance may be achieved by making payments (including for any penalty and interest owed to the IRS and any backpay wages owed to any applicable wage earner) to cure any failure to have satisfied such requirements).
(xiii) The Project (i) will be owned by a single legal entity, (ii) will have been constructed and installed on contiguous pieces of land, (iii) will be described in common power purchase agreements, (iv) will have a common intertie, (v) has a common substation, (vi) will be described in one or more common environmental or other regulatory permits, (vii) will have been constructed pursuant to a single master construction contract, and (viii) will have been financed pursuant to a single loan agreement.
(xiv) As of the Closing Date, the Beginning of Construction Certificate is true, correct, and complete.
(xv) Seller is not aware of any reason that the Project would fail to satisfy the “Prevailing Wage Requirements” and the “Apprenticeship Requirements” set forth in Code Sections 48(a)(10) and 48(a)(11), respectively, prior to being Placed In Service.
(xvi) The interconnection property identified as ITC eligible property in the Appraisal constitutes “qualified interconnection property” under Section 48(a)(8) of the Code. All such interconnection property: (i) is part of an addition, modification, or upgrade to a transmission or distribution system that is required at or beyond the point at which the Project interconnects to such transmission or distribution system in order to accommodate such interconnection, (ii) was either (A) constructed, reconstructed, or erected by the Company (as defined in Treas. Reg. §1.48-9(b)(1)), or (B) the cost with respect to the construction, reconstruction, or erection of such property was paid or incurred by the Company, (iii) is properly chargeable to the capital account of the Company, and (iv) the original use (as defined in Treas. Reg. §1.48-9(b)(3)), of which, pursuant to the Interconnection Agreement, commences with a utility (as defined in Treas. Reg. §1.48-14(h)(5)). The Seller does not reasonably anticipate any reimbursement of the cost of such interconnection property by the applicable utility or any other Person.
(l) Compliance with Applicable Law.
(i) (A) The Project Company is and, since the Acquisition Date always has been, in material compliance with all Applicable Law and Governmental Approvals, (B) each of the Seller and, to the Knowledge of Seller, the AC Subsidiary is and always has been in material compliance with all Applicable Law and Governmental Approvals
and (C) none of Seller, its Affiliates, the Project Company, or to the Knowledge of Seller, the AC Subsidiary has received any written notice from any Governmental Authority of an actual or potential material violation of any Applicable Law with respect to the Project, Seller, the AC Subsidiary, the Project Company or the Transaction which violation has not been remedied or cured.
(ii) None of Seller, the Project Company or any Covered Entity relating to Seller or the Project Company is a Sanctioned Person, has any of its Assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person or does business in or with, or derives any of its operating income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority. The proceeds of any Transaction Document will not be used to fund any operations in, finance any investments or activities in or make any payments to a Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority. The funds used for the Project are not derived from any unlawful activity. Each of the Project Company and Seller and each Covered Entity relating to Seller and the Project Company is in compliance with and does not engage in any dealings or transactions prohibited by any Anti-Terrorism Laws.
(m) Personal Property. To the Knowledge of Seller, all goods, equipment, parts, materials and facilities furnished in connection with the Project are or will be in good repair and operating condition and suitable for the purposes for which they are employed, including, without limitation, for the construction, development, ownership, operation and maintenance of the Project for its intended purposes, and to the Knowledge of Seller, there is no material defect or dangerous condition of such equipment or facilities.
(n) Information Provided. The information delivered by or for Seller or its Affiliates to the Company consultants or advisors engaged by the Company in connection with the Transactions (including any information pertaining to the price paid to the PSA Seller under the PSA) is true and complete in all material respects, and contains no and does not omit to state a material fact that was necessary in order to make the statements therein, in light of the circumstances under and at the time which they were made, not misleading. The Base Case Model has been prepared in good faith based upon assumptions that are consistent with the Project Documents and Construction Financing Documents, and are believed by Seller to be reasonable at the time made and at the time so furnished. Notwithstanding anything to the contrary, no representation or warranty is made with respect to (i) any projected financial information or other forward-looking statement (except that such projections and the Base Case Model were made and prepared in good faith) or (ii) conclusions contained in any third-party reports, except as specifically provided herein. The Company acknowledges and agrees that any assumptions that are projections are subject to uncertainties and contingencies, many of which are beyond the control of Seller and the Company, and that no assurance can be given that any such projections will be realized and actual results may differ and the differences may be material.
(o) Financial Statements. Seller has provided to the Company complete copies of the most recent unaudited, non-consolidated balance sheet of the Project Company (the “Current Balance Sheet”). The Current Balance Sheet has been prepared in accordance with GAAP and presents fairly in all material respects the financial position of the Project Company as of the date or for the period set forth therein, subject to normal year-end audit adjustments and the absence of footnotes. Since December 31, 2024, no event, change, fact, condition or circumstance has occurred and is continuing, that has had, or could reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.
(p) Environmental Matters. Except as set forth on Schedule 3.1(p): (i) Each of Seller and the Project Company is, and its businesses and operations are, in compliance in all material respects with all applicable Environmental Laws. To the Knowledge of Seller, no Hazardous Substances have been Released on the Site in violation of Environmental Laws. Neither Seller nor the Project Company has received written notice from any Governmental Authority of an actual or potential violation of or liability under any Environmental Laws. To the Knowledge of Seller, there are no material Liabilities arising from Environmental Laws with respect to the Project.
(ii) Seller has delivered to the Company complete copies of any and all material reports, site assessments, audits, and studies concerning environmental conditions or media sampling results prepared by or on behalf of, or otherwise in the possession or control of Seller or the Project Company concerning the Project.
(iii) The Project Company has not nor, to the Knowledge of Seller, has any third party used, Released, generated, manufactured, produced, or stored in, on, under, or about the Site, or transported thereto or therefrom, or has caused or is otherwise responsible for any human exposure to, any Hazardous Substances that could reasonably be expected to subject the Project Company to any Environmental Claim.
(iv) To the Knowledge of Seller, no Environmental Claim is pending or threatened (in writing) against the Project Company. To the Knowledge of Seller, there is no condition, circumstance, occurrence, action, activity or event at the Site that could reasonably be expected to form the basis of an Environmental Claim. Neither Seller nor the Project Company is conducting, paying for or performing, in whole or in part, any clean-up, removal, remediation, excavation, or other corrective action pursuant to any Environmental Law at the Site; nor is the Project Company subject or a party to any order, judgment, or decree, or a contract or agreement with a Governmental Authority that imposes any obligation or liability under any Environmental Law.
(q) Insurance. The insurance policies listed in Schedule 3.1(q) are the policies held by the Project Company and constitute all of the insurance coverage required under each Project Document. All such policies are in full force and effect, and there are no unpaid claims or premiums for any such insurance.
(r) Regulatory Matters.
(i) Seller is a “holding company” within the meaning of Section 1262(8) of PUHCA solely with respect to its ownership of Exempt Wholesale Generators and is entitled to the waivers and exemptions set forth in 18 C.F.R. § 366.3(a). The Project Company is (i) not a “holding company” within the meaning of Section 1262(8) of PUHCA, and (ii) an Exempt Wholesale Generator and exempt from regulation under PUHCA pursuant to 18 C.F.R. § 366.7(e).
(ii) Seller is not a “public utility” within the meaning of Section 201(e) of the FPA.
(iii) The Project Company is a “public utility” within the meaning of Section 201(e) of the FPA, with MBR Authority. The Project Company has not provided transmission service to any party or made any sales of electric energy at wholesale. From and after the time when any energy generated by the Project (including test power) is first delivered or sold, the Project Company will (A) have MBR Authority, (B) be an “electric utility company,” and a “public-utility company,” as such terms are defined in PUHCA, and (C) be an Exempt Wholesale Generator.
(iv) Neither the Seller nor the Project Company has received any notice, claim, complaint, protest, or assertion either from, or directed to, any Governmental Authority stating or finding that any of them is in violation of or has failed to comply with any requirement under the FPA or PUHCA.
(v) The Project Company is not subject to regulation as a “public utility” as defined in N.C. Gen. Stat. § 62-3(23), or the NCUC’s administrative rules or other laws or regulations of the State of North Carolina respecting the rates charged by, or the financial or organizational regulation of “public utilities” or “electric utilities”. The Project Company is not subject to regulation as an “alternative retail electric supplier” or an “electric supplier” under the NCUC’s administrative rules or other laws or regulations of the State of North Carolina respecting the rates charged by, or the financial or organizational regulation of “public utilities” or “electric utilities”.
(vi) The Project Company is in compliance in all material respects with all applicable Laws, judgments, decrees, consents, requirements, orders and rules and regulations of PJM, FERC, NERC and NCUC, applicable to the Project Company.
(s) Site.
(i) There are no Encumbrances affecting the use or occupancy of the Project or the Site, other than Permitted Encumbrances. To the Knowledge of Seller, there are no soil, structural, subsurface or other natural or artificial conditions affecting the applicable Site that could reasonably be expected to materially and adversely affect the Project Company’s ability to conduct its operations on such real property materially in accordance with the Project Documents and the Base Case Model or otherwise have a
Material Adverse Effect, and the Site is otherwise sufficient for the construction, development, operation and maintenance of the Project. The portions of the Site on which the buildings, improvements and fixtures comprising the Project (the “Facilities”) are being built are not located in an area that has been identified by the Director of the Federal Emergency Management Agency as a special flood hazard area in which flood insurance has been delivered under the National Flood Insurance Act of 1968, as amended. The Project Company has good and valid fee simple, leasehold and easement or other real property interests in the Site and all such valid, irrevocable and permanent easements, rights of way and other property rights as are reasonably necessary for the construction, development, ownership, operation and maintenance of the Project for its intended purposes. The Real Property Documents listed on Schedule 2 are all of the agreements to which the Project Company is a party pertaining to Project or the Site and grant all rights sufficient in all material respects to enable (A) the Project to be located, constructed, operated, maintained, removed and replaced on the Site and (B) the Project Company to construct, operate, maintain, remove and replace the Project in accordance with all Governmental Approvals and Transaction Documents, including, without limitation, providing sufficient ingress and egress in connection with the construction, operation, maintenance, removal and replacement of the Project. Other than pursuant to the Real Property Documents listed on Schedule 2, the Project Company does not have any interest in real property, whether owned, leased or otherwise occupied or used, and the Project Company is not a party to any agreement to acquire or sell any interest in real property. The Real Property Documents are in full force and effect and are valid, binding and enforceable against the Project Company and the other parties thereto. The Project Company has not assigned any interest in the Real Property Documents, subleased or granted a sub-easement, in whole or in part, or otherwise granted any third party the right to use or occupy, to any portion of the Site or the appurtenances thereto, and there are no parties in possession of the Site that are not entitled to such possession, unless otherwise shown in any of the Project Contracts. All rents and monetary obligations due and payable by the Project Company under the Real Property Documents have been paid in full and the Project Company is not in breach or default beyond any applicable notice or cure periods of its obligations under the Real Property Documents. The Project Company is not in breach or default beyond any applicable notice or cure periods of its obligations, if any, under those documents and/or instruments listed in the Title Policy and not otherwise listed as a Real Property Document. Except as may be described in the Title Policy or shown on the ALTA Survey, to the Knowledge of Seller, there are no unrecorded interests in any portion of the Site, including oil, gas or other mineral rights leases, easements, options, rights to purchase, tenancies, licenses, occupancies, rights of possession claims, encroachments or prescriptive easements. All roads necessary for the construction, development, operation and maintenance of the Project have either been completed or the Project Company possesses all necessary real property rights for the construction and completion thereof. The Site is not subject to any conservation reserve program or other agricultural preserve program.
(ii) The Site is either (a) freely accessible directly from public streets, or (b) uses adjoining private land to access the same in accordance with valid, permanent,
irrevocable and appurtenant easements benefiting such land. To the Knowledge of Class B Member, there is no condition that would result in the termination or impairment of such access, and such access is sufficient for the operation of the Project.
(iii) With regard to the Real Property Documents and the Site: (i) the Project Company’s possession and quiet enjoyment of the Site has not been disturbed, Seller has not received written notice of any disputes with respect to any Real Property Documents, and, to the Knowledge of Seller, there are no facts or circumstances that would give rise to any disputes with respect to any Real Property Documents; (ii) no security deposit or portion thereof, if any, has been applied in respect of a breach or default under any Real Property Document that has not been redeposited in full; (iii) the other party to each Real Property Document is not in any way affiliated with Class B Member; and (iv) the Project Company has not collaterally assigned or granted any security interest in any of the Real Property Documents or any interest therein.
(t) Intellectual Property. The Project Company owns, has a valid license to or other contractual right to use all material intellectual property that is reasonably necessary to install, operate and maintain the Project. There are no pending Proceedings concerning any such intellectual property to which Seller is a party, and to the Knowledge of Seller, no such Proceeding is threatened. To the Knowledge of Seller, there is not now and has never been any infringement or misappropriation by Seller of any patent, trademark, trade name, domain name, service mark, copyright or trade secret that is owned by any third party.
(u) Warranties. When the Project reaches Substantial Completion, the Warranties and the warranty of the EPC Contractors under the EPC Contracts, the warranty of the Module Supplier under the Module Supply Agreements and the warranty of the Operator under the O&M Agreement will in each case be in full force and effect, have been assigned to or are directly for the benefit of the Project Company, are enforceable by the Project Company in all material respects, and will satisfy the standards in Exhibit C. (v) Payment of All Costs. As of the Effective Date, all costs and expenses then due and payable by the Project Company and, to the Knowledge of Seller, the AC Subsidiary, including all payments then due and payable under the relevant Material Project Documents, AC Subsidiary LLCA, Transaction Documents and Construction Financing Documents, have been paid.
(w) Mechanical Completion. The Project has achieved Mechanical Completion as of the Closing Date.
(x) Condemnation; Unrepaired Casualty. No condemnation is pending or, to the Knowledge of Seller, threatened with respect to all or part of the Project or the Site, and no unrepaired Substantial Casualty exists with respect to all or part of the Project or the Site.
(y) Brokers. None of Seller, the Project Company or their Affiliates has incurred any liability for any broker, agent or finder with respect to the Transaction Documents, Transaction or Project Documents.
(z) Banks and Accounts. Schedule 3.1(z) contains a true and correct list of the names of all banks and other financial institutions with which the Project Company currently has an account, deposit or safe deposit box, along with the account numbers and the names of the persons holding check signing or withdrawal power. (aa) Books and Records. True, correct and complete copies of all records of the Project Company have been delivered to the Company on the Effective Date. Such records have been maintained in accordance with good business practices.
(bb) Employees. The Project Company does not have and has not, since the Effective Date, had any employees, any “employee benefit plan” as defined in section 3(3) of ERISA or any liabilities or obligations in connection with such a plan.
(cc) Powers of Attorney. Except as set forth in the Construction Financing Documents, there are no outstanding powers of attorney executed by or with respect to the Project Company or the Project.
(dd) Prior Owner Obligations. Since the Acquisition Date, the Project has not been owned by a Person other than the Project Company.
(ee) Real Property. Seller has delivered true, complete and accurate copies of all of the Real Property Documents to the Company. Schedule 2 sets forth a true and complete list of (i) a description of all Real Property Documents, (ii) the street address and tax parcel number of such real property pertaining to each Real Property Document; (iii) the counterparties to each Real Property Document; and (iv) the use of the real property pertaining to each Real Property Document. Except as set forth on Schedule 2, (i) all available options to acquire additional real property interests contained in the Real Property Documents necessary to enable the Project to be owned, located, constructed, developed, operated, maintained, removed and replaced at the Site have been exercised, and (ii) the Real Property Documents provide all of the real property interests sufficient to (A) enable the Project to be owned, located, constructed, developed, operated, maintained, removed and replaced for a period of the Term (as such term is defined in the PPA) and (B) provide sufficient ingress to and egress from the Project for the construction, development, ownership, operation, maintenance, removal or replacement of the Project, all without any further consent or approval from any third party. Except as otherwise expressly provided herein, the Project Company neither owns nor leases any real property other than each of the Sites that are described in the Real Property Documents.
(ff) No Subsidiaries. Other than its minority interests in AC Subsidiary, the Project Company does not own any capital stock, security, partnership interest or other equity interest of any kind in any corporation, partnership, limited liability company, joint venture, association or other entity.
(gg) No Other Representations or Warranties. Seller is not relying on any representations or warranties whatsoever, express, implied, at common law, statutory or otherwise, except for the representations or warranties expressly set out in this MIPA and the other Transaction Documents to which it is a party.
3.2 Representations and Warranties of the Company. The following representations and warranties are made by the Company to Seller on the Effective Date, unless specifically limited to only certain dates:
(a) Organization, Good Standing, Authority, Etc. The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite power and authority to own, lease and operate its properties and to carry on its business as being conducted.
(b) No Conflicts. The execution and delivery by the Company of the Transaction Documents to which it is a party do not, and the performance of its obligations under such agreements, will not (i) violate any laws, statutes, rules, regulations, ordinances, judgments, settlements, orders, decrees, injunctions, and writs of any Governmental Authority having jurisdiction over the Company, (ii) conflict with or cause a breach of any provision in the charter, bylaws or other organizational document of the Company, or (iii) cause a breach of, constitute a default under, cause the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any authorization, consent, waiver or approval under any contract, license, instrument, decree, judgment or other arrangement to which the Company is a party or under which it is bound or to which any of its Assets are subject (or result in the imposition of an Encumbrance upon any such Assets) except (in the case of clause (i), (ii) and (iii)) for any such event that would not reasonably be expected to have a Material Adverse Effect or adversely affect the ability of the Company to timely execute, deliver and perform any of its material obligations under this MIPA.
(c) Absence of Litigation. There is no action, suit, claim, investigation or proceeding of any kind pending or, to the knowledge of the Company, threatened, before any court, arbitration panel or Governmental Authority having jurisdiction against the Investor that could reasonably be expected to adversely affect the Company’s ability to execute, deliver and perform its obligations under this MIPA and each Transaction Document to which it is a party and consummate the Transaction.
(d) Authority; Enforceability. The Company has the requisite power and authority to execute, deliver and enter into the Transaction Documents to which it is a party and to perform its obligations thereunder and consummate the Transaction. The execution and delivery by the Company of the Transaction Documents to which it is a party and the consummation of the Transaction have been duly authorized by all necessary entity action. Each Transaction Document to which the Company is a party has been duly authorized, validly executed and delivered and constitutes the legal, valid and binding obligations of the Company, enforceable against such person in accordance with its terms, except as its enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and general equitable principles (whether in a proceeding in equity or at law).
(e) Consents and Approvals. No filings, consents, waivers, authorizations or approvals are required for the Company to execute, deliver and perform its obligations under the Transaction Documents to which it is a party, or for the consummation of the Transaction, other
than those already obtained or made, those to be obtained or made in the ordinary course of business or those that are not required to be obtained or made prior to such date.
(f) Brokers. None of the Company or its Affiliates has retained or incurred any liability for any other broker, agent or finder with respect to the Transaction Documents or the Transaction.
(g) No Other Representations or Warranties. The Company is not relying on any representations or warranties whatsoever, express, implied, at common law, statutory or otherwise, except for the representations or warranties expressly set out in this MIPA and the other Transaction Documents to which it is a party.
(h) Compliance with Applicable Law.
(i) (A) The Company is and always has been in material compliance with all Applicable Law and Governmental Approvals and (B) the Company has not received any written notice from any Governmental Authority of an actual or potential material violation of any Applicable Law with respect to the Company, or the Transaction, which violation has not been remedied or cured.
(ii) None of the Company or any Covered Entity relating to the Company is a Sanctioned Person, has any of its Assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person or does business in or with, or derives any of its operating income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority. The proceeds of any Transaction Document will not be used to fund any operations in, finance any investments or activities in or make any payments to a Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority. The funds used for the Project are not derived from any unlawful activity. The Company and each Covered Entity relating to the Company is in compliance with and does not engage in any dealings or transactions prohibited by any Anti-Terrorism Laws.
ARTICLE FOUR
CONDITIONS PRECEDENT
4.1 Closing Date Deliverables.
(a) On or prior to the Closing Date, Seller shall deliver, or cause to be delivered, to the Company:
(i) Officer’s Certificate. A certificate duly executed by an authorized officer of Seller dated as of the Closing Date certifying (i) that attached thereto is a true, correct and complete copy of the certificate of formation of Seller, as amended; (ii) as to the authority and incumbency of the officers of Seller executing this MIPA and the
Assignment Agreement; (iii) that attached thereto is a certificate of good standing of Seller from its jurisdiction of formation; and (iv) that attached thereto are true, correct and complete copies of the limited liability company agreement and certificate of formation of Project Company.
(ii) FIRPTA Certificate. An affidavit of non-foreign status that complies with Section 1445 of the Code and the Treasury Regulations promulgated thereunder duly executed by Seller (or, if Seller is disregarded as separate from its owner for federal income tax purposes, the Person that is treated as the owner of Seller’s assets for federal income tax purposes); provided that a valid executed IRS Form W-9 shall be acceptable for satisfying the requirements of this Section 4.1(a)(ii). (iii) Books and Records. All original books and records of Project Company.
(iv) Beginning of Construction Certificate. The Beginning of Construction Certificate, executed by the Seller.
(b) On or prior to the Closing Date, the Company shall deliver, or cause to be delivered, to Seller:
(i) Officer’s Certificate. A certificate duly executed by an authorized officer of the Company dated as of the Closing Date certifying (i) that attached thereto is a true, correct and complete copy of the certificate of formation of the Company, as amended; (ii) as to the authority and incumbency of the officers of the Company executing this MIPA and the Assignment Agreement; and (iii) that attached thereto is a certificate of good standing of the Company from its jurisdiction of formation.
(ii) FIRPTA Certificate. An affidavit of non-foreign status that complies with Section 1445 of the Code and the Treasury Regulations promulgated thereunder duly executed by the Company (or, if the Company is disregarded as separate from its owner for federal income tax purposes, the Person that is treated as the owner of the Company’s assets for federal income tax purposes); provided that a valid executed IRS Form W-9 shall be acceptable for satisfying the requirements of this Section 4.1(b)(ii). (iii) Approvals. Copies of all consents and approvals (if any) required to be obtained, made or delivered by the Company in connection with the transactions contemplated by this MIPA.
ARTICLE FIVE
TAXES
5.1 Transfer Taxes. The responsibility for paying any Transfer Taxes imposed by Applicable Law by reason of the transfer of the Membership Interests in Project Company to the Company as provided herein shall be borne by Seller. The Parties shall cooperate in obtaining all
applicable exemptions from Transfer Taxes that are allowable under Applicable Law. Seller shall file all necessary documentation and Tax Returns with respect to such Transfer Taxes and the Company shall provide such cooperation in connection with the preparation and filing of such documentation and Tax Returns as may be reasonably requested by Seller.
5.2 Tax Matters. Seller shall have responsibility for, and shall pay or cause to be paid when due, any and all Taxes imposed on the assets of Project Company or on Project Company with respect to any Tax period (or portion thereof) ending on or before the Closing Date. In the case of any Taxes that are imposed on a periodic basis and relate to Tax periods that begin before and end after the Closing Date (each a “Straddle Taxable Period”) with respect to the Project Assets or Project Company, the portion of such Tax which related to the portion of such taxable period ending on the Closing Date shall (a) in the case of any Taxes other than the Taxes based upon or related to income or receipts, be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on the Closing Date and the denominator of which is the number of days in the entire taxable period, and (b) in the case of any Tax based upon or related to income or receipts, be deemed equal to the amount which would be payable if the relevant taxable period ended on the Closing Date. Seller shall have responsibility for, and shall pay or cause to be paid when due, any and all Taxes with respect to a Straddle Taxable Period (“Straddle Period Taxes”) relating to the Project Assets or Project Company that, in each case, are attributable to the portion of the Straddle Taxable Period beginning before and ending on the Closing Date, and the Company shall have responsibility for, and shall pay or cause to be paid when due, any and all such Straddle Period Taxes for the portions of any Straddle Taxable Periods beginning after the Closing Date. Neither Seller nor any Affiliate of Seller (other than the Class B Member following the MC Funding Date) will claim on any Tax Return any depreciation or amortization deductions or the ITC with respect to ownership or operation of the Project or any property that is part of the Project, including the Project Assets, other than as a result of the ownership of the Class B Units (as defined in the LLCA) by Class B Member (or its regarded owner for U.S. federal income tax purposes).
ARTICLE SIX
INDEMNIFICATION AND REMEDIES
6.1 General. From and after the Closing Date, Seller shall defend, indemnify and hold harmless the Company Indemnified Parties from and against, and without duplication, any and all Damages imposed upon, suffered or incurred by any Company Indemnified Party by reason of, arising out of or resulting from: (a) any inaccuracy, breach or failure of any representation or warranty by Seller set forth in this MIPA; (b) any breach of any covenant or obligation of Seller set forth in this MIPA; (c) Transfer Taxes for which Seller is liable; or (d) any Taxes of Seller for any taxable period.
6.2 Limitations on Liability.
(a) Overall Limitations. Notwithstanding any other provision of this MIPA, Seller’s aggregate liability under this Article Six shall not exceed one-hundred percent (100%) of the Cash Purchase Price paid to Seller, plus all out of pocket costs, expenses or fees (including
reasonable and documented attorneys’ fees and costs) incurred in connection with collection of amounts under Section 6.1 and enforcement of this MIPA, except that there shall be no limitation on the liability of Seller for claims for Damages resulting from a breach of a Fundamental Representation, fraud, gross negligence or willful misconduct of Seller or any Affiliate of Seller, any Third Party claim, environmental claims, any Recapture Event, any tax gross-up, or any costs of collection and enforcement by any Company Indemnified Party. (b) Survival. No indemnification claim may be made under Section 6.1(a) based on the inaccuracy, breach or failure of any representation or warranty after a period of fifteen (15) months following the Effective Date; provided that an indemnification claim may be brought with respect to (i) any Fundamental Representation and any Tax Loss or Tax Representation, within sixty (60) days after the expiration of the applicable statute of limitations (giving effect to any waivers or extensions thereof) and (ii) any Environmental Representation, within a period of five (5) years following the Effective Date; and provided, further, that if written notice of an indemnification claim has been given by a Company Indemnified Party on or prior to the last day of the respective foregoing period, then the obligation of Seller to indemnify such Company Indemnified Party pursuant to this Article Six shall survive with respect to such claim until such claim is finally resolved. 6.3 Procedure for Indemnification.
(a) Notice of Claim. After (i) receipt by a Company Indemnified Party of any claim or demand asserted, or any notice of the commencement of any Proceeding, by any Third Party or (ii) the occurrence of any other Damages, in either case as to which indemnification may be sought by any Company Indemnified Party under this Article Six, such Company Indemnified Party shall give prompt written notice thereof to Seller, specifying the nature of such claim, demand or Proceeding and the amount or estimated amount of Damages to the extent determinable, which estimate shall not be binding on the Company Indemnified Party; provided that a failure of a Company Indemnified Party to give timely notice shall not affect its rights to indemnification under this Article Six, except to the extent that Seller has been actually prejudiced by such failure. (b) Conduct of Claim. Seller shall have the right, at its option and at its own expense, to be represented by counsel of its choice and to participate in, or take control of, the defense, negotiation and/or settlement of such claim, demand or Proceeding that relates to any amounts indemnifiable or potentially indemnifiable under this Article Six; provided that the Company Indemnified Party may participate in any such Proceeding with counsel of its choice (which shall be at its own expense) if (i) Seller chooses counsel not reasonably acceptable to such Company Indemnified Party, or (ii) in the reasonable opinion of such Company Indemnified Party and its counsel, such Proceeding involves the potential imposition of criminal liability upon such Company Indemnified Party or a conflict of interest between such Company Indemnified Party and Seller. The Company Indemnified Party shall have a right to notice of any settlement, and Seller shall not execute or otherwise agree to any settlement that (A) provides for other than solely monetary payment without the Company Indemnified Party’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed or (B) does not include as an unconditional term thereof the giving of a release from all liability with respect to such claim by
each claimant or plaintiff to each Company Indemnified Party that is or may be subject to the Third Party claim, without the Company Indemnified Party’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. If Seller elects not to defend or settle such claim, demand or Proceeding and the Company Indemnified Party defends, settles or otherwise deals with any such Proceeding, the Company Indemnified Party shall provide fifteen (15) days’ written notice of any settlement to Seller and shall act reasonably and in accordance with the Company Indemnified Party’s good faith business judgment. Notwithstanding the foregoing, the Company Indemnified Party shall have the right to pay or settle any such claim; provided that in such event the Company Indemnified Party shall waive any right to indemnity therefor by Seller. Seller and the Company Indemnified Party shall cooperate fully with each other in connection with the defense, negotiation or settlement of any such claim, demand or Proceeding.
(c) Payment of Third Party Claims. After final judgment or award shall have been rendered by a Governmental Authority of competent jurisdiction and the expiration of the time in which to file an appeal therefrom, or a settlement shall have been consummated, or the Company Indemnified Party and Seller shall have arrived at a mutually binding agreement with respect to each separate matter indemnified by Seller, the Company Indemnified Party shall forward to Seller notice of any sums due and owing by Seller with respect to such matter, and Seller shall pay such sums within fifteen (15) days after the date of receipt of such notice.
(d) Access to Information. If any claim is made by a Third Party against a Company Indemnified Party, the Company Indemnified Party shall use commercially reasonable efforts to make available to Seller those partners, members, officers and employees whose assistance, testimony or presence is necessary to assist Seller in evaluating and defending such claims; provided that any such access shall be conducted in a manner as not to interfere unreasonably with the operations of the business of the Company Indemnified Party.
6.4 Tax Treatment of Indemnification Payments. Except as otherwise required by Applicable Law, the Parties shall treat indemnification payments pursuant to Section 6.1 as adjustments to the Purchase Price for Tax purposes. 6.5 RESERVED.
6.6 No Duplication. The Company, for itself, and the Company Indemnified Parties agree that, notwithstanding anything to the contrary herein or in any other agreement, any liability for indemnification under Section 6.1 shall be determined without duplication of recovery by the Company and the Company Indemnified Parties under this MIPA, the ECCA, the LLCA or any other Transaction Document. Without limiting the generality of the prior sentence, if a statement of facts, condition or event constitutes a breach of more than one cause, representation, warranty, covenant or agreement which is subject to an indemnification obligation in Section 6.1, only one recovery thereof shall be allowed. 6.7 Sole Remedy. Each Company Indemnified Party will not bring any action or proceeding, or take any other action, in respect of indemnification claims to the extent recoverable and addressed by the payment of money except as provided by this Article Six and each Company Indemnified Party hereby agrees that the only relief and remedy available to each Company
Indemnified Party in respect of indemnification claims to the extent recoverable and addressed by the payment of money shall be as set forth in this Article Six; provided, that (a) the foregoing limitation shall not apply to a cause of action relating to fraud or willful misconduct, in relation to any breach, default, or nonperformance by any party or any of its Affiliates of its or their respective representations and warranties, covenants or obligations, made in whatever capacity pursuant to, and under the terms of, this MIPA, or any certificate, instrument, or document delivered pursuant hereto and (b) no Company Indemnified Party has waived any rights to pursue non monetary or equitable remedies under this MIPA or the other Transaction Documents, or to pursue any other remedy expressly provided herein. ARTICLE SEVEN
GENERAL PROVISIONS
7.1 Notices. All notices and communications will be in writing and deemed given if delivered by email (subject to confirmation of receipt), delivered personally, by a nationally recognized overnight courier, or mailed by registered or certified mail (return receipt requested) (or if any such delivery is refused) to the Parties at the following addresses:
| | | | | | | | |
| If to Seller, to: |
| | |
| | MN8 DevCo 3 LLC |
| | c/o MN8 Energy LLC |
| | 1155 Avenue of the Americas, 27th Floor |
| | New York, NY 10036 |
| | Attn: Legal |
| | Email: notices@mn8.com |
| | |
| With a copy to: |
| | |
| | Holland & Knight LLP |
| | 811 Main St, Suite 2500 |
| | Houston, TX 77002 |
| | Attn: Ram Sunkara and Elizabeth Crouse |
| | Email: Ram.Sunkara@hklaw.com; Elizabeth.Crouse@hklaw.com |
| | |
| If to the Company, to: |
| | |
| | American Beech Solar LLC |
| | c/o MN8 Energy LLC |
| | 1155 Avenue of the Americas, 27th Floor |
| | New York, NY 10036 |
| | Attn: Legal |
| | Email: notices@mn8.com |
Each Party may change the place to which notices are sent or delivered or to specify one additional address to which copies of notices may be sent, in either case by similar notice sent or delivered in like manner to the other Party.
7.2 Amendment and Waiver. Neither this MIPA 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). No failure or delay on the part of a Party hereto in the exercise of any right hereunder will operate as a waiver thereof, nor will any single or partial exercise of any such right preclude any other or further exercise thereof or of any other right.
7.3 Binding Nature; Assignment. This MIPA will bind and inure to the benefit of the Parties hereto and their respective successors and legal representatives and permitted assigns. No Party will assign its rights, interests or obligations under this MIPA (except by operation of law), without the prior written consent of the other Parties hereto, and any such assignment contrary to the terms hereof will be null and void and of no force and effect; provided, this MIPA may be collaterally assigned to the Collateral Agent pursuant to the Construction Financing Documents (as used herein, as such terms are defined in the ECCA) and assigned to the Collateral Agent and any Subsequent Transferee (as used herein, as such term is defined in the Tax Equity Consent) that has succeeded to Class B Member’s rights under the LLCA, the ECCA and this MIPA in connection with a Transfer (as used herein, as such term is defined in the LLCA) upon foreclosure and an initial Transfer after such foreclosure (or in lieu of such foreclosure) under an Encumbrance (as such term is defined in the LLCA) held by the Collateral Agent pursuant to the Construction Financing Documents, so long as in each case the Collateral Agent, any Subsequent Transferee and any Transfer upon foreclosure and any such initial Transfer after foreclosure of any such Encumbrance (or Transfer in lieu of such foreclosure) complies with the express terms and conditions of the Tax Equity Consent with respect to any Transfer upon foreclosure and any such initial Transfer after foreclosure of the Encumbrance (or Transfer in lieu of such foreclosure) held by the Collateral Agent in the LLCA, the ECCA and the MIPA.
7.4 GOVERNING LAW. THIS MIPA WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CHOICE OF LAW RULES (OTHER THAN SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
7.5 Submission to Jurisdiction. Each of the Parties irrevocably consents to the non-exclusive jurisdiction of the courts of the State of New York, Borough of Manhattan and of any federal court located in the Southern District of New York in connection with any suit, action or other proceeding arising out of or relating to this MIPA or the transactions contemplated hereby, agrees to waive any objection to venue in the State and County of New York, and agrees that, to the extent permitted by law, service of process in connection with any such proceeding may be effected by mailing in the same manner provided in Section 7.1. Each Party hereto hereby waives, to the fullest extent permitted by Applicable Law, any right it may have to a trial by jury in respect of any litigation directly or indirectly arising out of, under or in connection with this MIPA.
7.6 Entire Agreement. This MIPA constitutes the entire understanding of the Parties with respect to the subject matter hereof, and supersedes all prior statements or agreements, whether oral or written, among the Parties with respect to such subject matter.
7.7 Counterparts; Electronic Signatures. This MIPA may be executed in counterparts (which may be delivered by use of a facsimile machine or an e-mail which attaches a portable document format (.pdf) document), each of which will be an original, but each of which, when taken together, will constitute one and the same instrument. The words “execution”, “execute”, “signed”, “signature”, and words of like import in or related to any document signed or to be signed in connection with this MIPA 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 Parties, 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.
7.8 No Third Party Beneficiaries. This MIPA is solely for the benefit of the Parties and their respective successors and permitted assigns, and except as expressly provided in Article Six, this MIPA shall not otherwise be deemed to confer upon or give to any other third party any right, claim, cause of action or other interest herein. 7.9 Confidentiality. The confidentiality provisions of Section 7.7 of the LLCA apply to this MIPA, mutatis mutandis, as though they were set out in full in this MIPA, except that (i) references to the LLCA therein shall be construed as references to this MIPA, (ii) references to the Parties, any Party, such Party, each Party, a Party and no Party therein shall each be construed as references to the Parties as defined in this MIPA and (iii) references to other Party, other Parties and another Party therein shall each be construed as references to the Parties, collectively, as defined in both this MIPA and the LLCA.
7.10 Further Assurances. Each Party agrees to furnish or cause to be furnished to the other Party, upon request, as promptly as practicable, but subject to any confidentiality restrictions and attorney-client privilege, such information and assistance (including access to books and records and any additional documents) relating to the Project or Project Company as is reasonably necessary for: (i) the preparation of any Tax Return or the prosecution or defense against any action with respect to Taxes; or (ii) the initiation or defense of any action to which the requesting Party is a party or is subject, provided that no such obligation shall exist with respect to any action in which the Parties (or their Affiliates) are adverse to one another. If after the Closing Date, there are any documents necessary in connection with any action relating to Taxes, any litigation or investigation or any other matter requiring any such books and records (other than as provided in the prior sentence), each Party will make available to the other Party, during normal business hours after reasonable advance notice, all books and records retained and remaining in existence. In addition, if after the Closing Date any further action is reasonably necessary to carry out the purposes of this MIPA and the transactions contemplated hereby, each of the Parties will take such
further reasonable actions (including the execution and delivery of such further instruments and documents) as the other Party may reasonably request in writing; provided that the requesting Party shall be required to pay any out of pocket, third-party expenses incurred by the other Party in complying with such request; and provided further that no Party will be required to take any action that, in the opinion of counsel, would constitute a violation of any Applicable Law.
7.11 Equitable Remedies. Each Party acknowledges that the other would suffer irreparable damage and would not have an adequate remedy at law for money damages in the event that any of the covenants or agreements set forth in this MIPA were not performed by such other Party in accordance with its terms, and therefore each Party agrees that the other Party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to specific performance, injunctive and other equitable relief, without the necessity of posting of a bond or other security.
7.12 Consequential Damages. NO PARTY SHALL BE LIABLE (WHETHER IN CONTRACT, TORT, STRICT LIABILITY, EQUITY OR OTHERWISE) FOR ANY SPECIAL, INDIRECT, PUNITIVE, EXEMPLARY, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER OR NOT FORESEEABLE, INCLUDING LOST PROFITS OR REVENUES AND ANY OTHER DAMAGES WHICH CANNOT BE READILY ASCERTAINED AND QUANTIFIED, FOR ANY BREACH OF A REPRESENTATION OR WARRANTY UNDER THIS MIPA, OTHER THAN SPECIAL, INDIRECT, PUNITIVE, EXEMPLARY, INCIDENTAL OR CONSEQUENTIAL DAMAGES AWARDED TO ANY THIRD PARTY WHOSE CLAIM IS SUBJECT TO INDEMNIFICATION IN ACCORDANCE WITH ARTICLE SIX. THE OBLIGATIONS OF THE PARTIES UNDER THIS MIPA ARE OBLIGATIONS OF THE PARTIES ONLY AND NO RECOURSE SHALL BE AVAILABLE UNDER THIS MIPA AGAINST ANY OFFICER, DIRECTOR, MANAGER, MEMBER, PARTNER OR AFFILIATE OF ANY PARTY. [Signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this MIPA to be duly executed as of the day and year first above written.
| | | | | | | | |
| MN8 DEVCO 3 LLC |
| | |
| | |
| By: | |
| Name: |
| Title: |
| | |
| | |
| AMERICAN BEECH SOLAR HOLDINGS LLC |
| | |
| | |
| By: | |
| Name: |
| Title: |
[Signature Page to American Beech Membership Interest Purchase Agreement]
EXHIBIT A
DEFINITIONS
“AC Subsidiary” means AC1 ASOA LLC, a Delaware limited liability company.
“AC Subsidiary LLCA” means that certain Second Amended and Restated Limited Liability Company Agreement of AC1 ASOA LLC, dated as of January 10, 2023, by and among the Project Company and the other parties from time to time thereto.
“Affiliate” means, with respect to a Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is Controlled by or under common Control with such first Person; provided, that, with respect to the Company and the Project Company, “Affiliate” shall not include the Investor or any other Person that, directly or indirectly through one or more intermediaries, Controls, is Controlled by or under common Control with the Investor.
“Affiliate Contract” means any Contract between or among the Project Company, on the one hand, and any Affiliate of Seller, on the other hand.
“ALTA Survey” means, an ALTA/NSPS land title survey of the real property interests comprising the Site, including all easements, related rights of way and other appurtenances thereto, whether owned, licensed or leased, certified to the Title Company, the Company, the Project Company and the Investor, and as revised, updated, or reissued pursuant to the terms of the ECCA.
“Anti-Terrorism Laws” means any laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering, or bribery, all as amended, supplemented or replaced from time to time.
“Applicable Law” means any federal, state or local treaty, constitution, law, statute, ordinance, rule, injunction, writ, order, decree, regulation or other directive that is legally binding and has been enacted, issued or promulgated in final form by any Governmental Authority, including all protocols and other binding rules of any relevant independent system operator.
“Appraised Value” means the fair market value of the Project as set forth in the Appraisal (as defined in the ECCA) delivered in connection with the MC Funding Date (as defined in the ECCA) pursuant to the ECCA; provided, however, that any development premium shall not exceed 20% of the fair market value of the Project (exclusive of the development premium), taking into consideration any other developer fees or payments under any construction service agreements.
“Appraiser” means Marshall & Stevens Incorporated.
“Acquisition Date” means October 29, 2024.
“Asset Management Agreement” means that certain Management Services Agreement, dated as of August 27, 2025, by and between the Project Company and the Asset Manager.
“Asset Manager” means GSRP Services LLC.
“Assets” means all right, title and interest of a Person in land, properties, buildings, improvements, fixtures, foundations, assets and rights of any kind, whether tangible or intangible, real, personal or mixed, including contracts, leases, easements, equipment, systems, books, data, reports, studies and records, proprietary rights, intellectual property, Governmental Approvals, rights under or pursuant to all warranties, representations and guarantees, cash, accounts receivable, deposits and prepaid expenses.
“Assignment Agreement” means an assignment agreement substantially in the form attached as Exhibit B. “Backleverage Financing Documents” is defined in the LLCA.
“Bankruptcy” means, with respect to any Person: (a) that such Person (i) files in any court pursuant to any statute of the United States or of any state a voluntary petition in bankruptcy or insolvency, (ii) files a petition or answer seeking for such Person a reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law or the appointment of a receiver or a trustee of all or substantially all of such Person’s Assets, (iii) makes a general assignment for the benefit of creditors, (iv) becomes the subject of an order for relief or is declared insolvent in any federal or state bankruptcy or insolvency proceedings, (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against such Person in a proceeding of the type described in subclauses (i) through (iv) of this clause (a), (vi) admits in writing its inability to pay its debts (other than debts subject to a bona fide dispute) as they fall due or (vii) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for all or substantially all of its Assets; or (b) a petition in bankruptcy or insolvency, or a proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any law has been commenced against such Person, and (i) 60 days have expired since the service of such petition on the Person without dismissal thereof or (ii) with respect to which, without such Person’s consent or acquiescence, a trustee, receiver, or liquidator of such Person or of all or substantially all of such Person’s properties has been appointed and (x) 60 days have expired without the appointment’s having been vacated or stayed, or (y) 60 days have expired after the date of expiration of a stay, if the appointment has not previously been vacated; or (c) if a Member (as defined in the ECCA), the whole or any material portion of such Person’s Membership Interest is levied or attached, and such levy or attachment is not released or discharged within 60 days.
“Base Case Model” means the financial model attached as Exhibit B to the ECCA as updated in accordance with the express terms of the ECCA and the LLCA. “Beginning of Construction Certificate” has the meaning given to the term Beginning of Construction Certificate (MC Funding) in the ECCA except that such certificate shall be given by the Seller (and not the Class B Member).
“Block” has the meaning given to the term “Circuit” in the PV EPC Contract.
“Cash Purchase Price” has the meaning set forth in Section 2.2(a).
“Class B Member” has the meaning set forth in the MIPA recitals.
“Closing Date” means the MC Funding Date pursuant to (and as defined in) the ECCA.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral Agent” means Natixis, New York Branch or any other Person serving in the role of collateral agent under the Construction Financing Documents and the Backleverage Financing Documents.
“Company” has the meaning set forth in the MIPA preamble.
“Company Indemnified Parties” means, collectively, the Company and its Affiliates and their respective members, managers, partners, shareholders, officers, directors, employees, consultants, agents advisors, successors and assigns.
“Compliance Authority” means the (a) U.S. Department of the Treasury /Office of Foreign Assets Control, (b) U.S. Department of the Treasury /Financial Crimes Enforcement Network, (c) U.S. Department of State /Directorate of Defense Trade Controls, (d) U.S. Department of Commerce /Bureau of Industry and Security, (e) U.S. Internal Revenue Service, (f) U.S. Department of Justice and (g) U.S. Securities and Exchange Commission.
“Construction Financing Agreement” means that certain Credit Agreement, dated as of December 31, 2024, by and among MN8 DevCo 3 LLC and MN8 Bleeker LLC, as borrowers, Natixis, New York Branch, as administrative agent and collateral agent, and the financial institutions party thereto as lenders and LC issuers, as amended, amended and restated, supplemented, or otherwise modified from time to time.
“Construction Financing Documents” is defined in the LLCA.
“Construction Management Agreement” means that certain Construction Management and Administrative Services Agreement, dated October 29, 2024, between the Project Company and the Construction Manager.
“Construction Manager” means BayWa r.e. Solar Projects LLC.
“Contract” means any written agreement, contract, lease, sublease, promise, evidence of indebtedness (including any promissory note), mortgage, indenture, security agreement, bond, guaranty, deed of trust, purchase order, letter of credit, license, sublicense, instrument, obligation, commitment, or undertaking of any nature, but not including any Governmental Approvals.
“Control” means the possession, directly or indirectly, of either of the following: (a) (i) in the case of a corporation, more than 50% of the outstanding voting securities, (ii) in the case of a limited liability company, partnership, limited partnership or joint venture, the right to more than 50% of the distributions (including liquidating distributions) or more than 50% of the economic or outstanding voting securities, (iii) in the case of a trust or estate, including a business trust, more than 50% of the beneficial interest and (iv) in the case of any other entity, more than 50% of the
economic or beneficial interest, or (b) 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. “Controlled” and “Controlling” each have a correlative meaning.
“Cost Segregation Report” means the cost segregation report prepared by the Appraiser, and included as part of the Appraisal, allocating the Company’s basis in the Project among the assets of the Project (including the portion that is eligible for the ITC).
“Covered Entity” means any Person and its Affiliates.
“Damages” means any and all judgments, awards, claims, actions, demands, liabilities, causes of action, lawsuits, suits, proceedings, damages (including liquidated damages), losses (including amounts paid in settlement of claims), Taxes, Tax Losses, costs and expenses (including litigation costs and documented attorneys’ and experts’ fees and expenses), assessments, fines, penalties, settlements, administrative orders or injunctions (including any loss of profits or consequential, punitive, incidental or special damages recovered by any Third Party, but excluding loss of future profits or consequential, punitive, incidental or special damages asserted by any Party or an Affiliate; provided, that lost ITCs and other lost tax benefits contemplated by the Base Case Model shall not constitute lost future profits or consequential, punitive, incidental or special damages), including interest, penalties, disbursements and costs of investigations, deficiencies, levies, duties and imposts.
“Data Site” means that certain data room named “American Beech” located on https://app.idealsvdr.com.
“Disqualified Entity” is defined in the LLCA.
“ECCA” has the meaning set forth in the MIPA recitals.
“Effective Date” has the meaning set forth in the MIPA preamble.
“Encumbrance” means any lien (statutory or otherwise), mortgage, deed of trust, security deed, deed to secure debt, claim, option, lease, occupancy or use agreement, grant, right of way, charge, easement, charge, pledge, security interest, hypothecation, assignment, restriction (whether on voting, sale, transfer or disposition), purchase right or option, right of first refusal, encroachment, deficiency, defect, adverse claim or other encumbrance of any kind or nature, whether voluntary or involuntary, or imposed by law (including any agreement to give any of the foregoing or any conditional sale or other title retention agreement), understanding or otherwise, and whether or not of record, impairing or adversely affecting the title to real or personal property (including membership interests).
“Energy Management Services Agreement” has the meaning given in the LLCA.
“Environmental Claim” means any suit, action, notice of violation or non-compliance, investigation, notice of liability or potential liability, consent order, consent decree, consent agreement, or proceeding before any Governmental Authority or arbitral body, or otherwise
brought or made by a Governmental Authority relating to the Project or the Project Company: (a) arising pursuant to any Environmental Law; (b) in connection with any actual or alleged violation of, or liability pursuant to, any Environmental Law; (c) in connection with the presence or Release of, or exposure to, any Hazardous Substance, including claims to report, clean up, remove, remediate, contain, confine, excavate, treat, monitor, assess, evaluate, investigate, delineate, study, test, analyze or in any other way address Hazardous Substances in the environment, including the Project Site; or (d) in connection with any actual or alleged damage, injury, threat or harm to: (i) health or safety regulated under any Environmental Law; (ii) natural resources; (iii) endangered, threatened, listed or protected species or habitat; or (iv) the environment.
“Environmental Law” means any Applicable Law (both statutory and common law) pertaining to, regulating, relating to or imposing liability, standards or obligations of conduct concerning pollution or protection of health, safety (including the health and safety of workers under the U.S. Occupational Safety and Health Act of 1970 (29 U.S.C. §§ 651 et seq.)), the environment, wildlife, wildlife habitat or natural resources, including without limitation (a) any Applicable Law relating to any actual or threatened emission, discharge, Release, manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of any hazardous waste (as defined by 42 U.S.C. § 6903(5)), hazardous substance (as defined by 42 U.S.C. § 9601(14)), hazardous material (as defined by 49 U.S.C. § 5102(2)), toxic pollutant (as listed pursuant to 33 U.S.C. § 1317), pollutant or contaminant (as pollutant or contaminant is defined in 42 U.S.C. § 9601(33)), or oil (as defined by 33 U.S.C. § 2701(23)) and (b) the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§ 9601 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.), and the Endangered Species Act of 1973 (16 U.S.C. §§ 1531 et seq.), with any amendments or reauthorization thereto or thereof, and any and all regulations promulgated thereunder, and all analogous state and local counterparts or equivalents.
“Environmental Representations” means the representations set forth in Section 3.1(p). “EPC Contractor” means, individually or collectively as the context may require, the HV EPC Contractor and the PV EPC Contractor.
“EPC Contracts” means the HV EPC Contract and the PV EPC Contract.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Exempt Wholesale Generator” means an “exempt wholesale generator” under PUHCA and the implementing regulations of FERC at 18 C.F.R. Part 366.
“FERC” means the Federal Energy Regulatory Commission or any successor agency.
“Final Completion” has the meaning given in the applicable EPC Contract.
“First Installment” has the meaning set forth in Section 2.2(b)(i).
“FPA” means the Federal Power Act, as amended, and FERC’s rules and regulations thereunder.
“Fundamental Representation” means each of the representations and warranties made by the Seller pursuant to Sections 3.1(a), 3.1(b), 3.1(d) and 3.1(f)(i). “GAAP” means United States generally accepted accounting principles as in effect from time to time, applied on a consistent basis.
“Governmental Approvals” means filings and registrations with, and licenses, permits, notices, approvals, grants, easements, exemptions, variances and authorizations from, any Governmental Authority, other than those licenses, permits, notices, approvals, grants, easements, exemptions, variances and authorizations that are ministerial in nature and can be obtained in the ordinary course of business.
“Governmental Authority” means any foreign, domestic, federal, territorial, state or local governmental or quasi-governmental authority, court, commission, board, bureau, agency or instrumentality, or any regulatory, administrative or other department, agency, or any political or other subdivision, department or branch of any of the foregoing, and any taxing authority and any electric reliability organization, regional transmission organization or independent system operator, including FERC, NERC, PJM, and NCUC or any successor thereto, in each case, with legal jurisdiction over the matter or Person in question.
“Hazardous Substances” means all substances, materials, or chemicals (whether solid, liquid or gaseous) that (a) require removal, remediation or reporting under any Environmental Law or (b) are defined, listed, classified, or regulated as a “pollutant,” “contaminant,” “hazardous material,” “hazardous substance,” “hazardous waste,” “toxic substance,” or any word, term, or phrase of similar meaning or regulatory effect under any Environmental Law. Hazardous Substances include asbestos or asbestos containing materials, radioactive materials, lead, polychlorinated biphenyls, any petroleum or petroleum product, mold, mycotoxins, urea formaldehyde foam insulation and radon gas.
“HV EPC Contract” means that certain HV Balance of Plant Agreement, dated as of September 27, 2024, by and between the Project Company and the HV EPC Contractor, as supplemented by Third Amended and Restated Limited Notice to Proceed, dated August 30, 2024.
“HV EPC Contractor” means RES America Construction Inc.
“Indebtedness” means (a) any indebtedness for borrowed money; (b) any indebtedness evidenced by any note, bond, debenture, mortgage or other debt instrument or debt security; (c) amounts owing as the deferred purchase price for the purchase of property or services other than accounts payable incurred in the ordinary course of business which are less than thirty (30) days past due; (d) liabilities under any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement or other similar agreement designed to protect the Project Company against fluctuations in interest rates or other currency fluctuations and all net ordinary course settlement or other obligations under any other hedging
arrangement; (e) all contingent reimbursement obligations with respect to letters of credit; (f) any obligations under leases which are or should be, in accordance with GAAP, recorded as capital leases, conditional sales contracts and other similar title retention instruments whether short term or long term; (g) all obligations to purchase securities (or other property) which arise out of or in connection with the sale of the same or substantially similar securities (or property); (h) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to acquired property (even though the rights and remedies of the seller or lender under such agreement are limited to repossession or sale of such property); (i) any obligations of the types referred to in clauses (a) – (h) secured by a lien on any property or Assets of the Project Company and/or any off-balance sheet financings, whether or not such indebtedness is assumed by such Person or is non-recourse to such Person; and (j) all guarantees (or obligations that are substantially the economic equivalent of a guarantee) of obligations of a type referred to in clauses (a) – (i).
“Interconnecting Utility” means Virginia Electric and Power Company.
“Interconnection Agreement” means that certain Interconnection Service Agreement, dated as of March 25, 2022, by and among PJM Interconnection, L.L.C., the Project Company and the Interconnecting Utility, as amended by that certain Agreement to Amend, dated as of May 4, 2023, by and among PJM Interconnection, L.L.C., the Project Company and the Interconnecting Utility.
“Interconnection Construction Services Agreement” means that certain Interconnection Construction Service Agreement, dated as of May 2, 2022, by and among PJM Interconnection, L.L.C., the Project Company, and the Interconnecting Utility, as amended by that certain Agreement to Amend, dated as of May 4, 2023, by and among PJM Interconnection, L.L.C., the Project Company, and the Interconnecting Utility.
“Inverter Supply Agreement” means that certain Purchase Order No. P-0284-6245 for PCS Skids and Commissioning, dated as of July 17, 2024, by and between the Project Company and Sungrow USA Corporation.
“Investor” has the meaning set forth in the MIPA recitals.
“IRS” means the Internal Revenue Service or any successor agency.
“ITC” means the investment tax credit allowed pursuant to Section 48 of the Code.
“Knowledge” means actual knowledge after due inquiry of the persons listed on Schedule 1.
“Liability” means the outstanding amount of principal and accrued interest outstanding under the Construction Financing Documents (as defined in the ECCA) as of the Effective Date and any other liability, indebtedness, adverse claim or other obligation of Project Company as of the Effective Date; provided, that “Liability” shall not include any Remaining Costs (Estimated).
“LLCA” has the meaning set forth in the MIPA recitals.
“Material Adverse Effect” means any change, circumstance, event or effect that has a material adverse effect on (a) the Project, (b) the business, earnings, Assets, liabilities, results of operations or financial condition of the Project Company, (c) the ability of the Project Company or any Material Contract Party (other than any counterparty to a Real Property Document) to timely perform any of its material respective obligations under any Transaction Document, Material Project Document or any Construction Financing Document to which it is a party, or (d) has a materially adverse impact on the validity or enforceability of any Transaction Document, any Material Project Document, or any Construction Financing Document.
“Material Contract Party” means a counterparty to a Material Project Document other than the Company or the Project Company.
“Material Project Documents” means the PPA, the Interconnection Agreement, the Interconnection Construction Services Agreement, the EPC Contracts, the Module Supply Agreements, the Energy Management Services Agreement, the Asset Management Agreement, the O&M Agreement, the O&M Guaranty, the Warranties, the Real Property Documents, the Construction Management Agreement, the Inverter Supply Agreement, the Tracker Supply Agreement, the Transformer Supply Agreement, each Additional Material Project Document, the Support Obligations, in connection with any Material Project Document, and each other agreement replacing or entered into in connection with any Material Project Document; provided, however, that any Material Project Document shall cease to be a Material Project Document when all material obligations thereunder have been performed and paid in full, other than contingent indemnity and reimbursement obligations that survive the expiration of the applicable Material Project Document.
“MBR Authority” means an order issued by FERC, without any restriction or condition that could reasonably be expected to result in a Material Adverse Effect, authorizing the sale at wholesale of electric energy, capacity and specified ancillary services at market-based rates pursuant to Section 205 of the FPA, accepting a tariff for filing providing for such sales, and granting such regulatory waivers and blanket authorizations as FERC customarily grants to persons authorized to sell electric energy and capacity at market-based rates, including blanket authorization to issue securities and assume liabilities under Section 204 of the FPA and FERC’s applicable regulations at 18 C.F.R. Part 34.
“Mechanical Completion” has the same meaning, collectively, given to the terms “Circuit Mechanical Completion” as defined in the PV EPC Contract and “Mechanical Completion” as defined in the HV EPC Contract, as the context may require.
“Membership Interest” means, for a limited liability company, the membership interest of a member in such company including, without limitation, its right to a share of the profits, losses, deductions and credits of the company and its right to a distributive share of the Assets of the company in accordance with the provisions of the applicable limited liability company agreement.
“MIPA” has the meaning set forth in the MIPA preamble.
“Module Supplier” means Jinko Solar (U.S.) Industries Inc.
“Module Supply Agreements” means, collectively, (a) that certain Project Module Supply Agreement, dated as of May 16, 2024, by and between the Project Company and the Module Supplier, as amended by that certain First Amendment to Project Module Supply Agreement, dated as of September 24, 2024 and (b) that certain Project Module Supply Agreement, dated as of September 27, 2024, by and between the Project Company the Module Supplier.
“NCUC” means the North Carolina Utilities Commission or any successor entity.
“NERC” means the North American Electric Reliability Corporation or any successor thereto and any applicable regional entity thereof.
“O&M Agreement” means that certain Operation and Maintenance Agreement, dated August 27, between Project Company and MN8 Solutions LLC.
“O&M Guaranty” means that certain Operator Parent Guaranty, dated August 27, 2025, by MN8 Energy Operating Company LLC for the benefit of the Project Company, in connection with the O&M Agreement.
“Operator” means MN8 Solutions LLC, a Delaware limited liability company.
“Order” means any order, injunction (whether temporary, preliminary or permanent), ruling, decree (including any consent decree), writ, judgment, or award entered, issued, made or rendered by any court or other Governmental Authority or by any arbitrator.
“Party” means one of the parties to this MIPA.
“Permitted Encumbrances” means (a) Encumbrances imposed by any Governmental Authority for taxes (i) that are not yet due or (ii) that are being contested in good faith by appropriate proceedings diligently conducted so long as (x) such proceeding will not involve any material risk of the sale, forfeiture or loss of any part of the Project or any Asset of the Company or the Project Company and (y) the payment thereof is (A) reserved for in accordance with GAAP, (B) fully covered by bonds or (C) fully covered by other security that in the case of this clause (C) is reasonably acceptable to the Investor, (b) carrier’s, warehouse’s, mechanics’, materialmen’s, landlord’s, repairmen’s, contractor’s, operator’s, vendor’s and other similar liens arising in the ordinary course of business or incident to the construction, improvement or restoration of the Project in respect of obligations (i) that are not past due or (ii) that are being contested in good faith by appropriate proceedings so long as (x) such proceedings will not involve any material risk of forfeiture, sale or loss of any part of the Project or any Asset of the Company and (y) the payment thereof is (A) reserved for in accordance with GAAP, (B) fully covered by bonds or (C) fully covered by other security that in the case of this clause (C) is reasonably acceptable to the Investor, (c) Encumbrances created by any Project Document and any Transaction Document, (d) obligations or duties to any Governmental Authority or utility arising in the ordinary course of business (including under Governmental Approvals), (e) restrictions on transfer imposed by applicable securities laws, applicable energy regulatory laws or as set forth in the organizational documents of the Company and Project Company, (f) prior to the SC Funding Date (as defined in the ECCA), liens created pursuant to, and securing any Indebtedness under the Construction
Financing Documents, (g) Encumbrances on the Site that are (i) exceptions listed on the Title Policy, or (ii) defects in title, easements, rights-of-way, restrictions, including land use and zoning restrictions, covenants, licenses, encroachments, protrusions and other similar charges or encumbrances on or with respect to real property that do not, individually or in the aggregate, (i) impair the value thereof, (ii) materially and adversely affect the use by the Project Company of the real property for the Project or (iii) materially and adversely interfere with the construction, development, operation or maintenance of the Project for its intended use, (h) pledges or deposits to secure the performance of bids, tenders, trade contracts and leases (other than for the repayment of borrowed money) incurred in the ordinary course of business, (i) pledges or deposits to secure regulatory or statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business securing the payment of amounts not yet due and payable or amounts being contested in good faith and by appropriate proceedings, including (without limitation) in connection with workers’ compensation, unemployment or other social security, (j) Encumbrances securing Indebtedness of the type described in clause (c) of the definition thereof, (k) Encumbrances and any right of setoff in favor of a bank or other financial institution arising by operation of Applicable Laws or in the ordinary course of business encumbering deposits held by such bank or financial institution and (l) judgment Encumbrances that do not involve any immediate risk of forfeiture of the Project and are being contested in good faith and by appropriate proceedings, and adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP or the Encumbrance is covered by insurance, bonds or other reasonable security.
“Permitted Equity Encumbrances” means, with respect to any equity interests, (a) those restrictions on transfer or ownership imposed by applicable securities laws and restrictions or imposed on transfer or ownership set forth in the applicable governing documents in respect of such equity interests and (b) prior to the SC Funding Date (as defined in the ECCA), liens created pursuant to, and securing any Indebtedness under the Construction Financing Documents.
“Person” means an individual, corporation, limited liability company, partnership, association, joint venture, Governmental Authority, trust or any other entity or organization.
“Placed In Service” means, with respect to a Block (or the Project, as applicable), that such Block (or the Project, as applicable) is placed in service for tax purposes within the meaning of Section 48(a)(1) of the Code.
“Placed in Service Factors” means, with respect to a Block (or the Project, as applicable), (A) all licenses and permits necessary for operation thereof and the generation and sale of electricity therefrom have been obtained; (B) all critical tests necessary for the proper operation thereof have been performed; (C) such Block and/or the Project are capable of operating in a reliable and continuous manner for their intended purpose and/or have commenced daily and regular operations; (D) care, custody and control of, risk of loss and legal title thereto have transferred to the Project Company; and (E) such Block and/or the Project have been synchronized to the grid.
“Power Purchaser” means Microsoft Corporation.
“PPA” means that certain Renewable Energy Purchase Agreement, dated as of February 1, 2024, between the Project Company and the Power Purchaser, as amended, restated, or supplemented from time to time.
“Proceeding” means any action, claim, complaint, charge, arbitration, audit, hearing, investigation, inquiry, suit, litigation or other proceeding (whether civil, criminal, administrative or investigative) commenced, brought, conducted or heard by or before any Governmental Authority or arbitrator.
“Project” has the meaning set forth in the MIPA recitals.
“Project Company” has the meaning set forth in the MIPA recitals.
“Project Documents” means, without duplication, the Material Project Documents and any other Contract relating to the development, construction or operation of the Project to which the Project Company is a party (other than any Transaction Document) under which the Project Company could reasonably be expected to have obligations, liabilities or revenues equal to or in excess of five hundred thousand dollars ($500,000) in any year or seven hundred fifty thousand dollars ($750,000) in the aggregate; provided, however, that any Project Document shall cease to be a Project Document when all material obligations thereunder have been performed and paid in full, other than contingent indemnity and reimbursement obligations that survive the expiration of the applicable Project Document.
“Project Party” means a counterparty to a Project Document other than the Company or the Project Company.
“Prudent Industry Practices” means, with respect to the Project, the practices, standards, designs, methods, means, techniques, equipment and acts, as they may change from time to time, that (a) are generally used to own, operate and maintain utility scale solar photovoltaic power generation projects, safely, reliably and efficiently and in compliance with Applicable Law (including Environmental Laws), manufacturers’ warranties, manufacturers’ recommendations and the Material Project Documents and (b) are consistent with the exercise of the reasonable judgment, skill, diligence and care expected of an operator of utility scale solar photovoltaic power generation projects of a type and size similar to the Project in order to efficiently accomplish the desired result consistent with applicable standards of safety, output, dependability, efficiency and economy, including recommended practice, of a good, safe, prudent and workman-like character, in each case, taking into account the location of the Project, including climatic, environmental and general conditions. Prudent Industry Practices are not intended to be limited to the optimum or minimum practice or method to the exclusion of all others, but rather to be a spectrum of reasonable and prudent practices and methods as commonly practiced in the solar photovoltaic industry in the same region of the Project during the relevant time.
“PSA” means that certain Membership Interest Purchase Agreement, dated as of October 20, 2024, by and between Seller and PSA Seller.
“PSA Seller” means, collectively, BayWa r.e. Development Portfolio I LLC and BayWa r.e. USA LLC.
“PUHCA” means the Public Utility Holding Company Act of 2005, as amended, and FERC’s rules and implementing regulations thereunder.
“Purchase Price” has the meaning set forth in Section 2.2(a). “PV EPC Contract” means that certain PV Engineering, Procurement and Construction Agreement, dated as of September 24, 2024, by and between the Project Company and the PV EPC Contractor, as amended by that certain Change Order No. 2, dated January 9, 2025, that certain Change Order No. 3, dated April 22, 2025 and that certain Change Order No. 4, dated February 10, 2025, as supplemented by Limited Notice to Proceed, dated January 24, 2024, Limited Notice to Proceed No. 2, dated May 31, 2024, Limited Notice to Proceed No. 3, dated June 24, 2024, Limited Notice to Proceed No. 4, dated August 8, 2024, Limited Notice to Proceed No. 5, dated August 14, 2024 and Limited Notice to Proceed No. 6, dated October 10, 2024.
“PV EPC Contractor” means Pure Power Contractors, LLC.
“PWA Requirements” means the prevailing wage and apprenticeship requirements described in Sections 48(a)(10)-(11) of the Code, including any Treasury Regulations, IRS Notices, or other issued guidance with respect thereto
“Real Property Documents” means those certain leases, subleases, licenses, sublicenses, easements, deeds, occupancy or use agreements, crossing agreements, letters of no objection, subordination agreements and other documents (together with all amendments, modifications, supplements, guaranties, extensions, renewals and other agreements with respect thereto) listed on Schedule 2.
“Recapture Event” means any recapture, reduction, loss or disallowance of all or any portion of the ITCs.
“Related Person” means a Person that has a relationship with a purchaser of electricity from the Project that results in the purchaser being a “related person” to such Person or to the Company for purposes of application of the loss disallowance rules of Section 267(a) or Section 707(b)(1) of the Code.
“Release” means any release, spill, leak, emission, deposit, pumping, pouring, emptying, discharging, injecting, escaping, leaching, disposing, dumping, dispersion or migration of Hazardous Substances into the environment. “Released” has a correlative meaning.
“Remaining Costs (Estimated)” means the aggregate amount of remaining costs estimated to be incurred by the Company and Project Company on and after the Closing Date in connection with the development, engineering, construction, procurement, installation and commissioning of the Project through Final Completion (as such term is defined in the EPC Contracts) determined as of the Closing Date.
“Sanctioned Country” means a country subject to a sanctions program maintained by any Compliance Authority.
“Sanctioned Person” means any individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person or entity, or subject to any limitations or prohibitions (including but not limited to the blocking of property or rejection of transactions), under any order or directive of any Compliance Authority or otherwise subject to, or specially designated under, any sanctions program maintained by any Compliance Authority.
“Second Installment” has the meaning set forth in Section 2.2(b)(ii). “Seller” has the meaning set forth in the MIPA preamble.
“Site” means the real property on which the Project is located.
“Straddle Period Taxes” has the meaning set forth in Section 5.2. “Straddle Taxable Period” has the meaning set forth in Section 5.2. “Substantial Casualty” means, with regard to the Project Company, any sudden, unexpected, or accidental event that results in significant physical damage or loss to property, assets, or infrastructure, with losses and/or damages valued at no less than $5,000,000 as mutually determined and agreed to by the Parties, where the extent of the damage is sufficient to trigger coverage under applicable insurance policies. This includes, but is not limited to, damage caused by fire, flood, storm, vandalism, or other insured perils, and typically requires repair, replacement, or restoration.
“Substantial Completion” has the meaning given to the term in the applicable EPC Contract.
“Support Obligations” means all letters of credit, guarantees, deposits, payment or performance bonds or other credit support from the Project Company or other Person relating to the ownership or operation of the Project or use of the Site, in each case as set forth on Schedule 3.
“Tax” or “Taxes” means all taxes, including all charges, fees, duties, imposts, levies or other assessments in the nature of taxes, now or hereafter imposed by any Governmental Authority, including income, gross receipts, excise, property, sales, gain, use, license, custom duty, unemployment, inheritance, corporation, capital stock, transfer, franchise, payroll, withholding, social security, minimum estimated, profit, gift, severance, value added, escheat, disability, premium, recapture, credit, occupation, service, leasing, employment, stamp, goods and services, ad valorem, utility, utility users and other taxes, and shall include interest, penalties or additions attributable thereto or attributable to any failure to comply with any requirement regarding Tax Returns.
“Tax Equity Consent” means that certain Consent and Agreement, dated as of the date hereof, by and among Investor, Company, Collateral Agent and Class B Member.
“Tax Loss” means the loss, reduction, unavailability, delay or recapture of ITCs assumed in the Base Case Model or loss, reduction, unavailability, or delay of tax depreciation benefits as measured against those assumed in the Base Case Model.
“Tax Representations” means the representations contained in Section 3.1(k). “Tax Return” means any report, return, declaration, claim for refund, or other information supplied or required to be supplied to a Tax authority in connection with Taxes, including any schedule or attachment thereto, including estimated returns and reports of every kind, and including any amendment thereof.
“Third Party” has the meaning set forth in the LLCA.
“Title Company” means Chicago Title Insurance Company.
“Title Policy” is defined in the LLCA.
“Tracker Supply Agreement” means that certain Tracker Supply Agreement, dated as of September 6, 2024, by and between the Project Company and Nextracker, LLC, as amended by that certain Change Order No 1, dated December 11, 2024.
“Transaction” means the transactions contemplated by the Transaction Documents.
“Transaction Documents” means this MIPA and the Assignment Agreement.
“Transfer Taxes” means any and all sales, use, transfer, real property transfer, recording, documentary, stamp, registration, stock transfer and other similar Taxes (including any penalties and interest or additions thereto) incurred in connection with the transactions contemplated by this MIPA (including recording and escrow fees and any real property or leasehold interest transfer or gains or any similar Tax).
“Transformer Supply Agreement” means that certain Purchase Order No. P-0234-911, dated as of August 16, 2019, by and between Virginia Transformer Corporation and the Project Company (as assignee of the Construction Manager pursuant to the Assignment and Assumption Agreement, dated as of October 20, 2024), as amended by that certain Change Order No. 1, dated February 28, 2020, that certain Change Order No. 2, dated April 20, 2023, and that certain Change Order No. 3, dated January 7, 2025.
“Treasury Regulations” means regulations issued by the IRS to implement the Code.
“Warranties” means the warranties with respect to inverters, modules, trackers, and transformers for the Project.
EXHIBIT B
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (this “Assignment”) is made and entered as of [ò], 2025 between MN8 DevCo 3 LLC, a Delaware limited liability company (“Assignor”) and [ò], a Delaware limited liability company (“Assignee”). Capitalized terms used but not defined herein shall have the meanings ascribed thereto in that certain Membership Interest Purchase Agreement, dated August 27, 2025, between Assignor and Assignee (as amended, restated, supplemented or otherwise modified from time to time, the “MIPA”).
WITNESSETH
WHEREAS, Assignor directly owns one hundred percent (100%) of the membership interests (collectively, the “Interests”) in American Beech Solar LLC, a North Carolina limited liability company (the “Acquired Entity”); and
WHEREAS, pursuant to and in accordance with the MIPA, on the date hereof Assignor desires to transfer and assign all of its right, title and interest in and to the Interests, free and clear of all Encumbrances (except for Permitted Encumbrances), to Assignee, and Assignee desires to accept such assignment and transfer.
NOW, THEREFORE, for good and value consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows:
1.Assignment. Assignor hereby sells, assigns, conveys, transfers and delivers all of Assignor’s right, title and interest in and to the Interests, free and clear of all Encumbrances (except for Permitted Encumbrances), to Assignee, and Assignee hereby accepts this assignment and purchases and assumes the Interests from Assignor.
2.Effect of Transfer. As of the date hereof, (a) Assignor will cease to be a member of the Acquired Entity and (b) Assignee will be admitted as, and become, the sole member of the Acquired Entity, and such termination and admission will be deemed to occur simultaneously.
3.Further Assurances. Each of Assignor and Assignee agrees to execute and deliver such additional instruments and other documents, and to take such other actions, as may be reasonably requested by the other party to further effectuate and confirm the transfer and assignment of the Interests as herein provided.
4.The MIPA. This Assignment is being delivered pursuant to the MIPA and will be construed consistently therewith. This Assignment is not intended to, and does not, in any manner enhance, diminish or otherwise modify the rights and obligations of the parties under the MIPA. To the extent that any provision of this Assignment conflicts or is inconsistent with the terms of the MIPA, the terms of the MIPA will govern.
5.Governing Law. THIS ASSIGNMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CHOICE OF LAW RULES (OTHER THAN SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
6.Successors and Assigns. This Assignment will bind and inure to the benefit of the parties hereto and their respective successors and legal representatives and permitted assigns.
7.Counterparts. This Assignment may be executed in counterparts (which may be delivered by use of a facsimile machine or an e-mail which attaches a portable document format (.pdf) document), each of which will be an original, but each of which, when taken together, will constitute one and the same instrument.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Assignment on the date first written above.
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| MN8 DEVCO 3 LLC | |
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| Title: | |
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| ASSIGNEE: | |
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| [ò] | |
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[Signature Page to Assignment Agreement]
EXHIBIT C
WARRANTY STANDARDS
The Project must have the following Warranties and such Warranties must meet the following standards:
1.All modules must be warranted against defects in workmanship for a period of not less than 12 years and against defects in performance for a period of not less than 30 years from the Warranty Start Date, as such term is defined in the corresponding Module Supply Agreement.
2.All inverters must be warranted against defects in workmanship and against defects in performance for a period of not less than 10 years from the earlier of (i) the first-time commissioning date, or (ii) 6 months after the delivery date.
3.All trackers must be warranted against defects in workmanship and against defects in performance for a period of (i) not less than 10 years for their structural components and (ii) not less than 5 years for the motor, gear and controller, starting on the earlier of (a) completion of commissioning, or (b) 120 days from final delivery.
4.Initial 5 year availability guaranty under the O&M Agreement backed by the O&M Guaranty.
5.The transformer must be warranted in that they satisfy all applicable law, be new, unused and undamaged at the time of delivery, suitable for intended use, free from defects in design, engineering, materials, construction and workmanship, for a period of 18 months after operational startup or 24 months from delivery, whichever happens first. All equipment provided by Virginia Transformer Corp. shall have a warranty as described in the Standard Terms and Conditions of Sale dated August 2020, and extend to 12 months from the date of equipment installation or 18 months from date of shipment, whichever occurs first, provided that coils and cores shall be warranted for failure in the normal operation of the transformer for 60 months.
6.All work performed under the HV BoP Agreement must be warranted as provided in Section 13.1 thereof, for a period of 2 years after the Substantial Completion Date, provided that the warranty shall be extended for any corrected defect as provided thereunder.
7.All work performed under the PV EPC Agreement must be warranted as provided in Section 13.1 thereof, for a period of 2 years after the Substantial Completion Date, provided that the warranty shall be extended for any corrected defect as provided thereunder.
EXHIBIT D
BEGINNING OF CONSTRUCTION CERTIFICATE
[See attached.]
EXHIBIT B
LLCA
AMENDED AND RESTATED LIMITED LIABILITY
COMPANY AGREEMENT
OF AMERICAN BEECH SOLAR HOLDINGS LLC
Dated as of August 27, 2025
between
TENASKA AMERICAN BEECH HOLDINGS, LLC
(as Class A Member)
and
AMERICAN BEECH CLASS B LLC
(as Initial Class B Member)
CONTENTS
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ARTICLE I DEFINITIONS | 1 |
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| 1.1 | Certain Definitions | 1 |
| 1.2 | Other Definitional Provisions | 1 |
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| ARTICLE II THE COMPANY | 2 |
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| 2.1 | Continuation of Limited Liability Company | 2 |
| 2.2 | Name | 2 |
| 2.3 | Principal Office | 2 |
| 2.4 | Registered Office; Registered Agent | 2 |
| 2.5 | Purposes | 2 |
| 2.6 | Term | 3 |
| 2.7 | Title to Property | 3 |
| 2.8 | No State Law Partnership | 3 |
| 2.9 | Membership Interests | 3 |
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| ARTICLE III CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; LOANS | 3 |
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| 3.1 | Capital Contributions | 3 |
| 3.2 | Capital Accounts | 4 |
| 3.3 | Delay Damages; Additional Working Capital; Working Capital Loans. | 4 |
| 3.4 | Credit Support Loans | 7 |
| 3.5 | O&M Loans | 8 |
| 3.6 | Remedial Loans | 8 |
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| ARTICLE IV ALLOCATIONS | 9 |
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| 4.1 | Allocations | 9 |
| 4.2 | Special Allocations | 10 |
| 4.3 | Loss Limitations | 12 |
| 4.4 | Certain Reallocations | 12 |
| 4.5 | Allocation of ITC | 13 |
| 4.6 | Tax Allocations | 13 |
| 4.7 | Transfer or Change in Company Interest | 13 |
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| ARTICLE V DISTRIBUTIONS | 14 |
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| 5.1 | Distributions of Available Cash Flow | 14 |
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| 5.2 | Satisfaction of Certain Obligations of the Class B Members to the Class A Member | 17 |
| 5.3 | Withholding | 18 |
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| ARTICLE VI MANAGEMENT | 18 |
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| 6.1 | Managing Member; Operations Manager | 18 |
| 6.2 | Standard of Care; Delegation; Required Consents | 20 |
| 6.3 | Removal of Managing Member | 26 |
| 6.4 | Indemnification and Exculpation | 29 |
| 6.5 | Company Reimbursement | 29 |
| 6.6 | Approved Budgets | 29 |
| 6.7 | Insurance | 30 |
| 6.8 | Officers | 31 |
| 6.9 | Rebuild | 31 |
| 6.10 | FERC 203 Approval | 32 |
| 6.11 | Interim Period Prior to FERC 203 Approval | 33 |
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| ARTICLE VII RIGHTS AND RESPONSIBILITIES OF MEMBERS | 33 |
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| 7.1 | General | 33 |
| 7.2 | Member Voting Rights | 33 |
| 7.3 | Member Liability | 34 |
| 7.4 | Withdrawal | 35 |
| 7.5 | Member Compensation | 35 |
| 7.6 | Other Ventures | 35 |
| 7.7 | Confidential Information | 35 |
| 7.8 | Retirement, Resignation, Expulsion, Incompetency, Bankruptcy or Dissolution of a Member | 37 |
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| ARTICLE VIII ADMINISTRATIVE AND TAX MATTERS | 37 |
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| 8.1 | Intention for Income Tax Purposes | 37 |
| 8.2 | Books and Records; Bank Accounts; Company Procedures | 37 |
| 8.3 | Information and Access Rights | 38 |
| 8.4 | Reports | 38 |
| 8.5 | Permitted Investments | 41 |
| 8.6 | Tax Elections | 42 |
| 8.7 | Partnership Representative and Tax Audits | 43 |
| 8.8 | Preparation of Tax Returns | 45 |
| 8.9 | Representations, Warranties and Covenants of the Members | 47 |
| 8.10 | Additional Representations and Warranties of the Managing Member | 49 |
| 8.11 | Tax Credit Transfers. | 50 |
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| 8.12 | Survival | 51 |
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| ARTICLE IX TRANSFERS OF INTERESTS; PURCHASE OPTION | 51 |
| | | |
| 9.1 | Transfer Restrictions | 51 |
| 9.2 | Permitted Transfers | 52 |
| 9.3 | Conditions to Transfers | 53 |
| 9.4 | Regulatory Compliance | 55 |
| 9.5 | Encumbrances of Membership Interest | 56 |
| 9.6 | Admission of Transferee as a Member | 57 |
| 9.7 | Buyout Events | 57 |
| 9.8 | Purchase Option and ROFO | 58 |
| 9.9 | Terminated Member | 60 |
| | | |
| ARTICLE X TRACKING MODEL AND FLIP DATE | 61 |
| | | |
| 10.1 | Calculation of Internal Rate of Return | 61 |
| 10.2 | Flip Date Dispute Resolution | 65 |
| | | |
| ARTICLE XI INDEMNIFICATION | 65 |
| |
| 11.1 | Indemnification | 65 |
| 11.2 | Limitation on Liability | 67 |
| 11.3 | Procedure for Indemnification | 69 |
| 11.4 | No Right of Contribution | 69 |
| 11.5 | No Duplication | 69 |
| 11.6 | Sole Remedy | 70 |
| | | |
| ARTICLE XII DISSOLUTION, LIQUIDATION AND TERMINATION | 70 |
| | | |
| 12.1 | Dissolution | 70 |
| 12.2 | Liquidation and Termination | 70 |
| 12.3 | Deficit Capital Accounts | 71 |
| 12.4 | Termination | 72 |
| | | |
| ARTICLE XIII GENERAL PROVISIONS | 72 |
| | | |
| 13.1 | Notices | 72 |
| 13.2 | Governing Law and Severability | 72 |
| 13.3 | Jurisdiction | 72 |
| 13.4 | Amendment or Modification | 73 |
| 13.5 | Counterparts; Electronic Signatures | 73 |
| | | | | | | | | | | |
| 13.6 | Amendment and Restatement | 73 |
| 13.7 | Expenses | 73 |
| | | | | |
| Exhibit A | Definitions |
| Exhibit B | Initial Capital Account Balances |
| Exhibit C | Initial Annual Operating Budget |
| Exhibit D | [Reserved] |
| Exhibit E | Form of Transfer Agreement |
| Exhibit F | Form of Monthly Report |
| Exhibit G | Form of Quarterly Report |
| Exhibit H | Form of Annual Report |
| Exhibit I | Form of Certificate of Interest |
| |
| Schedule 1 | Operations Manager Responsibilities |
| Schedule 2 | Insurance |
| Schedule 3 | Permitted Debt Service |
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF AMERICAN BEECH SOLAR HOLDINGS LLC
THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF AMERICAN BEECH SOLAR HOLDINGS LLC (this “LLCA”), dated as of August 27, 2025 (the “Effective Date”), is made and entered into by and between Tenaska American Beech Holdings, LLC, a Delaware limited liability company, as the Class A Member (the “Class A Member”) and American Beech Class B LLC, a Delaware limited liability company, as the Initial Class B Member (the “Initial Class B Member”).
RECITALS
A. American Beech Solar Holdings LLC, a Delaware limited liability company (the “Company”) was formed pursuant to the Act on June 30, 2025. Before the Effective Date, the Initial Class B Member owned 100% of the membership interests in the Company and was party to the Limited Liability Company Agreement of the Company, dated as of June 30, 2025 (the “Original LLCA”).
B. The Class A Member will make a Capital Contribution to the Company on the Effective Date in exchange for the Class A Membership Interests, and the membership interests in the Company held by the Initial Class B Member immediately prior to the Effective Date will automatically convert into Class B Membership Interests on the Effective Date.
C. In connection with the foregoing, the parties wish to amend and restate the Original LLCA to reflect the admission of the Class A Member as a Member of the Company, the issuance of the Class A Membership Interests to the Class A Member and the conversion of the existing membership interests held by the Initial Class B Member into the Class B Membership Interests.
NOW, THEREFORE, in consideration of the foregoing and the agreements, covenants and promises in this LLCA, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. Capitalized terms used but not otherwise defined herein are defined in Exhibit A.
1.2 Other Definitional Provisions. All the agreements, contracts or documents defined or referred to in this LLCA will mean such agreements, contracts or documents as the same may from time to time be supplemented or amended or their terms waived or modified to the extent permitted by, and in accordance with, or not prohibited by, the terms of the agreement and this LLCA, and will disregard any supplement, amendment or waiver made in breach of this LLCA. Defined terms in this LLCA will include in the singular number the plural and in the plural number the singular. Wherever from the context it appears appropriate, pronouns stated in the masculine,
feminine or neuter gender will include the masculine, feminine and neuter genders. All references to Articles, Sections, Schedules and Exhibits will be references to Articles, Sections, Schedules and Exhibits of this LLCA, unless otherwise specified. The words “will” and “should” have the same meaning. The words “include,” “includes” and “including” are not limiting, and are in all cases to be construed as followed by the words “without limitation” (whether or not expressly so followed); the word “or” is not exclusive; references to Persons include their respective successors and assigns or, in the case of Governmental Authorities, Persons succeeding to the relevant functions of such Persons; and all references to statutes and related regulations will include any amendments of the same and any successor statutes and regulations. The words “herein,” “hereof” and “hereunder” will refer to this LLCA as a whole and not to any particular section or subsection of this LLCA.
ARTICLE II
THE COMPANY
2.1 Continuation of Limited Liability Company. The Managing Member will execute or cause to be executed all certificates, instruments and other documents, and cause to be done all filings and other actions, as necessary or appropriate to operate, continue or terminate the Company as a limited liability company under the laws of Delaware and to qualify the Company to do business in all jurisdictions other than Delaware in which the Company conducts or proposes to conduct business.
2.2 Name. The name of the Company is “American Beech Solar Holdings LLC.” The Managing Member will take any action required to comply with the Act or similar statute in effect in each jurisdiction in which the Company conducts or proposes to conduct business, and the Members agree to execute any documents reasonably requested by the Managing Member in connection with any such action.
2.3 Principal Office. The Company will maintain a principal office at c/o MN8 Energy LLC, 1155 Avenue of the Americas, 27th Floor, New York, New York 10036. The Managing Member may change the principal office upon prior written notice to the Members and will maintain all records of the Company at its principal office or a location designated by the Managing Member in a notice to the Members.
2.4 Registered Office; Registered Agent. The address of the registered office of the Company in the State of Delaware is c/o Corporation Service Company, 251 Little Falls Drive, Wilmington, New Castle County, Delaware 19808. The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is Corporation Service Company, 251 Little Falls Drive, Wilmington, New Castle County, Delaware 19808. The Managing Member may change the registered agent and registered office upon prior written notice to the Members.
2.5 Purposes. The purposes of the Company are (a) to own and operate the Project Company, which owns the Project and the proceeds thereof, (b) to, and to cause the Project Company to, (i) develop, own, finance, operate, maintain, and repair the Project, including for the purpose of producing electricity, (ii) sell electricity, renewable energy credits, tax credits and other
attributes produced by or associated with the Project and (iii) enter into, comply with and perform its obligations and enforce its rights under the Transaction Documents and the Project Documents to which it is a party, and (c) to engage in and perform any activities necessary, incidental, related or appropriate to the foregoing. The Company will not engage in any activity or own any Assets that are unrelated to this purpose.
2.6 Term. The Company was formed on June 30, 2025 and will continue in existence until dissolved and terminated in accordance with this LLCA or the Act.
2.7 Title to Property. Title to the Company’s Assets will be held in the name of the Company, and no Member will have any direct interest in such property.
2.8 No State Law Partnership. The Members intend that the Company not be a partnership or joint venture and no Member be a partner or joint venturer of any other Member, for any purpose other than tax purposes.
2.9 Membership Interests. There shall be two classes of Membership Interests: the Class A Membership Interests and the Class B Membership Interests. Membership Interests shall be represented by Units, divided into Class A Units (in the case of Class A Membership Interests), and Class B Units (in the case of Class B Membership Interests). The Membership Interests represented by Class A Units and Class B Units shall have the respective rights, powers and preferences ascribed to Class A Units and Class B Units in this LLCA. The class of Membership Interest and number of Units of a Member shall be as provided in Exhibit B. The Members hereby specify, acknowledge and agree that all Units (and the Membership Interests represented thereby) are securities governed by Article 8 and all other provisions of the Uniform Commercial Code, and pursuant to the terms of Section 8-103(c) of the Uniform Commercial Code, such interests shall be “securities” for all purposes under such Article 8 and under all other provisions of the Uniform Commercial Code. All Units (and the Membership Interests represented thereby) shall be represented by certificates substantially in the form attached hereto as Exhibit I, shall be recorded in a register thereof maintained by the Company, and shall be subject to such rules for the issuance thereof in compliance with this LLCA, as the Managing Member may from time to time determine. The Company shall maintain books for the purpose of registering the transfer of limited liability company interests. A transfer of limited liability company interests in the Company shall be effected by the Company’s registering the transfer upon delivery of an endorsed certificate representing the limited liability company interests being transferred. ARTICLE III
CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; LOANS
3.1 Capital Contributions. The Members will make Capital Contributions to the Company at the times and in the amounts required by, and the Managing Member will cause Company to apply such amounts in accordance with, Article 2 of the ECCA. No other Capital Contributions will be required of Members except as provided in Section 3.3, Section 6.9, Section 6.12 or Section 12.3. The initial Capital Account balances of the Members as of the MC Funding Date are shown in Exhibit B.
3.2 Capital Accounts. The Company will establish and maintain a separate Capital Account for each Member in accordance with the following provisions:
(a) Each Member’s Capital Account shall be increased by (i) the amount of money and the Gross Asset Value of any property contributed by such Member pursuant to any provision of this LLCA, (ii) the income and gain (or items thereof) the Member is allocated by the Company, including any income and gain that are exempted from tax and income and gain described in Treasury Regulation Section 1.704-1(b)(2)(iv)(g) and any tax-exempt income allocated as a result of a transfer pursuant to Code Section 6418, but excluding income and gain described in Treasury Regulations Section 1.704-1(b)(4)(i), (iii) the amount of any Company liabilities assumed by such Member or that are secured by any property distributed to such Member, and (iv) an amount equal to an allocation of upward basis adjustment to such Member as described in Treasury Regulation Section 1.704-1(b)(2)(iv)(j).
(b) Each Member’s Capital Account shall be decreased by (i) the amount of money and the Gross Asset Value of any property distributed to such Member pursuant to any provision of this LLCA, (ii) any expenditures of the Company described in Section 705(a)(2)(B) of the Code that are allocated to the Member, (iii) losses and deductions (or items thereof) that are allocated to the Member but excluding loss or deduction described in Treasury Regulation Section 1.704-1(b)(4)(i), (iv) the amount of any liabilities of such Member assumed by the Company or that are secured by any property contributed by such Member to the Company, and (v) an amount equal to an allocation of downward basis adjustment to such Member as described in Treasury Regulation Section 1.704-1(b)(2)(iv)(j).
(c) The Gross Asset Values of all Company property shall be adjusted to equal their respective gross fair market values (taking Section 7701(g) into account), as agreed by the Consent of the Members, as required by and in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f). If a Member transfers all or part of its Membership Interest, then the Transferee will succeed to the Capital Account of the Transferring Member in the transferred interest.
(d) This Section 3.2 and the other provisions of this LLCA relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulation Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Treasury Regulation. 3.3 Delay Damages; Additional Working Capital; Working Capital Loans.
(a) To the extent (i) the Commercial Operation Date (as defined in the PPA) has not occurred on or prior to the Guaranteed Commercial Operation Date (as defined in the PPA) and (ii) the Company is liable for any Delay Damages (as defined in the PPA), the Initial Class B Member shall make a Capital Contribution to the Company (or make payment with Available Cash Flow otherwise available for distribution to the Initial Class B Member in lieu of such a Capital Contribution) on or prior to the SC Funding Date in an amount sufficient to cover all Delay Damages (as defined in the PPA) asserted against, resulting to, imposed upon, incurred by, or payable by the Project Company as a result of the delay in achieving the Commercial Operation Date (as defined in the PPA) on or prior to the Guaranteed Commercial Operation Date (as defined
in the PPA); provided, that the amount of any Delay Liquidated Damages (as defined in each EPC Contract) or any delay liquidated damages under any other Project Document actually received by the Project Company or any proceeds actually received by the Project Company or the Company under any insurance policy or pursuant to any claim, recovery, settlement or payment by or against any other Person in connection with a delay in achieving the Commercial Operation Date (as defined in the PPA), net of any actual costs, expenses or premiums incurred in connection with securing or obtaining such proceeds, shall be deducted from such amount payable by the Class B Member. In the event that the Initial Class B Member pays any such costs and expenses directly on behalf of the Project Company, such payment shall be treated as a Capital Contribution by the Initial Class B Member to the Company.
(b) The Managing Member shall use commercially reasonable efforts to cause the Project to achieve Final Completion. During the period from the Effective Date until the date of Final Completion, if the Managing Member, in its sole discretion, determines that additional funds (in excess of any amounts available for drawing under the Construction Financing Agreement or in the Final Completion Account) are required to enable the Company to cause its assets or any of the Project Company’s assets to be properly constructed, operated or maintained or to pay and perform its respective costs, expenses, obligations and liabilities, the Managing Member shall make additional Capital Contributions to the Company.
(c) After Final Completion, if the Company needs additional working capital to contribute to the Project Company to operate and maintain the Project, to pay costs or liabilities and has inadequate reserves and there is no availability under the Backleverage Financing Agreement for Managing Member to make an O&M Loan, then the Managing Member will notify the Members in writing, and each Class B Member will have the right (but not the obligation) to provide all or part of its Pro Rata Share of the needed funds as a Capital Contribution. Each Class B Member will notify the Managing Member in writing, within ten (10) Business Days after the notice from the Managing Member, whether it will provide all or part of the needed funds. If a Class B Member chooses to contribute its Pro Rata Share of such funds, then it will do so within five Business Days after responding to the notice from the Managing Member.
(d) If any Class B Member fails to deliver a notice or notifies the Managing Member that it plans to contribute less than all of its share of the needed funds pursuant to Section 3.3(c), then the Class A Member may make a working capital loan up to the amount of the needed funds that such Class B Member has not committed to fund, but Class A Member will be under no obligation to do so. The Class A Member will notify the Managing Member in writing of its intention to fund a working capital loan within ten (10) Business Days after expiration of the period for each Class B Member to notify the Managing Member of its intention. Any such loan by the Class A Member will be made within five Business Days after the Class A Member notifies the Managing Member that it plans to make such a loan. Working capital loans made pursuant to this Section 3.3(d) will be unsecured and bear a floating rate of interest, with annual compounding, at the lesser of the Reference Rate plus four percent (4%) or the highest interest rate that may be charged under Applicable Law. Interest will be payable quarterly in arrears. The loan will be evidenced by a promissory note satisfactory to Class A Member and will contain arm’s-length terms and conditions. Working capital loans shall be repaid out of Available Cash Flow of the
Company before any distributions to any Member and after payment of other Company expenses, O&M Loans, Credit Support Loans and remedial loans. Working capital loans shall not be considered a part of a Member’s Capital Contribution and shall not increase such Member’s Capital Account. Unless repaid earlier, the working capital loans will be due and payable at the dissolution of the Company, but after repayment of any other Company expenses, O&M Loans, Credit Support Loans and remedial loans made under this Article III and before any liquidating distributions to the Members. In no event may the aggregate principal amount of all outstanding working capital loans exceed two million dollars ($2,000,000). (e) Notwithstanding anything to the contrary in this Agreement, on or prior to the first day that the Project Company could be required to pay PJM Penalties for the then-applicable PJM Capacity Auction Period, the Managing Member shall cause the Company to fund an amount equal to the then-applicable PJM Penalty Reserve Amount into the PJM Penalty Reserve Account utilizing capacity sales revenue of the Project Company, in each case if and only if such revenue is greater than or equal to $1,000,000 for the then-applicable PJM Capacity Auction Period. In the event that any PJM Penalties become due and payable by the Project Company at a time when the Project Company does not have available cash to pay such amounts, the Managing Member shall cause funds on deposit in the PJM Penalty Reserve Account (if any) to be transferred by the Project Company and the Managing Member shall cause the Project Company to use such proceeds to pay such amounts. Upon the first Distribution Date to occur after the expiration of an applicable PJM Capacity Auction Period, all remaining amounts on deposit in the PJM Penalty Reserve Account after any required payments by the Project Company shall be distributed to the Members in accordance with the percentages set out in Section 5.1(a). To the extent the funds on deposit in the PJM Penalty Reserve Account are insufficient to pay PJM Penalties due and payable as of any applicable date of determination, then (i) the Class B Member shall make a working capital loan to the Company in an amount sufficient to pay any and all such amounts due, and (ii) the Managing Member shall cause the Project Company to use any such working capital loan proceeds to pay such due amounts. Working capital loans made pursuant to this Section 3.3(e) will be unsecured and bear a floating rate of interest, with annual compounding, at the lesser of the Reference Rate plus two percent (2%) or the highest interest rate that may be charged under Applicable Law, and shall otherwise be consistent with and upon the same terms and conditions set forth in Section 3.3(d). (f) Notwithstanding anything to the contrary in this Agreement, (i) on or prior to the SC Funding Date, the Class B Member shall fund the PJM DAT Account in an amount equal to $500,000, and (ii) prior to the date falling 12 months after the SC Funding Date, the Managing Member shall cause the Company to fund and maintain an amount equal to the then-applicable PJM DAT Required Amount into the PJM DAT Account utilizing Available Cash Flow. In the event that any PJM DAT Costs become due and payable by the Project Company at a time when the Project Company does not have available cash to pay such amounts, the Managing Member shall cause funds on deposit in the PJM DAT Account to be transferred by the Project Company and the Managing Member shall cause the Project Company to use such proceeds to pay such amounts. Following any use of funds in the PJM DAT Account to pay PJM DAT Costs, the Managing Member shall cause the PJM DAT Account to be funded with Available Cash Flow in an amount necessary to cause the amount on deposit therein to be equal to the PJM DAT Required
Amount on or prior to the next Distribution Date. Upon the first Distribution Date to occur after the Flip Date, all remaining amounts on deposit in the PJM DAT Account after any required payments by the Project Company shall be distributed to the Members in the following percentages: (A) to the Class A Member, 5%, and (B) to the Class B Member, 95%. To the extent the funds on deposit in the PJM DAT Account are insufficient to pay PJM DAT Costs due and payable as of any applicable date of determination, then the provisions of Section 3.3(g) shall apply. (g) To the extent (i) the funds on deposit in the PJM DAT Account are insufficient to pay PJM DAT Costs due and payable as of any applicable date of determination, (ii) the PJM DAT Account has not been funded to an amount equal to the PJM DAT Required Amount on or prior to the date falling 12 months after the SC Funding Date, or (iii) following payment of PJM DAT Costs with funds in the PJM DAT Account, the Managing Member has failed to cause the PJM Account to be replenished to an amount equal to the PJM DAT Required Amount, then (A) the Class B Member shall make a working capital loan to the Company in an amount sufficient to pay any and all such amounts due, and (B) the Managing Member shall cause the Project Company to use any such working capital loan proceeds to pay such due amounts. Working capital loans made pursuant to this Section 3.3(g) will be unsecured and bear a floating rate of interest, with annual compounding, at the lesser of the Reference Rate plus two percent (2%) or the highest interest rate that may be charged under Applicable Law, and shall otherwise be consistent with and upon the same terms and conditions set forth in Section 3.3(d). 3.4 Credit Support Loans. The Managing Member shall be obligated to obtain and maintain, or cause its Affiliates to obtain and maintain, the Support Obligations and all other letters of credit, guaranties or other security for the Project Company’s and Company’s obligations under any Project Document to which it is party or by which it is bound, in each case in accordance with the terms of such Project Document and the Managing Member shall be obligated to obtain, or cause to be obtained, on behalf of the Project Company and the Company, any replacement security in accordance with any Project Document. The Company shall reimburse the Managing Member or its Affiliates for actual fees, costs and expenses payable in respect of any such security, including fees, costs and expenses payable to third-parties; provided, however, that such fees, costs and expenses payable to the Managing Member or its Affiliates (as the case may be) shall be in accordance with the then-effective Approved Budget. Any such security posted by the Managing Member or its Affiliates in the form of cash (whether such cash is posted directly or indirectly by means of a draw under a letter of credit provided by the Managing Member or its Affiliates) and any reimbursement obligations arising from draws on any letters of credit, which shall include, for the avoidance of doubt, any obligation of the Managing Member to repay any principal, interest, costs, fees and expenses in respect of any such draws drawn in respect of any letter of credit, or replacements thereof, posted by Managing Member or its Affiliate as security for the Project Company’s obligations under any Project Document shall be deemed to be a loan by the Managing Member to the Company (any such loan, a “Credit Support Loan”). At the Managing Member’s request, any Credit Support Loan shall be evidenced by a non-negotiable promissory note. All of the reimbursements described in this Section 3.4 and Credit Support Loans shall be repaid out of Available Cash Flow of the Company before any distributions to any Member, before payment of remedial loans and working capital loans and after payment of other Company expenses and O&M
Loans. Credit Support Loans shall be unsecured loans and shall bear interest solely with respect to the portion thereof constituting principal at a rate per annum equal to the rate of interest payable on the applicable letter of credit loan therefor pursuant to the Backleverage Financing Agreement then in effect. Credit Support Loans shall not be considered a part of a Member’s Capital Contribution and shall not increase such Member’s Capital Account. Unless repaid earlier, Credit Support Loans will be due and payable at the dissolution of the Company before the repayment of any remedial loans and working capital loans, and after payment of O&M Loans, and before liquidating distributions to the Members.
3.5 O&M Loans. From and after the SC Funding Date, the Managing Member may (but shall not be obligated to) obtain and maintain, or cause its Affiliates to obtain and maintain, a revolving credit facility or letter of credit facility with a commitment amount not to exceed the maximum amount of the Project Company’s and Company’s O&M Expenses over any six-month period as set forth in the Base Case Model; for the avoidance of doubt, in no event shall the Class A Member, the Company or the Project Company be obligors under such facility or provide any guarantee, security or other collateral in connection therewith. The Company shall reimburse the Managing Member or its Affiliates for actual fees, costs and expenses payable in respect of any such facility, including fees, costs and expenses payable to third-parties; provided, however, that such fees, costs and expenses payable to the Managing Member or its Affiliates (as the case may be) shall be in accordance with the then-effective Approved Budget. From and after the SC Funding Date, any obligation of the Managing Member to repay any principal, interest, costs, fees and expenses in respect of any such facility to the extent that loans are borrowed or draws are made thereunder and contributed to the Company or the Project Company solely for the purpose of paying any O&M Expense shall be deemed to be a loan by the Managing Member to the Company (any such loan, an “O&M Loan”). At the Managing Member’s request, any O&M Loan shall be evidenced by a non-negotiable promissory note. The O&M Loans shall be repaid out of Available Cash Flow of the Company before any distributions to any Member, before the repayment of any other loan made pursuant to this Article III, and after payment of other Company expenses. O&M Loans shall be unsecured loans and shall bear interest solely with respect to the portion thereof constituting principal at a rate per annum equal to the rate of interest payable on the applicable loan therefor pursuant to the Backleverage Financing Agreement then in effect. O&M Loans shall not be considered a part of a Member’s Capital Contribution and shall not increase such Member’s Capital Account. Unless repaid earlier, O&M Loans will be due and payable at the dissolution of the Company before the repayment of any remedial loans, working capital loans and Credit Support Loans, and before liquidating distributions to the Members. 3.6 Remedial Loans.
(a) Notwithstanding anything to the contrary in this Article III, if there is an event of default by the Company or the Project Company under a Project Document that would permit the contract counterparty to pursue remedies under such Project Document, and such event of default has occurred as a result of an act or omission of the Managing Member, then the Managing Member will give prompt written notice to the Members. If Capital Contributions and working capital loans under Section 3.3(d) or O&M Loans under Section 3.5 are insufficient to cure the default, then the Class B Members shall have the right to cure such event of default within sixty
(60) days of the aforementioned notice from the Managing Member. In the event that the Class B Members fail to cure such event of default during such cure period, then the Class A Member will have the right (but not the obligation) to make a remedial loan to the Company to cure the default.
(b) Remedial loans will be unsecured and bear a floating rate of interest at the greater of (i) the Reference Rate plus five percent (5%) and (ii) ten percent (10%), or, if less, the highest rate of interest that may be charged under Applicable Law. Interest will be payable quarterly in arrears. The loan will be evidenced by a promissory note satisfactory to Class A Member and will contain arm’s-length terms and conditions. Remedial loans shall be repaid out of Available Cash Flow before any distributions to any Member, before the repayment of any working capital loans made pursuant to Section 3.3, and after payment of other Company expenses, O&M Loans, and Credit Support Loans. Unless repaid earlier, remedial loans will be due and payable at the dissolution of the Company before the repayment of any working capital loans made pursuant to Section 3.3, and after payment of O&M Loans and Credit Support Loans, and before liquidating distributions to the Members. (c) In no event may the aggregate principal amount of all outstanding remedial loans exceed three million dollars ($3,000,000).
ARTICLE IV
ALLOCATIONS
4.1 Allocations. For purposes of maintaining Capital Accounts, after giving effect to Section 4.2 and subject to Sections 4.3, 4.4 and 12.2, all items of Company income, gain, loss, deduction and credit (including the ITC) will be allocated to the Members as follows: (a) Subject to Section 4.1(b), in the following order and priority: (i) from the Effective Date through the later of (x) the last day of the first Fiscal Year in which the last Block is Placed In Service and (y) the last day of the second calendar quarter that immediately follows the calendar quarter in which the last Block is Placed In Service, 99% to the Class A Member and 1% to the Class B Members in accordance with their Pro Rata Shares;
(ii) thereafter through the last day of the Recapture Period, 67% to the Class A Member and 33% to the Class B Members in accordance with their Pro Rata Shares;
(iii) from and after the first day after the Recapture Period through the Flip Date, 99% to the Class A Member and 1% to the Class B Members in accordance with their Pro Rata Shares; and
(iv) thereafter, 5.00% to the Class A Member and 95.00% to the Class B Members in accordance with their Pro Rata Shares.
(b) Notwithstanding the other provisions of Section 4.1(a): (i) In the first Fiscal Year in which the Company generates positive taxable income, all items of Company income, gain, loss, deduction and credit will be allocated 99% to the Class A Member and 1% to the Class B Members in accordance with their Pro Rata Shares; and
(ii) If the Class A Member has a deficit Capital Account balance on or after the Flip Date, 99% of the amount of items of income and gain shall be allocated to the Class A Member and 1% to the Class B Members in accordance with their Pro Rata Shares and items of loss, deductions and credits shall be allocated 5% to the Class A Member and 95% to the Class B Members in accordance with their Pro Rata Shares until the Class A Member’s Capital Account balance is $0. The allocations under this Section 4.1(b)(ii) for an Allocation Period to the Class A Member shall be made prior to determining for that Allocation Period whether any Member has a taxable distribution under Section 731(a) of the Code (and any corresponding adjustments pursuant to Section 4.2(g)), so as to minimize to the extent possible any such taxable distribution to the Class A Member; and (iii) Any amount received as consideration for the sale of ITCs pursuant to an ITC Transfer will be treated as tax exempt income to the Company and will be allocated to the Class A Member in accordance with Section 6418(c)(1)(B) of the Code and any Treasury Regulations issued with respect thereto, including Section 1.6418-3(b)(2)(iii) of the Treasury Regulations, and any items of deduction attributable to ITC Transfer Costs shall be allocated to the Class A Member.
4.2 Special Allocations. The following special allocations shall be made in the following order:
(a) In any Allocation Period in which there is a net decrease in Company Minimum Gain, income and gain in the amount of the net decrease will be allocated to Members in the manner and ratio required by Treasury Regulation section 1.704-2(f)(6), (g)(2) and (j)(2)(i) or any successor provision. This Section 4.2(a) is intended to comply with the minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith. (b) In any Allocation Period in which there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to Member Nonrecourse Debt, then income and gain in the amount of the net decrease will be allocated to each Member who was considered to have had a share of the Member Nonrecourse Debt Minimum Gain at the beginning of the Allocation Period in the manner and ratio required by Treasury Regulations sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii) or any successor provisions. This Section 4.2(b) is intended to comply with the partner nonrecourse debt minimum gain chargeback requirements in Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith. (c) In the event any Member unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulation sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of
Company income and gain will be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Member’s Adjusted Capital Account Deficit as quickly as possible; provided, however, that an allocation will be made under this Section 4.2(c) only if and to the extent that the Member would have an Adjusted Capital Account Deficit after all other allocations provided for in Sections 4.1 and 4.2 have been tentatively made as if this Section 4.2(c) were not in this LLCA. This Section 4.2(c) is intended to qualify as a “qualified income offset” within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. (d) In the event any Member has a deficit Capital Account at the end of any Allocation Period that is in excess of the sum of (A) the amount such Member is obligated to restore pursuant to Section 12.3 and (B) the amount such Member is deemed obligated to restore pursuant to the penultimate sentences of Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5), such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, except that an allocation pursuant to this Section 4.2(d) shall be made only if and to the extent that such Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in Sections 4.1 and 4.2 have been made as if Section 4.2(c) and this Section 4.2(d) were not in this LLCA. (e) Nonrecourse Deductions for any Allocation Period will be allocated to the Members in the same ratio as other income and loss under Section 4.1 or 12.2, as applicable. (f) Any Member Nonrecourse Deductions for any Allocation Period will be allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which the Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i)(1).
(g) If the Company distributes property to a Member in liquidation of the Membership Interest of the Member and there is an adjustment in the adjusted tax basis of Company property under Section 734(b) of the Code, then there will be a corresponding adjustment to the Capital Account of the Member receiving the distribution. If the Company distributes cash to a Member in excess of its outside basis in its Membership Interest, leading to an adjustment in the inside basis of the Company property under Section 734(b) of the Code, solely for purposes of adjusting Capital Accounts of the Members, the adjustment in the inside basis will be treated as gain or loss and be allocated among the Members in the same ratio as other gain or loss for the Allocation Period in which the adjustment occurs. This Section 4.2(g) is intended to comply with Treasury Regulation Sections 1.704-1(b)(2)(iv)(m)(2) and (4) and shall be interpreted and applied consistently therewith. (h) The allocations in this Section 4.2 (the “Regulatory Allocations”) are required to comply with the Treasury Regulations. To the extent the Company can do so consistently with the Treasury Regulations and Section 4.4, the net amount of the allocations under this Article IV and Section 12.2 to each Member will be the net amount that would have been allocated to each Member if this LLCA did not contain the Regulatory Allocations. Therefore, notwithstanding any other provision of this Section 4.2, to the extent the Company can do so consistently with the Treasury Regulations and Section 4.4, the Company shall make offsetting special allocations of
Company items of income, gain, loss or deduction such that, to the extent possible, the net amount of allocations under this Article IV and Section 12.2 will be the net amount that would have been allocated to each Member if the LLCA did not contain the Regulatory Allocations. (i) Upon a transfer of a Company asset that constitutes “capital gain property” within the meaning of Treasury Regulations Section 1.755-1(a)(1), then notwithstanding any other provision of Section 4.1 or 4.2, any item of gain (not including any gain for which Sections 1245(a)(1) or 1250(a) would apply) resulting from such transfer shall be allocated first 99% to any Class A Member that has a deficit Capital Account balance in excess of the amount such Member is deemed obligated to restore pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) and 1% to the Class B Members, in accordance with their Pro Rata Shares, to the extent of any such excess, and thereafter 5% in the aggregate to the Class A Members, in accordance with their Pro Rata Shares, and 95% to the Class B Members, in proportion to their Pro Rata Shares. 4.3 Loss Limitations. Notwithstanding Sections 4.1, 4.2 and 12.2, items of loss or deduction allocated pursuant to each Member (i) shall not exceed the maximum amount of items of loss or deduction that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any Allocation Period and (ii) shall not be made to the Class A Member to the extent that such allocation would result in the increase or recurrence of a deficit Capital Account balance of such Class A Member following such time as such Class A Member’s deficit Capital Account balance has occurred and then has been reduced or eliminated. In the event some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of items of loss or deduction, the limitation set forth in this Section 4.3 shall be applied on a Member by Member basis and items of loss or deduction not allocable to any Member as a result of such limitation shall be allocated to the other Members in accordance with the positive balances in such Members’ Capital Accounts so as to allocate the maximum permissible items of losses or deduction to each Member under Treasury Regulation Section 1.704-1(b)(2)(ii)(d). 4.4 Certain Reallocations. Notwithstanding Section 4.1, after giving effect to the special allocations set forth in Section 4.2, if the allocations set forth in Section 4.1 or Section 12.2(c) otherwise (x) would result in less than sixty-seven percent (67%) of the general profits of the Company as determined for purposes of Section 702(a)(8) of the Code for any Allocation Period during the Recapture Period being allocated to the Class A Member, then all Company items of income, gain, loss or deduction shall be reallocated for such Allocation Period so that not less than 67% of the general profits of the Company as determined for purposes of Section 702(a)(8) of the Code are allocated to the Class A Member, (y) would result in less than 5.00% of any item of income or gain for any Allocation Period being allocated to the Class A Member, then such item of income or gain shall be reallocated for such Allocation Period so that not less than 5.00% of each such item of income and gain is allocated to the Class A Member, or (z) would result in less than 1% of any item of income, gain, loss or deduction for any Allocation Period being allocated to the Class B Members in accordance with their Pro Rata Shares, then to the extent possible after giving effect to clauses (x) and (y), such item of income, gain, loss or deduction shall be reallocated for such Allocation Period so that not less than 1% of each such item is allocated to the Class B Members in accordance with their Pro Rata Shares.
4.5 Allocation of ITC. It is the intention of the Members that the allocations of income and gain provided in Section 4.1 constitute, for purposes of Treasury Regulation Section 1.46-3(f)(2)(i), the ratio in which the Members divide the general profits of the Company (that is, the taxable income of the partnership as described in Section 702(a)(8) of the Code) regardless of whether the Company has a profit or a loss for a relevant taxable year. Further, it is the intention of the Members that, for purposes of Treasury Regulation Section 1.47-6(a)(2)(i)(b), the allocations provided in Section 4.1 for Allocation Periods beginning after the Flip Date shall not constitute a reduction in the Class A Member’s interest in the general profits of the Company (that is, the taxable income of the Company as described in Section 702(a)(8) of the Code) below two-thirds of the Class A Member’s interest in the general profits of the Company for the Allocation Period in which the applicable ITC Eligible property was placed in service by the Company for U.S. federal income tax purposes before the close of the “estimated useful life” of such ITC Eligible Property (treating the “estimated useful life” of the ITC Eligible Property as ending not earlier than the end of the fifth anniversary of its placed in service date for purposes of Section 168 of the Code). 4.6 Tax Allocations.
(a) All allocations of tax items of Company income, gain, deductions and losses for each Allocation Period will be allocated in the same proportions as the allocations of book items of Company income, gain, deductions and losses were made pursuant to Sections 4.1 and 4.2. (b) Notwithstanding Section 4.6(a), if, as a result of contributions of property by a Member to the Company or an adjustment to the value of Company property under Section 3.2, there is a difference between the adjusted basis of an item of Company property for U.S. federal income tax purposes and as determined under the definition of Gross Asset Value, then allocations of income, gain, loss and deduction will be allocated among the Members to take into account any variation between the adjusted basis of the property for U.S. federal income tax purposes and its initial Gross Asset Value using the remedial method. (c) Allocations pursuant to this Section 4.3 are solely for purposes of U.S. federal, state and local income taxes and will not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of items of income, gain, deductions or losses or distributions pursuant to any other provision of this LLCA. (d) To the extent an adjustment to the adjusted tax basis of any Company asset is made under Section 743(b) of the Code, any adjustment to the depreciation, amortization, gain or loss resulting from the adjustment will affect the Transferee only and not the Capital Account of the Transferring Member or Transferee. The Transferee will be required to provide to the Company information about the allocation of any step-up or step-down in basis to the Company’s assets and the depreciation or amortization method for any step-up in basis to the Company’s assets.
4.7 Transfer or Change in Company Interest. If the Membership Interests or allocation ratios described in this Article IV of the existing Members change or a Membership Interest is Transferred in compliance with this LLCA, then, for the Allocation Period in which the change or Transfer occurs, all items of income, gains, losses, deductions, credits and other tax incidents
resulting from the operations of the Company will be allocated between the Members for the Allocation Period in which the change occurs or between the Transferring Member and Transferee by taking into account the varying interests using the closing of the books method permitted by Treasury Regulation section 1.706-1(c)(2)(ii), unless the Members agree otherwise in writing.
ARTICLE V
DISTRIBUTIONS
5.1 Distributions of Available Cash Flow.
(a) Subject to Sections 3.3, 3.4, 3.5, 3.6, 5.1(b), 5.2, 10.1 and 12.2 of this LLCA, Available Cash Flow will be distributed to the Members as follows: (i) on Distribution Dates prior to the Flip Date, 20.00% to the Class A Member and 80.00% to the Class B Members in accordance with their Pro Rata Shares; provided, that if the Flip Date has not occurred on or prior to that date that is the seven (7) year anniversary of the SC Funding Date (the “Target Flip Date”), then on Distribution Dates from the Target Flip Date until the Flip Date, 50.00% to the Class A Member and 50.00% to the Class B Members in accordance with their Pro Rata Shares; and
(ii) on Distribution Dates on or after the Flip Date, 5.00% to the Class A Member and 95.00% to the Class B Members in accordance with their Pro Rata Shares.
(b) Notwithstanding Section 5.1(a): (i) Subject to the terms of the Construction Financing Documents with respect to proceeds received prior to the SC Funding Date:
(A) in the event the Company or the Project Company receives proceeds relating to (i) a casualty (other than a Subject Casualty) or condemnation to the Project that will not be used to repair the Project, (ii) an early termination under the PPA, (iii) any guaranty, warranty or indemnity claims under any contract or warranty for the Project that will not be used to repair the Project or (iv) title insurance or any other insurance claim relating to the Project, then the Managing Member shall determine the characterization of such net proceeds (i.e., as a payment for disallowance or recapture of the ITC or a payment for lost revenues or other obligations under the applicable agreement or insurance policy or with respect to any payments made under any title policy in respect of the Project that are not used to repair or restore the Project) and shall distribute such payment to the Members as appropriate, it being understood and agreed by the Members that a payment characterized as a payment for disallowance or recapture of the ITC (including any gross-up amounts related thereto) shall be distributed to the Members in accordance with the ratios set forth in Section 4.1(a) and all items of income associated therewith shall be allocated to the Members in accordance with Section 4.1(a), and a payment characterized as a payment for lost revenues under an applicable agreement or insurance policy shall be distributed in a manner to
restore, to the greatest extent possible, each of the Members to the position that they would have been in had the event or circumstance giving rise to such proceeds not occurred, in each case, based upon the Tracking Model results on the date immediately preceding the occurrence of such event or circumstance; provided¸ that in the event that such net proceeds exceed $250,000, the Managing Member shall notify the Members in writing of the proposed characterization and provide an updated Base Case Model demonstrating the impact of such event and proceeds on the Flip Date; and if the Flip Date will be delayed beyond one (1) calendar quarter, any such characterization and proposed distribution shall be approved by the Consent of the Members; and if no agreement has been reached by the Members within thirty (30) Days following receipt by the Project Company or the Company of an amount described in this Section 5.1(b)(i)(A), then the actual determination shall be finally referred to independent public accounting firm appointed jointly by the Members; and (B) in the event the Company or the Project Company receives proceeds (including Loss Proceeds) relating to a Subject Casualty that will not be used to repair the Project in accordance with Section 6.9, such proceeds shall be distributed one hundred percent (100%) to the Class A Member until (x) in the case of total casualty, the Class A Member reaches the Target IRR or (y) in the case of a partial casualty, the Tracking Model demonstrates that the Flip Date is anticipated to occur on or before the Flip Date estimated by the Tracking Model prior to the Subject Casualty, and in each case thereafter, any remaining amounts shall be distributed in accordance with Section 5.1(a)(ii); (ii) any amounts received as a return of Support Obligations provided by a Class B Member that are replaced with Support Obligations provided by a Class B Member shall be distributed entirely to the applicable Class B Member providing such replacement Support Obligations;
(iii) any amounts received in respect of any network or interconnection upgrade refunds pursuant to the Interconnection Agreement shall be distributed entirely to the Class B Members;
(iv) any amounts received as delay liquidated damages under any Project Document net of the portion thereof necessary to pay Delay Damages (as defined in the PPA) in accordance with Section 3.3(a) shall be distributed entirely to the Class B Members; (v) any amounts received in respect of any test revenues under the PPA shall be distributed entirely to the Class B Members;
(vi) any funds remaining in the Final Completion Account after the Project reaches Final Completion will be distributed to the Initial Class B Member and will be treated, to the extent eligible, as a reimbursement of pre-formation expenditures to the extent permitted by Treasury Regulations section 1.707-4(d);
(vii) with respect to any Allocation Period that begins after the Flip Date, as determined under the procedures set forth in Section 10.1, on each Distribution Date, Available Cash Flow that would otherwise have been distributed to the Class B Members in accordance with their Pro Rata Shares shall instead be distributed to the Class A Member to the extent necessary such that, after giving effect to the amounts distributed to the Class A Member pursuant to this Section 5.1(b)(vii) and otherwise distributable to the Class A Members pursuant to Section 5.1(a), the Class A Member receives an amount at least equal to the product of (i) the Corporate Tax Rate and (ii) the net federal taxable income recognized by the Class A Member in excess of the taxable income allocated to the Class A Member pursuant to Section 4.1(a)(iv) with respect to such Allocation Period as a consequence of its ownership of an interest in the Company (after taking into account any amount of Tax Benefit that was previously suspended under Code Sections 704(d) and 163(j) with respect to such Class A Member and is now available to offset any such additional net taxable income); (viii) notwithstanding anything in this Agreement to the contrary, if a Recapture Event occurs as a result of a Subject Casualty, then (A) to the extent not otherwise reflected in the Tracking Model in accordance with the provisions of Article X or the other provisions of this Agreement, the Tracking Model shall be modified to reflect the amount of ITCs subject to such recapture, reduction, loss or disallowance resulting from such Subject Casualty (including the forecast of future Available Cash Flow after any planned rebuild or repair), and the ITCs and other Tax Benefits to be allocated to the Class A Members upon any planned rebuild or repair of the Project in accordance with Section 6.9 (all determined in a manner consistent with the Base Case Model), and (B) the amount of Available Cash Flow otherwise distributable to the Class A Members pursuant to Section 5.1(a) shall be modified to the extent necessary to cause the Flip Date to occur as closely as possible to the Flip Date estimated by the Tracking Model prior to revision to reflect such Subject Casualty, and the consequences thereof, but not to exceed 50% of the Available Cash Flow that would otherwise have been distributed to the Class B Members under this Section 5.1, taking into account any amounts already distributed pursuant to Section 5.1(b); (ix) notwithstanding the foregoing provisions of this Section 5.1, in the event that, after the SC Funding Date and prior to the Adjustment Outside Date, there is a Change in Tax Law which results in an ITC Loss, the percentages set forth in Section 5.1(a) with respect to the Class A Member shall be adjusted to the extent necessary to preserve the Target Parameters and the Target Flip Date (the “IRA Post Funding Adjustment”); provided, that in no event shall the IRA Post Funding Adjustment allow the Class A Member to be entitled to more than fifty percent (50%) of Available Cash Flow; provided, further, that if the IRA Post Funding Adjustment is insufficient to preserve the Target Parameters, the Managing Member shall have the obligation to make an additional Capital Contribution to the Company, which shall be distributed to the Class A Member in order to preserve the Target Parameters and Target Flip Date. The Class B Member shall reimburse the Class A Member for all reasonable and documented legal costs and expenses
of the Class A Member incurred in connection with implementing this Section 5.1(b)(ix); and
(x) notwithstanding the foregoing provisions of this Section 5.1, in the event (i) a Proposed Change in Tax Law that was incorporated in the SC Funding Date Base Case Model and by the Adjustment Outside Date, (X) such Proposed Change in Tax Law (or any bill that has the same impact as such Proposed Change in Tax Law) has not been enacted into law or (Y) such Proposed Change in Tax Law is enacted into law with modifications or amendments, then, in the case of clause (X) above, by the date that is ten (10) days (excluding Sundays) after the Adjustment Outside Date, or in the case of clause (Y) above, 30 days from the enactment of such Proposed Change in Tax Law: (A) the Base Case Model as of the SC Funding Date shall be rerun without regard to the Proposed Change in Tax Law taken into account in such Base Case Model, but otherwise in accordance with, and without any changes to, the assumptions reflected therein, and if clause (Y) above applies, taking into account the Proposed Change in Tax Law as modified or amended and enacted (such rerun Base Case Model, the “True-Up Base Case Model”); and
(B) in the event that the True-Up Base Case Model demonstrates that the Flip Date would be accelerated under the P50 production case in the Base Case Model delivered pursuant to Section 4.3(b) of the ECCA, at the Class A Member’s option, either (x) the percentages set forth in Section 5.1(a) shall be adjusted to the extent necessary to preserve the Target Parameters; or (y) the Class A Member shall make a Capital Contribution to the Company in an amount equal to the difference between the amount that was contributed by the Class A Member on the applicable Funding Date and the amount that the Class A Member would have been required to contribute without regard to the applicable Proposed Change in Tax Law, as determined by the True-Up Base Case Model, and 100% of such amount shall be distributed by the Company to the Class B Member as a special distribution. In no event will the Investor be required to make a Capital Contribution that will result in its total contributions exceeding the cap described in the definition of Commitment (as defined in the ECCA).
The Class B Member shall reimburse the Class A Member for all reasonable and documented costs and expenses (including attorney’s fees) of the Class A Member incurred in connection with implementing this Section 5.1(b)(ix).
5.2 Satisfaction of Certain Obligations of the Class B Members to the Class A Member. During any period when there is an unpaid Indemnification Claim under Section 11.1 that is not being disputed by the Class B Member or the Class B Member Guarantor and that remains unpaid by or on behalf of any Indemnifying Party after the date when payment is due in accordance with Section 11.3(b), and the applicable Indemnified Party has submitted a demand of payment to the Class B Member Guarantor in accordance with the Guaranty, commencing with the next Distribution Date occurring after the 30-day period following such demand, the greater of (a) 50% of the Available Cash Flow that would otherwise have been distributed to the Class B Members
under Section 5.1 and (b) 100% the Available Cash Flow that would otherwise have been distributed to the Class B Members under Section 5.1 less the amount needed to pay Permitted Debt Service, will be paid instead to the Indemnified Parties to the extent necessary to pay the undisputed portion of such Indemnification Claim, provided, for purposes of clarity, that any portion of such Indemnification Claim that is in dispute shall instead be paid into a segregated account used solely for such purpose, maintained at a commercial bank that is a member of the Federal Reserve System and has a combined capital and surplus of at least $1,000,000,000, up to the amount of such disputed claim, and shall be payable to the applicable Indemnified Party upon final resolution of the relevant disputed claim. Amounts paid to the Indemnified Parties pursuant to this Section 5.2 will be treated as if distributed to the Class B Members and then immediately paid by the Indemnifying Party to the Indemnified Party. 5.3 Withholding. Notwithstanding any other provision of this LLCA, the Company shall comply with any withholding requirements under any Applicable Law and shall remit amounts withheld to, and file required forms with, applicable taxing authorities. To the extent that the Company is required to withhold and pay over any amounts to any taxing authority with respect to distributions or allocations to any Member, the amount withheld shall be treated as a distribution of cash to such Member in the amount of such withholding. It shall be the duty of the Managing Member to cause the Company to comply with such requirements and to take such actions. If an amount required to be withheld was not withheld from an actual distribution, the Company may reduce subsequent distributions by the amount of such required withholding and any penalties or interest thereon. Each Member agrees to furnish to the Company such forms or other documentation as is necessary to assist the Company in determining the extent of, and in fulfilling, its withholding obligations.
ARTICLE VI
MANAGEMENT
6.1 Managing Member; Operations Manager.
(a) The Initial Class B Member is appointed by the Members as the initial Managing Member of the Company. Except as provided in Section 6.2, or as otherwise expressly provided in this LLCA, the Managing Member will exercise day-to-day control over the activities of the Company and the Project Company (through its management of the Company as the sole member of the Project Company), will have full power and authority on behalf of the Company to manage and administer the business and affairs of the Company and the Project Company (through its management of the Company as the sole member of the Project Company), to sign for on behalf of the Company and the Project Company, and to bind the Company and the Project Company, and to do or cause to be done any and all acts necessary or appropriate to conduct the business of the Company and the Project Company. (b) Without limiting the foregoing, the Managing Member will, in accordance with the Prudent Operator Standard and the standard of care set forth in Section 6.2: (i) cause the Company or the Project Company to perform and pursue the Company’s and the Project Company’s obligations and rights under the Transaction Documents and the Project Documents to which it is a party and, prior to the SC Funding Date, the Construction Financing Documents to which it is a
party; (ii) ensure material compliance by the Company and the Project Company with any Applicable Law, including Environmental Laws, Anti-Terrorism Laws and laws of a Compliance Authority or relating to Sanctioned Persons and Sanctioned Countries; and (iii) not cause the Company or the Project Company to take or omit to take any action that would result in a material breach or an event of default, or that would permit or result in the acceleration of any obligation or termination of any right, under any Transaction Document or Project Document to which it is a party and, prior to the SC Funding Date, the Construction Financing Documents to which it is a party; provided, that, for the avoidance of doubt, Managing Member will be entitled to all applicable protections of Section 6.4 and the waiver set forth in Section 6.4 in so discharging such obligations. (c) The Managing Member will enforce any Affiliate Contract in material compliance with its terms. Upon a default under an Affiliate Contract, the Managing Member will exercise remedies under the Affiliate Contract in consultation with the Class A Member. The Managing Member shall neither exercise its remedies under the Affiliate Contract, nor fail to exercise such remedies, absent the express, prior consent of the Class A Member, which shall not be unreasonably withheld, conditioned or delayed.
(d) The Project Company has entered into the Asset Management Agreement pursuant to which the Asset Manager shall be responsible for the administration of certain Project Documents and the day-to-day operations of the Company and the Project Company, and the Members acknowledge and agree that the Managing Member may, to the fullest extent permitted by Applicable Law, delegate to the Asset Manager all or any part of its power and authority as the Managing Member hereunder (subject to consent rights set forth in Section 6.2(b), and other matters requiring a vote by the Members pursuant to this LLCA) pursuant to the Asset Management Agreement. (e) The Class A Member is appointed by the Members as the initial Operations Manager of the Company subject to the Project Company obtaining all necessary approvals from any Governmental Authority, including without limitation the FERC 203 Approval, and the duties and obligations of the Operations Manager shall be limited to such duties and obligations that are set forth in Schedule 1 and as otherwise expressly set forth in this LLCA; provided, however, that, for the avoidance of doubt, the Class A Member shall not be obligated to, and shall not, act as or perform the duties and obligations of the Operations Manager for the Project Company or the Company (1) until after the Placed In Service Date, and (2) unless and until the FERC 203 Approval has been obtained. In carrying out the duties and obligations set forth in Schedule 1 and as otherwise expressly set forth in this LLCA, the Operations Manager will have full power and authority on behalf of the Company and the Project Company (through its management of the Company as the sole member of the Project Company) to sign for on behalf of the Company and the Project Company (with the prior written consent of the Managing Member), to bind the Company and the Project Company (with the prior written consent of the Managing Member), and to do or cause to be done any and all acts necessary or appropriate to fully discharge such duties and obligations. The Operations Manager shall have no authority to take any action for or on behalf of the Company or the Project Company, except as expressly set forth in this Section, and shall not be entitled to any compensation for performing the services contemplated hereby.
6.2 Standard of Care; Delegation; Required Consents.
(a) The Managing Member and the Operations Manager will be required to perform their respective duties and obligations under this LLCA in accordance with Applicable Law, in good faith and in a manner reasonably believed to be in the best interest of the Company, the Project Company and the Project and, with respect to operation and management of the Project, in accordance with the Prudent Operator Standard; provided, that to the fullest extent permitted by Applicable Law, that it shall not be a breach of the Managing Member’s or the Operations Manager’s standard of care and neither the Managing Member nor the Operations Manager shall be responsible hereunder for the negligence, gross negligence or willful misconduct of, or breach of contract by, any sufficiently qualified Person engaged by the Managing Member or the Operations Manager, as applicable, pursuant to a contract that requires such Person to perform its duties in accordance with the Prudent Operator Standard (or substantially similar standard of care) if such Person is sufficiently qualified to perform such duties and the Managing Member or the Operations Manager, as applicable, is diligent in its oversight of such Person in accordance with the Prudent Operator Standard; provided, further, that (i) the foregoing proviso shall not be applicable to any agreement with an Affiliate of the Managing Member or the Operations Manager, as applicable, and (ii) the Managing Member shall be obligated to administer and enforce the agreements to which each of the Company and the Project Company is a party in a commercially reasonable manner in accordance with their respective terms; provided, further, that (A) it shall not be a breach of the Managing Member’s standard of care and the Managing Member shall not be responsible hereunder for the negligence, gross negligence or willful misconduct of, or breach of this LLCA by, the Operations Manager and (B) it shall not be a breach of the Operations Manager’s standard of care and the Operations Manager shall not be responsible hereunder for the negligence, gross negligence or willful misconduct of, or breach of this LLCA by, the Managing Member.
(b) Notwithstanding any other provision of this LLCA to the contrary, except to the extent any such action is reasonably necessary, as determined by the Managing Member, in response to an unexpected event or circumstance occurring at the Project that (1) unless remedied or addressed immediately, poses actual or imminent risk of (a) personal injury, (b) material property damage to, or impairment of value of, the Project or (c) an imminent violation of Applicable Law not precipitated by any breach of the Managing Member’s obligations hereunder, and (2) requires, in the good faith and reasonable determination of the Managing Member, immediate preventative or remedial action, the Managing Member and the Operations Manager may not cause the AC Subsidiary, the Company or the Project Company, as applicable, to take any of the following actions without the prior written Consent of the Members, such Consent of the Members not to be unreasonably withheld, conditioned or delayed:
(i) do any act, or omit to take any act, in material breach of its obligations under any Transaction Document or the organizational documents of the AC Subsidiary, the Company or the Project Company;
(ii) (A) during the Recapture Period, sell, lease, transfer, assign, distribute or dispose of the Project or its Assets or any ownership interest in the Project Company or the
AC Subsidiary or its assets, or (B) following the Recapture Period, sell, lease, transfer, assign, distribute or dispose of the Project, the Company, any ownership interest in the Project Company, any ownership interest in the AC Subsidiary owned by the Project Company or any of their Assets with a fair market value prior to the later of (x) the Flip Date and (y) the date upon which any negative Capital Account balance of the Class A Member has been reduced to zero (the “DRO Zero Date”) (the later of clauses (x) and (y), the “Consent Date”), in excess of $500,000 in any year or $2,000,000 in the aggregate, and on and after the Consent Date, in excess of $350,000 in one or a series of transactions, in each case, other than a disposition of Assets that are obsolete, beyond repair, surplus or no longer required for such Project and sales or transfers of electricity, RECs, other renewable energy credits and other power attributes; provided, however, that any funds received by the AC Subsidiary pursuant to the Duke ASOA Agreement shall not be subject to this Section 6.2(b)(ii) and shall be distributed in accordance with that agreement.;
(iii) cause the Company or the Project Company to engage in any business or activity that is not within the purpose of the Company described in Section 2.5 or the purpose set forth in the AC Subsidiary’s or the Project Company’s organizational documents, or to change such purpose; (iv) cause the Company or the AC Subsidiary to elect to be treated other than as a partnership, or the Project Company to be treated other than as a disregarded entity, for U.S. federal income tax purposes;
(v) permit on behalf of the AC Subsidiary, the Company or the Project Company, or cause the Company or the Project Company to enter into or permit: (A) any amendment or modification, any waiver or termination of any provision of, or assignment of, any Governmental Approval, any Material Project Document, any Construction Financing Document (prior to the SC Funding Date) or any Transaction Document, other than any such amendments, waivers or modifications (I) to correct ministerial or clerical errors or (II) that relate solely to increased costs and such amendment, waiver or modification would not reasonably be expected to result in additional cost to the Project Company or the Company in excess of (x) $250,000 (or, after the Consent Date, $750,000) in any consecutive twelve (12)-month period, (B) (I) on or prior to the Consent Date, a substitution or replacement of any Material Project Document, except for substitution or replacement contracts that contain terms no less favorable to the Company and the Project Company than those in the Material Project Document being substituted or replaced and, on and after the Consent Date, that would not reasonably be expected to cause a Material Adverse Effect, or (II) a substitution or replacement of any Construction Financing Document (prior to the SC Funding Date), (C) any new contract or agreement that involves amounts to be paid by any party or parties, prior to the Consent Date in excess of $250,000, and on and after the Consent Date, $750,000 or (D) any new contract, or any amendment, renewal or termination of any existing contract, with an Affiliate of any Class B Member, and that on and after the Consent Date, is other than on arms-length terms;
(vi) (A) compromise, settle or consent to any decision or entry of judgment in connection with any dispute (whether or not governed by contractual dispute resolution procedure), litigation, or arbitration where any such compromise, settlement, consent or decision (I) would reasonably be expected to have a Material Adverse Effect on the Company or the Project Company, (II) involves amounts to be paid by any party or parties in excess of $500,000, and on and after the Consent Date, $1,000,000 for any single proceeding or $500,000 in the aggregate and on and after the Consent Date, $1,000,000 in the aggregate, (III) includes consent to or award of an injunction, specific performance or other equitable relief by the AC Subsidiary, the Company, the Project Company or any Member or (IV) that includes a criminal investigation or criminal proceedings against the AC Subsidiary, the Company, the Project Company the Managing Member or any of their respective officers, Managing Members or directors (but only to the extent such investigation or proceeding relates to such officer’s, Managing Member’s or director’s actions or failure to act in their capacity as an officer, Managing Member or director of the AC Subsidiary, the Company, the Project Company or the Managing Member), or (B) waive or forfeit any material claim or remedy or other material economic interest under any Transaction Document or Material Project Document or, prior to the SC Funding Date, any Construction Financing Document;
(vii) remove the EPC Contractor, Operator, Energy Manager or Asset Manager prior to the scheduled expiration or termination of the EPC Contract, O&M Agreement, Energy Management Services Agreement or Asset Management Agreement then in effect and appoint a new EPC Contractor, Operator, Asset Manager or Energy Manager;
(viii) cause the Company to permit (A) possession of property of the Company or the Project Company by any Member or (B) the assignment, mortgage, transfer, Encumbrance (other than Permitted Encumbrances) or pledge of rights of the AC Subsidiary or the Company in specific property or Assets of the Company, the AC Subsidiary or the Project Company (other than, prior to the SC Funding Date, any pledge to the Collateral Agent under the Construction Financing Documents) or to assign any monies owing or to be owing to the AC Subsidiary, the Project Company or the Company, in each case other than in accordance with the Transaction Documents;
(ix) (A) prior to the Consent Date, cause the AC Subsidiary, the Company or the Project Company to initiate any litigation or arbitration that involves amounts to be paid by any party or parties in excess of $500,000 or (B) after the Consent Date, cause the AC Subsidiary, the Company or the Project Company to initiate any litigation or arbitration that involves amounts to be paid by any party or parties in excess of $1,000,000;
(x) amend the Delaware Certificate or other organizational document of the Company or the Project Company (other than amendments to change the authorized signatories, registered agent or registered office of the Company or the Project Company or ministerial changes);
(xi) cause the Company to advance any compensation or other consideration to the Managing Member or any of its Affiliates, other than in accordance with the
Transaction Documents or the Project Documents in place immediately prior to the payment of such compensation or consideration;
(xii) cause the AC Subsidiary, the Company or the Project Company to (A) merge or consolidate with any Member or other Person, or cause the AC Subsidiary, the Company or the Project Company to agree to an exchange of interests with any other Person, or acquire all or substantially all of the Assets or stock of any other Person or (B) purchase or own the stock or other equity interest in any other Person (other than the Company’s equity in the Project Company, the Project Company’s interests in the AC Subsidiary, and investments permitted under Section 8.5) or enter into any joint venture or partnership; (xiii) cause the AC Subsidiary, the Company or the Project Company to convert to a general partnership or other entity or otherwise change its legal form, recapitalize, liquidate, wind-up or dissolve (other than, in the case of the Company, in accordance with the terms of this LLCA);
(xiv) cause the AC Subsidiary, the Company or the Project Company to take or file any action or institute any proceedings in Bankruptcy, serve as a petitioning creditor in connection with an involuntary petition against the Company or the Project Company, cooperate with creditors to commence an involuntary bankruptcy petition, guarantee such creditors’ claims, or take any action to encourage or assist in any way with an involuntary bankruptcy petition against the AC Subsidiary, the Company or the Project Company;
(xv) cause the Company to make any distribution to any Member, except as specified in this LLCA, or fail to distribute all Available Cash Flow on each Distribution Date in accordance with Article V, or fail to cause the Project Company to distribute all available cash to the Company in accordance with its limited liability company operating agreement; (xvi) cause the Company or the Project Company to repurchase any membership interests in the Company or the Project Company, except, in the case of the Company, pursuant to a Buyout Event or the Purchase Option;
(xvii) admit any additional Member of the Company or the Project Company or issue, sell, dispose of, or transfer any Membership Interest of the Company, any membership interest of the Project Company, any securities convertible, exchangeable or exercisable into any Membership Interest of the Company or any membership interest of the Project Company, or warrants, options, calls, rights of first offer, rights of first refusal, tag along rights, drag along rights, preemptive rights or other commitments or rights of any character entitling any Person to acquire any Membership Interest of the Company or any membership interest of the Project Company, in each case, except as permitted under the transfer provisions of this LLCA;
(xviii) take any action specifically reserved to the Members under this LLCA (including in their capacity as Partnership Representative or Operations Manager) or under any other Transaction Document;
(xix) (A) compromise, adjust or settle any insurance claim of the AC Subsidiary, the Company or the Project Company where the potential recovery is in excess of $1,000,000, and on and after the Consent Date, $2,000,000 or (B) cause the AC Subsidiary, the Company or the Project Company to amend, restate, revise or otherwise modify in any material respect any insurance policy of the AC Subsidiary, the Company or the Project Company or issue any additional endorsement to any such policy, that directly or indirectly would materially and adversely affect the rights or coverages afforded to the AC Subsidiary, the Company, the Project Company or the Class A Member under the existing policy;
(xx) (A) other than pursuant to Sections 3.3, 3.4, 3.5 and 3.6 and the Construction Financing Documents (prior to the SC Funding Date), incur or cause the AC Subsidiary, the Company or the Project Company to incur any Indebtedness except for unsecured Indebtedness of the Company or the applicable Project Company in a principal amount not to exceed $250,000 and on and after the Consent Date (but only if the subsections (x) and (y) of Section 6.2(b)(ii) have been achieved) $2,000,000 or (B) cause the AC Subsidiary, the Company or the Project Company to loan any funds of the AC Subsidiary, the Company or the Project Company to any Person; (xxi) except for the Support Obligations and the Construction Financing Documents (prior to the SC Funding Date), cause the AC Subsidiary, the Company or the Project Company to guarantee, in the name or on behalf of the AC Subsidiary, the Company or the Project Company, the payment of money or the performance of any contract or other obligation of any Person;
(xxii) amend the Approved Budget to increase projected expenditures or expend funds in excess of the aggregate amounts in the Approved Budget for the AC Subsidiary, the Company and the Project Company for any Fiscal Year, except for amendments or expenditures that (A) do not increase the aggregate spending under the Approved Budget for the AC Subsidiary, the Company and the Project Company above 110% of the aggregate expenses reflected in the Approved Budget or (B) as reasonably determined by the Managing Member, are necessary on an emergency basis to preserve and protect the Assets of the AC Subsidiary, the Company or the Project Company upon an accident, mechanical failure, catastrophe or similar event or to avoid the imminent violation of law or injury or death to any natural person (and, in the case of this clause (B), with prompt notice to the Members);
(xxiii) cause the AC Subsidiary, the Company or the Project Company to make any capital expenditures, other than (A) below 110% of the expenditures as contemplated by the Approved Budget, (B) expenditures required by law or otherwise mandated by a Governmental Authority (and, in the case of this clause (B), with prompt notice to the Members), or (C) expenditures necessary to prevent or mitigate or eliminate an emergency
situation (and, in the case of this clause (C), with prompt notice to the Members) and even then only to the extent that such action is taken to prevent or mitigate or eliminate the effects of such emergency while the emergency is ongoing and promptly thereafter;
(xxiv) cause the AC Subsidiary, the Company or the Project Company to take or omit to take any action that would result in a material breach or an event of default, or that would permit or result in the acceleration of any material obligation or termination of any right, under any Material Project Document or, prior to the SC Funding Date, any Construction Financing Document;
(xxv) cause the Company or the Project Company to decommission or permanently remove the Project from service, except as (A) required by law, consistent with the Prudent Operator Standard or (B) as required by the exercise of an early termination under the PPA for which the Company or the Project Company receives a termination payment;
(xxvi) cause the Company or the Project Company to (A) change its methods of accounting as in effect as of the Effective Date, except as required by GAAP, or take any action, other than reasonable and usual actions in the ordinary course of business or specifically contemplated under the Project Documents, with respect to accounting policies or procedures, unless required by GAAP, (B) consent to any tax audit adjustment or (C) approve any replacement of the Certified Public Accountant;
(xxvii) allow any electricity from the Project to be used to heat a swimming pool or to be sold to a Member or Affiliate of a Member;
(xxviii) other than in its capacity as the Partnership Representative (if applicable) in accordance with Article VII, make any tax election, or cause the Company to make any tax election, other than as provided herein; (xxix) cause the AC Subsidiary, the Company or the Project Company to hire any employees, enter into or adopt any bonus, profit sharing, thrift, compensation, option, pension, retirement, savings, welfare, deferred compensation, employment, termination, severance or other employee benefit plan, agreement, trust, fund, policy or arrangement for the benefit or welfare of any directors, officers or employees of the AC Subsidiary, the Company or the Project Company or transfer any of the AC Subsidiary’s, the Company’s or the Project Company’s Assets to satisfy any liabilities of any Class B Member or its Affiliates arising from ERISA;
(xxx) seek any private letter ruling from the IRS relating to the transactions contemplated hereunder;
(xxxi) cause the Company or Project Company to engage in any speculative energy trading, excluding hedge or swap arrangements, renewable energy credit sales, forward contracts, transactions pursuant to the Energy Management Services Agreement, and similar transactions for the Project and replacements therefor;
(xxxii) claim any energy community bonus credit available under Section 48(a)(14) of the Code with respect to the Project or the domestic content bonus credit available under Section 48(a)(12) of the Code credit or elect to transfer any ITCs pursuant to Section 6418 of the Code except as permitted by Section 8.11; (xxxiii) make any amendment to or modification of any of the methodology, conventions, formulas or rules set forth in the Base Case Model, except for those expressly contemplated by, and made in accordance with, the provisions set forth in this LLCA or the ECCA;
(xxxiv) take any action that would cause the Project Company to cease to be an Exempt Wholesale Generator or fail to take any action needed for the Project Company to continue to be an Exempt Wholesale Generator;
(xxxv) take any action that would result in the loss of, or any restrictions or limitations on, the Project Company’s MBR Authority, or fail to take any action necessary for the Project Company to have MBR Authority and comply with FERC’s rules with respect to such MBR Authority; or
(xxxvi) take any action that would cause the Project Company to become a “public utility” or fail to take any action needed to prevent the Project Company from being a “public utility” under N.C. Gen. Stat. § 62-3(23);
provided, however, that each decision that relates to the AC Subsidiary identified in this Section 6.2(b) shall be subject to the Project Company’s rights (including any limitations thereon) and obligations set forth in the AC Subsidiary LLCA (c) Any action taken by the Managing Member in compliance with the Prudent Operator Standard (i) that is necessary to comply with Applicable Law including the permanent cessation of operation of the Project that is the result of a casualty, force majeure event or other event outside of the reasonable control of the Managing Member or (ii) which arises from circumstances not within the Managing Member’s reasonable control that results in an event of default under any Project Documents shall not, in either case of clauses (i) and (ii), constitute a breach of the requirement to obtain the Consent of the Members required pursuant to Section 6.2(b). 6.3 Removal of Managing Member; Removal and Resignation of Operations Manager.
(a) The Managing Member will be subject to removal as Managing Member by the Members who are not Affiliates of the Managing Member upon written notice that any of the following has or have occurred:
(i) the Class A Member has brought a good faith claim that the Managing Member has engaged in fraud, gross negligence, or willful misconduct; provided, however, that if an Order provides that the Managing Member did not engage in fraud, gross negligence or willful misconduct, then (A) the Managing Member shall be immediately
reinstated as the Managing Member, and (B) the Class A Member shall reimburse the Managing Member, the Company, and their respective Affiliates for all documented out-of-pocket expenses arising from or related to the Managing Member’s removal or defending such claim and shall indemnify and hold harmless the Managing Member for any actions taken by the Company between the date of removal and the date of the Order;
(ii) the Managing Member or its Affiliate breaches any of its representations and warranties or covenants in the ECCA, this LLCA or, solely with respect to the Managing Member, any other Transaction Document to which it is a party and (to the extent such material breach is capable of being cured) such material breach has not been cured within thirty (30) days of receiving written notice from the Class A Member of such breach (or within ten (10) days of receiving written notice from the Class A Member of such breach, in the case of failure to make cash distributions), and if such breach cannot be cured within such period, and the Managing Member or such Affiliate is proceeding with diligence to cure such breach, the thirty-day cure period shall be extended by an additional period of up to sixty (60) additional days for a total cure period of ninety (90) days;
(iii) the Managing Member breaches its covenants in this LLCA and such breach directly causes a failure by the Company or the Project Company to materially comply with their respective insurance requirements in such a manner as to create a situation that would reasonably be expected to result in a lapse of property or liability coverage for the Company or the Project Company and such failure has not been cured within sixty (60) days of receiving written notice from the Class A Member of such failure, provided, however, that if the Company or the Project Company, as applicable, is diligently seeking to replace such insurance coverage during such sixty (60) day period but such insurance coverage is not available on market terms then, subject to the granting of a waiver in accordance with Section 1.5 of Schedule 2 hereto, such breach shall be deemed cured for purposes of this Agreement;
(iv) the occurrence of a Change of Member Control with respect to the Managing Member that is not permitted or consented to in accordance with Article IX; (v) the Managing Member fails to make any member loan to the Company as and when required hereunder; and
(vi) the Class B Member Guarantor or the Managing Member becomes Bankrupt.
(b) The Managing Member will be removed automatically, without any further action or notice if the Managing Member or the Class B Member Guarantor is Bankrupt, unless each of the Members who are not Affiliates of the Managing Member elect otherwise.
(c) If the Managing Member is removed, the Members who are not Affiliates of the removed Managing Member will elect a successor Managing Member, subject to the Company and the replacement Managing Member obtaining all necessary approvals from any Governmental Authority.
(d) The Operations Manager will be subject to removal as Operations Manager by the Members who are not Affiliates of the Operations Manager upon written notice that any of the following has or have occurred:
(i) the Class B Member has brought a good faith claim that the Operations Manager has engaged in fraud, gross negligence, or willful misconduct; provided, however, that if an Order provides that the Operations Manager did not engage in fraud, gross negligence, or willful misconduct, then (A) the Operations Manager shall be immediately reinstated as the Operations Manager, and (B) the Class B Member shall reimburse the Operations Manager for all documented out-of-pocket expenses arising from or related to the Operations Manager’s removal or defending such claim and shall indemnify and hold harmless the Operations Manager for any actions taken by the Company between the date of removal and the Order;
(ii) the occurrence of a Change of Member Control with respect to the Operations Manager that is not permitted or consented to in accordance with Article IX; (iii) upon a Transfer that, taken together with all prior Transfers of Class A Units, constitutes a Transfer of more than 50% of the aggregate number of Class A Units; or
(iv) the Operations Manager becomes Bankrupt.
(e) The Operations Manager will be removed automatically, without any further action or notice if the Operations Manager is Bankrupt, in the event of a Transfer that, taken together with all prior Transfers of Class A Units, constitutes a Transfer of more than 50% of the aggregate number of Class A Units, unless each of the Members who are not Affiliates of the Operations Manager elect otherwise.
(f) If the Operations Manager is removed, the Members who are not Affiliates of the removed Operations Manager may elect (i) a successor Operations Manager or (ii) to cause the Managing Member to perform the duties of Operations Manager, subject to the Company and the replacement Operations Manager obtaining all necessary approvals from any Governmental Authority, to the extent required.
(g) At any time upon ninety (90) days prior written notice to the Members, the Operations Manager shall be permitted to resign with twenty (20) Business Days prior notice to the other Members, and if the Operations Manager has so resigned, the Members who are not Affiliates of the resigned Operations Manager may (i) elect a successor Operations Manager or (ii) cause the Managing Member to perform the duties of Operations Manager, subject to the Company and the replacement Operations Manager or Managing Member, as applicable, obtaining all necessary approvals from any Governmental Authority.
6.4 Indemnification and Exculpation.
(a) To the fullest extent permitted by Applicable Law, the Managing Member, the Operations Manager and the Partnership Representative and their respective officers, directors, employees and agents will be exculpated from, and the Company will indemnify such Persons from and against, all Damages any of them incurs by reason of any act or omission performed or omitted by such Person in performing, in good faith, in a manner reasonably believed to be in the best interest of the Company, and consistent with its rights and obligations under this LLCA, the Managing Member’s, the Operations Manager or the Partnership Representative duties under this LLCA or relating to the Company’s activities and business, in each case, subject to and in accordance with the terms of this LLCA and Applicable Law; provided, that this indemnity does not apply to Damages attributable to the gross negligence, willful misconduct or fraud of such Person or a material breach by the Managing Member, the Operations Manager, or the Partnership Representative or any of their respective Affiliates of their covenants, representations, or warranties in any Transaction Document, any Construction Financing Document, or Project Document to which it is a party.
(b) To the fullest extent permitted by Applicable Law, the Company shall, within 10 days after an Indemnified Party notifies the Indemnifying Party and the Company, advance reasonable and documented expenses incurred by the Indemnified Party under this Section 6.4 from Available Cash Flow prior to the final disposition of any matter but subject to each Member’s credit support obligations hereunder and only upon receipt by the Company of an undertaking from a Person with sufficient credit capacity to repay such amount if it is determined by a court of competent jurisdiction pursuant to a non-appealable ruling that the Indemnified Party is not entitled to be indemnified. (c) The Company may purchase and maintain insurance on behalf of any officer, employee or agent of the Company (including, without limitation, the Managing Member, Operations Manager and Partnership Representative).
6.5 Company Reimbursement. The Company will directly pay and reimburse the Managing Member, the Operations Manager and the Partnership Representative for all reasonable and documented Third Party costs and expenses consistent with the Approved Budget incurred in the ordinary course of business, or otherwise permitted hereunder in emergency circumstances and incurred, by the Managing Member, the Operations Manager or the Partnership Representative on behalf of the Company in performing the duties in this LLCA, but not including amounts paid to the Asset Manager under the Asset Management Agreement and any costs and expenses attributable to the gross negligence, willful misconduct or fraud of the Managing Member, the Operations Manager or the Partnership Representative or a breach by the Managing Member, the Operations Manager or the Partnership Representative or any of their respective Affiliates of their covenants, representations or warranties in any Transaction Document, Construction Financing Document or Project Document to which it is a party.
6.6 Approved Budgets. Prior to receipt of the FERC 203 Approval, the Managing Member shall (in consultation with the Class A Member) and, on and after receipt of the FERC 203 Approval, the Managing Member shall (in consultation with the Operations Manager) prepare
or cause to be prepared for each Fiscal Year of the Company an annual operating budget that includes the anticipated revenues and expenses of the Company and the Project Company for the Fiscal Year, including any necessary provision for expenditures or reserves for maintenance and capital items and other extraordinary expenditures, and using methodology consistent with the methodology set forth in the Base Case Model. The initial annual operating budget for the period commencing on the SC Funding Date and ending on December 31, 2025 is attached as Exhibit C. At least 60 days before the start of each subsequent Fiscal Year, the Operations Manager (or Managing Member prior to receipt of the FERC 203 Approval) will submit the proposed annual operating budget for that Fiscal Year to the Managing Member (or Class A Member prior to receipt of the FERC 203 Approval) and the other Members for their review. Consent of the Members will be required for any proposed aggregate annual operating budget only if the budget (i) is more than the lesser of 10% above the aggregate annual spending projected in the Base Case Model for the applicable Fiscal Year as of the MC Funding Date or 5% above the aggregate annual spending projected in the Approved Budget for the previous Fiscal Year, (ii) includes expenditures exceeding $200,000 and on and after the Consent Date, $500,000 in aggregate of a type not included in the Base Case Model as of the MC Funding Date for the Fiscal Year or in the Approved Budget for the previous Fiscal Year (in which case Consent of the Members is only required for those items), (iii) contains any items of a type that would be considered inconsistent with Prudent Industry Practices (in which case Consent of the Members is only required for those items) or (iv) is not approved by the Administrative Agent in accordance with the express terms of the Construction Financing Agreement and the Backleverage Financing Agreement, which non-approval shall be promptly notified in writing by the Managing Member to the other Members. If the Consent of the Members is not obtained as provided above, the Operations Manager (in consultation with the Managing Member) (or, prior to receipt of the FERC 203 Approval, the Managing Member, in consultation with the Class A Member) will promptly prepare or cause to be prepared a revised annual operating budget, which will be submitted to the Members for their approval according to this section, and upon final approval of such annual operating budget by the Consent of the Members, the budget will become an Approved Budget. If the Consent of the Members cannot be obtained for any revised proposed annual operating budget, then the budget may be submitted by the Managing Member (in consultation with the Operations Manager) (or, prior to receipt of the FERC 203 Approval, the Managing Member, in consultation with the Class A Member) to the Independent Engineer or another independent engineer selected jointly by the Parties to review and provide recommendations to the Members to accept or reject. To the extent that amounts relating to any items of a proposed budget are not approved, then the corresponding amounts for such items in the previous Fiscal Year’s Approved Budget will carry over into the next Fiscal Year. The Managing Member may propose to the Members to amend the Approved Budget.
6.7 Insurance. The Managing Member will cause the Company and the Project Company to acquire and maintain the casualty, general liability, property damage and other types of insurance, in each case, reasonably acceptable to the Class A Member in consultation with the Insurance Consultant and listed in Schedule 2 (provided, for purposes of clarity, that the requirement that such policies be reasonably acceptable to the Class A Member in consultation with the Insurance Consultant shall not apply to renewal on the same terms of any such insurance policies), provided, that the Managing Member shall (a) solely with respect to the annual renewals
of insurance, use commercially reasonable efforts to procure casualty insurance with (i) sublimits that are more advantageous to the Company or the Project Company than any applicable sublimits that may apply to any insurance policy in place as of the Effective Date set forth in Schedule 2 and (ii) lower deductible levels that may apply to any insurance policy in place as of the Effective Date than previously procured, in each case upon expiration or renewal of the term of any insurance if such insurance is then available on customary and commercially reasonable terms and provided the total premium for all required insurance policies shall not be required to exceed $435,000, as such amount shall be escalated annual in accordance with the Base Case Model, as long as the per occurrence and annual aggregate limits of such insurance policies are at least equal to the annual aggregate limits set forth on Schedule 2 as of the Effective Date, (b) enforce its rights, and cause each of the Company and Project Company to enforce its rights, to insurance coverage, defense, and indemnification, (c) prior to the expiry of any insurance required under Schedule 2, provide certificates of replacement insurance satisfying the requirements of Schedule 2, and (d) shall cause the Company or the Project Company (as the case may be) to pursue and submit (or cause to be pursued and submitted on behalf of the Project Company or Company) any claims which may arise with respect to the Project or the Site under any insurance policies that the Company or the Project Company is required to procure and maintain under Schedule 2.
6.8 Officers. The Managing Member may appoint officers of the Company to act on behalf of the Company and assign in writing titles to the officers. Any assignment of a title will constitute the delegation to such person of the authorities and duties that are normally associated with such title or as otherwise expressly delegated to (or withheld from) such officer by the Managing Member. Each officer will hold office until his successor has been appointed or until his death, resignation or removal. Any officer may be removed by the Managing Member at any time for any reason in its sole discretion. The Managing Member will be responsible for the actions or inactions of the officers to the same extent that the Managing Member would be responsible if such actions and inactions were taken by the Managing Member.
6.9 Rebuild. If a casualty event (or a related series of casualty events) occurs at the Project which (u) results in damages in excess of $5,000,000 or (v) has a Material Adverse Effect (a “Subject Casualty”), Managing Member shall use commercially reasonable efforts to rebuild, repair, restore or replace the affected portion of the Project at the Site (“Rebuild”) subject to the following, and in each case subject to the terms of the Construction Financing Documents with respect to proceeds received prior to the SC Funding Date: Within thirty (30) days of the applicable Subject Casualty, the Managing Member shall (x) prepare an updated Base Case Model that demonstrates that the Class A Member’s Target Flip Date will not be delayed, which updated Base Case Model shall be subject to the reasonable approval of the Class A Member; (y) prepare a Restoration Plan to effect such Rebuild, pursuant to which the Project would be repaired giving due consideration to avoiding or mitigating an actual or potential Recapture Event, which Restoration Plan shall be subject to the reasonable approval of the Class A Member (and, at the Class A Member’s election, such approval in consultation with the Independent Engineer); and (z) consider in good faith and incorporate into the updated Base Case Model and Restoration Plan any comments and modifications proposed by the Class A Member. The Managing Member shall keep
the Class A Member regularly informed of, and permit the Class A Member to monitor the progress of, the Managing Member’s implementation of the Restoration Plan.
(a) Managing Member shall determine the applicable costs to effect such Rebuild, less any Loss Proceeds received with respect to the Subject Casualty by the Class B Member, the Company or the Project Company (or any Affiliate of any of the foregoing) and any Available Cash Flow that is available for such Rebuild (such remaining amount, the “Rebuild Cost”), which cost determination shall be subject to the reasonable approval of the Class A Member (and, at the Class A Member’s election, such approval in consultation with the Independent Engineer);
(b) The Managing Member shall cause any Loss Proceeds received with respect to the Subject Casualty by the Class B Member, the Company or the Project Company (or any Affiliate of any of the foregoing) and Available Cash Flow to be used to repair the Project in accordance with the applicable Restoration Plan. In the event that such Loss Proceeds and Available Cash Flow are insufficient to satisfy the Rebuild Cost, the Managing Member will use commercially reasonable efforts to coordinate a solution with the Class A Member and Class B Member; and
(c) The Managing Member shall use commercially reasonable efforts to minimize any loss, disallowance, reduction or recapture of the ITC arising out of any Subject Casualty.
6.10 FERC 203 Approval. The Members acknowledge and agree that the Class A Member may not perform the duties and obligations of the Operations Manager with respect to the Company and the Project Company as set forth on Schedule 1 or as otherwise expressly set forth in this Agreement (1) until after the Placed In Service Date, and (2) unless and until the FERC 203 Approval has been obtained. The Operations Manager shall perform its duties and obligations in accordance with Applicable Law, Prudent Industry Practices, and this LLCA. In furtherance of the foregoing, the Class A Member shall promptly prepare, in coordination with the Managing Member, the documentation necessary to obtain the FERC 203 Approval in order to permit the Class A Member to perform the role of Operations Manager in respect of the Company and the Project Company. The Class A Member (in coordination with the Managing Member) will be responsible for and shall control the preparation of all such documentation and communicating with FERC, and the Managing Member and the Initial Class B Member shall cooperate in providing all documentation and other information requested by the Class A Member, in each case in connection with and as is reasonably necessary to obtain the FERC 203 Approval. Upon Consent of the Members (such consent not to be unreasonably withheld, conditioned or delayed), the Managing Member shall cause the Project Company to promptly file with FERC the application for the FERC 203 Approval. The Class A Member will reimburse (a) the Managing Member for any reasonable and documented, out-of-pocket third party costs associated with filing the application for the FERC 203 Approval and (b) the Managing Member and the Initial Class B Member for all reasonable and documented, out-of-pocket third party costs and expenses incurred by such Person in connection with its cooperation and providing documentation or other information associated with filing the application for the FERC 203 Approval. Notwithstanding anything to the contrary set forth in this Agreement, any action to be performed by the Operations Manager in respect of the Company and the Project Company as identified Schedule 1 or as
otherwise expressly set forth in this Agreement prior to the receipt of the FERC 203 Approval shall be performed by the Managing Member.
6.11 Interim Period Prior to FERC 203 Approval. Prior to the receipt of the FERC 203 Approval, the Class A Member shall take all steps as reasonably necessary to prepare for its role as Operations Manager in respect of the Company and the Project Company so that it may promptly consummate such role upon the receipt of the FERC 203 Approval. In furtherance of the foregoing, upon three (3) Business Days prior written notice from the Class A Member, Managing Member shall, and shall cause its Affiliates and the Company to, at the Class A Member’s sole cost and expense, during normal business hours (i) permit representatives of the Class A Member to observe and monitor activities of the Managing Member conducted by or on behalf of or relating to the Company and the Project Company and (ii) make reasonably available to the Class A Member the relevant personnel of Managing Member, its Affiliates and the Company, and any data or other information relating thereto, in each case pertaining to the role of Operations Manager and as reasonably requested by Class A Member in connection with its preparation for the role of Operations Manager of the Company and the Project Company; provided, that no such observation, monitoring or providing of any such data or other information shall interfere with completion of construction of the Project or in the business of the Managing Member, the Company or the Project Company or their Affiliates.
6.12 AC Subsidiary. To the extent that from time to time the AC Subsidiary requires capital contributions from the Project Company pursuant to Section 4.1 of the AC Subsidiary LLCA, the Class B Members shall be solely responsible for making (or causing to be made) all such capital contributions to the Company for further contribution to the Project Company and the AC Subsidiary in order to satisfy such requirements.
ARTICLE VII
RIGHTS AND RESPONSIBILITIES OF MEMBERS
7.1 General. The rights and responsibilities of the Members will be as provided in the Delaware Certificate, this LLCA and the Act.
7.2 Member Voting Rights. Unless otherwise provided in this LLCA, the Consent of the Members is required to constitute the approval by any action by or on behalf of the Company that requires a vote, consent, approval or action of or an election by the Members set forth in this LLCA; provided, that without the prior written approval of each Member adversely affected thereby, no such consent will (a) modify the limited liability of a Member; (b) require a Member to provide funds to the Company, by loan, contribution or otherwise (or amend any of the conditions to making any loan or contribution), in each case other than as expressly provided in this LLCA; or (c) alter the interest of any Member in Capital Accounts, Company items or distributions of Available Cash Flow. Within fifteen (15) days following its receipt of such request for consent, each Member shall respond to the Managing Member in writing as to whether such Member consents and approves or objects to the proposed action. The Managing Member shall not take any action that requires the Consent of the Members until it has received the affirmative written Consent of the Members.
7.3 Member Liability.
(a) To the fullest extent permitted under the Act and any other Applicable Law, (i) no Member Party will have any liability for the debts, obligations, expenses or liabilities of the Company or the Project Company, and (ii) the Company will indemnify, defend and hold harmless each Member Party from and against any claims for or relating to the debts, obligations, expenses or liabilities of the Company and the Project Company. The foregoing indemnification is limited to the Assets of the Company and the Project Company. In no event will any Member be liable under this LLCA to another Member for any special, incidental, consequential, punitive, or exemplary damages (including damages for lost opportunity, lost profits or revenues or loss of use of such profits or revenues, but excluding damages recovered by any Third Party) incurred by such Member arising from a breach of this LLCA; provided, that subject to the limitations in Article XI, (x) to the extent the Tax Benefits are lost or disallowed as a result of representations and warranties made by the Initial Class B Member in the ECCA or any Class B Member in this LLCA being false, or the breach of any covenant, obligation or agreement by the Managing Member, the value of such lost Tax Benefits will be recoverable as direct damages and will not constitute special, incidental, consequential, punitive, or exemplary damages and (y) losses in respect of Third Party claims will not be considered consequential damages that are not recoverable. (b) A Member will be liable only to make its Capital Contributions as provided in this LLCA and, except to the extent expressly provided in Section 12.3, will not be required to restore a deficit balance in its Capital Account. (c) Each Member will be entitled to rely in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company or the Project Company by any other Person who is a Member, any Affiliate Party or any officer or employee of the Company or the Project Company that is not an Affiliate of such Member, or by any other individual about matters that such Member reasonably believes are within such other Person’s professional or expert competence.
(d) Except as otherwise provided in this LLCA, and to the fullest extent permitted by the Act and any other Applicable Law, (i) none of any Member, any Member Party, the Operations Manager, the Partnership Representative or the Managing Member shall owe any fiduciary duty or similar obligation to the Company or any other Member by reason of this LLCA or such Member’s investment in the Company; (ii) none of any Member, any Member Party, the Operations Manager, the Partnership Representative or the Managing Member shall be liable including under any legal or equitable theory of fiduciary duty or other theory of liability, to the Company or any Member for any Damages incurred by reason of any act or omission performed or omitted by such Member in its capacity as Member; (iii) to the extent that the Managing Member, a Member, any Member Party, the Operations Manager or the Partnership Representative has duties and liabilities in such capacity to the Company or to any Member or other Person bound by this LLCA, the Managing Member, such Member, such Member Party, the Operations Manager and the Partnership Representative will not be liable to the Company or to any Member or other Person bound by this LLCA for its good faith reliance on the provisions of this LLCA; and (iv) none of the Managing Member, any Member, the Operations Manager or the Partnership
Representative will have liability under this LLCA for breach of contract or duties arising out the performance of its duties under this LLCA, so long as (in the case of clauses (iii) and (iv)), (A) in the case of the Managing Member or the Operations Manager, the Managing Member or the Operations Manager has acted in accordance with Sections 6.1 and 6.2, as applicable, and (B) the Managing Member’s or such Member’s actions (or failure to act) did not constitute willful misconduct, gross negligence, criminal violation of the law, or fraud. 7.4 Withdrawal. Except as expressly provided in this LLCA, no Member is entitled to withdraw voluntarily or resign from the Company, withdraw or demand the return of any part of its Capital Contributions from the Company or receive property other than cash in return for its Capital Contribution.
7.5 Member Compensation. No Member will receive any interest, compensation or drawing with respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Company, the Project Company or otherwise in its capacity as a Member, except as otherwise provided in this LLCA.
7.6 Other Ventures. The Members and their Affiliates may engage in and possess interests in other business ventures of any and every type and description, including other business ventures competitive with or of the same type and description as the Company and the Project Company, independently or with others, as long as such venture does not cause the Project Company (a) to lose its status as an Exempt Wholesale Generator or to become subject to regulation under PUHCA other than with respect to regulations applicable to Exempt Wholesale Generator status, or (b) to lose, or to have limitations or restrictions imposed upon, its MBR Authority. None of the Members or their respective Affiliates shall have any obligation to offer to the Company, the Project Company any Member or any of their Affiliates the right to participate in those activities. If any Member or its respective Affiliates acquires ownership or control of Assets, or becomes affiliated with a company that becomes or owns or controls any generation facilities or has long-term firm purchases of capacity and/or energy, inputs to electric power production, transmission facilities, or has a franchised service area, and such Member reasonably determines that such acquisition could trigger a requirement for the Company or the Project Company to submit a report or filing to FERC, then such Member shall provide the Company with a written notice of such event, within ten (10) days after such event occurs, and provide additional information as reasonably requested by the Company so that the Company can timely submit to FERC any reports or filings that it or the Project Company may need to make with FERC. Any Member shall provide the Company with information it may reasonably request in order for it or the Company to comply with any of its or the Project Company’s other obligations under the FPA or PUHCA.
7.7 Confidential Information.
(a) Except to the extent necessary for the exercise of its rights and remedies and the performance of its obligations under this LLCA, the other Transaction Documents or the Project Documents, each of the Parties will not disclose (and will not permit the disclosure by any of its Affiliates, any of the officers, directors or employees of it or its Affiliates (collectively, “Representatives”), or any of its, or its Affiliates’ advisors, auditors, counsel, fund managers and
public accountants (collectively, “Advisors”)), directly or indirectly, any of the terms and conditions of the Project Documents, this LLCA, the other Transaction Documents or other information in respect of the Transaction (including information delivered pursuant to the terms hereof), the Company, the Project Company, the Project, or any of the Members (“Confidential Information”); provided, that (i) any Party and its Affiliates, Representatives and Advisors may disclose Confidential Information to such Party’s Affiliates, Representatives and Advisors and to the other Party and its Affiliates, Representatives and Advisors, (ii) any Party and its Affiliates, Representatives and Advisors may disclose Confidential Information that (A) has been publicly disclosed or is publicly known (other than by such Party or any of its Affiliates, Representatives or Advisors in breach of this Section 7.7), (B) has lawfully come into the possession of such Party or any of its Affiliates, Representatives or Advisors other than from another Party or a Person acting on such other Party’s behalf, or (C) has been independently developed by such Party or any of its Affiliates, Representatives or Advisors without use of information obtained under this LLCA, (iii) to the extent that such disclosure is (A) required by Applicable Law, a subpoena or any other applicable legal process, (B) by request of, or to the extent required by, any Governmental Authority having jurisdiction over such Party, any stock exchange on which such Party’s or its Affiliates securities are traded or any self-regulatory body having jurisdiction over such Party (including, to the extent applicable, any bank regulatory authority), such Party may disclose Confidential Information as so required or requested; provided, that in such case, such Party shall, unless otherwise prohibited by Applicable Law, (1) give prompt notice to the other Parties that such disclosure is or may be required and (2) cooperate in protecting the confidential or proprietary nature of the Confidential Information which must be, or is hereby permitted to be, disclosed; provided, that no such notification under clause (1) shall be required in respect of any disclosure to FERC or bank, insurance or financial industry regulatory authorities having jurisdiction over such Party, (iv) disclosures to lenders, potential lenders or other Persons providing financing to the Company or to its Representatives and Advisors, any Party or any Affiliate of any Party and potential purchasers of equity interests in or assets of the Company, any Party or any Affiliate of any Party, any Person to which the applicable Member sells or offers to sell its investment in the Company or any portion thereof, if, in each case described in this clause (iv), such Persons have agreed to abide by the terms of this Section 7.7 or have otherwise entered into a contract with restrictions on disclosure substantially the same (and not less than two years in duration) as the terms of this Section 7.7 (or in the case of Advisors, are otherwise bound by professional or legal obligations of confidentiality), (v) any Party and its Affiliates, Representatives and Advisors may disclose Confidential Information, and make such filings, as may be required by this LLCA, and (vi) any Party and its Affiliates, Representatives and Advisors may disclose Confidential Information as to the tax treatment and tax structure of the transactions and arrangements contemplated in this LLCA or in connection with any communication regarding the tax consequences of the Project, the Company’s ownership and operation of the Project or such Party’s ownership of an interest in the Company (as tax treatment and tax structure are defined in United States Treasury Regulation section 1.6011-4). Each Member will be liable under this Section 7.7 for any violation of this Section 7.7 by any of its Representatives or Advisors. Without limiting the foregoing, and other than with respect to the Representatives and Advisors of a Party, no Party will use the name of the other Parties or their Affiliates without their prior written consent, except that each Party may disclose the name of the Members as equity investors or potential equity investors.
(b) Except as otherwise permitted by this Section 7.7, no Member shall include in a press release or otherwise disclose (other than as required to be included in a filing to FERC, PJM, NCUC, or any bank, insurance or financial industry regulatory authority having jurisdiction over such Member, its affiliates or permitted transferees) the name of any Member as an equity investor or potential equity investor without the prior written consent of such Member, which consent shall not be unreasonably withheld, conditioned or delayed. (c) If the Company or the Project Company is required at any time to make any regulatory filing that identifies by name, or otherwise relates specifically to, any Member or any of its affiliates or permitted transferees, then the Company shall submit (or the Company shall cause the Project Company to submit) an advance draft of such regulatory filing to such Member or its affiliate or permitted transferee, as applicable, as early as practicable in advance of the specified deadline imposed by FERC, PJM, NCUC or their regulations but in no event later than ten (10) Business Days prior to such deadline (except where the specified filing deadline does not permit ten (10) Business Days). Such Member (or its affiliate or permitted transferee, as applicable) shall have the right to provide comments to such regulatory filing as it relates to such Member (or its affiliate or permitted transferee), and the Company or the Project Company shall incorporate or reasonably accommodate, prior to submitting such filing, such comments if timely received; provided, that if such Member (or its affiliate or permitted transferee) has timely received an advance draft of such FERC, PJM, or NCUC filing in accordance with this Section 7.7(c) and does not provide comments prior to the date that the Company or the Project Company, as applicable, is required by FERC, PJM, or NCUC to make a filing by a specified deadline imposed by FERC, PJM, NCUC or their regulations, then the Company or the Project Company, as applicable, may make such FERC filing without the obligation to wait for such Member (or its affiliate or permitted transferee) comments. 7.8 Retirement, Resignation, Expulsion, Incompetency, Bankruptcy or Dissolution of a Member. The retirement, resignation, expulsion, bankruptcy or dissolution of a Member will not dissolve the Company. The successors interest to the Member that is Bankrupt will, for the purpose of settling the estate, have all of the rights of such Member, including the same rights and subject to the same limitations that such Member would have had under the provisions of this LLCA to Transfer its Membership Interest. A successor interest to a Member will not become a substituted Member except as provided in this LLCA.
ARTICLE VIII
ADMINISTRATIVE AND TAX MATTERS
8.1 Intention for Income Tax Purposes. The Members intend that the Company be treated as a partnership for federal, state and local income tax purposes and that it be operated in a manner consistent with such treatment.
8.2 Books and Records; Bank Accounts; Company Procedures. The Managing Member will keep the records required to be kept pursuant to the Act and any other books and records with respect to the Company as the Managing Member deems necessary or desirable. Any information reasonably sufficient to substantiate the tax documents, reports, records, and other tax information will be kept and maintained for six (6) tax years after the statute of limitations expires on any tax
audit of such returns or reports of the Company. The Company will use the calendar year as its Fiscal Year. It will use the same year as its tax year, unless required to use a different year by the Code or Treasury Regulations. The Company’s books of account will be prepared and maintained in accordance with GAAP for the type of business of the Company. The Managing Member will cause the Company and the Project Company to maintain its respective existence separate and distinct from any other Person, including causing each of the Company and the Project Company to take the following actions:
(a) acting solely in its own limited liability company name and not that of any other Person, including the Managing Member, any Affiliate Party and their respective Affiliates;
(b) except as provided in the Construction Financing Documents (prior to the SC Funding Date), not holding itself out as having agreed to pay, or as being liable for, the obligations of the Managing Member, any Member and their respective Affiliates or any other Person;
(c) observing all limited liability company formalities required in this LLCA and by the Delaware Certificate or the certificate of formation;
(d) not acquiring obligations of its Members, the Managing Member, the Operator, the Energy Manager, the Asset Manager, any Affiliate Party or their respective Affiliates or any other Person;
(e) conducting its affairs separately from and maintaining separate books and records from its Members, the Managing Member, and their respective Affiliates and any other Person, and holding itself out as a separate entity;
(f) correcting any known misunderstanding regarding its separate identity; and
(g) except as provided in the Construction Financing Documents (prior to the SC Funding Date) and except for the Final Completion Account and a single operating account of the Company or the Project Company, not commingling its assets with those of any other Person.
8.3 Information and Access Rights. Each Member will have the right to inspect, at reasonable times and at its own expense, the Project and the Company’s Assets and to audit, examine and make copies of all relevant documents, books and records of the Company or the Project Company upon reasonable prior notice to the Managing Member. The foregoing rights may be exercised by any agent or employee designated by the Member or by an independent public accountant, engineer, attorney or other consultant so designated. Any such inspection will be conducted during normal business hours and so as not to unreasonably interfere with the business of the Company and the Managing Member.
8.4 Reports. The Managing Member will, at the Company’s expense, deliver or make available, or cause to be delivered or made available, to each Member, the following items at the times indicated below:
(a) Annually (in the case of the following clauses (i) and (iii), commencing with the Fiscal Year in which the Effective Date occurs):
(i) within one hundred twenty (120) days after the end of each Fiscal Year, audited financial statements for the Company prepared in accordance with GAAP effective as of the end of the immediately-preceding year, including a balance sheet and statements of income, members’ equity and changes in cash flows and accompanied by a report of the Certified Public Auditor stating that their examination was made in accordance with generally accepted auditing standards and that in their opinion such financial statements of the Company fairly present the Company’s cash flows, results of operations and changes in financial position on a GAAP basis;
(ii) within one hundred twenty (120) days after the end of each Fiscal Year, audited financial statements for Class B Member Guarantor prepared in accordance with GAAP effective as of the end of the immediately-preceding year, including a consolidated balance sheet and consolidated statements of income, members’ equity and changes in cash flows and accompanied by a report of the Certified Public Auditor stating that their examination was made in accordance with generally accepted auditing standards and that in their opinion such financial statements of the Class B Member Guarantor and its consolidated subsidiaries fairly present the Class B Member Guarantor’s and its consolidated subsidiaries’ cash flows, results of operations and changes in financial position on a GAAP basis; provided, however, that notwithstanding anything else herein to the contrary, the Class B Member Guarantor shall not be obligated to deliver any such audited financial statements immediately as of the date on which the Guaranty is terminated or expires pursuant to its terms; and
(iii) within one hundred twenty (120) days after the end of each Fiscal Year, the Tracking Model prepared pursuant to Section 10.1; (b) Annually, within seventy-five (75) days after the end of each Fiscal Year (commencing with the Fiscal Year in which the Effective Date occurs), a draft Schedule K-1 for such Member for the prior tax year;
(c) Annually, by no later than March 31, a projection of any Adjusted Capital Account Deficit for a Member that might lead to a reallocation of losses for the tax year to the other Members;
(d) Each of the following reports; provided, that Managing Member may satisfy its obligation to deliver or make available such report to the extent covered in a report by Energy Manager, Asset Manager or Operator by delivering or making available to the Members copies of the applicable reports prepared by such Person:
(i) monthly, within thirty (30) days after the end of a calendar month following the SC Funding Date, a report, in the form of Exhibit F (a “Monthly Report”), showing (A) details of actual production, insolation and availability versus applicable projections for such calendar month and (B) any substantial technical or operational issues for the
Project, as well as updates with respect to such matters previously reported in a prior Monthly Report;
(ii) quarterly, within sixty (60) days after the end of a calendar quarter following the SC Funding Date, a report, in the form of Exhibit G, showing (A) the revenues and expenses of the Company and the Project Company for such quarter and (B) the information provided in the Monthly Report on a quarterly basis; and (iii) annually, within sixty (60) days after the end of each Fiscal Year (commencing with the Fiscal Year in which the Effective Date occurs), an annual report in the form of Exhibit H, showing (A) details of actual production, insolation and availability versus applicable projections for such Fiscal Year, (B) the revenues and expenses of the Company and Project Company for the Fiscal Year, and (C) any substantial technical or operational issues for the Project, as well as updates with respect to such matters previously reported in a prior Monthly Report or quarterly report; (e) Within five (5) Business Days after receipt thereof, copies of all operating reports delivered to the Project Company or the Company by the Operator in connection with the O&M Agreement, the Energy Manager in connection with the Energy Management Services Agreement and the Asset Manager in connection with the Asset Management Agreement;
(f) Quarterly within sixty (60) days after the end of each calendar quarter, unaudited quarterly financial statements of the Company and the Class B Member Guarantor for the calendar quarter then ended;
(g) Within five (5) Business Days of becoming aware of any of the following events or circumstances, notice of (i) any litigation pending or, to the knowledge of the Managing Member, threatened against the Company or the Project Company or, if related to the Project or could reasonably be expected to result in a Material Adverse Effect, the Managing Member, any Class B Member, the Class B Member Guarantor or any Affiliate Party, (ii) any force majeure event that would reasonably be expected to have a Material Adverse Effect, any material breach or any event of default under any Project Document, any Construction Financing Document (prior to the SC Funding Date) or any Governmental Approvals, (iii) any material noncompliance with or material violations of law, including Environmental Law, Anti-Terrorism Law and law of a Compliance Authority, the Company, the Project Company, the Managing Member, any Class B Member or if related to the Project or could reasonably be expected to result in a Material Adverse Effect, the Class B Member Guarantor or any Affiliate Party, (iv) any material communications by the Managing Member, any Class B Member, the Company or the Project Company with any Governmental Authority outside the ordinary course of business, (v) the aggregate expenses of the Company within a calendar year exceeding (or anticipated to exceed) the Approved Budget for such calendar year by 10% or more, and (vi) any other event or circumstance that results in, or could reasonably be expected to result in a Material Adverse Effect;
(h) Within ten (10) Business Days following any request therefor, make available such other reports and information to the extent commercially relevant to the operations of the Company and the Project Company and in the possession of the Managing Member as reasonably requested
by the Members and, within sixty (60) days following any request therefor such other reports reasonably requested by and paid for by the requesting Member to the extent external costs are incurred with respect to the preparation of such reports;
(i) Within ten (10) Business Days following receipt or delivery thereof, copies of all material notices of default delivered to or by the Company or the Project Company, in each case, pursuant to, or in respect of any Construction Financing Document (prior to the SC Funding Date) or Material Project Document;
(j) Within thirty (30) Business Days after renewal, copies of policies of insurance owned or held by or on behalf of the Company, including current certificates of insurance, and promptly following receipt, any notices of nonpayment of premium, nonrenewal or cancellation;
(k) Promptly upon execution thereof, a copy of: (i) any amendment, modification, waiver or termination of any Material Project Document or, prior to the SC Funding Date, any Construction Financing Document, (ii) any new, or substitution or replacement of, any Construction Financing Document entered into prior to the SC Funding Date or of any Support Obligation and (iii) any new contract between the Company or the Project Company and an Affiliate of any Member and any amendment or modification of any existing Affiliate Contract and (iv) any Additional Material Project Document; and
(l) Within five (5) Business Days following receipt or delivery thereof, deliver to each Member notice of any amendments or other modifications to the budget approval process or methodology for preparing the budget contained in the Construction Financing Agreement or any Backleverage Financing Agreement to the extent different from the process and methodology therefor set forth in the Construction Financing Agreement as of the Effective Date.
8.5 Permitted Investments. Cash of the Company may only be invested and reinvested in the following investment alternatives (provided, that such investment alternatives shall not include any investment directly or indirectly in any “public utility,” “public-utility company,” “holding company,” “electric utility,” “transmission and distribution utility,” “alternative retail electric suppliers” or “electric suppliers” as those terms are defined under the FPA, PUHCA or the NCUC regulations, as applicable, unless applicable prior FERC, PUHCA or NCUC approvals have been obtained):
(a) direct obligations of the United States of America or obligations the timely payment of the principal of and interest on which are fully guaranteed by the United States of America, in each case maturing within one year from the date of acquisition;
(b) checking or interest-bearing demand or time deposits that are either (i) insured by the Federal Deposit Insurance Corporation, or (ii) held in banks and savings and loan associations, having general obligations rated at least “A-” by S&P, “A3” by Moody’s or equivalent, or if not so rated, secured at all times, in the manner and to the extent provided by law, by collateral security described in clause (a) above or this clause (b), of a market value of no less than the amount of monies so invested;
(c) obligations of any state of the United States or any agency or instrumentality of any of the foregoing which are rated at least “AA” by S&P or at least “Aa” by Moody’s, in each case maturing within one (1) year from the date of acquisition thereof;
(d) commercial paper rated (on the date of acquisition thereof) at least “A-1” or “P-1” or equivalent by S&P or Moody’s, respectively (or an equivalent rating by another nationally recognized credit rating agency of similar standing if neither of such corporations is then in the business of rating commercial paper), maturing not more than ninety (90) days from the date of creation thereof but excluding any such commercial paper issued by any Member or any Affiliate of the Managing Member;
(e) money market mutual funds that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended, and operated in accordance with Rule 2a-7 and that at the time of such investment are rated “Aaa” by Moody’s and/or “AAA” by S&P; or
(f) any other investments agreed to by Consent of the Members and agreement of the Managing Member.
8.6 Tax Elections. The Company shall make the following U.S. federal income tax elections on the appropriate Company Tax Returns:
(a) to the extent permitted under section 706 of the Code, elect the calendar year as the Company’s tax year;
(b) elect the accrual method of accounting;
(c) elect to amortize any organizational and start-up expenses of the Company or the Project Company ratably over a period of 180 months as permitted by Section 709(b) of the Code;
(d) elect not to claim any “bonus depreciation” otherwise available under Section 168(k) of the Code and elect to use MACRS for all depreciation with respect to any “5-year MACRS” property; provided, however, that the Class A Member may require the Company to elect to claim “bonus depreciation” under Section 168(k) of the Code for one or more classes of property by written notice to the Managing Member at least 5 Business Days prior to the U.S. federal income tax return filing deadline (including extensions) of the applicable Company Tax Return;
(e) make an election under section 754 of the Code if requested by any Member; and
(f) if approved by the Consent of the Members, any other election.
Notwithstanding the foregoing, the Company may make ministerial tax elections that (i) are made in the ordinary course of preparing the Company’s Tax Returns or (ii) do not materially affect the economic consequences to the Class A Member shown in the Base Case Model without the Consent of the Members. In addition, the Partnership Representative may elect to extend the time for filing any Company Tax Return as provided for under the Code and applicable state statutes.
None of the Class B Member, the Company or the Project Company or their respective Affiliates (and no successor entity of any of the foregoing) shall elect to receive production tax credits, claim credits under Section 48E of the Code, make the election under Sections 6417 or 6418 of the Code or elect to receive cash grant or similar benefit in lieu of tax credits with respect to the Project except as permitted by Section 8.11. None of the Class B Member, the Company or the Project Company or their respective Affiliates (and no successor entity of any of the foregoing) shall claim the energy community bonus credit available under Section 48(a)(14) of the Code with respect to the Project or the domestic content bonus credit available under Section 48(a)(12) of the Code with respect to the Project without the prior written consent of the Class A Member, which may be withheld in its sole discretion.
8.7 Partnership Representative and Tax Audits.
(a) The Managing Member will be the initial “partnership representative” under section 6223(a) of the Code (the “Partnership Representative”) with all of the rights, duties and powers and subject to the limitations provided for in sections 6221 through 6234 of the Code. The Partnership Representative shall appoint the “designated individual” pursuant to Treasury Regulation Section 301.6223-1(b) and the Company may engage accountants and legal counsel to assist the Partnership Representative in discharging its duties hereunder. The Partnership Representative shall represent the Company in connection with all examinations of the Company’s affairs by tax authorities, including resulting administrative and judicial proceedings.
(b) If (i) the Managing Member designated as Partnership Representative (A) resigns as Managing Member of the Company or (B) is removed pursuant to this LLCA, or (ii) the Managing Member (A) has engaged in gross negligence, misconduct or fraud, (B) has performed any action or omitted to take any material action that is a breach or violation of the obligations of the Partnership Representative under this LLCA, or (C) is declared bankrupt, then the Class A Member shall designate a successor Partnership Representative in accordance with applicable rules of the Code, Treasury Regulations, and the IRS that apply to audits conducted thereunder (the “Applicable Rules”) and the successor Partnership Representative shall take such action, including notifying the IRS of its designation as such, as may be necessary or appropriate under the Applicable Rules.
(c) Notwithstanding any provision in this LLCA to the contrary, but subject to this Section 8.7(c), to the extent permitted by the Applicable Rules, the Partnership Representative shall not take any of the following actions without the consent of the Class A Member: (i) enter into any agreement to extend the period for assessing any tax that is attributable to any item that may be the subject of an audit of any Tax Return being audited;
(ii) enter into a settlement agreement with the IRS or any other tax authority (other than for claims for which the Class B Members have agreed to indemnify the Class A Member in accordance with Article XI in immediately available funds and on an After Tax Basis from any adverse tax consequences of the underlying claims, including interest and penalties and have acknowledged in writing to the Class A Member their
responsibility to so indemnify, and the Class A Member is reasonably satisfied with the Class B Member’s financial ability to make such indemnification payments);
(iii) commence, settle or compromise any judicial or administrative proceeding with respect to any income Tax Return being audited;
(iv) make any submission to a tax authority in respect of an audit, contest or other tax matter or proceeding which affects any tax item reported to the Class A Member on the Schedule K-1 without providing such submission for review and comment by the Class A Member and incorporating the Class A Member’s reasonable comments thereto;
(v) file any voluntary request for an administrative adjustment with respect to any partnership item;
(vi) waive any restrictions imposed on any taxing authority with respect to any assessment of tax imposed on the Company or any Member;
(vii) enter into any closing agreement under Section 7121 of the Code or any other binding settlement agreement with respect to any income Tax Return of the Company (including IRS Form 1065 and any related Schedule K-1) with the IRS or any state or local taxing authority; or
(viii) take or not take any non-ministerial action in respect of an audit, contest or other tax matter or proceeding, the taking or omission of which, respectively, affects any material tax item reported to the Class A Member on Schedule K-1 or that would delay the expected timing of the Class A Member achieving the Target IRR or would materially impact the Class A Member’s negative Capital Account balance.
(d) In the event of any pending tax action, investigation, claim or controversy at the Company level that may result in an adjustment to any item reported on an income Tax Return of any Member (a “Tax Contest”), the Partnership Representative will alert the Members promptly, consult with them about the defense, keep them reasonably informed of all material developments in the proceeding (including delivering to each Member promptly upon receipt a copy of all material notices, communications, reports and writings received from any federal, state or local taxing authority), show them drafts of any proposed submissions to the tax authorities with sufficient time to review and comment on the drafts, consider in good faith any such comments, incorporate reasonable comments into the drafts and, to the extent permitted under Applicable Law, allow the Members and their counsel to participate in all substantive meetings, presentations, proceedings or calls with the tax authorities about the matter, and take such action as may be required (to the extent permitted) to enable such participation, whether such meeting, presentation or proceeding is in person, or by electronic, telephonic or other means. Notwithstanding the previous sentence, if at any point it becomes clear that the Class A Member will not be indemnified under Section 11.1 for Tax Losses that result from any Tax Contest that involves Tax Benefits for any Allocation Period (or portion thereof) ending before the Flip Date, then any action taken by the Partnership Representative with respect to a Tax Contest shall be solely at the direction of the
Class A Member; provided, that the Partnership Representative shall not be required to advocate for any position at the direction of any Member if the Partnership Representative obtains a written legal opinion from nationally recognized tax counsel, selected jointly by the Members, that there is no reasonable basis for such position.
(e) Notwithstanding anything herein to the contrary, the Partnership Representative shall cause the Company to elect application of Section 6226 of the Code and shall comply with all of the requirements and procedures required in connection therewith, to have the Members of the Company for the year which is under examination pay the applicable tax liability. The Partnership Representative shall provide the IRS and each affected Member with such information as required by Section 6226 of the Code and any Applicable Rules. Each Member agrees to cooperate with the Company in utilizing the procedures under Section 6226 of the Code, whether or not such person is a Member at the time of a final partnership adjustment. For the avoidance of doubt, to the extent that any Class B Member is required to indemnify the Class A Member for any Tax Loss, such obligation shall include indemnifying the Class A Member for any special underpayment interest rate provided by Section 6226(c)(2) of the Code.
(f) Notwithstanding anything herein to the contrary, upon the receipt by the Company of a notice of final partnership adjustment pursuant to Section 6231(a)(3) of the Code (“Notice of Final Partnership Adjustment”) that would result in a Tax Loss for which any of the Class B Members would be required to indemnify the Class A Member pursuant to Article XI, the Class B Members shall cause to be paid to the Class A Member (or into escrow under terms reasonably acceptable to the Class A Member) an amount equal to the full amount of such Tax Loss set forth in the Notice of Final Partnership Adjustment. In the event that, upon Final Determination, the Tax Loss for which the Class B Members are required to indemnify pursuant to Article XI is an amount less than the amount so paid, the excess shall be promptly repaid to the Class B Members. (g) Any cost or expense incurred by the Partnership Representative in connection with its duties, including, if relevant, the preparation for or pursuit of administrative or judicial proceedings, will be paid by the Company; provided, however, that the Class B Members shall be solely responsible for all costs and expenses incurred by the Company or Partnership Representative in connection with any action or proceeding described in this Section 8.7 to the extent such action is taken without consent of the Class A Member by reason of an assertion that the action or proceeding involved a Tax Contest that the Class B Members are entitled to control pursuant to this Section 8.7. (h) This Section 8.7 will survive the termination of the Company and the termination of any Member’s interest in the Company and will remain binding on the Members for the period necessary to resolve any tax controversies. 8.8 Preparation of Tax Returns.
(a) The Partnership Representative will cause the Certified Public Accountant to prepare and timely file all federal, state and local Tax Returns required to be filed by the Company. Subject to the provisions of this Section 8.8(a), all Tax Returns of the Company shall be prepared on a basis consistent with this LLCA, including the Fixed Tax Assumptions and other assumptions
contained in the Base Case Model as adjusted pursuant to Section 2.1(d) of the ECCA unless, (i) the Company is required to file an inconsistent Tax Return as a result of (A) a Final Determination in a federal income tax audit or administrative or judicial proceeding conducted in accordance with the terms of this LLCA and involving such Tax Return or a Tax Return for a prior period, (B) a breach by the Class A Member of any of its representations, warranties or covenants in the Transaction Documents, (C) a Change in Tax Law or other change in Applicable Law; provided, that the Partnership Representative provides an opinion to the Class A Member from a nationally recognized law firm reasonably acceptable to all Members that there is no reasonable basis to take a position on such Tax Return consistent with this LLCA, the Base Case Model or the Fixed Tax Assumptions, or (ii) the Class A Member delivers its express written consent that such Tax Return may be filed in a manner inconsistent with the Fixed Tax Assumptions. Notwithstanding the foregoing or anything to the contrary in the LLCA, the Partnership Representative’s obligation to file any Tax Return or provide the Members with copies thereof or related tax information under this Section 8.8(a) shall be suspended, and the Partnership Representative shall not be considered in breach of any such of its obligations under this Section 8.8(a), to the extent that the Certified Public Accountant preparing the Tax Returns for the Company is unwilling to sign a Tax Return prepared consistent with the Base Case Model and the Fixed Tax Assumptions and the requisite Consent of the Members for an inconsistent Tax Return is not obtained due to one or more Members (other than the Partnership Representative) failing or refusing to consent thereto, it being understood that the suspension of such obligations shall not be deemed to permit the Partnership Representative to file, or cause to be filed, any inconsistent Tax Return; provided, that, promptly upon the Partnership Representative becoming aware that the Certified Public Accountant is unwilling or unable to sign a Tax Return consistent with the Base Case Model and the Fixed Tax Assumptions and a Member refusing to consent to filing an inconsistent Tax Return, the Partnership Representative shall notify the Class A Member in writing and shall either (x) propose a replacement for such Certified Public Accountant, reasonably acceptable to the Class A Member, who is willing to so sign a consistent Tax Return, or (y) permit the Class A Member to appoint a Certified Public Accountant so long as such Certified Public Accountant is affiliated with a firm of independent public accountants with national reputation and expertise in the relevant subject tax matters, and in the case of (x) or (y) such replacement Certified Public Accountant shall thereafter serve as the Certified Public Accountant for all purposes under this LLCA; provided, further, that if the Class A Member after good faith effort is unable to identify a Certified Public Accountant who is willing to sign a Tax Return consistent with the Base Case Model and the Fixed Tax Assumptions within a reasonable time prior to the due date for filing such Tax Return (taking into account available extensions), the Partnership Representative shall be permitted to file an inconsistent Tax Return without the consent of the Class A Member; provided, further, that for the avoidance of doubt none of the Partnership Representative, the Managing Member or any Class B Member shall be relieved of any liability pursuant to Article XI arising out of or resulting from the breach of any representation or other obligation of the Partnership Representative, the Managing Member or any Class B Member under any Transaction Document. Each Member will furnish to the Partnership Representative all pertinent information in its possession relating to the Company’s operations that the Certified Public Accountant requests that is reasonably necessary to allow the Company’s Tax Returns to be prepared and filed. The Company will furnish to the Members (a) by no later than 75 days after the end of the taxable year, drafts of Schedules K-1 proposed to be delivered to the Members and filed by the Company with
its Tax Return for such taxable year and (b) by no later than July 31 of each year, copies of the U.S. federal, state and local Tax Returns proposed to be filed by the Company for the immediately preceding tax year, together with all accompanying schedules and tax work papers; provided, however, that any such Tax Return for any year in which the Company claims an ITC shall be provided no later than May 31st. The Partnership Representative shall incorporate all reasonable changes or comments to such proposed Tax Return and information returns requested by the other Members at least 10 days prior to the filing date for such Tax Returns (as extended). After making such requested changes, the Partnership Representative shall, on behalf of the Company, file all Tax Returns in a timely manner, taking into account any applicable extensions; provided, however, that any such Tax Return for any year in which the Company claims an ITC shall be filed no later than July 31st. Within 20 days after filing, the Partnership Representative shall, on behalf of the Company, deliver to each Member a copy of such Tax Returns and information returns as filed, together with any additional tax-related information in the possession of the Partnership Representative or the Company that such Member may reasonably and timely request in order to prepare its own income Tax Returns. The Company will bear the costs of the preparation and filing of its returns, including the fees of the Certified Public Accountant and any costs incurred by the Partnership Representative.
8.9 Representations, Warranties and Covenants of the Members. Each of the Class A Member and Class B Members represents, warrants and covenants to the Company and the other Members that the following statements are true and correct as of (x) with respect to the Class A Member and the Initial Class B Member, the Effective Date and each Funding Date and (y) with respect to any other Person hereafter admitted as a Member pursuant to this LLCA, the date such Person is so admitted as a Member and each Funding Date occurring thereafter (in each case, unless otherwise noted):
(a) It (i) is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (ii) has the full right, power and authority to perform its obligations under this LLCA, (iii) will at all times report the Transaction in accordance with this LLCA and its own applicable regulatory requirements, (iv) has discussed the Transaction and the accounting and tax treatment that it intends to accord the Transaction with its independent advisors, and it is solely responsible for deciding to enter into the Transaction and has not relied on any other party (save for any representations made in this LLCA), other than its independent advisors, in respect of the accounting or tax treatment to be applied to the Transaction or the overall suitability of the Transaction, (v) is an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of the Securities Act and is able to bear the economic risk of losing its entire investment in the Company, (vi) has such sophistication, knowledge and experience in financial and business matters that it is capable of evaluating the merits, risks and suitability of entering into the Transaction, (vii) is acquiring its interest for its own account and not as a nominee or agent, (viii) understands its interest has not been, and will not be, registered under the Securities Act and is being acquired in a transaction not involving a public offering by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of each Member’s investment intent and the accuracy of the Members’ respective representations as expressed herein, (ix) understands that no public market now exists for the Membership Interests or any of the securities of the Company and that
neither the Company nor any Member or its affiliate has made any assurances that a public market will ever exist for the Membership Interests or the Company’s securities, (x) (or if it is a disregarded entity, the Person treated as owning such Member’s assets for U.S. federal income tax purposes) is and will continue to be a “United States person” as defined in section 7701(a)(30) of the Code and (xi) (or if it is a disregarded entity, the Person treated as owning such Member’s assets for U.S. federal income tax purposes) is and will remain not subject to withholding under Section 1446 of the Code.
(b) This LLCA is a legal valid and binding obligation of the Member, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and by general equitable principles.
(c) That either (i) no part of the aggregate Capital Contributions made by the Member and used by the Member to acquire its membership interest constitutes Assets of any “employee benefit plan” within the meaning of section 3(3) of ERISA or other “benefit plan investor” (as defined in U.S. Department of Labor Reg. §§ 2510.3-101 et seq. or in section 3(42) of ERISA) or Assets allocated to any insurance company separate account or general account in which any such employee benefit plan or benefit plan investor (or related trust) has any interest or (ii) the source of the funding used to pay the Capital Contributions made by the Member is an “insurance company general account” within the meaning of Department of Labor Prohibited Transaction Exemption 95-60, issued July 12, 1995, and there is no employee benefit plan, treating as a single plan all plans maintained by the same employer or employee organization, with respect to which the amount of the general account reserves and liabilities for all contracts held by or on behalf of such plan exceeds 10% of the total reserves and liabilities of such general account (exclusive of separate account liabilities) plus surplus, as set forth in the National Association of Insurance Commissioners “Annual Statement” filed with such Member’s state of domicile.
(d) Neither the Member (or if it is a disregarded entity, the Person treated as owning such Member’s assets for U.S. federal income tax purposes) nor any of its direct or indirect owners is a Disqualified Entity or will become, within the Recapture Period, a Disqualified Entity. Neither the tax status of the Member (or if it is a disregarded entity, the Person treated as owning such Member’s assets for U.S. federal income tax purposes) nor any of its direct or indirect owners causes, or will cause, any portion of the Project to be subject to the alternative depreciation system under Section 168(g) of the Code.
(e) Such Member (or if such Member is a disregarded entity, the person treated as owning the Member’s assets for federal income tax purposes) is not and will not be a Related Person.
(f) Such Member (A) will not take a position on any Tax Return that is inconsistent with any Project and any property that is part of such Project being Placed In Service by the Company and the “original use” (within the meaning of Code Section 48) of any Project and any property that is part of such Project commencing with the Company and (B) will not claim on any Tax Return any depreciation or amortization deductions, ITCs, PTCs or any other tax credits or deductions that are available with respect to ownership or operation of any Project or any property
that is part of such Project (except to the extent claimed by the Company and allocated to such Member).
(g) No Covered Entity relating to such Member (i) is a Sanctioned Person, (ii) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person or (iii) does business in or with, or derives any of its operating income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority. Each Covered Entity is in compliance with, and no Covered Entity engages in any dealings or transactions prohibited by, any laws of the United States, including but not limited to any Anti-Terrorism Laws.
(h) The proceeds of any Transaction Document will not be used to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority and the funds used with respect to the Project are not derived from any unlawful activity.
8.10 Additional Representations and Warranties of the Managing Member. The Managing Member represents, warrants and covenants to the Company and the other Members that the following will be true and correct as of the Effective Date and will continue to be true throughout the Recapture Period (unless otherwise noted below):
(a) No federal tax credit or grant in lieu of a tax credit has been claimed with respect to the Project or will be claimed with respect to the Project within the Recapture Period other than the ITC, as contemplated by the Base Case Model.
(b) Either (x)(i) for purposes of Section 48(a)(9)(B)(ii) of the Code, construction of the Project began before January 29, 2023 and (ii) the Project is exempt from the prevailing wage and apprenticeship requirements of Section 48(b)(9)-(10) of the Code, and (iii) all property included in the Project has been or will be Placed In Service by December 31, 2025 or (y)(i) (a) for purposes of Section 48(a) of the Code, construction of the Project began before December 31, 2024 by complying with the Five Percent Safe Harbor (as defined in IRS Notice 2018-59) as of such date, (ii) the Project has complied with the PWA Requirements and (iii) the Class B Member has maintained (or has caused to be maintained) records sufficient to enable the Company to demonstrate compliance with, or to correct any failure to comply with, the PWA Requirements (including the information set forth in Treasury Regulations Sections 1.45-12).
(c) If it becomes reasonably likely that all or any portion of the Project may be Placed In Service after December 31, 2025, the Class B Member shall comply with the requirements of Section 6.1(c) of the ECCA.
(d) If the Project is Placed in Service after December 31, 2025, the Class B Member shall, at its sole cost and expense, cause the Project to satisfy the PWA Requirements, including by maintaining (or causing to be maintained) records, including the information set forth in Treasury Regulations Sections 1.45-12, sufficient to enable the Company to demonstrate
compliance with, and to correct any failure to comply with the PWA Requirements by paying backpay, penalties and interest, as required.
(e) Except as provided in this LLCA, no Person other than the Company and the Project Company has or will have an ownership interest, or a right to acquire an ownership interest, in any Project.
(f) No electricity generated by the Project will be used to heat a swimming pool.
(g) No electricity from the Project will be sold to a Member or an Affiliate of a Member.
(h) Except to the extent otherwise required based on a prior IRS determination or in accordance with Section 8.8(a), the Managing Member and its Affiliates will not take any position or allow the Company to take any position that is inconsistent with the Fixed Tax Assumptions. (i) No part of the Assets of the Company or the Project Company is or will at any time be “tax-exempt use property” within the meaning of Section 168(h) of the Code, other than as a result of the ownership interest of the Class A Member or its direct or indirect owners.
(j) For purposes of the ITC, the tax basis allocable to the ITC Eligible Property of the Project shall be equal to the amount allocated to ITC Eligible Property in the Cost Segregation Report. The Project qualifies for the ITC rate of thirty percent (30%) of the ITC Eligible Basis unless otherwise reflected in the applicable Funding Date Model.
(k) It shall provide written notice to Class A Member promptly, and in any case, within ten (10) days of it taking any action or becoming aware of any new obligation or circumstance that would require the Project Company to make a report to, or filing with, FERC, NERC, PJM or NCUC, pursuant to any applicable Law, including those rules or regulations applicable to the Project Company’s ability to sell electric energy at wholesale, ancillary services, capacity, or RECs from the Project. Managing Member, the Company and the Project Company shall cooperate and provide such information as may be reasonably necessary in order to make any such reports or filings required under any applicable Law.
8.11 Tax Credit Transfers.
(a) Generally. If any portion of the Project is Placed In Service after December 31, 2025, the Class A Member may, by written notice to the Managing Member, direct the Managing Member, (i) to cause the Company to make a valid election pursuant to Section 6418 of the Code, the Treasury Regulations promulgated thereunder and any guidance issued that is associated therewith (collectively, the “ITC Transfer Legal Requirements”) with respect to each eligible credit property (an “ITC Transfer Election”) to transfer all or any specified portion of the ITCs generated after December 31, 2025 to which it is entitled (an “ITC Transfer”) to one or more persons who are not related to the Company within the meaning of Sections 267(b) and 707(b)(1) of the Code (each, an “ITC Transferee”) and (ii) to enter into one or more tax credit purchase agreements (each, a “Tax Credit Purchase Agreement”) between the Company and the ITC
Transferee reflecting the terms of the ITC Transfer that comply with the requirements in this Section 8.11. The Managing Member shall cause any ITC Transfer Election and subsequent ITC Transfer to comply with the ITC Transfer Legal Requirements. (b) Cooperation. If the Managing Member is directed by the Class A Member to make an ITC Transfer Election, (i) the Class A Member shall provide to the Managing Member the necessary information regarding such ITC Transferee, (ii) the Managing Member shall timely furnish to the Class A Member, the ITC Transferee and the IRS, as applicable, all information and documentation reasonably requested and filings necessary to effectuate such ITC Transfer in compliance with the ITC Transfer Legal Requirements, and (iii) the Managing Member shall cause the Company to complete the “pre-filing registration” process in compliance with ITC Transfer Legal Requirements promptly after Placed In Service and in any event no later than sixty (60) days prior to the time set forth by the ITC Transfer Legal Requirements for the completion of such registration; provided, however, that if the IRS registration portal is not then available, such registration shall be effected promptly upon the opening of the IRS registration portal.
(c) ITC Transfer Costs. The Class A Member shall economically bear all reasonable and documented transaction costs and expenses (including fees of external legal counsel) of the Company and the Class B Members (such costs and expenses, the “ITC Transfer Costs”) in connection with the ITC Transfer Election and ITC Transfer (including any reasonable and documented costs and expenses (including fees of external legal counsel) incurred in connection with making the agreed modifications to this Agreement and the review of the applicable Tax Credit Purchase Agreement in connection with such ITC Transfer). All ITC Transfer Costs associated with any ITC Transfer will be paid by the Class A Member in accordance with the foregoing and will not be deducted from the ITC Transfer purchase price paid to the Company such that the Company receives the full amount of the purchase price.
(d) Indemnification. None of the Company, the Project Company, the Managing Member, or the Class B Member or any of its Affiliates shall be required to indemnify any ITC Transferee in any ITC Transfer without such Person’s consent.
8.12 Survival. The representations, warranties and covenants in this Article VIII will survive the termination of this LLCA and the Company. ARTICLE IX
TRANSFERS OF INTERESTS; PURCHASE OPTION
9.1 Transfer Restrictions. A Member may not Transfer all or any portion of its Membership Interest, except in strict accordance with this Article IX. References in this LLCA to Transfers of a “Membership Interest” will also refer to Transfers of a portion of a Membership Interest. Any attempted Transfer of any Membership Interest in violation of this Article IX will be null and void ab initio. The Members agree that a breach of the provisions of this Article IX may cause irreparable injury to the Company and to the other Members for which monetary damages (or other remedy at law) are inadequate in view of (a) the complexities and uncertainties in measuring the actual damages that would be sustained by reason of the failure of a Member to comply with such provision and (b) the uniqueness of the Company’s business and the relationship
among the Members. Accordingly, the Members agree that this Article IX may be enforced by specific performance. 9.2 Permitted Transfers.
(a) Transfers by the Class A Member. Prior to the SC Funding Date, the Class A Member may Transfer all or part of its Class A Membership Interests to a Person that is not a Disqualified Transferee and is an Affiliate of the Class A Member so long as it satisfies the requirements of Section 9.3 and so long as the Class A Member, the transferee, and each other party the Class A Guaranty sign an acknowledgement stating the Class A Guaranty shall continue in full force and effect as credit support for the satisfaction of the obligations of such assignee. After the SC Funding Date, the Class A Member may Transfer all or part of its Class A Membership Interests to a Person that is (i) not a Disqualified Transferee and (ii) prior to the Flip Date, within the two (2) years preceding such assignment, has made investments in renewable energy assets in the aggregate of at least fifty million dollars ($50,000,000) (or, if the initial Class A Member retains any part of the Class A Units following such transfer, at least twenty five million dollars ($25,000,000)), so long as it satisfies the requirements of Section 9.3. Notwithstanding the foregoing, the Class A Member may Transfer all or part of its Class A Membership Interests at any time in accordance with any of Sections 9.4, 9.7 and 9.8. (b) Transfers by the Class B Members Prior to the Consent Date. Prior to the Consent Date, any Class B Member may Transfer all or part of its Class B Membership Interests so long as it satisfies the requirements of Section 9.3 with prior written Consent of the Members; provided, that the following Transfers to any Person that is not a Disqualified Transferee are not subject to the approval by Consent of the Members so long as the requirements of Section 9.3 are satisfied (provided, that in the case of any such Transfers during the Recapture Period, the Class A Member shall have confirmed acceptance of the Class B Transfer Tax Opinion in writing to the Class B Member prior to the consummation of such Transfer): (i) a Transfer to a Qualified Transferee;
(ii) a Transfer in accordance with Section 9.7; (iii) a direct Transfer that, taken together with all prior Transfers, constitutes a Transfer of less than 50% of the aggregate number of Class B Units to a Person that is not a Disqualified Transferee and whom will not assume the role of Managing Member;
(iv) an indirect Transfer consisting of a direct or indirect transfer of an interest in a Class B Member that does not constitute a Change of Member Control pursuant to clause (a) or (b) of the definition of Control (but substituting 30% for 50% in each instance set forth therein); and
(v) a Transfer upon foreclosure (or in lieu of such foreclosure) under an Encumbrance on the Class B Membership Interests or on any membership interest in any Class B Member (or any direct or indirect Parent of such Class B Member) as permitted in accordance with Section 9.5.
(c) Transfers by the Class B Members After the Consent Date. After the Consent Date, each Class B Member may Transfer all or part of its Class B Membership Interests to any Person that is not a Disqualified Transferee, so long as it satisfies the requirements of Section 9.3. 9.3 Conditions to Transfers. Except as otherwise expressly provided in this Article IX, all Transfers permitted by this LLCA will be subject to the satisfaction of the following requirements: (a) Transfer Documents. The following documents will have been delivered by the Transferring Member to the Managing Member and each other Member:
(i) Notice. Written notice not less than 10 Business Days before the proposed effective date of the Transfer; provided, that such notice will not be required in the case of an indirect Transfer that is not a Change of Member Control or a Transfer in connection with a foreclosure of an Encumbrance (or in lieu of such foreclosure) permitted pursuant to Section 9.5. (ii) Transfer Instrument. A transfer instrument executed by the Transferring Member and the Transferee, in substantially the form of Exhibit E; provided, that such an instrument will not be required in the case of an indirect Transfer or a Transfer upon or in lieu of foreclosure under an Encumbrance on the Class B Membership Interests or any membership interest in any Class B Member (or any direct or indirect Parent of such Class B Member) as permitted in accordance with Section 9.5, and the transfer instrument requirement may be satisfied by the dating by the Transferee of a transfer power delivered in connection with the granting of the Encumbrance. (iii) Class B Member Credit Support. If the Transfer involves any direct or indirect Transfer of any Class B Membership Interest (including any Transfer upon foreclosure (or in lieu of such foreclosure) under an Encumbrance on such Class B Membership Interest or Change of Member Control of a Class B Member), then: (A) such Class B Member has delivered to Class A Member an amendment or ratification, as applicable, by the Class B Member Guarantor of the Guaranty, or a certification by such Class B Member, confirming that such Guaranty will continue in full force and effect and the guaranteed obligations thereunder will include the obligations of the Transferee as a Class B Member and, if such Class B Member is the Managing Member, Managing Member hereunder; provided, that no such amendment, certification or confirmation will be needed in connection with any direct or indirect Transfer of equity interests in, or change in Control of, such Class B Member’s Parent or (B) the Transferee has delivered a replacement guaranty in the same form and containing the same terms as the Guaranty in favor of Class A Member, issued by a guarantor who is a Qualified Transferee or, in the case of a direct Transfer of the Class B Membership Interests, the Transferee is a Qualified Transferee.
(iv) Class A Member Credit Support. If the Transfer (A) occurs prior to the SC Funding Date and (B) involves (1) any Class A Membership Interest (including any Transfer upon foreclosure (or in lieu of such foreclosure) under an Encumbrance on such
Class A Membership Interest) or (2) a Change of Member Control of the Class A Member, then: (x) the Class A Member has delivered to the Class B Member a ratification by the Class A Member Guarantor of the Class A Guaranty, confirming that it will continue in full force and effect and will include the obligations of the Transferee as the Class A Member to make Capital Contributions under the ECCA; provided, that no such ratification will be needed in connection with any direct or indirect Transfer of equity interests in, or change in Control of, Class A Member’s Parent or (y) the Transferee has delivered a replacement guaranty in the same form and containing the same terms as the Class A Guaranty in favor of Class B Member, issued by a guarantor who satisfies the requirements of clauses (b) and (d) of the definition of Qualified Transferee.
(b) Applicable Law; Securities Law. Such Transfer does not violate any provision of Applicable Law, including applicable securities law.
(c) Tax Consequences. The Transfer must not (i) cause the Company to be classified as a corporation for federal income tax purposes (for example, as a publicly traded partnership) or (ii) if such Transfer by a Class B Member occurs prior to the end of the Recapture Period, be a Transfer to a Disqualified Entity or Related Person. In connection with a Transfer within the Recapture Period, the Transferring Class B Member shall provide an opinion of a nationally-recognized tax counsel, selected jointly by the Members, at least at a “will” level that the Transfer is not to a Disqualified Entity or Related Person (it being understood that in rendering such opinion, such tax counsel shall be entitled to rely upon reasonable assumptions and customary and reasonable representations provided by the relevant parties) (such opinion, the “Class B Transfer Tax Opinion”). The Transferring Class B Member is not relieved from any indemnity obligation under this LLCA for any adverse tax consequences resulting from a Transfer to a Disqualified Entity or Related Person within the Recapture Period.
(d) Payment of Expenses. The Transferring Member and the Transferee will have paid or reimbursed the Company, the Project Company and each Member for all reasonable costs and expenses incurred by the Company, such Project Company and such Members in connection with the Transfer and admission no later than ten (10) days after such Person’s receipt of an invoice for the amount due; provided, that notwithstanding anything to the contrary, a Member that attempts but fails to Transfer any Membership Interests shall reimburse the Company, the Project Company and each Member for all of the reasonable, documented, out-of-pocket costs and expenses incurred by each of them in connection with the failed Transfer no later than ten (10) days of such Member’s receipt of an invoice for the amount due.
(e) No Release. Such Transfer will not effect a release of the Transferring Member from any liabilities to the Company, the Project Company or the other Members arising from events occurring prior to or in connection with the Transfer.
(f) Consents and Permits. All consents, approvals and Governmental Approvals with respect to such Transfer will have been obtained.
(g) Investment Company Act. Such Transfer does not require the Company or the Project Company to register as an “investment company” under the Investment Company Act of 1940, as amended.
(h) Project Documents; Covenants. Such Transfer will not cause a default or event of default under any Project Document or, prior to the SC Funding Date, any Construction Financing Document or result in the breach by the Transferring Member of any covenant of such Member under this LLCA.
(i) Regulatory Matters. Such Transfer shall not result in (i) the Project Company ceasing to be an Exempt Wholesale Generator or becoming subject to regulation under PUHCA other than with respect to regulations pertaining to maintaining Exempt Wholesale Generator status or (ii) the loss of the Project Company’s MBR Authority, or any restrictions or limitations thereto.
(j) KYC. If the Transfer involves any Membership Interest (including any Transfer upon foreclosure (or in lieu of such foreclosure) under an Encumbrance on such Membership Interest) or Change of Member Control of a Member, the Transferring Member shall have delivered to the non-Transferring Members all such documentation and information requested by the non-Transferring Members (including the names and addresses of the proposed Transferee) that is reasonably necessary for the non-Transferring Members to identify the Transferee in accordance with the requirements of the US PATRIOT Act of 2001 (including the “know your customer” and similar regulations thereunder).
9.4 Regulatory Compliance.
(a) In the event that the Class A Member reasonably determines that it has a Regulatory Problem, the Company and the Managing Member agree, at the sole cost and expense of the Class A Member, to take all actions reasonably requested by the Class A Member (i) to effectuate and facilitate any transfer by the Class A Member of any Securities that it holds in the Company to any Person it designates that is not a Disqualified Transferee so long as Section 9.3 is complied with, (ii) to permit the Class A Member (or any of its Affiliates) to exchange all or any portion of the voting Securities then held by such Person for non-voting Securities of the Company, which non-voting Securities will be identical to the voting Securities, except that such new Securities will be non-voting and will be convertible into voting Securities on terms requested by the Class A Member and reasonably acceptable to the Company in light of regulatory considerations then prevailing, and (iii) to continue and preserve the respective allocation of the voting interests with respect to the Company arising out of the Class A Member’s ownership of voting Securities before the transfers and amendments referred to above (including entering into additional contracts reasonably requested by the Class A Member to permit any Persons designated by the Class A Member to exercise any voting power relinquished by the Class A Member upon any exchange of voting Securities for non-voting Securities of the Company). At the sole cost and expense of the Class A Member, the Company will take any additional actions reasonably requested by the Class A Member to effectuate the intent of the foregoing so long as the additional actions do not have an adverse impact on the Company or any other Member. If the Class A Member is, or elects to transfer Securities of the Company in order to avoid a Regulatory Problem to, a Regulated Holder,
the Company and each of the Members agree that, at the request of the Class A Member, the provisions of this Section 9.4 will apply to such Regulated Holder in order to assist such Regulated Holder in complying with Applicable Law and regulations to which it is subject. To the extent necessary to comply with such laws and regulations, such agreements may include restrictions on the redemption, repurchase or retirement of Securities of the Company that would result or be reasonably expected to result in such Regulated Holder holding more voting Securities or total Securities (equity and debt) than it is permitted to hold under such laws and regulations. (b) In the event the Class A Member has the right to acquire any of the Company’s Securities from the Company or any other Person (as the result of a preemptive offer, pro rata offer or otherwise), and the Class A Member reasonably determines that it has a Regulatory Problem, at the Class A Member’s request, the Company, at the sole cost and expense of the Class A Member, will offer to sell to the Class A Member non-voting Securities (or, if the Company is not the proposed seller, will arrange for the exchange of any voting Securities for non-voting Securities immediately prior to or simultaneous with such sale) on the same terms as would have existed had the Class A Member acquired the Securities so offered and immediately requested their exchange for non-voting Securities pursuant to subsection (a) above. (c) Related Covenants.
(i) The Company will provide at least 15 days prior written notice to the Class A Member of a proposal to distribute voting or equity Securities to any Member or to repurchase voting or equity Securities from any Member.
(ii) If, in connection with a Regulatory Problem, at any time as a result of any repurchase, redemption or conversion of Company Securities or otherwise, the Class A Member will hold in excess of 4.99% of any class of voting Securities of the Company, the portion of the Class A Member’s Securities of each such class of Securities entitling the Class A Member to in excess of 4.99% of the voting power of such class will, without further action on the part of the Class A Member or the Company, be deemed to be non-voting Securities.
(d) Any transfer requested to be made, or any accommodation requested to be given, pursuant to Sections 9.4(a) or (b) will be requested and made or given only to the extent the Class A Member determines (in its reasonable judgment) to be necessary to address the applicable Regulatory Problem. (e) The Class A Member shall indemnify, defend, and hold harmless the Company, the Project Company, each other Member, and their respective Affiliates from and against any and all reasonable, documented, out-of-pocket costs, expenses, liabilities, and damages arising out of or related to the evaluation and execution of any documents in connection with the Transfer, including but not limited to reasonable, documented, out-of-pocket legal fees, consultant fees, and any other costs incurred in connection with such evaluation and execution.
9.5 Encumbrances of Membership Interest. The Class A Member may Encumber its Membership Interest directly or indirectly, and any Class B Member may Encumber its
Membership Interest directly or indirectly, in each case, so long as any Transfer upon foreclosure of such Encumbrance (or Transfer in lieu of such foreclosure) is to a Qualified Transferee (solely in the case of a Class B Member), is not to a Disqualified Transferee and otherwise complies with the requirements of Section 9.3. Notwithstanding anything to the contrary, if there is a foreclosure or a transfer in lieu of such a foreclosure upon a Class B Member Encumbrance pursuant to the Lender Consent, such foreclosure or transfer in lieu of a foreclosure shall be permitted. 9.6 Admission of Transferee as a Member. Any direct Transferee of a Membership Interest in a Transfer permitted under Section 9.2 will be admitted to the Company as a Member, with the Membership Interest so transferred to such Transferee, to the extent that (a) the Transferring Member making the Transfer has granted the Transferee the Transferring Member’s entire Membership Interest, or, in the case of Transfer of a part of such Member’s Membership Interest, the express right to be so admitted as a Member; and (b) such Transfer is effected in strict compliance with Section 9.3. 9.7 Buyout Events.
(a) This Section 9.7 will apply to any of the following events (each, a “Buyout Event”): (i) a Member becomes Bankrupt;
(ii) a Member involuntarily dissolves and commences liquidation or winding up; or
(iii) an event occurs (other than a Regulatory Problem resolved pursuant to Section 9.4) that makes it unlawful for the Member to continue to be a Member, and such Member does not, within 30 days after becoming aware of such Buyout Event, either take all actions necessary to make its continuation as a Member lawful or Transfer its Membership Interest in accordance with Section 9.2 and 9.3. (b) In each case, the Member with respect to whom a Buyout Event has occurred is referred to as the “Affected Member”.
(c) If a Buyout Event occurs, each of the other Members will have the option to acquire the membership interest of the Affected Member (or to cause it to be acquired by a Third Party designated by the other Members; provided, that such Third Party is not a Disqualified Transferee) in accordance with the requirements provided in Section 9.3, and any of such other Members electing to exercise such option will be referred to as “Purchasers”. If more than one Member wishes to purchase the Affected Member’s membership interest, then the Affected Member’s membership interest will be apportioned among the Purchasers as agreed by all of such Members or, if such Members cannot agree, in proportion to their Capital Accounts after all the Capital Contributions required by Article II of the ECCA have been made.
(d) The options described in this Section 9.7 may be exercised by the Purchasers by giving to the Affected Member 20 Business Days prior written notice to such effect (the “Buyout Notice”). (e) The purchase price (the “Purchase Price”) for a Membership Interest being purchased will be the fair market value agreed to by the Parties or, absent agreement, determined by a qualified appraiser as of the date of such purchase. If the applicable Members are unable to agree on a qualified appraiser, then, within 10 Business Days of written notice from the initiating party of the commencement of an appraisal procedure, the Affected Member on the one hand and the Purchasers on the other hand will each appoint one qualified appraiser, and such qualified appraisers will attempt to agree upon the subject of the appraisal. If either of the applicable Members fails to appoint its respective qualified appraiser within such 10 Business Day period, the determination of the other qualified appraiser shall be conclusive and binding hereunder. If the appointed qualified appraisers are unable to agree upon the value or other determination in question within 30 days after the date on which the last of the qualified appraisers is appointed, the average of the determinations of the qualified appraisers shall be conclusive and binding hereunder.
(f) The closing of any such purchase will occur (i) in the case of a Buyout Event described in Section 9.7(a)(iii) that is attributable to an event outside the control of the Affected Member and such Affected Member is the Class A Member, on the later of the 20th Business Day following the date of the Buyout Notice, and the 5th Business Day after the receipt of all applicable Governmental Approvals and necessary approvals from any Governmental Authority, and (ii) in the case of all other Buyout Events, on the later of the 20th Business Day following the date of the Buyout Notice, the 20th Business Day following the determination of the fair market value of the Membership Interest, and the fifth Business Day after the receipt of all applicable Governmental Approvals and necessary approvals from any Governmental Authority. (g) At the closing, (i) the Purchasers will expressly assume any and all obligations and liabilities of the Affected Member under this LLCA and any other Transaction Document, Material Project Document or, prior to the SC Funding Date, any Construction Financing Document, as applicable (except those obligations or liabilities accrued through the date of such closing), (ii) the Members will amend this LLCA to reflect the withdrawal of the Affected Member and the transfer of the Membership Interest effective as of the date of such closing, and (iii) the Purchasers will pay the Purchase Price to the Affected Member by wire transfer of immediately available funds.
9.8 Purchase Option and ROFO.
(a) Purchase Option. The Class B Members, acting jointly, will have the right to purchase all, but not less than all, of the Class A Membership Interests for one hundred eighty (180) days after each of (1) the occurrence of the Flip Date and (2) the fifth (5th) anniversary of the Flip Date (the “Purchase Option Period”) and upon the terms and conditions in this Section 9.8 (the “Purchase Option”). The purchase price will be the greater of (A) the fair market value of the Class A Units (determined in accordance with this Section 9.8(a)), and (B) the amount required for the Class A Member to achieve an After-Tax IRR (taking into consideration the tax
effect of such purchase on the Class A Member) equal to 10.0% (the “Purchase Option Price”), subject to the following terms:
(i) The Purchase Option may be exercised by the Class B Members by written notice to the Managing Member and the Class A Member on or before the last day of the Purchase Option Period.
(ii) The fair market value of the Class A Membership Interests is what the Parties agree at the time is the value or, absent agreement, what an appraiser, selected jointly by the Parties, says is the value as of the purchase date. If the Members cannot agree on a qualified appraiser, then the appraiser selection process described in Section 9.7(e) will apply. The Class B Members will pay any sales, use or other transfer taxes incurred in connection with the exercise of the Purchase Option. (iii) The closing on the purchase will occur, subject to the receipt of applicable Governmental Approvals, including, without limitation, the approvals, if any, required by FERC, twenty (20) Business Days after the date of the exercise notice or, if later, twenty (20) Business Days after determination of the fair market value or five (5) Business Days after the receipt of any required Governmental Approvals. At the closing, (i) the applicable Class B Member will assume all obligations and liabilities of the Class A Member under the Transaction Documents (except those obligations and liabilities accrued before closing), (ii) the Members will amend this LLCA to reflect the withdrawal of the Class A Member and the transfer of the Class A Membership Interests and (iii) the applicable Class B Member will pay the Purchase Option Price to the Class A Member by wire transfer of immediately available funds.
(b) ROFO.
(i) Except as permitted under Section 9.5, no Class B Member may Transfer all or any portion of its Membership Interest to any Person (other than (A) to an Affiliate, (B) to another Member, (C) in connection with a Transfer upon foreclosure (or in lieu of such foreclosure) under an Encumbrance on the Class B Membership Interests or on any membership interest in any Class B Member (or any direct or indirect Parent of such Class B Member) as permitted in accordance with the terms and conditions of Section 9.5 or, following such a Transfer upon foreclosure (or in lieu of such foreclosure), the first subsequent Transfer made to a Qualified Transferee or (D) any direct or indirect Transfer of equity interests in, or change in Control of, a Member’s Parent) without first offering to sell such Membership Interest (or portion thereof, if applicable) to the Class A Member pursuant to the provisions of this Section 9.8(b). Except as otherwise provided in the foregoing sentence, any Class B Member wishing to Transfer all or any portion of its Membership Interest (the “Offeror”) to any Third Party shall deliver a written notice (an “Offer Notice”) to the Class A Member (the “Offeree”) not less than thirty (30) days prior to offering, or soliciting offers for, its Membership Interest (or portion thereof, if applicable) from any Third Party or parties.
(ii) The Offer Notice shall describe in reasonable detail the Membership Interest (or portion thereof, if applicable) being offered by the Offeror. Upon receipt of an Offer Notice, the Offeree shall have the right (a “Right of First Offer”), exercisable by delivery of written notice to the Offeror within 30 days after the date of the Offer Notice, to make a binding offer to Offeror to purchase all of the Membership Interest being offered pursuant to the Offer Notice (an “Offeree Bid”). The Offeree Bid shall state the price that the Offeree is willing to pay the Offeror for the offered Membership Interest and such other terms as may reasonably be expected by a seller of the offered Membership Interest.
(iii) No later than 30 days after the date of the Offer Notice (the “Offer Notice Period”), the Offeror must notify the Offeree of its decision with respect to its Offeree Bid. The Offeror hereby agrees not to sell the offered Membership Interest prior to the earlier of (A) the expiration of the Offer Notice Period and (B) the communication to the Offeree of the decision by the Offeror not to sell the offered Membership Interest to the Offeree.
(iv) If the Offeror elects, in its sole discretion, to accept an Offeree Bid, then the Offeror and Offeree shall, subject to Section 9.2, arrange a mutually convenient time (not later than ninety (90) days after the date of the Offer Notice) to execute such purchase and sale and, at that time, Offeree shall pay to the Offeror consideration for the offered Membership Interest subject to such purchase and sale by delivering such consideration in exchange for the offered Membership Interest. (v) If (A) the Offeree has not exercised its Right of First Offer for the offered Membership Interest (or portion thereof, if applicable) described in the Offer Notice within the 30-day period following the date of the Offer Notice or (B) the Offeror elects, in its sole discretion, to not accept the Offeree Bid with respect to such Membership Interest (or portion thereof, if applicable) on or prior to the end of the Offer Notice Period, then the Offeror may, during the succeeding one hundred eighty (180) days (provided, that if such sale is subject to regulatory approval, such one hundred eighty (180)-day period shall be extended, so long as the Offeror and its transferee are using commercially reasonable efforts to obtain such regulatory approval, until the expiration of ten (10) Business Days after all such approvals have been received) Transfer such Membership Interest (or portion thereof, if applicable) to a Third Party at a price equal to or higher than one hundred and five percent (105%) (or, solely in the event of a Portfolio Sale, one hundred percent (100%)) of the price specified in the Offeree Bid or on other terms and conditions, taken as a whole, not less favorable to the Offeror than the terms specified in such Offeree Bid (any such proposed sale a “Proposed Third Party Sale”). If, at the end of such one hundred eighty (180)-day period (as extended pursuant to the first sentence of this Section 9.8(b)(v), if applicable), the Offeror has not completed such Proposed Third Party Sale, then the Offeror shall not Transfer all or any portion of any Membership Interest without again complying with this Section 9.8(b). 9.9 Terminated Member. Upon the closing of a direct Transfer by a Member of all of its Membership Interest in the Company in accordance with this Article IX, the following provisions will apply to the Transferring Member (a “Terminated Member”).
(a) The Terminated Member will cease to be a Member immediately upon the occurrence of such closing.
(b) The Terminated Member will no longer be entitled to receive any distributions (including liquidating distributions) or allocations from the Company, and it will not be entitled to exercise any voting or consent rights or to receive any further information (or access to information) from the Company (other than any required tax information).
(c) The Terminated Member must pay (i) to the Company all amounts owed to the Company by the Terminated Member and (ii) to each other Member all amounts owed to such Member by the Terminated Member.
(d) The Terminated Member will remain obligated for all liabilities it may have under this LLCA or with respect to the Company that accrue prior to the closing.
(e) The Membership Interest, including its Capital Account balance, of the Terminated Member will be allocated among the applicable Transferees in proportion to the relative transferred Membership Interests acquired by such Transferee.
ARTICLE X
TRACKING MODEL AND FLIP DATE
10.1 Calculation of Internal Rate of Return.
(a) Tracking Progress. The Managing Member will send the Class A Member, within 120 days after the end of each Fiscal Year (commencing with the Fiscal Year in which the Effective Date occurs), a report in the form of the Tracking Model showing where it believes the Class A Member is in relation to the Target IRR. The Managing Member will calculate and report whether the Class A Member has reached the Target IRR at least quarterly thereafter (and at least monthly, for each month occurring within the period that is two (2) quarters prior to the projected achievement of the Target IRR) if the report suggests that the Target IRR will be reached during the next two Fiscal Years. The Managing Member will make its advisers available to answer any questions about its calculations. The Class A Member may invoke the dispute resolution procedures in Section 10.2 to resolve any item or procedure that is in dispute. (b) Notice of Date. The Managing Member will notify the Class A Member in writing at least 10 Business Days before the Distribution Date after the calendar month in which it believes the Class A Member reached the Target IRR or at least 30 days before making any liquidating distributions if it believes the Class A Member will reach the Target IRR as a consequence of the liquidating distributions. The notice will include the Tracking Model showing the Managing Member’s calculations and, in the case of a notice delivered in connection with a liquidation, the allocations and distributions that the Managing Member proposes to make to the Class A Member under Section 12.2 in light of the calculations. The Managing Member will make its advisers available to answer any questions about its calculations. The Class A Member may invoke the dispute resolution procedures in Section 10.2 to resolve any dispute.
(c) Calculation Conventions. The Managing Member will use the following assumptions and conventions to calculate the After-Tax IRR:
(i) The calculation shall be made on the basis of the Class A Membership Interest acquired by the Class A Member.
(ii) The Class A Member will be assumed to have owned its Class A Membership Interest since the Effective Date.
(iii) Tax Costs and Tax Benefits shall be taken into account as follows:
(A) Tax Costs and Tax Benefits shall be calculated on the basis of the Fixed Tax Assumptions (except as provided in Section 10.1(c)(iii)(B)) unless a Fixed Tax Assumption is incorrect as a result of a Specified Exception, in which case the applicable Fixed Tax Assumption shall be disregarded. In all other respects, items of income, gain, loss, deduction and credit of the Company for any Allocation Period will be calculated based on the amounts allocated in accordance with the U.S. federal income tax accounting methods and tax elections actually used with respect to such Allocation Period by the Company in the preparation of its U.S. federal income Tax Returns, or as adjusted on any amended U.S. federal income Tax Return or as a result of a U.S. federal income tax audits described in Article VIII. For the avoidance of doubt, subject to clause (v) of the definition of “Fixed Tax Assumptions,” the Fixed Tax Assumptions will apply regardless of whether a Change in Tax Law or other change in law makes the Fixed Tax Assumptions incorrect. For the avoidance of doubt, any tax detriment from any gain recognized by the holder of a Class A Unit pursuant to Section 731(a) of the Code (determined in accordance with this Section 10.1(c)(iii)(A)) or upon any distribution in liquidation of the Company or any sale of Class A Units pursuant to Article IX, shall be treated as a Tax Cost for all purposes of this LLCA, and any allocable Section 734(b) adjustment shall be treated as a Tax Benefit. (B) Any loss, deduction or credit (including ITCs) for a period after the Effective Date and allocable to a Class A Unit shall be deemed to produce Tax Benefits on the Tax Payment Dates for the Allocation Period in which such loss, deduction or credit arises (but subject to any provision of Applicable Law limiting, restricting, deferring or disallowing such loss, deduction or credit that applies at the level of the Company); provided, that the Members agree that, for these purposes, any ITC generated by a Block Placed In Service (i) in 2025 will be deemed to produce Tax Benefits at the end of the month of April 2026, (ii) on or after January 1, 2026 and before April 1, 2026 will be deemed to produce Tax Benefits ratably at the end of the month of each of June 2026, September 2026, and December 2026, and (iii) on or after April 1, 2026 will be deemed to produce Tax Benefits at the end of the month of April 2027; provided, further, that if the Class A Member is unable to use any Tax Benefits due to limitations imposed by Section 704(d) of the Code, such Tax Benefits will not be taken into account until such time as such Tax Benefits are available to be used and no longer limited by Section 704(d) of the
Code or such time as such Tax Benefits would have been available to be used and no longer limited by Section 704(d) of the Code but for a change in ownership of a Class A Membership Interest. Any income or gain allocable to a Class A Unit shall be deemed to produce Tax Costs on the Tax Payment Date for the Allocation Period in which such income or gain arises.
(C) With respect to any calendar year which has ended prior to the Distribution Date or date of distribution of Liquidation Proceeds as of which the calculation is being made, the net Tax Costs or Tax Benefits, as the case may be, with respect to the tax items allocable to the Class A Member for such year shall be allocated equally to the Tax Payment Dates in that year and treated as having been paid or received, as the case may be, on such Tax Payment Dates, except that, subject to Section 10.1(c)(iii)(B) (including, for the avoidance of doubt, the Members’ agreement that ITCs generated by a Block Placed In Service (i) in 2025 will be deemed to produce Tax Benefits at the end of the month of April 2026, (ii) on or after January 1, 2026 and before April 1, 2026 will be deemed to produce Tax Benefits ratably at the end of the month of each of June 2026, September 2026, and December 2026, and (iii) on or after April 1, 2026 will be deemed to produce Tax Benefits at the end of the month of April 2027), any Tax Costs or Tax Benefits (other than the ITC) for the calendar year that includes the Placed In Service Date shall be allocated ratably over the Tax Payment Dates in that year on and subsequent to the Placed In Service Date. (D) With respect to any calendar year that has not ended prior to the Distribution Date or date of distribution of Liquidation Proceeds as of which the calculation is being made, the net Tax Costs or Tax Benefits, as the case may be, with respect to the tax items allocable to the Class A Member for the portion of such year as has been completed (as of the end of the calendar quarter immediately preceding such Distribution Date or date of distribution of Liquidation Proceeds) shall be allocated ratably and treated as having been paid or received, as the case may be, on the Tax Payment Dates for such calendar year, including Tax Payment Dates which fall subsequent to the Distribution Date or date of distribution of Liquidation Proceeds. In any case in which Tax Costs or Tax Benefits are deemed to be received after the Distribution Date or date of distribution of Liquidation Proceeds, or in calculating the Flip Date, the Target IRR shall be applied to calculate the present value of such items for the period between the Distribution Date or date of distribution of Liquidation Proceeds, or the estimated Flip Date, as the case may be, and the Tax Payment Date.
(E) Any ITC Transfer shall be disregarded for purposes of calculating the Target IRR. Any ITC Transfer Costs or cash proceeds distributed to or incurred by (as the case may be) the Class A Members with respect to a Class A ITC Transfer shall be ignored for purposes of the Target IRR calculation, the Class A Member’s Capital Account, and the Class A Member’s outside basis in its partnership interests.
(d) End-of-Year True Up. If the U.S. federal income Tax Return that the Company files for the Fiscal Year in which the Target IRR is reached suggests that the Target IRR was not reached in the calendar quarter the Company assumed for reasons other than inaccuracy of the Fixed Tax Assumptions (unless they are inaccurate due to a Specified Exception) or the calculation assumptions and conventions in Section 10.1(c), then the Managing Member will recalculate when the Target IRR was reached and send a new notice to the Class A Member that will be subject to the same dispute resolution procedures in Section 10.2 as the original notice. The Managing Member will also calculate the shortfall in or excess Available Cash Flow, in present-value terms using the Target IRR as the discount rate, that the Class A Member should return, or should receive, as a consequence of the earlier miscalculation (the “Cash Difference”). Once the revised calculation becomes final, the distribution percentages in Section 5.1 will be adjusted to the maximum extent necessary to correct, on a present value basis calculated at the Target IRR, the Cash Difference; provided, that the sharing percentage of the Class A Member shall be equal to or greater than 5.00%; provided, further, that the sharing percentage of the Class B Members shall be equal to or greater than the greater of 50% of the Available Cash Flow that would otherwise have been distributed to the Class B Members under Section 5.1 and the amount needed to pay Permitted Debt Service. The revised distribution percentages will remain in effect until the Cash Difference has been eliminated. (e) Curative Flip Allocations. If, after filing the U.S. federal income Tax Return for the year in which the Company treated the Target IRR as having been reached, there is a change in the income, loss or any ITC the Company reported for the period through the end of the calendar quarter in which the Target IRR was assumed to have been reached, as a result of the change the Target IRR has not been reached for reasons other than inaccuracy of the Fixed Tax Assumptions (unless they are inaccurate due to a Specified Exception) or the calculation assumptions and conventions in Section 10.1(c) and the Company has not yet made liquidating distributions under Section 12.2, then there will be a “Curative Flip Allocation.” The Managing Member will determine the shortfall between the Target IRR and the After-Tax IRR the Class A Member actually achieved through the last Distribution Date the Company distributed cash under Section 5.1. The sharing ratios in Sections 4.1 and 5.1 will be adjusted for subsequent allocations and distributions to the maximum extent necessary to restore the Class A Member to the Target IRR as quickly as possible; provided, that the sharing ratio of the Class B Members shall be equal to or greater than the greater of 50% of the Available Cash Flow that would otherwise have been distributed to the Class B Members under Section 5.1 and the amount needed to pay Permitted Debt Service. The change in sharing ratios will remain in effect until the difference between the Target IRR and the actual After-Tax IRR has been eliminated. The internal rate of return the Class A Member actually achieved will be calculated using the Fixed Tax Assumptions (unless they are inaccurate due to breach of a representation or covenant by any Class B Member or any Affiliate of any Class B Member or by the Company in any Transaction Document) and the calculation assumptions and conventions in Section 10.1(c). If an event occurs that would have triggered a Curative Flip Allocation but for the fact that a Class B Member has already purchased the Class A Membership Interests under Section 9.8, then such Class B Member will pay in cash, within 30 days after the event, the economic equivalent of the Curative Flip Allocation as additional purchase price for the Class A Membership Interests.
10.2 Flip Date Dispute Resolution. The Class A Member must inform the Managing Member in reasonable detail within 20 Business Days after receipt of any report under this Article X of any disagreement about the Managing Member’s calculations. The Parties will attempt in good faith to resolve any difference, but failing agreement, the matter will be referred to an independent public accounting firm, selected jointly by the Class A Member and the Class B Members, to resolve the dispute. The determination by the accounting firm will be final and binding and will apply for all subsequent periods to any item or procedure substantially similar to that settled. The Company will pay the fees of the accounting firm. ARTICLE XI
INDEMNIFICATION
11.1 Indemnification.
(a) Each of the Class B Members and each additional Person that becomes a Class B Member subsequent to the Effective Date (each, an “Indemnifying Party”) agrees to (and if there shall be more than one Class B Member, each Class B Member agrees to jointly and severally) indemnify, defend, reimburse and hold harmless the Class A Member and its parent or subsidiary companies, shareholders, partners, members and other Affiliates, and their respective officers, directors, managing members, employees, attorneys, contractors and agents (collectively, the “Indemnified Parties”) from and against, without duplication, any and all Damages (the “Losses”), asserted against, resulting to, imposed upon, or incurred by any or all of the Indemnified Parties, directly or indirectly, by reason of, arising out of or resulting from any of the following (collectively, clauses (A) through (F), the “Indemnification Claims”): (A) the inaccuracy, breach or failure of any representation or warranty or covenant contained in any Transaction Document by the Class B Member Guarantor, the Company (solely with respect to the inaccuracy, breach or failure of any representation or warranty under the MIPA), any Class B Member, the Seller, the Partnership Representative (to the extent an Affiliate of any Class B Member) or the Managing Member (to the extent an Affiliate of any Class B Member), and, subject to Section 6.2(a), whether or not arising pursuant to authority delegated pursuant to a Project Document; (B) the inaccuracy, breach or failure of any representation or warranty or covenant contained in any Project Document by any Affiliate Party of a Class B Member;
(C) fraud, willful misconduct or gross negligence, in each case by any Class B Member, acting in its capacity as a Class B Member, Class B Member (as such term is defined in the ECCA), the Managing Member (to the extent an Affiliate of any Class B Member), or the Partnership Representative (to the extent an Affiliate of any Class B Member);
(D) (I) the failure of the SC Funding Date to occur on or prior to the Commitment Expiration Date (including as a result of the failure of any condition precedent set forth in Section 4.3 of the ECCA to be satisfied as of the Commitment
Expiration Date) or (II) the Company ceasing to own one hundred percent (100%) of the membership interests of the Project Company, the Company ceasing to own one hundred percent (100%) of the assets of the Company or the Project Company ceasing to own one hundred percent (100%) of the assets of the Project Company, including in each case as a result of an exercise of remedies under the Construction Financing Documents;
(E) any Recapture Event resulting from or attributable to a Subject Casualty;
(F) any costs that are required to be paid by the Class B Member for the Project to comply with the PWA Requirements; or
(G) the ownership by the Project Company of the AC Subsidiary, including all obligations of the AC Subsidiary to any Person, and without duplication of clause (A), any breach of Section 6.12.
provided, that in no event will the Class B Members be responsible for any such Losses to the extent caused by the gross negligence, fraud, or willful misconduct of an Indemnified Party. If any Losses are not timely paid after a claim has been made in accordance with Section 5.2, then portions of distributions payable to the Class B Members under this LLCA will be used to satisfy the obligations of the Indemnifying Parties as directed under Section 5.2. (b) Notwithstanding anything in this LLCA to the contrary, in the event that no portion of the Project has been Placed In Service, the Losses suffered by the Indemnified Parties (without any requirement of the Class A Member to prove actual Losses), and the amount payable by the Indemnifying Parties for any Indemnification Claim under Section 11.1(a)(D) shall be deemed to be an amount equal to 110% of the aggregate Capital Contributions made by the Class A Member, including, all out-of-pocket costs, expenses or fees incurred by the Class A Member in connection with any Third Party claim or the costs of collection and the enforcement of this LLCA or the Guaranty, with or without the filing of any legal action or proceeding, which aggregate amount (the “Completion Indemnity Amount”) shall be payable as liquidated damages in United States dollars in immediately available funds and shall constitute full and complete satisfaction of all amounts due and payable to the Class A Member as a result of such claim. In the event that any portion of the Project has been Placed In Service, the Completion Indemnity Amount shall be calculated and adjusted as necessary to take into account (i) the amount, timing and present value of any distributions (including all periodic distributions or other amounts) paid, or projected to be paid, to the Class A Member as a member of Company, (ii) the value and timing of any Tax Benefits received, or projected to be received, by the Class A Member, and (iii) any and all Losses arising out of or resulting from disputes or settlements of claims or foreclosure or exercise of other rights or remedies by Collateral Agent or any contractor or subcontractor or cures taken by or on behalf of the Project Company, the Company or the Class A Member. Solely to the extent that no portion of the Project has been Placed In Service, upon receipt by the Class A Member of the Completion Indemnity Amount on or prior to five (5) days after the Commitment Expiration Date, the Class A Member shall transfer, assign and convey to the Initial Class B Member, and the Initial
Class B Member shall accept and assume, one hundred percent (100%) of the Class A Membership Interests, without any representation or warranty other than that such Class A Membership Interests shall be transferred, assigned and conveyed to the Initial Class B Member free of any Encumbrances (other than Permitted Encumbrances set forth in clause (e) of the definition thereof).
11.2 Limitation on Liability.
(a) No claim for indemnification may be made with respect to any Losses of any Indemnified Party (other than with respect to a claim of a Third Party, fraud, gross negligence, and willful misconduct) until the aggregate amount of such Losses sought by (or previously sought by) the Indemnified Parties under this Agreement exceeds $250,000 in the aggregate; provided, that once such threshold amount of claims has been reached, then the Indemnified Parties shall have the right to be indemnified with respect to all such claims in excess of such amount. Other than as set forth under Section 11.1(b), the aggregate liability of the Indemnifying Parties for Indemnification Claims will not exceed the aggregate Capital Contributions made by the Class A Member; provided, that any claims for indemnification made by the Class A Member shall be subject to such a cap that is equal to the aggregate Capital Contributions made by the Class A Member plus an additional amount calculated as of the date payment is made hereunder that, when added to the foregoing amount, causes the Class A Member to achieve an After-Tax IRR equal to the All-In Yield for the applicable period ending in each case on such payment date (in accordance with the calculation methodologies and conventions set forth in this LLCA), less (1) any Indemnification Claims previously paid by the Indemnifying Parties or the Class B Member Guarantor to any Indemnified Party or paid pursuant to Section 5.2, (2) distributions made to the Class A Member pursuant to Section 5.1 and (3) the excess of Tax Benefits over Tax Costs allocated to the Class A Member pursuant to Section 4.1 from and after the date such tax benefits or investment tax credits are no longer subject to challenge, disallowance or recapture, as such excess is reduced by any recapture, disallowance, or reduction of any Tax Benefits not resulting from or arising out of (x) the breach by a Class A Member of a representation or covenant in the Transaction Documents or (y) a failure of the Fixed Tax Assumptions not caused by a breach or default of a relevant representation or covenant by the Class B Member or any Affiliate thereof; provided, further, that the caps in this Section 11.2(a) will not apply to (i) a claim resulting from a breach of a Fundamental Representation, (ii) a claim resulting from fraud, gross negligence or willful misconduct of any Indemnifying Party (whether in its capacity as a Member, the Managing Member, the Operator or the Partnership Representative) or any Affiliate of such Indemnifying Party, (iii) any claim of a Third Party, (iv) any costs that are required to be paid by the Class B Member for the Project to comply with the PWA Requirements, or (v) any claim under Section 11.1(a)(F). (b) No Indemnification Claim may be made under this Article XI based on the inaccuracy, breach or failure of any representation or warranty after a period of fifteen (15) months following the SC Funding Date (or, with respect to any breach or failure of any representation or warranty under this LLCA and with respect to any Class B Member which becomes a Class B Member after the SC Funding Date, for a period of fifteen (15) months following the date on which such Person becomes a Member hereunder); provided, that an Indemnification Claim may be
brought with respect to any (i) any Fundamental Representation and any Environmental Representation, within a period of five (5) years following the SC Funding Date, and (ii) any Tax Loss or Tax Representation, within sixty (60) days after the expiration of the applicable statute of limitations (giving effect to any waivers or extensions thereof), provided, that if written notice of an Indemnification Claim has been given by an Indemnified Party on or prior to the last day of the respective foregoing period, then the obligation of the Indemnifying Parties to indemnify such Indemnified Party pursuant to this Article XI shall survive with respect to such claim until such claim is finally resolved. (c) To the extent the Indemnified Party receives from an Indemnifying Party or otherwise a written opinion reasonably acceptable to the Indemnified Party at a “should” level or higher from a nationally-recognized U.S. tax counsel, chosen by the Indemnifying Party and reasonably acceptable to the Indemnified Party, supporting such position, any indemnity payment shall be treated as a nontaxable return of capital for federal income tax purposes. Otherwise, indemnity payments made pursuant to this Section 11.2(c) shall be treated as taxable and grossed-up and paid on an After-Tax Basis. If an indemnity payment is treated by the parties as a nontaxable return of capital and such position is subsequently disallowed by the IRS and as a result such indemnity payment is included in the recipient’s taxable income, the gross-up described in the preceding sentence will be promptly paid to the Indemnified Party. (d) No Indemnifying Party will be required to indemnify any Indemnified Party for any Loss covered by Section 11.1 that results from a Final Determination after a federal income tax audit, to which the Company or the Class A Member is a party, to the extent that the Final Determination specifically provides that the Loss results from the inaccuracy of one or more of the Fixed Tax Assumptions, except, in each case, to the extent such inaccuracy directly or indirectly occurs by reason of, arises out of or results from a Specified Exception. (e) The amount of any Indemnification Claim required to be paid by any Indemnifying Party to any Indemnified Party pursuant to this Article XI shall be reduced to the extent of any amounts actually received by such Indemnified Party (net of any cost of collection) after the Effective Date (a) pursuant to the terms of the insurance policies obtained and maintained by the Company covering such claim (but in no instance shall any insurance proceeds from policies obtained and maintained by any Indemnified Party or any Affiliate thereof be considered in connection with a reduction of damages pursuant to this Section 11.2), or (b) received from Third Parties (net of any costs of collection) arising out of the indemnified matters, and if any such recoveries are received after the payment of the applicable indemnity amount (for example, by the Company pursuing a third party for damages), the Indemnified Party shall promptly refund the amounts so received, but not in excess of the indemnity amount originally received by such Indemnified Party; provided, that the parties agree that nothing in this Section 11.2(e) shall imply any duty or obligation of any Indemnified Party to pursue any claim or seek any recovery under any such policy or from any Third Party. This Section 11.2(e) shall not prejudice any claim against any Indemnifying Party, whether through subrogation or otherwise, by an insurer of any Indemnified Party for reimbursement of such amounts.
(f) THE INDEMNIFICATION OBLIGATIONS UNDER THIS ARTICLE XI SHALL BE LIMITED TO ACTUAL DAMAGES AND SHALL NOT INCLUDE SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATION AND EXCLUSION SHALL NOT APPLY (I) TO DAMAGES AWARDED, PAID OR OWED TO ANY NON-AFFILIATE THIRD PARTY FOR WHICH ANY MEMBER IS OBLIGATED TO INDEMNIFY ANOTHER MEMBER HEREUNDER OR (II) COSTS, EXPENSES AND DAMAGES IN RESPECT OF TAXES OR WITH RESPECT TO LOSSES OF TAX BENEFITS.
11.3 Procedure for Indemnification.
(a) After learning of an Indemnification Claim, an Indemnified Party will give prompt written notice to the Indemnifying Party. In the case of an action brought by a Third Party against an Indemnified Party, other than any Tax Contest (which shall be governed by Section 8.7) for which an Indemnifying Party bears ultimate liability under Section 11.1, each such Indemnifying Party will be entitled to participate and to assume the defense of the action with counsel reasonably satisfactory to the Indemnified Party; provided, that the Indemnified Party will have the right to employ separate counsel at its own expense and to participate in the defense of the action. If the Indemnifying Party chooses not to assume, fails to assume or fails to pursue diligently the defense of the action, or in the case of a conflict of interest between the Indemnifying Party and the Indemnified Party, the Indemnified Party may assume the defense of the action with counsel of its choice, at the expense of the Indemnifying Party. If the Indemnifying Party assumes defense of an action, no compromise or settlement may be effected by the Indemnifying Party without the Indemnified Party’s written consent (such written consent not to be unreasonably withheld, conditioned, or delayed). (b) Uncontested tax claims must be paid by or before the applicable due date for such payment. Contested tax claims must be paid in accordance with Section 8.7(f) or otherwise upon the settlement, final resolution (through the U.S. Tax Court, federal district court, or the U.S. Court of Federal Claims, if taken to court, but not appeals from any court) or withdrawal of the contest. The Indemnifying Party’s rights to contest or defend any tax claim (including any Tax Contest) will be governed by Section 8.7. All other Indemnification Claims shall be paid by in immediately available funds within thirty (30) days after receipt of the corresponding claims under Section 11.3, unless any such Indemnification Claim is disputed in good faith within such thirty (30) day period. 11.4 No Right of Contribution. The Company will have no liability to indemnify any Class B Member on account of the breach of any representation or warranty or the nonfulfillment of any covenant or agreement of the Company under this LLCA or the other Transaction Documents or Project Documents, and no Class B Member will have any right of contribution against the Company.
11.5 No Duplication. Notwithstanding anything to the contrary herein or in any other agreement, any liability for indemnification under this Agreement shall be determined without duplication of recovery by the Indemnified Parties under this LLCA, the ECCA, the Guaranty or any other Transaction Document. Without limiting the generality of the prior sentence, if a
statement of facts, condition or event constitutes a breach of more than one cause, representation, warranty, covenant or agreement which is subject to an indemnification obligation pursuant to this Agreement, only one recovery thereof shall be allowed.
11.6 Sole Remedy. Without limiting any rights of the Class A Member under the Guaranty, the Indemnified Parties will not bring any action or proceeding, or take any other action, in respect of Indemnification Claims to the extent recoverable and addressed by the payment of money except as provided by this Article XI and the Members hereby agree, for themselves and the applicable Indemnified Parties the only relief and remedy available to the Indemnified Parties in respect of Indemnification Claims to the extent recoverable and addressed by the payment of money shall be as set forth in this Article XI; provided, that (a) the foregoing limitation shall not apply to a cause of action relating to fraud or willful misconduct, in relation to any breach, default, or nonperformance by any Indemnifying Party or any of its Affiliates of its or their respective representations and warranties, covenants or obligations, made in whatever capacity pursuant to, and under the terms of, this LLCA or any of the other Transaction Documents to which it or any of them is a party, or any certificate, instrument, or document delivered pursuant hereto or thereto, (b) the foregoing limitation shall not apply to any right of removal pursuant to Section 6.3 or Section 8.7 and (c) no Indemnified Party has waived any rights to pursue non-monetary or equitable remedies under this LLCA or the other Transaction Documents, or to pursue any other remedy expressly provided herein or under any other Transaction Document. ARTICLE XII
DISSOLUTION, LIQUIDATION AND TERMINATION
12.1 Dissolution. The Company will dissolve and its business will be wound up on the first to occur of the following: (i) the Consent of the Members to dissolve the Company, (ii) the disposition of all or substantially all of the Company’s business and assets and (iii) an event that makes it unlawful for the business of the Company to be carried on.
12.2 Liquidation and Termination.
(a) On dissolution of the Company, the Managing Member will appoint one or more Members as liquidator. The liquidator will proceed diligently to wind up the affairs of the Company and make final distributions as provided in this LLCA. The costs of liquidation will be borne as a Company expense. Until final distribution, the liquidator will continue to operate the Company with all of the power and authority of the Members.
(b) The Members intend that, upon liquidation of the Company, the liquidator will sell, and will cause the Company to, and to cause the Project Company to, sell (subject to any restrictions to which the Project is subject) all Assets and pay from Company funds all of the debts and liabilities of the Company or otherwise make reasonable provision for them.
(c) All assets of the Company will be treated as if sold, and the gain treated as realized on those assets will be allocated as follows: (i) first to Members with deficits in their Adjusted Capital Accounts (in the ratio of the deficits if more than one Member’s Adjusted Capital Account is in deficit) in order to eliminate the deficits, (ii) then to the Class A Member to set its Capital
Account at a level that will allow it to reach the Target IRR out of the liquidating distributions, and (iii) then to Members using the distribution percentages in Section 5.1(a)(ii). (d) The Company will then distribute what value remains at liquidation to each Member in the amount of its Capital Account, as adjusted under Section 12.2(c). All liquidating distributions will be made by the end of the tax year during which the liquidation occurs (or, if later, within 90 calendar days after the date of such liquidation). Promptly thereafter, the Company’s accountants will prepare, and the Managing Member will furnish to each Member, a statement showing the manner in which the Company assets were liquidated and distributed. (e) The distribution of cash or property to a Member under this Section 12.2 constitutes a complete return to the Member of its Capital Contributions and a complete distribution to the Member on account of its Membership Interest and all the Company’s property and constitutes a compromise to which all Members have consented pursuant to Section 18-502(b) of the Act. 12.3 Deficit Capital Accounts.
(a) Except as expressly provided in this Section 12.3, no Member shall be obligated to contribute cash to restore a deficit in its Capital Account balance. (b) In the event a Class B Member’s Membership Interest in the Company is “liquidated” within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g), if such Class B Member has a deficit Capital Account balance, calculated in each case in accordance with Section 12.2 and the other provisions of this LLCA, then such Class B Member shall be obligated to pay to the Company cash in an amount equal to such deficit balance by the end of the tax year during which the liquidation of the Company occurs, or if later, within ninety (90) Days after the date of such liquidation; provided, however, that the restoration obligation of such Class B Member shall not be more than $0. Notwithstanding the foregoing, a Class B Member shall have the right by delivering a written notice to the Company (a “DRO Notice”), at any time and in its sole discretion, to elect to increase its deficit Capital Account restoration obligation to the amount specified in such DRO Notice. A DRO Notice given by a Class B Member pursuant hereto shall be deemed to constitute a duly adopted amendment to this LLCA without any further action by any party. Nothing contained in this LLCA shall obligate any Class B Member to issue a DRO Notice. Notwithstanding the foregoing, no Class B Member’s deficit Capital Account restoration obligation shall exceed, at the end of each tax year, an amount equal to the sum of (i) the amount of any gain recognized by such Class B Member under Code Section 731(a) for such tax year, less any adjustment made to its Capital Account pursuant to Treasury Regulation section 1.704-1(b)(2)(iv)(m) in respect of that gain, plus (ii) the absolute value of the deficit (if any) the Class B Member’s Capital Account at the end of the immediately preceding tax year. (c) If the Class A Member’s interest in the Company is “liquidated” within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g) and the Class A Member has a deficit Capital Account balance (after giving effect to all contributions, distributions, and allocations for all prior periods and determined without regard to the Class A Member’s obligation pursuant to this Section 12.3(c)), then such Class A Member will be obligated to contribute to the Company cash in an amount equal to such deficit balance by the later of (i) the end of the taxable year during
which the liquidation occurs and (ii) the ninetieth (90th) day following the date of such liquidation; provided, that the restoration obligation of the Class A Member will not be an amount greater than sixty percent (60%) of its aggregate Capital Contributions (the “Class A DRO Cap”); provided, further, that if there has been a deficit balance in the Class A Member’s Capital Account and subsequently such deficit balance has been reduced or eliminated, the Class A DRO Cap will be automatically decreased to the extent of such reduction (but only to the extent that, pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(f), it would not affect the validity of prior allocations); provided, further, the Class A DRO Cap will not be reduced to less than the aggregate value of (x) the absolute value of the deficit Capital Account balance of the Class A Member plus (y) the aggregate amount of any items described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) with respect to the Class A Member, less (z) the aggregate amount that the Class A Member is deemed to be obligated to restore pursuant to the penultimate sentences in Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5). Notwithstanding the foregoing, the Class A Member will have the unilateral right and option, but not the obligation, to amend this LLCA, by written notice to the Company and to each other Member, to increase its Class A DRO Cap.
12.4 Termination. After satisfaction of liabilities and distribution of Assets as provided in this LLCA, the Managing Member (or other Person required or permitted by the Act) will file a certificate of cancellation with the Secretary of State of Delaware and cancel any other filings required by Section 2.1 and take any other actions necessary to terminate the Company. The Company will pay all costs and expenses related to the obligations under this Section 12.4. ARTICLE XIII
GENERAL PROVISIONS
13.1 Notices. All notices and communications will be in writing and deemed given if delivered by email (subject to confirmation of receipt), delivered personally or by a nationally recognized overnight courier, or mailed by registered or certified mail (return receipt requested) (or if any such delivery is refused) to the Parties at the addresses in the signature blocks of this LLCA. Any notice, request or consent to the Company must be given to the Managing Member. Each Party may change the place to which notices are sent or delivered or to specify one additional address to which copies of notices may be sent, in either case by similar notice sent or delivered in like manner to the other Party.
13.2 Governing Law and Severability. This LLCA will be construed, interpreted and enforced in accordance with the internal laws and decisions of the State of Delaware without giving effect to any choice of law or conflict of law rules or provisions of any other state or jurisdiction. If any provision of this LLCA is contrary to any Applicable Law, then the provision will be deemed null and void but will not affect the legality of the remaining provisions of this LLCA. This LLCA will be deemed to be modified and amended to be in compliance with Applicable Law and then will be construed in a way as will best serve the intention of the Parties at the time of the execution of this LLCA.
13.3 Jurisdiction. The Parties agree to submit to the non-exclusive jurisdiction of the Supreme Court of the State of New York and the Federal District Court located in the Borough of
Manhattan, State of New York, and any court of appeal from either court for purposes of this LLCA and the transactions contemplated by the ECCA. Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any litigation directly or indirectly arising out of, under or in connection with this LLCA.
13.4 Amendment or Modification. Except as otherwise provided herein, this LLCA may be amended or modified from time to time only by a written instrument executed by all Members (or, in respect of a waiver, the waiving Member). In the event that the SC Funding Date does not occur by the Commitment Expiration Deadline, if any portion of the Project has been Placed In Service, but the Managing Member amends or otherwise modifies in accordance with Section 6.2(b) the Material Project Documents to reflect a smaller than anticipated Project in a manner satisfactory to the Class A Member, the Members agree to negotiate in good faith to amend this LLCA in a manner to preserve the intended economic benefits and risks of the actual investments made by the Members. 13.5 Counterparts; Electronic Signatures. This LLCA may be executed in one or more counterparts, each bearing the signatures of the Parties. Each such counterpart will be considered an original and all of such counterparts will constitute a single agreement binding all the parties as if all had signed a single document. Facsimile signatures will be accepted as original signatures for purposes of this LLCA. The words “execution”, “execute”, “signed”, “signature”, and words of like import in or related to any document signed or to be signed in connection with this LLCA 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 Parties, 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.
13.6 Amendment and Restatement. This LLCA amends, restates and supersedes the Original LLCA in its entirety.
13.7 Expenses. In the event an amendment or modification to this LLCA or any other Transaction Document is required and such amendment or modification is requested by any Class B Member, then such Class B Member shall reimburse the Class A Member for all documented costs and expenses of the Class A Member incurred in connection with the execution of such amendment or modification, including, but not limited to, the Class A Member’s documented legal costs and expenses, and such Class B Member shall pay such costs and expenses to the Class A Member within thirty (30) Business Days of receipt of an invoice therefor.
(Signature Pages Follow)
IN WITNESS WHEREOF, the Parties have executed this LLCA as of the date first written above.
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| TENASKA AMERICAN BEECH HOLDINGS, LLC, as the Class A Member |
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| Address for Notices: | | |
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| Tenaska American Beech Holdings LLC,
as Class A Member
14302 FNB Parkway
Omaha, NE 68154
Attention: David Kirkwood
Telephone: (402) 691-9555
Email: dkirkwood@tenaska.com; taxequityinvestments@tenaska.com | |
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| AMERICAN BEECH CLASS B LLC, as the Initial Class B Member | |
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| Address for Notices: | | |
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| American Beech Class B LLC c/o MN8 Energy LLC 1155 Avenue of the Americas, 27th Floor New York, NY 10036 Attn: Legal Email: notices@mn8.com with a copy to: | |
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| Holland & Knight LLP 811 Main St, Suite 2500 Houston, TX 77002 Attn: Ram Sunkara and Elizabeth Crouse Email: Ram.Sunkara@hklaw.com; Elizabeth.Crouse@hklaw.com |
EXHIBIT A
Definitions
“AC Subsidiary” means AC1 ASOA LLC, a Delaware limited liability company.
“AC Subsidiary LLCA” means that certain Second Amended and Restated Limited Liability Company Agreement of AC1 ASOA LLC, dated as of January 10, 2023, by and among the Project Company and the other parties from time to time thereto.
“Act” means the Delaware Limited Liability Company Act, 6 Del. Code §§ 18-101 et seq.
“Additional Material Project Document” means any Contract entered into, or to be entered into, by the Project Company or the Company (other than any Transaction Document) (i) that replaces or substitutes any Material Project Document, (ii) under which the Project Company or the Company could reasonably be expected to have obligations, liabilities or revenues equal to or in excess of five hundred thousand dollars ($500,000) in any year or seven hundred fifty thousand dollars ($750,000) in the aggregate or (iii) that is between the Company or the Project Company, on the one hand, and any Class B Member or any Affiliate of a Class B Member, on the other hand.
“Adjusted Capital Account” means, with respect to any Member, the Capital Account established and maintained for such Member, as the same is specially computed as of the end of the tax year after giving effect to the following adjustments:
(a) credit to the Member’s Capital Account any amounts that the Member is obligated to restore pursuant to Section 12.3 of this LLCA or is deemed obligated to restore pursuant to the penultimate sentences in Treasury Regulations sections 1.704-2(g)(1) and 1.704-2(i)(5), and (b) debit to the Member’s Capital Account any items described in Treasury Regulations sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
“Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in the Member’s Adjusted Capital Account. This definition of “Adjusted Capital Account Deficit” and the foregoing definition of “Adjusted Capital Account” are intended to comply with Treasury Regulations section 1.704-1(b)(2)(ii)(d) and will be interpreted consistently with such regulation.
“Adjustment Outside Date” means the adjournment sine die of the 119th Congress, unless any ITCs from the Project are claimed in Fiscal Year 2026, in which case, such date shall be the later of (x) the adjournment sine die of the 119th Congress, and (y) the one-year anniversary of the Placed in Service Date for the last Block of the Project.
“Administrative Agent” means Natixis, New York Branch, or any other Person serving in the role of administrative agent under the Construction Financing Documents or the Backleverage Financing Documents.
“Advisors” is defined in Section 7.7 of this LLCA. “Affected Member” is defined in Section 9.7(b) of this LLCA. “Affiliate” means, with respect to a Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is Controlled by or under common Control with such first Person; provided, that, with respect to the Company and the Project Company, “Affiliate” shall not include any Member or any other Person that, directly or indirectly through one or more intermediaries, Controls, is Controlled by or under common Control with any Member; provided, further, that for purposes of Section 7.6 only, any Person shall be deemed to be an Affiliate of any specified Person if such Person owns fifty percent (50%) or more of the voting securities of the specified Person, if the specified Person owns fifty percent (50%) or more of the voting securities of such Person, or if fifty percent (50%) or more of the voting securities of the specified Person and such Person are under common Control. For purposes of this Agreement, neither the Company nor the Project Company shall be deemed to be an Affiliate of the Members except as may be required for FERC purposes. “Affiliate Contract” means any Contract between or among the Company or the Project Company, on the one hand, and any Affiliate of the Company, the Project Company, or any Class B Member, on the other hand.
“Affiliate Parties” means, collectively, (a) any counterparty to an Affiliate Contract other than the Company or the Project Company and (b) AC Subsidiary.
“After-Tax Basis” means a payment will be “grossed up” by dividing the underlying Damages or Losses or other amount by one minus the highest marginal composite federal, state and local income tax rate to which the recipient of the payment is subject at time of payment.
“After-Tax IRR” means, with respect to the Class A Member and at the time of any determination, the discount rate (calculated and compounded on a daily basis using the Microsoft Excel XIRR function or a similar software package and calculated in accordance with Section 10.1(c) of this LLCA) that sets A equal to B, where A is the present value as of the MC Funding Date of (a) all Tax Benefits, plus (b) the cash distributed to the Class A Member, plus (c) any indemnity payments (net of any tax gross-up) received by the Class A Member under Article XI of this LLCA or Article 9 of the ECCA that compensate for loss of any item that would otherwise have been counted in clause (a) or (b) minus (d) the present value as of the MC Funding Date of all Tax Costs, and B is the present value as of the MC Funding Date of the Class A Member’s Capital Contributions. Section 10.1(c) of this LLCA contains additional assumptions and conventions that will be used when calculating the After-Tax IRR (including determining the amount and timing of Tax Benefits and Tax Costs). “All-In Yield” means ten percent (10.00%).
“Allocation Period” means (a) the period commencing on the Effective Date and ending on the immediately succeeding December 31; (b) any subsequent twelve (12) month period commencing on January 1 and ending on December 31; or (c) any portion of the period described
in preceding clause (a) or (b) for which the Company is required to allocate items of the Company income, gain, loss, deduction or credit.
“Anti-Terrorism Laws” means any laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering, or bribery, all as amended, supplemented or replaced from time to time.
“Applicable Law” means any federal, state or local treaty, constitution, law, statute, ordinance, rule, injunction, writ, order, decree, regulation or other directive that is legally binding and has been enacted, issued or promulgated in final form by any Governmental Authority, including all protocols and other binding rules of any relevant independent system operator.
“Applicable Rules” is defined in Section 8.7(b) of this LLCA. “Approved Budget” means the annual operating budget prepared by the Operations Manager (in consultation with the Managing Member) and approved by the Members in accordance with Section 6.6 of this LLCA. “Asset Management Agreement” means that certain Management Services Agreement, dated as of August 27, 2025, by and between the Project Company and the Asset Manager.
“Asset Manager” means GSRP Services LLC, a Delaware limited liability company.
“Assets” means all right, title and interest of a Person in land, properties, buildings, improvements, fixtures, foundations, assets and rights of any kind, whether tangible or intangible, real, personal or mixed, including contracts, leases, easements, equipment, systems, books, data, reports, studies and records, proprietary rights, intellectual property, Governmental Approvals, rights under or pursuant to all warranties, representations and guarantees, cash, accounts receivable, deposits and prepaid expenses.
“Available Cash Flow” means the gross cash receipts from the Company’s and the Project Company’s operations, insurance payments, warranty payments, indemnity payments, cash previously reserved and all Capital Contributions received from Members since the last cash distribution, less the portion of such amount used to pay or establish reserves for all Company and Project Company expenses to the extent such reserves (a) were expressly included in the Approved Budget or are permitted variances thereto under the LLCA, (b) are with respect to permitted agreements under this LLCA not set forth in the Approved Budget as a result of such permitted agreement being approved after the applicable Approved Budget, (c) are, in the reasonable judgment of the Managing Member, necessary to prevent or mitigate an emergency situation; (d) are established with the Consent of the Members; or (e) are necessary to allow the Company to meet expenses that are expected with reasonable certainty to become due, and which are not included in the Approved Budget; provided, however, that funds on deposit in the PJM Penalty Reserve Account and the PJM DAT Account and any funds received pursuant to the Duke ASOA Agreement shall not be considered “Available Cash Flow”.
“Backleverage Financing Agreement” means (a) the Construction Financing Agreement and (b) from and after the Project is financed under that certain MN8 Portfolio IV LLC, MN8 Mulberry BESS HoldCo LLC Note Purchase Agreement, dated as of July 9, 2025 (as amended, amended and restated, supplemented, or otherwise modified from time to time, the “NPA”), the NPA and the related LC Facility Credit Agreement (as defined in the NPA).
“Backleverage Financing Documents” means the “Financing Documents” (or similar term) (but excluding, for the avoidance of doubt, any “Construction Collateral Documents” (or similar term) that have terminated on the “Term Conversion Date” (or similar term) pursuant to the Backleverage Financing Agreement), as such terms are defined in a Backleverage Financing Agreement.
“Bankruptcy” means, with respect to any Person: (a) that such Person (i) files in any court pursuant to any statute of the United States or of any state a voluntary petition in bankruptcy or insolvency, (ii) files a petition or answer seeking for such Person a reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law or the appointment of a receiver or a trustee of all or substantially all of such Person’s Assets, (iii) makes a general assignment for the benefit of creditors, (iv) becomes the subject of an order for relief or is declared insolvent in any federal or state bankruptcy or insolvency proceedings, (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against such Person in a proceeding of the type described in subclauses (i) through (iv) of this clause (a), (vi) admits in writing its inability to pay its debts (other than debts subject to a bona fide dispute) as they fall due or (vii) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for all or substantially all of its Assets; or (b) a petition in bankruptcy or insolvency, or a proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any law has been commenced against such Person, and (i) 60 days have expired since the service of such petition on the Person without dismissal thereof or (ii) with respect to which, without such Person’s consent or acquiescence, a trustee, receiver, or liquidator of such Person or of all or substantially all of such Person’s properties has been appointed and (x) 60 days have expired without the appointment’s having been vacated or stayed, or (y) 60 days have expired after the date of expiration of a stay, if the appointment has not previously been vacated; or (c) if a Member, the whole or any material portion of such Person’s Membership Interest is levied or attached, and such levy or attachment is not released or discharged within 60 days.
“Base Case Model” means the financial model attached as Exhibit B to the ECCA as updated in accordance with the express terms of this LLCA and the ECCA.
“Block” has the meaning given to the term “Circuit” in the EPC Contract.
“Business Day” means any day other than Saturday, Sunday, or a day on which banks in New York City or Luxembourg are authorized or required by law or other governmental action to be closed.
“Buyout Event” is defined in Section 9.7(a) of this LLCA.
“Buyout Notice” is defined in Section 9.7(d) of this LLCA. “Capital Account” means a capital account established and maintained under Section 3.2 of this LLCA. “Capital Contribution” means, with respect to any Member, the amount of money and the initial Gross Asset Value of any property (other than money) contributed to the Company with respect to such Member’s Membership Interest. Any reference to the Capital Contribution of a Member shall include the Capital Contribution of its predecessors in interest.
“Cash Difference” is defined in Section 10.1(d) of this LLCA. “Certified Public Accountant” means KPMG LLP, or another firm with national reputation and demonstrated expertise in renewable energy approved by Class A Member.
“Certified Public Auditor” means KPMG LLP, or another firm with national reputation and demonstrated expertise in renewable energy approved by Class A Member.
“Change in Tax Law” is defined in the ECCA.
“Change of Member Control” means, with respect to any Member, a transaction or other event that causes such Member to cease to be Controlled by such Member’s Parent; provided, that neither (x) a direct or indirect Transfer of equity interests in, or change in Control of, a Member’s Parent nor (y) the foreclosure of an Encumbrance or transfer in lieu of such foreclosure (in each case to the extent permitted pursuant to Section 9.5 of this LLCA) will be deemed a “Change of Member Control.” “Class A DRO Cap” is defined in Section 12.3(c) of this LLCA. “Class A DRO Guaranty” means the Guaranty (DRO) dated as of the Effective Date, made by the Class A Member Guarantor and Tenaska Energy Holdings, LLC in favor of the Company, in the form attached to the ECCA as Exhibit H.
“Class A Guaranty” means the Guaranty, dated as of the Transaction Commitment Date, made by the Class A Member Guarantor and Tenaska Energy Holdings, LLC in favor of the Initial Class B Member.
“Class A Member” is defined in the preamble.
“Class A Member Guarantor” means Tenaska Energy, Inc., and any other Person providing a guaranty of Class A Member obligations pursuant to the terms of this LLCA.
“Class A Membership Interests” means (a) the Class A Member’s status as the Class A Member; (b) Class A Member’s share of the income, gain, loss, deduction and credits of, and the right to receive distributions from, the Company with respect to Class A Units; (c) all other rights, benefits and privileges enjoyed by that Class A Member (under the Act, the LLCA, or otherwise) in its capacity as the Class A Member, including Class A Member’s rights to consent and approve
and otherwise to participate in the management of the Company, to the extent provided in the LLCA; and (d) all obligations, duties and liabilities imposed on that Class A Member (under the Act, the LLCA or otherwise) in its capacity as the Class A Member, including any obligations to make Capital Contributions.
“Class A Units” means Units in the Company representing the Class A Membership Interest having the rights, preferences and designations provided for Class A Units in the LLCA.
“Class B Member” means any Member that holds Class B Units. As of the Effective Date, the Initial Class B Member shall be the sole Class B Member.
“Class B Member Guarantor” means MN8 Energy LLC, a Delaware limited liability company, and any other Person providing a guaranty of Class B Member obligations pursuant to the terms of this LLCA.
“Class B Membership Interests” means, with respect to any Class B Member, (a) such Class B Member’s status as a Class B Member; (b) such Class B Member’s share of the income, gain, loss, deduction and credits of, and the right to receive distributions from, the Company with respect to Class B Units; (c) all other rights, benefits and privileges enjoyed by that Class B Member (under the Act, the LLCA, or otherwise) in its capacity as a Class B Member, including a Class B Member’s rights to consent and approve and otherwise to participate in the management of the Company, to the extent provided in the LLCA; and (d) all obligations, duties and liabilities imposed on that Class B Member (under the Act, the LLCA or otherwise) in its capacity as a Class B Member, including any obligations to make Capital Contributions.
“Class B Transfer Tax Opinion” is defined in Section 9.3(c) of this LLCA. “Class B Units” means Units in the Company representing the Class B Membership Interests having the rights, preferences and designations provided for Class B Units in the LLCA.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral Agent” means Natixis, New York Branch or any other Person serving in the
role of collateral agent under the Construction Financing Documents and the Backleverage Financing Documents.
“Commitment Expiration Date” means April 30, 2026.
“Company” is defined in the recitals.
“Company Minimum Gain” has the same meaning as “partnership minimum gain” in Treasury Regulations section 1.704-2(b)(2) and will be determined as provided in Treasury Regulations section 1.704-2(d).
“Completion Indemnity Amount” is defined in Section 11.1(b).
“Compliance Authority” means the (a) U.S. Department of the Treasury /Office of Foreign Assets Control, (b) U.S. Department of the Treasury /Financial Crimes Enforcement Network, (c) U.S. Department of State /Directorate of Defense Trade Controls, (d)
U.S. Department of Commerce /Bureau of Industry and Security, (e) U.S. Internal Revenue Service, (f) U.S. Department of Justice and (g) U.S. Securities and Exchange Commission.
“Confidential Information” is defined in Section 7.7. “Consent of the Members” means the consent of the Class A Member and the Class B Members; provided, that for purposes of this definition, (i) “consent of the Class A Member” means the approving vote (or written consent) of the Class A Members holding more than 50% of the Class A Membership Interests (excluding Class A Membership Interests held by any Class B Member or any Affiliate of any Class B Member) and (ii) “consent of the Class B Member” means the approving vote (or written consent) of the Class B Members holding more than 50% of the Class B Membership Interests; provided, further, that any decision (a) to remove or replace the Managing Member, Consent of the Members will not require consent of the affiliated Managing Member or any of its Affiliates, (b) to remove or replace the Operations Manager, Consent of the Members will not require consent of the affiliated Member or any of its Affiliates, (c) in respect of approval, termination or enforcement of a Project Document with an Affiliate of a Member, Consent of the Members will not require consent of the such Member or its Affiliates and (d) relating to a Transfer or a Change of Member Control, Consent of the Members will not require consent of the Transferring Member or its Affiliates.
“Construction Financing Agreement” means that certain Credit Agreement, dated as of December 31, 2024, by and among MN8 DevCo 3 LLC and MN8 Bleeker LLC, as borrowers, Natixis, New York Branch, as administrative agent and collateral agent, and the financial institutions party thereto as lenders and LC issuers, as amended, amended and restated, supplemented, or otherwise modified from time to time.
“Construction Financing Documents” means the Pledge Agreements, Mortgages, Depositary Agreement, Consents, Sponsor Equity Contribution Agreement, and the Security Agreement, each as defined in the Construction Financing Agreement.
“Construction Management Agreement” has the meaning set forth in the ECCA.
“Contract” means any agreement, contract, lease, promise, evidence of indebtedness (including any promissory note), purchase order, letter of credit, license, instrument, obligation or undertaking of any nature, but not including any Governmental Approvals.
“Control” means the possession, directly or indirectly, of either of the following: (a) (i) in the case of a corporation, more than 50% of the outstanding voting securities, (ii) in the case of a limited liability company, partnership, limited partnership or joint venture, the right to more than 50% of the distributions (including liquidating distributions) or more than 50% of the economic
or outstanding voting securities, (iii) in the case of a trust or estate, including a business trust, more than 50% of the beneficial interest and (iv) in the case of any other entity, more than 50% of the economic or beneficial interest, or (b) 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. “Controlled” and “Controlling” each have a correlative meaning.
“Corporate Tax Rate” means the highest marginal federal income tax rate applicable to U.S. corporations generally (excluding subchapter S corporations), as in effect for any applicable year, which rate is twenty-one percent (21%) as of the Effective Date.
“Cost Segregation Report” is defined in the ECCA.
“Covered Entity” means any Person and its Affiliates.
“Credit Support Loan” is defined in Section 3.4 of this LLCA. “Curative Flip Allocation” is defined in Section 10.1(e) of this LLCA. “Damages” means any and all judgments, awards, claims, actions, demands, liabilities, causes of action, lawsuits, suits, proceedings, damages (including liquidated damages), losses (including amounts paid in settlement of claims), Taxes, Tax Losses, costs and expenses (including litigation costs and documented attorneys’ and experts’ fees and expenses), assessments, fines, penalties, settlements, administrative orders or injunctions (including any loss of profits or consequential, punitive, incidental or special damages recovered by any Third Party (including for the avoidance of doubt any ITC Transferee under any Tax Credit Purchase Agreement), but excluding loss of future profits or consequential, punitive, incidental or special damages asserted by any Party or an Affiliate; provided, that lost ITCs and other lost tax benefits contemplated by the Base Case Model shall not constitute lost future profits or consequential, punitive, incidental or special damages), including interest, penalties, disbursements and costs of investigations, deficiencies, levies, duties and imposts.
“Delaware Certificate” means the Certificate of Formation of the Company filed with the Secretary of State of Delaware on June 30, 2025, as amended or restated from time to time.
“Depreciation” means, for each Allocation Period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable for U.S. federal income tax purposes with respect to an asset for such Allocation Period, except that if the Gross Asset Value of an asset differs from its adjusted basis for U.S. federal income tax purposes at the beginning of such Allocation Period, the Depreciation for such Allocation Period shall be an amount which bears the same ratio to such Gross Asset Value as the U.S. federal income tax depreciation, amortization or other cost recovery deduction for such Allocation Period bears to such adjusted tax basis; provided, however, that if the U.S. federal income tax depreciation, amortization or other cost recovery deduction for such Allocation Period or part thereof is zero, the Depreciation shall be determined with reference to such Gross Asset Value under a method reasonably selected by the Consent of the Members; provided, further, that with respect to any property the Gross Asset Value of which differs from its adjusted tax basis for U.S. federal income Tax purposes and which difference is
being eliminated by use of the remedial allocation method pursuant to Treasury Regulation Section 1.704-3(d), Depreciation for such period shall be the amount of book basis recovered for such period under the rules prescribed by Treasury Regulation Section 1.704-3(d)(2).
“Disqualified Entity” means (a) the United States, any state or political subdivision thereof, any possession of the United States, or any agency or instrumentality of any of the foregoing; (b) any organization which is exempt from tax imposed by the Code (including any previously tax-exempt organization within the meaning of Section 168(h)(2)(E) of the Code); (c) any tax-exempt controlled entity within the meaning of Section 168(h)(6)(F)(iii) of the Code unless such entity makes the election provided in Section 168(h)(6)(F)(ii) of the Code for the applicable taxable year in which the entity or its subsidiary becomes a Member of the Company; (d) any Person who is not a “United States person” within the meaning set forth with respect to such term in Section 7701(a)(30) of the Code; (e) any Indian tribal government described in Section 7701(a)(40) of the Code; and (f) any partnership or other pass-through entity (including a disregarded entity) a direct owner of which is an organization or entity described in clause (a) through (e) or this clause (f); provided, that any such Person shall not be considered a Disqualified Entity to the extent that (i) the exception under Section 168(h)(1)(D) of the Code applies with respect to the income from the Company for that Person or (ii) the Person is described within clause (c) of this definition and the exception under Section 168(h)(2)(B)(i) of the Code applies with respect to the income from the Company for that Person. For the avoidance of doubt, any Person whose direct or indirect ownership of Units would cause any asset of the Company or any asset of any subsidiary of the Company to be treated (wholly or partly) as “tax-exempt use property” under Section 168(h) of the Code shall be a Disqualified Entity.
“Disqualified Transferee” means (a) any Person that is, or whose Affiliate is, then a party adverse in any material pending or threatened (in writing or other reasonably satisfactory evidence of such threat) action, suit or proceeding in the United States against the Project Company, the Company or any Member, unless the Company (with the Consent of the Members) or, to the extent involving a Member, such Member (in its sole and absolute discretion), as applicable, shall have consented to the Transfer to such Person; provided, however, that any foreclosure upon any Membership Interests or any ownership interest in any direct or indirect parent company of the Class B Members, including the Parent, pursuant to an Encumbrance permitted hereunder will not be an action, suit or proceeding for the purposes of clause (a); (b) a Person who is then Bankrupt; (c) a Person who, or is an Affiliate of any Person who, is a Sanctioned Person; (d) a Disqualified Entity or a Related Person; (e) any Person that would result in a Regulatory Problem (as notified to the transferring Member in writing upon the reasonable prior written request of the non-Transferring Member and after the transferring Member has identified the prospective transferee to the non-Transferring Member), or (f) with respect to any Transfer of a Class A Membership Interest, a Person directly or indirectly engaged in managing, constructing, operating, maintaining or developing facilities for the production of electricity utilizing solar energy for sale to others or in the manufacture, marketing or sale of solar modules (an “Active Person”) other than Class B Member Guarantor or an Affiliate thereof; provided, that a Person will not be deemed to be an Active Person solely by virtue of owning an interest in a facility similar to the ownership interest of the Class A Member in the Company (disregarding for this purpose the activities of the Class A Member pursuant to the LLCA in its capacity as the Operations Manager).
“Distribution Date” means March 31, June 30, September 30, and December 31.
“DRO Notice” is defined in Section 12.3(b) of this LLCA. “DRO Zero Date” is defined in Section 6.2(b)(ii) of this LLCA. “Duke ASOA Agreement” means the Assignment Agreement dated July 15, 2022, by and between Edgecombe Solar LLC, a Delaware limited liability company and the AC Subsidiary.
“ECCA” means the Equity Capital Contribution Agreement, dated as of the Transaction Commitment Date, among the Company, the Class A Member and the Initial Class B Member.
“Effective Date” is defined in the preamble.
“Encumbrance” means any lien (statutory or otherwise), mortgage, deed of trust, claim, option, lease, easement, charge, pledge, security interest, hypothecation, assignment, restriction (whether on voting, sale, transfer or disposition), purchase right, right of first refusal, encroachment, deficiency, defect, adverse claim or other encumbrance of any kind or nature, whether voluntary or involuntary, or imposed by law (including any agreement to give any of the foregoing or any conditional sale or other title retention agreement), understanding or otherwise, and whether or not of record, impairing or adversely affecting the title to real or personal property (including membership interests). “Encumber” has a correlative meaning.
“Energy Management Services Agreement” means that certain Amended and Restated Energy Management Services Agreement, dated as of July 15, 2020, by and between [REDACTED] and Customized Energy Solutions Ltd.
“Energy Manager” means Customized Energy Solutions, Ltd.
“Environmental Law” means any Applicable Law (both statutory and common law) pertaining to, regulating, relating to or imposing liability, standards or obligations of conduct concerning pollution or protection of health, safety (including the health and safety of workers under the U.S. Occupational Safety and Health Act of 1970 (29 U.S.C. §§ 651 et seq.)), the environment, wildlife, wildlife habitat or natural resources, including without limitation (a) any Applicable Law relating to any actual or threatened emission, discharge, Release, manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of any hazardous waste (as defined by 42 U.S.C. § 6903(5)), hazardous substance (as defined by 42 U.S.C. § 9601(14)), hazardous material (as defined by 49 U.S.C. § 5102(2)), toxic pollutant (as listed pursuant to 33 U.S.C. § 1317), pollutant or contaminant (as pollutant or contaminant is defined in 42 U.S.C. § 9601(33)), or oil (as defined by 33 U.S.C. § 2701(23)) and (b) the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§ 9601 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.), and the Endangered Species Act of 1973 (16 U.S.C. §§ 1531 et seq.), with any amendments or reauthorization thereto or thereof, and any and all regulations promulgated thereunder, and all analogous state and local counterparts or equivalents.
“Environmental Representations” means the representations set forth in Section 3.1(p) of the ECCA.
“EPC Contractor” means, individually or collectively as the context may require, the HV EPC Contractor and the PV EPC Contractor.
“EPC Contracts” means the HV EPC Contract and the PV EPC Contract.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Exempt Wholesale Generator” means an “exempt wholesale generator” under PUHCA and the implementing regulations of FERC at 18 C.F.R. Part 366.
“Fee Letter” means the Fee Letter, dated as of the Transaction Commitment Date, between Class A Member and Class B Member.
“FERC” means the Federal Energy Regulatory Commission or any successor agency.
“FERC 203 Approval” means the order issued by FERC pursuant to FPA Section 203 authorizing the Class A Member to assume its obligations as the Operations Manager with respect to the Project Company and the Company under this Agreement.
“Final Completion” has the meaning given in the applicable EPC Contract.
“Final Completion Account” means the Final Completion Account of the Company listed on Part B of Schedule 3.1(aa) to the ECCA.
“Final Determination” has the meaning set forth in the ECCA.
“Fiscal Year” means (a) the period starting on the Effective Date and ending on December 31, 2025, (b) any subsequent calendar year except that (c) the final Fiscal Year of the Company will end on the date the Company is terminated under Article XII of this LLCA. “Fixed Tax Assumptions” means the following assumptions: (i) the Class A Member will be fully taxable at the Corporate Tax Rate, (ii) the Project Company is and will remain an entity disregarded as separate from the Company for federal income tax purposes; (iii) the Company is as of the MC Funding Date and will remain a partnership for federal income tax purposes, and, after the MC Funding Date, the Class B Member and the Class A Member (and their respective assignees) are and will remain the sole partners in such partnership; (iv) the Company is and will be the sole owner for federal income tax purposes of the Project; (v) the Company will be entitled to claim federal income tax depreciation and amortization with respect to the tax basis (after being reduced for 1/2 of the ITC) in the Project in accordance with, subject to a Change in Tax Law, the depreciation periods, and methods as set forth in the Base Case Model (as updated in connection with the SC Funding Date, if applicable); provided, however, that this assumption shall not apply to the classification of any assets into the appropriate depreciation class or the amount of tax basis or depreciation available with respect to any property); (vi) the Class A Member’s distributive share of the Company’s items (excluding ITCs) for federal income tax purposes will be as provided
by the allocations within the LLCA and such allocations (but not the amounts) shall be respected by the IRS because such allocations have “substantial economic effect” within the meaning of Section 704(b) of the Code, or are otherwise consistent with the Members’ interest in the Company within the meaning of Section 704(b) of the Code and the Treasury Regulations thereunder, and Class A Member’s distributive share of ITCs (but not the amount) for federal income tax purposes as provided by the allocations in the LLCA will be respected by the IRS because such allocations are deemed consistent with the Members’ interests in the Company within the meaning of Section 704(b) of the Code and the Treasury Regulations promulgated thereunder; provided, that this assumption shall not apply to (x) the calculation of the amount of items of income, gain, loss, deduction and credit in the aggregate or (y) the timing that such items arise and occur; (vii) the Class A Member will be able to fully utilize all items of loss, deduction and credit allocated to it from the Company in the period in which such loss, deduction or credit arises, without regard to any provision of law limiting, restricting, deferring or disallowing such loss, deduction or credit that is applicable to Class A Member (as opposed to the Company) and without regard to the existence of income, gains or tax liability against which Class A Member is permitted to offset such loss, deduction or credit (except to the extent that losses allocated to the Class A Member are suspended under Section 704(d) or 163(j) of the Code, in which case the Class A Member will be assumed to utilize such losses when permitted pursuant to Section 704(d) or 163(j) of the Code); and (viii) state, local, foreign or other non-U.S. federal income taxes are inapplicable. For the avoidance of doubt, the Fixed Tax Assumptions shall not be interpreted to include the tax consequences or tax treatment of the transactions contemplated by the MIPA.
“Flip Date” means the last day of the calendar month in which the Class A Member reaches an After-Tax IRR equal to the Target IRR, but not before the end of the month in which the Recapture Period ends.
“FPA” means the Federal Power Act, as amended, and FERC’s rules and regulations thereunder.
“Fundamental Representation” means (i) with respect to the ECCA, each of the representations and warranties made by the Initial Class B Member pursuant to Sections 3.1(a), 3.1(b), 3.1(d) and 3.1(f)(i) of the ECCA and (ii) with respect to this LLCA, each of the representations and warranties made by each Class B Member pursuant to Section 8.9(a)(i)-(ii) of this LLCA. “Funding Dates” means the MC Funding Date and the SC Funding Date.
“GAAP” means United States generally accepted accounting principles as in effect from time to time, applied on a consistent basis.
“Governmental Approvals” means filings and registrations with, and licenses, permits, notices, approvals, grants, easements, exemptions, variances and authorizations from, any Governmental Authority, other than those licenses, permits, notices, approvals, grants, easements, exemptions, variances and authorizations that are ministerial in nature and can be obtained in the ordinary course of business.
“Governmental Authority” means any foreign, domestic, federal, territorial, state or local governmental or quasi-governmental authority, court, commission, board, bureau, agency or instrumentality, or any regulatory, administrative or other department, agency, or any political or other subdivision, department or branch of any of the foregoing, and any taxing authority and any electric reliability organization, regional transmission organization or independent system operator, including FERC, NERC, PJM and NCUC or any successor thereto, in each case, with legal jurisdiction over the matter or Person in question.
“Gross Asset Value” means with respect to any Asset (other than money), the asset’s adjusted basis for U.S. federal income tax purposes, except as follows:
(a) the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as agreed to by the Consent of the Members;
(b) the Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values (taking Section 7701(g) of the Code into account) at the times described in Section 3.2 of this LLCA; (c) the Gross Asset Value of any Company asset distributed to any Member shall be adjusted to equal the gross fair market value (taking Section 7701(g) of the Code into account) of such asset on the date of distribution, as agreed to by the Consent of the Members; and
(d) the Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Sections 734(b) or 743(b) of the Code, but only to the extent that such adjustments are required to be taken into account in determining Capital Accounts pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted pursuant to this clause (d) to the extent that an adjustment pursuant to clause (b) of this definition is required in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (d); and
(e) if the Gross Asset Value of an asset has been determined or adjusted pursuant to clause (a), (b) or (d) above, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset.
(f) If the Gross Asset Value of an asset has been determined or adjusted pursuant to clause (a), (b) or (d) of this definition, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset, for purposes of computing profits and Losses.
“Guaranty” means the Guaranty, dated as of the Transaction Commitment Date, made by Class B Member Guarantor in favor of the Class A Member, and any replacement and additional guaranty with respect to a Class B Member provided pursuant to the terms of this LLCA.
“Hazardous Substances” means all substances, materials, or chemicals (whether solid, liquid or gaseous) that (a) require removal, remediation or reporting under any Environmental Law or (b) are defined, listed, classified, or regulated as a “pollutant,” “contaminant,” “hazardous material,” “hazardous substance,” “hazardous waste,” “toxic substance,” or any word, term, or phrase of similar meaning or regulatory effect under any Environmental Law. Hazardous Substances include asbestos or asbestos containing materials, radioactive materials, lead, polychlorinated biphenyls, any petroleum or petroleum product, mold, mycotoxins, urea formaldehyde foam insulation and radon gas.
“HV EPC Contract” means that certain HV Balance of Plant Agreement, dated as of September 27, 2024, by and between the Project Company and the HV EPC Contractor.
“HV EPC Contractor” means RES America Construction Inc.
“Indebtedness” means (a) any indebtedness for borrowed money; (b) any indebtedness evidenced by any note, bond, debenture, mortgage or other debt instrument or debt security; (c) amounts owing as the deferred purchase price for the purchase of property or services other than accounts payable incurred in the ordinary course of business which are less than ninety (90) days past due; (d) liabilities under any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement or other similar agreement designed to protect the Company or Project Company against fluctuations in interest rates or other currency fluctuations and all net ordinary course settlement or other obligations under any other hedging arrangement; (e) all contingent reimbursement obligations with respect to letters of credit; (f) any obligations under leases which are or should be, in accordance with GAAP, recorded as capital leases, conditional sales contracts and other similar title retention instruments whether short term or long term; (g) all obligations to purchase securities (or other property) which arise out of or in connection with the sale of the same or substantially similar securities (or property); (h) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to acquired property (even though the rights and remedies of the seller or lender under such agreement are limited to repossession or sale of such property); (i) any obligations of the types referred to in clauses (a) – (h) secured by a lien on any property or Assets of the Company or Project Company and/or any off-balance sheet financings, whether or not such indebtedness is assumed by such Person or is non-recourse to such Person; and (j) all guarantees (or obligations that are substantially the economic equivalent of a guarantee) of obligations of a type referred to in clauses (a) – (i).
“Indemnification Claims” is defined in Section (a) of this LLCA. “Indemnified Parties” is defined in Section (a) of this LLCA. “Indemnifying Party” is defined in Section (a) of this LLCA. “Independent Engineer” means Black & Veatch Management Consulting, LLC.
“Initial Class B Member” is defined in the preamble.
“Insurance Consultant” means Moore-McNeil, LLC.
“Interconnection Agreement” means that certain Interconnection Service Agreement, dated as of March 25, 2022, by and among PJM, the Project Company and Virginia Electric and Power Company, as amended by that certain Agreement to Amend, dated as of May 4, 2023, by and among PJM, the Project Company and Virginia Electric and Power Company.
“Interconnection Construction Services Agreement” means that certain Interconnection Construction Service Agreement, dated as of May 2, 2022, by and among PJM, the Project Company, and Virginia Electric and Power Company, as amended by that certain Agreement to Amend, dated as of May 4, 2023, by and among PJM, the Project Company, and Virginia Electric and Power Company.
“Inverter Supply Agreement” means that certain Purchase Order No. P-0284-6245 for PCS Skids and Commissioning, dated as of July 17, 2024, by and between the Project Company and Sungrow USA Corporation.
“IRA Post Funding Adjustment” is defined in Section 5.1(b)(ix) of this LLCA. “IRS” means the Internal Revenue Service or any successor agency.
“ITC” means the investment tax credit allowed pursuant to Section 48 of the Code.
“ITC Eligible Property” means property that is “energy property” within the meaning of Section 48(a)(3)(A)(i) of the Code and described in Treasury Regulation Section 1.48-9(d)(3).
“ITC Loss” means the loss, reduction, unavailability, delay, or recapture of ITCs assumed in the Base Case Model; for the avoidance of doubt, any loss, reduction, unavailability, delay, or recapture of ITCs that have been transferred under Section 6418 of the Code shall be calculated as if such transfer has not been made.
“Lender Consent” means that certain Consent and Agreement, dated as of the Transaction Commitment Date, by and among the Class A Member, the Initial Class B Member, the Company and the Collateral Agent.
“Liability” means any liability, indebtedness, adverse claim or other obligation, direct or indirect, absolute or contingent, whether accrued, vested or otherwise and whether or not reflected or required to be reflected in the financial statements of a person.
“Liquidation Proceeds” means all cash, cash equivalents, liquid investments or other proceeds derived from or attributable to distributions pursuant to Section 12.2(d) of this LLCA. “LLCA” means the Amended and Restated Limited Liability Company Agreement of the Company, dated as of the Effective Date, by and between Class A Member and Initial Class B Member.
“Loss Proceeds” means, with respect to any casualty event at the Project, any insurance proceeds, condemnation awards or other compensation, awards, damages and other payments or relief received by the Managing Member, the Company, the Project Company or any of their respective Affiliates with respect to such event.
“Losses” is defined in Section 11.1(a) of this LLCA. “Managing Member” means the Person appointed by the Members pursuant to Article VI of this LLCA to manage the affairs of the Company and any person appointed as a successor Managing Member as provided in such article; provided, that references herein to the Managing Manager shall mean the Initial Class B Member or other Person succeeding the Initial Class B Member as Managing Member, as applicable, solely in its respective position as Managing Member and not in its respective capacity as a Member or the Initial Class B Member. “Material Adverse Effect” means any change, circumstance, event or effect that has a material adverse effect on (a) the Project, (b) the business, Assets, liabilities, results of operations or financial condition of Class B Member, the Company, the Project Company, any Affiliate Party or the Class B Member Guarantor that, in the case of any Affiliate Party or the Class B Member Guarantor, affects the ability of any Affiliate Party or the Class B Member Guarantor in any adverse respect to meet its financial obligations under the Affiliate Contracts or Transaction Documents to which it is a party in a timely manner, (c) the ability of Class B Member, the Class B Member Guarantor, the Company, the Project Company, any Affiliate Party or any Material Contract Party (other than any counterparty to a Real Property Document) to timely perform any of its material respective obligations under any Transaction Document, any Material Project Document, any Affiliate Contract or prior to the SC Funding Date, any Construction Financing Document to which it is a party, or (d) has a materially adverse impact on the validity or enforceability of any Transaction Document, any Material Project Document or prior to the SC Funding Date, any Construction Financing Document.
“Material Contract Party” means a counterparty to a Material Project Document other than the Company or the Project Company.
“Material Project Documents” is defined in the ECCA.
“MBR Authority” means an order issued by FERC, without any restriction or condition that could reasonably be expected to result in a Material Adverse Effect, authorizing the sale at wholesale of electric energy, capacity and specified ancillary services at market-based rates pursuant to Section 205 of the FPA, accepting a tariff for filing providing for such sales, and granting such regulatory waivers and blanket authorizations as FERC customarily grants to persons authorized to sell electric energy and capacity at market-based rates, including blanket authorization to issue securities and assume liabilities under Section 204 of the FPA and FERC’s applicable regulations at 18 C.F.R. Part 34.
“MC Funding Date” is defined in Section 2.1(a) of the ECCA.
“Mechanical Completion” has the same meaning, collectively, given to the terms “Circuit Mechanical Completion” as defined in the PV EPC Contract and “Mechanical Completion” as defined in the HV EPC Contract, as the context may require.
“Member” means any Person who executes the signature page of this LLCA as of the MC Funding Date or thereafter agrees to be bound thereby and is admitted to the Company as a Member pursuant to this LLCA, but excluding any Person that has ceased to be a Member.
“Member Nonrecourse Debt” has the same meaning as “partner nonrecourse debt” in Treasury Regulations section 1.704-2(b)(4).
“Member Nonrecourse Debt Minimum Gain” has the same meaning as “partner nonrecourse debt minimum gain” in Treasury Regulation Section 1.704-2(i)(2) and will be calculated as provided in Treasury Regulation Section 1.704-2(i)(3).
“Member Nonrecourse Deduction” has the same meaning as “partner nonrecourse deductions” in Treasury Regulation Sections 1.704-2(i)(1) and 1.704-(2)(i)(2).
“Member Party” means each Member and its officers, directors, shareholders, Affiliates, employees and agents, but will exclude any such Person in that Person’s capacity as the Managing Member, or a counterparty to any Transaction Document or any Project Document.
“Membership Interest” means a Class A Membership Interest or a Class B Membership Interest.
“MIPA” is defined in the ECCA recitals.
“Module Supplier” means Jinko Solar (U.S.) Industries Inc.
“Module Supply Agreements” means, collectively, (a) that certain Project Module Supply Agreement, dated as of May 16, 2024, by and between the Project Company and the Module Supplier, as amended by that certain First Amendment to Project Module Supply Agreement, dated as of September 24, 2024 and (b) that certain Project Module Supply Agreement, dated as of September 27, 2024, by and between the Project Company the Module Supplier.
“Monthly Report” is defined in Section 8.4(d)(i). “Moody’s” means Moody’s Investor Service, or any successor entity.
“NCUC” means the North Carolina Utilities Commission or any successor entity.
“NERC” means the North American Electric Reliability Corporation or any successor thereto.
“Nonrecourse Deduction” has the same meaning as “nonrecourse deductions” in Treasury Regulation Section 1.704-2(b)(1).
“Notice of Final Partnership Adjustment” has the meaning assigned to such term in Section 8.7(f). “O&M Agreement” means Operation and Maintenance Agreement, dated August 27, 2025, between Project Company and MN8 Solutions LLC.
“O&M Expenses” means, for any period, the sum, computed without duplication, of the following (in each case incurred by or on behalf of the Project Company and not reimbursed by any other Person, and whether or not budgeted): (a) expenses of managing, administering and operating the Project and of maintaining it in good repair and operating condition (whether of an operating or capital nature) payable during such period, including payments under the Project Documents plus (b) direct operating and maintenance costs of the Project (whether of an operating or capital nature) payable during such period plus (c) insurance costs payable during such period plus (d) applicable sales taxes and excise taxes payable by the Project Company during such period plus (e) franchise taxes payable by the Project Company during such period plus (f) Federal, state and local income taxes, if any, payable by the Project Company during such period plus (g) property taxes payable by the Project Company during such period plus (h) costs and fees attendant to the obtaining, maintaining in effect, transferring, amending, or otherwise incurred in connection with the requirements of, the Governmental Approvals payable during such period plus (i) reasonable legal, accounting and other professional fees attendant to any of the foregoing items payable during such period plus (j) reasonable general and administrative expenses for such period plus (k) the reasonable costs of the administration and enforcement of the Project Documents during such period plus (l) any other expenses approved in writing by the Class A Member during such period.
“O&M Loan” is defined in Section 3.5 of this LLCA. “Offer Notice” is defined in Section 9.8(b)(i) of this LLCA. “Offer Notice Period” is defined in Section 9.8(b)(iii) of this LLCA. “Offeree” is defined in Section 9.8(b)(i) of this LLCA. “Offeree Bid” is defined in Section 9.8(b)(ii) of this LLCA. “Offeror” is defined in Section 9.8(b)(i) of this LLCA. “Operations Manager” means, subject to the terms and conditions of Article VI of this LLCA, Class A Member initially and for so long as the Class A Member holds a Membership Interest and, following the Class A Member’s disposition of all of its Membership Interests in the Company, any Person appointed by the Managing Member as the Operations Manager; provided, that references herein to the Operations Manager shall mean the Class A Member or other Person, as applicable, solely in its position as Operations Manager and not in its capacity as a Member or the Class A Member. “Operator” means MN8 Solutions LLC.
“Order” is defined in the ECCA.
“Original LLCA” is defined in the recitals.
“Parent” means, with respect to any Person, the Person or Persons who directly and indirectly ultimately Control such Person; provided, that (a) each of Tenaska Energy, Inc. and Tenaska Energy Holdings, LLC shall be the Parent of the Class A Member and (b) MN8 Energy LLC, a Delaware limited liability company (or its successor in interest following any merger, division, recapitalization, or other capital event), shall be the Parent of the Initial Class B Member.
“Partnership Representative” is defined in Section 8.7(a) of this LLCA. “Party” means the Members executing this LLCA and any other Person that becomes a Member in accordance with the provisions hereof.
“Permitted Debt Service” means scheduled principal, interest and fee payments and ordinary course settlement payments owed under interest rate hedge agreements, in each case, due and payable for the applicable calendar quarter under the Backleverage Financing Agreement and the interest rate agreements in effect as of the SC Funding Date (without regard to subsequent amendments to or refinancing of the Backleverage Financing Agreement in effect on the Effective Date), as set forth on Schedule 3; provided, that in the event of a mandatory prepayment under Section 2.8(b) of the Backleverage Financing Agreement, Schedule 3 shall automatically be deemed updated to reflect the then-outstanding scheduled principal, interest and fee payments, and ordinary course settlement payments owed under interest rate hedge agreements, due and payable under the Backleverage Financing Agreement and the interest rate agreements. “Permitted Encumbrances” means (a) Encumbrances imposed by any Governmental Authority for taxes (i) that are not yet due or (ii) that are being contested in good faith by appropriate proceedings diligently conducted so long as (x) such proceeding will not involve any material risk of the sale, forfeiture or loss of any part of the Project or any Asset of the Company or the Project Company and (y) the payment thereof is (A) reserved for in accordance with GAAP, (B) fully covered by bonds or (C) fully covered by other security that in the case of this clause (C) is reasonably acceptable to the Class A Member, (b) inchoate carrier’s, warehouse’s, mechanics’, materialmen’s, landlord’s, repairmen’s and other similar liens arising in the ordinary course of business or incident to the construction, improvement or restoration of the Project in respect of obligations (i) that are not past due or (ii) that are being contested in good faith by appropriate proceedings so long as (x) such proceedings will not involve any material risk of forfeiture, sale or loss of any part of the Project or any Asset of the Company and (y) the payment thereof is (A) reserved for in accordance with GAAP, (B) fully covered by bonds or (C) fully covered by other security that in the case of this clause (C) is reasonably acceptable to the Class A Member, (c) Encumbrances created by any Project Document and any Transaction Document, (d) obligations or duties to any Governmental Authority or utility arising in the ordinary course of business (including under Governmental Approvals) the effect of which does not or could not be reasonably expected to result in a Material Adverse Effect, (e) restrictions on transfer imposed by applicable securities laws, applicable energy regulatory laws or as set forth in the organizational documents of the Company and Project Company, (f) prior to the SC Funding Date, liens created pursuant to,
and securing any Indebtedness under the Construction Financing Documents, (g) Encumbrances on the Site that are (i) exceptions listed on the Title Policy, or (ii) defects in title, easements, rights-of-way, restrictions, including land use restrictions, that do not adversely affect the use by the Project Company of the real property or interfere with the construction, operation or maintenance of the Project, and that individually and in the aggregate could not reasonably be expected to result in a Material Adverse Effect, (h) pledges or deposits to secure the performance of bids, tenders, trade contracts and leases (other than for the repayment of borrowed money) incurred in the ordinary course of business; (i) pledges or deposits to secure regulatory or statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business securing the payment of amounts not yet due and payable or amounts being contested in good faith and by appropriate proceedings; (j) Encumbrances securing Indebtedness of the type described in clause (c) of the definition thereof; (k) Encumbrances and any right of setoff in favor of a bank or other financial institution arising by operation of Applicable Laws or in the ordinary course of business encumbering deposits held by such bank or financial institution; and (l) judgment Encumbrances that do not involve any immediate risk of forfeiture of the Project and are being contested in good faith and by appropriate proceedings, and adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP or the Encumbrance is covered by insurance, bonds or other reasonable security.
“Person” means an individual, corporation, limited liability company, partnership, association, joint venture, Governmental Authority, trust or any other entity or organization.
“PJM” means PJM Interconnection, L.L.C., or any successor regional transmission organization.
“PJM Capacity Auction Period” means the period commencing on June 1 of each calendar year and ending on May 31 of the following calendar year.
“PJM DAT Account” means a segregated account maintained by the Project Company to be funded with the PJM DAT Required Amount (to the extent that the Company has sufficient Available Cash Flow) and maintained by the Company.
“PJM DAT Costs” means any costs payable to PJM by the Project Company in connection with day-ahead trading in the PJM market.
“PJM DAT Required Amount” means $1,000,000.
“PJM Open Access Transmission Tariff” means the open access transmission tariff of PJM, as accepted for filing by FERC under Section 205 of the FPA, in effect during the term of this Agreement.
“PJM Penalties” means any Capacity Resource Deficiency Charge or Non-Performance Charge (as defined in Attachment DD to the PJM Open Access Transmission Tariff) assessed by PJM against the Project Company, and penalties assessed by PJM against the Project Company in connection with the Project Company’s obligations as a Capacity Market Seller that has committed
the Project as a Capacity Resource for a Delivery Year, as such terms are defined in the PJM Open Access Transmission Tariff.
“PJM Penalty Reserve Account” means a segregated depositary account maintained by the Project Company to be funded with the PJM Penalty Reserve Amount.
“PJM Penalty Reserve Amount” means an amount as agreed in writing by the Members on or prior to the first day of each PJM Capacity Auction Period equal to the aggregate maximum amount of PJM Penalties that could be incurred by the Project Company during the then-current PJM Capacity Auction Period less any PJM Penalties actually paid by the Project Company during such period.
“Placed In Service” means, with respect to a Block (or the Project, as applicable), that such Block (or the Project, as applicable) is placed in service for tax purposes within the meaning of Section 48(a)(1) of the Code.
“Placed In Service Date” means, with respect to a Block (or the Project, as applicable), the date on which such Block (or the Project, as applicable) was Placed In Service.
“Portfolio Sale” means any indirect Transfer of membership interests in the Company pursuant to a single transaction in which the fair market value of consideration allocated to the indirect interest in the Company, as reasonably agreed by the Members based on a valuation that corroborates such allocation, constitutes less than thirty five percent (35%) of the fair market value of the aggregate consideration paid or payable to the transferee in connection with such transaction.
“Power Purchaser” means Microsoft Corporation.
“PPA” means that certain Renewable Energy Purchase Agreement, dated as of February 1, 2024, between the Project Company and the Power Purchaser.
“Project” is defined in the recitals of the ECCA.
“Project Company” is defined in the recitals of the ECCA.
“Project Documents” means, without duplication, the Material Project Documents and any other Contract relating to the development, construction or operation of the Project to which the Company or the Project Company is a party (other than any Transaction Document); provided, however, that any Project Document shall cease to be a Project Document when all material obligations thereunder have been performed and paid in full, other than contingent indemnity and reimbursement obligations that survive the expiration of the applicable Project Document.
“Proposed Third Party Sale” is defined in Section 9.8(b)(v) of this LLCA. “Pro Rata Share” means, as to the holder of any Class B Units as of any date of determination, the number of Class B Units of such class held by such Class B Member as of such date divided by the total number of Class B Units of such class outstanding as of such date.
“Prudent Industry Practices” means, with respect to the Project, the practices, standards, designs, methods, means, techniques, equipment and acts, as they may change from time to time, that (a) are generally used to own, operate and maintain utility scale solar photovoltaic power generation projects, safely, reliably and efficiently and in compliance with Applicable Law (including Environmental Laws), manufacturers’ warranties, manufacturers’ recommendations and the Material Project Documents and (b) are consistent with the exercise of the reasonable judgment, skill, diligence and care expected of an operator of utility scale solar photovoltaic power generation projects of a type and size similar to the Project in order to efficiently accomplish the desired result consistent with applicable standards of safety, output, dependability, efficiency and economy, including recommended practice, of a good, safe, prudent and workman-like character, in each case, taking into account the location of the Project, including climatic, environmental and general conditions. Prudent Industry Practices are not intended to be limited to the optimum or minimum practice or method to the exclusion of all others, but rather to be a spectrum of reasonable and prudent practices and methods as commonly practiced in the solar photovoltaic industry in the same region of the Project during the relevant time.
“Prudent Operator Standard” means those practices, standards, designs, methods, means, techniques, equipment, specifications, acts and standards of safety and performance and the level of supervision and monitoring of the performance of the Energy Manager, Asset Manager and Operator, as the same may be changed from time to time, that, with respect to the Project (a) are generally used to own, operate and maintain projects of a similar type and capacity as the Project, safely, reliably and efficiently and in compliance with Applicable Law (including Environmental Laws), manufacturers’ warranties, manufacturers’ recommendations and the Material Project Documents and (b) are consistent with the exercise of the reasonable judgment, skill, diligence and care expected of an operator of projects of a similar type and capacity as the Project in order to efficiently accomplish the desired result consistent with Prudent Industry Practices and applicable standards of safety, output, dependability, efficiency and economy, including recommended practice, of a good, safe, prudent and workman-like character, in each case, taking into account the location of the Project, including climatic, environmental, geographic and general conditions. The Prudent Operator Standard is not intended to be limited to the optimum or minimum practice or method to the exclusion of all others, but rather to be a spectrum of reasonable and prudent practices and methods as commonly practiced in the solar industry in the same region as the Project during the relevant time.
“PSA” means that certain Purchase and Sale Agreement, dated as of October 20, 2024, by and between PSA Buyer and PSA Seller.
“PSA Buyer” means Seller.
“PSA Seller” means, collectively, BayWa r.e. Development Portfolio I LLC and BayWa r.e. USA LLC.
“PTC” means the production tax credit allowed pursuant to Section 45 of the Code.
“PUHCA” means the Public Utility Holding Company Act of 2005, as amended, and FERC’s rules and implementing regulations thereunder.
“Purchase Option” is defined in Section 9.8 of this LLCA. “Purchase Option Period” is defined in Section 9.8 of this LLCA. “Purchase Option Price” is defined in Section 9.8 of this LLCA. “Purchase Price” is defined in Section 9.7(e) of this LLCA. “Purchasers” is defined in Section 9.7(c) of this LLCA. “PV EPC Contract” means that certain PV Engineering, Procurement and Construction Agreement, dated as of September 24, 2024, by and between the Project Company and the PV EPC Contractor, as modified by each change order thereto.
“PV EPC Contractor” means Pure Power Contractors, LLC.
“PWA Consultant” is defined in the ECCA.
“PWA Requirements” is defined in the ECCA.
“PWA Reserve Amount” is defined in the ECCA.
“Qualified Transferee” means a Person (a) that has owned and operated at least 250 MW(dc) of solar assets in North America for the immediately preceding three (3) years; (b) (i) with a long-term senior unsecured credit rating of at least “BBB-” by S&P or “Baa3” by Moody’s and such credit ratings are not on the Watchlist (Moody’s) (if rated by Moody’s) or on CreditWatch (S&P) (if rated by S&P) for a possible ratings downgrade and are not the subject of a negative credit or ratings outlook issued by the relevant agency, or, if either agency is not then in the business of providing ratings, any other entity that is then a nationally recognized statistical rating organization; or, (ii) if such entity does not have a credit rating, with a consolidated Tangible Net Worth under GAAP of at least five hundred million dollars ($500,000,000); (c) to whom the Class B Membership Interests could be Transferred without causing a Regulatory Problem; (d) that has satisfied all applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act of 2001; and (e) that is not a Disqualified Transferee.
“Qualifying Facility” means a qualifying facility pursuant to the Public Utility Regulatory Policies Act of 1978, as amended, and FERC’s implementing regulations.
“Real Property Documents” means those certain leases, easements, deeds and other documents listed on Schedule 2 to the ECCA.
“Rebuild” is defined in Section 6.9 of this LLCA. “Rebuild Cost” is defined in Section 6.9(b) of this LLCA.
“Recapture Event” means any recapture, reduction, loss or disallowance of all or any portion of the ITCs.
“Recapture Period” means the period beginning on the Effective Date and ending on the last day of the calendar year of the fifth (5th) anniversary of the Placed In Service Date of the last Block Placed In Service.
“RECs” means any credits, credit certificates, green tags or similar environmental or green energy attributes created by a Governmental Authority or independent certification board or group generally recognized in the electric power generation industry and generated by or associated with the Project or the electricity it produces, but not ITCs or any other tax benefits.
“Reference Rate” means the rate of interest reported in The Wall Street Journal as the prime lending rate or “prime rate,” as the rate changes from time to time.
“Regulated Holder” means any holder of the Company’s Securities that is (or that is a subsidiary of a bank holding company that is) subject to the various provisions of Regulation Y of the Board of Governors of the Federal Reserve Systems, 12 C.F.R., Part 225 (or any successor to Regulation Y) or to the Dodd Frank Wall Street Reform and Consumer Protection Act and all requests, guidelines and directives thereunder or issued in connection therewith.
“Regulatory Problem” means, with respect to any Class A Member, (a) any set of facts or circumstances wherein it has been asserted by any Governmental Authority (or the Member reasonably believes based on written advice of its counsel or written notice from a Governmental Authority that there is a material risk of such assertion) that the Class A Member (or any bank holding company or other regulated bank entity that controls the Class A Member) is not entitled to hold, or exercise any material right with respect to, all or any portion of the Membership Interest which such Person holds or (b) any set of facts or circumstances where such Person and its Affiliates reasonably believe (based on written advice of its counsel or written notice from a Governmental Authority) that such Person and its Affiliates do, or would, own, control or have power (including voting rights) over a greater quantity of the Membership Interests than is permitted under any law applicable to such Person or to which such Person is subject.
“Related Person” means a Person that has a relationship with a purchaser of electricity from the Project that results in the purchaser being a “related person” to such Person or to the Company for purposes of application of the loss disallowance rules of Section 267(a) or Section 707(b)(1) of the Code.
“Release” means any release, spill, leak, emission, deposit, pumping, pouring, emptying, discharging, injecting, escaping, leaching, disposing, dumping, dispersion or migration of Hazardous Substances into the environment.
“Representatives” is defined in Section 7.7 of this LLCA. “Restoration Plan” means, following any Subject Casualty, a plan for the Rebuild of the affected portion of the Project providing: (i) the plans and specifications and the schedule for the
Rebuild, (ii) a description of the Governmental Approvals required for the Rebuild, and (iii) a description of any termination, cancellation, revocation or other invalidity or impairment of any Governmental Approval or any Material Project Document then in effect as a result of such Rebuild.
“Right of First Offer” is defined in Section 9.8(b)(ii) of this LLCA. “S&P” means Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc., or any successor entity.
“Sanctioned Country” means a country subject to a sanctions program maintained by any Compliance Authority.
“Sanctioned Person” means any individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person or entity, or subject to any limitations or prohibitions (including but not limited to the blocking of property or rejection of transactions), under any order or directive of any Compliance Authority or otherwise subject to, or specially designated under, any sanctions program maintained by any Compliance Authority.
“SC Funding Date” is defined in Section 2.1(c) of the ECCA.
“Securities” means, with respect to any Person, such Person’s capital stock or limited liability company interests or any options, warrants or other securities which are directly or indirectly convertible into, or exercisable or exchangeable for, such Person’s capital stock or limited liability company interests, whether or not such derivative securities are issued by such Person, and any reference herein to “Securities” refers also to any such derivative securities and all underlying securities directly or indirectly issuable upon conversion, exchange or exercise of such derivative securities.
“Securities Act” means the Securities Act of 1933 or any successor statute, as amended from time to time.
“Seller” is defined in the ECCA recitals.
“Site” means the real property on which the Project is located.
“Specified Exception” means (a) the inaccuracy, breach or failure of any representation or warranty or covenant contained in this LLCA or any Transaction Document by the Class B Member Guarantor, any Class B Member (whether in its capacity as a Class B Member under this LLCA, as a party to any of the Transaction Documents, as the Partnership Representative or as the Managing Member), or any Affiliate of any Class B Member, the Company or the Seller (including, for the avoidance of doubt, a breach of the representation in Section 3.1(k)(iii) of the ECCA), (b) the inaccuracy, breach or failure of any representation or warranty or covenant contained in any Project Document by any Affiliate Party and (c) fraud, willful misconduct or gross negligence, in each case by a Class B Member (whether in its capacity as a Class B Member
under this LLCA, as a party to any of the Transaction Documents, as the Managing Member or as the Partnership Representative) or any Affiliate of any Class B Member.
“Subject Casualty” is defined in Section 6.9 of this LLCA. “Substantial Completion” has the meaning given in the applicable EPC Contract.
“Support Obligations” means all letters of credit, guarantees, deposits, payment or performance bonds or other credit support from the Company, the Project Company or other Person relating to the ownership or operation of the Project or use of the Site, in each case as set forth on Schedule 3 to the ECCA.
“Tangible Net Worth” means, with respect to any Person, (a) all shareholders’ equity in such Person and its wholly-owned subsidiaries, determined on a consolidated basis in accordance with GAAP or IFRS (less the value of all assets properly classified as intangible assets under GAAP or IFRS) or (b) if such Person is a fund or similar entity, (i) partners’ equity in such Person (determined in accordance with GAAP or IFRS) plus (ii) the unfunded or uncalled capital commitments of the partners in such Person determined in accordance with such Person’s limited partnership agreement or equivalent constituent documents, other than the unfunded or uncalled capital commitment of any defaulting partner or any partner whose commitment cannot be called in respect of the obligations of a Class B Member hereunder or any guaranty of those obligations being provided by such Person in connection herewith, less (iii) the sum of (A) the amount of any liabilities of such Person, determined in accordance with GAAP or IFRS, and (B) without duplication, the full amount of unfunded obligations of such Person to or related to investments and other activities of such Person (including amounts committed to be funded on a conditional or contingent basis).
“Target Flip Date” is defined in Section 5.1 of this LLCA. “Target IRR” means 7.25%.
“Target Parameters” is defined in the ECCA.
“Tax” or “Taxes” means all taxes, including all charges, fees, duties, imposts, levies or other assessments in the nature of taxes, now or hereafter imposed by any Governmental Authority, including income, gross receipts, excise, property, sales, gain, use, license, custom duty, unemployment, inheritance, corporation, capital stock, transfer, franchise, payroll, withholding, social security, minimum estimated, profit, gift, severance, value added, escheat, disability, premium, recapture, credit, occupation, service, leasing, employment, stamp, goods and services, ad valorem, utility, utility users and other taxes, and shall include interest, penalties or additions attributable thereto or attributable to any failure to comply with any requirement regarding Tax Returns.
“Tax Benefits” means, with respect to the Class A Member, the periodic federal income tax savings resulting from (i) the Class A Member’s distributive share of ITCs and (ii) the Class
A Member’s distributive share of tax losses, in each case, determined in accordance with Section 10.1(c). “Tax Contest” has the meaning assigned to such term in Section 8.7(d). “Tax Costs” means, with respect to the Class A Member, the periodic federal income tax liability resulting from (i) the Class A Member’s distributive share of taxable income and gain, determined without regard to any provision of law that applies at the level of such holder, (ii) any gain recognized by the Class A Member under Section 731(a) of the Code and (iii) any reduction, denial, deferral, recapture, disallowance, or loss of the ITC, or a portion thereof, by any Governmental Authority, at either the Company level or from any individual Member, in each case as calculated in accordance with Section 10.1(c). “Tax Credit Purchase Agreement” is defined in Section 8.11(a) of this LLCA. “Tax Loss” means the loss, reduction, unavailability, delay or recapture of ITCs assumed in the Base Case Model or loss, reduction, unavailability, or delay of tax depreciation benefits as measured against those assumed in the Base Case Model; for the avoidance of doubt, any loss, reduction, unavailability, delay or recapture of ITCs that have been transferred under Section 6418 of the Code shall be calculated as if such transfer has not been made.
“Tax Payment Dates” mean March 31, June 30, September 30 and December 31.
“Tax Representations” means the representations contained in Sections 8.9(d)-(e) and Sections 8.10(a)-8.10(j) of this LLCA and Section 3.1(k) of the ECCA. “Tax Return” means any report, return, declaration, claim for refund, or other information supplied or required to be supplied to a Tax authority in connection with Taxes, including any schedule or attachment thereto, including estimated returns and reports of every kind, and including any amendment thereof.
“Terminated Member” is defined in Section 9.9 of this LLCA. “Third Party” means a Person other than a Member or an Affiliate of a Member.
“Title Company” means Chicago Title Insurance Company.
“Title Policy” means one or more owner’s policies of title insurance insuring all real property interests held by the Project Company, in an amount at least equal to $215,000,000, containing such endorsements as the Class A Member may reasonably request, including non-imputation endorsements, and containing no exceptions (printed or otherwise) other than those approved by the Class A Member or constituting Permitted Encumbrances.
“Tracker Supply Agreement” means that certain Tracker Supply Agreement, dated as of September 6, 2024, by and between the Project Company and Nextracker, LLC.
“Tracking Model” means Base Case Model updated from time to time to reflect actual results of the Company, in accordance with and subject to the assumptions, conventions and procedures in Article X of this LLCA and in the form attached as Exhibit D. “Transaction” means the transactions contemplated by the Transaction Documents.
“Transaction Commitment Date” means August 27, 2025.
“Transaction Documents” means: (a) the ECCA, (b) this LLCA, (c) the Guaranty, (d) the Class A DRO Guaranty, (e) the Lender Consent, (f) the Fee Letter, (g) the Class A Guaranty and (h) the MIPA.
“Transfer” means with respect to any asset (including any Unit or Membership Interest or any portion thereof), any direct or indirect sale, assignment, transfer, conveyance, gift, exchange or other disposition of such asset, whether such disposition be voluntary, involuntary or by operation of Applicable Law, including the following: (a) in the case of an asset owned by a natural person, a transfer of such asset upon the death of its owner, whether by will, intestate succession or otherwise; (b) in the case of an asset owned by an entity, (i) a merger or consolidation of such entity (other than where such entity is the survivor thereof), (ii) a conversion of such entity into another type of entity to the extent that such conversion would be treated as a sale or exchange of such asset for federal income tax purposes, or (iii) a distribution of such asset, including in connection with the dissolution, liquidation, winding-up or termination of such entity (unless, in the case of dissolution, such entity’s business is continued without the commencement of liquidation or winding-up); and (c) any direct or indirect sale, assignment, transfer, Encumbrance, conveyance, gift, exchange or other disposition that constitutes a sale or exchange for U.S. federal income tax purposes.
“Transferee” means a Person to which a Transfer is or would be made and, in the case of a Transfer effected by way of a Change of Member Control, the Person that controls, or would control, the Member as its Parent immediately after the Change of Member Control.
“Transferred” and “Transferring” each has a correlative meaning.
“Transferring Member” means the Member effecting a Transfer.
“Transformer Supply Agreement” means that certain Purchase Order No. P-0234-911, dated as of August 16, 2019, by and between Virginia Transformer Corporation and the Project Company, as amended by that certain Change Order No. 1, dated February 28, 2020, that certain Change Order No. 2, dated September 12, 2024, and that certain Change Order No. 3, dated January 7, 2025.
“Treasury Regulations” means regulations issued by the IRS to implement the Code.
“True-Up Base Case Model” is defined in Section 5.1(b)(x)(A) of this LLCA. “Units” means the Class A Units and the Class B Units.
“Warranties” means the warranties with respect to inverters, modules, trackers, and transformers for the Project.
EXHIBIT B
[Omitted.]
EXHIBIT C
Initial Annual Operating Budget
[See attached]
EXHIBIT D
Tracking Model
See the following excel file: “[ ò ]”
EXHIBIT E
Form of Transfer Instrument
Assignment and Assumption Agreement
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is made as of ________________________________, 20 , by and between ________________ (the “Assignor”) and ____________________ (the “Assignee”). Capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in the LLCA (defined below).
W I T N E S E T H :
WHEREAS, the Assignor is a Member of American Beech Solar Holdings LLC, a Delaware limited liability company (the “Company”);
WHEREAS, Section 9.3 of the Amended and Restated Limited Liability Company Agreement of the Company, dated as of August 27, 2025 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “LLCA”) by and among the Members party thereto, permits, under certain circumstances, the disposition of the Assignor’s Membership Interest in the Company; WHEREAS, the Assignor has agreed to sell, grant, convey, transfer, assign and deliver to the Assignee (or its designee), and the Assignee has agreed to purchase, accept and assume (or will cause its designee to purchase, accept and assume), [all] [a portion] of the rights, duties and obligations of the Assignor with respect to the Assignor’s Membership Interest in the Company.
NOW, THEREFORE, for value received, in consideration of the mutual agreements herein contained and other good and valuable consideration, receipt and sufficiency thereof being hereby acknowledged, the parties hereto hereby agree as follows:
1. Assignment. The Assignor hereby irrevocably sells, grants, conveys, transfers, assigns, and delivers unto Assignee (or its designee), without recourse to the Assignor, [all] [ %] of the Assignor’s rights, title and interest in and to the Assignor’s Membership Interest in the Company (the “Assigned Interest”). The Assignor hereby irrevocably delegates, without recourse to the Assignor, any and all duties, obligations, responsibilities, claims, demands and other commitments in connection with the Assigned Interest, as applicable, unto Assignee.
2. Acceptance of Assignment. Assignee hereby irrevocably purchases, accepts and assumes the Assigned Interest and from the date hereof agrees to perform and be bound by all the terms, conditions and covenants of and assumes the duties and obligations of the Assignor with respect to the Assigned Interest.
3. Representations and Warranties of the Assignor. The Assignor hereby represents and warrants to the Assignee as follows:
(a) The Assignor (i) is duly organized and validly existing under the laws of its jurisdiction of organization or incorporation, (ii) is in good standing under such laws and (iii) has full power and authority to execute, deliver and perform its obligations under this Agreement.
(b) The rights and duties assigned by the Assignor pursuant to this Agreement are not subject to any prior sale, transfer, assignment or participation by the Assignor or any agreement to assign, convey, transfer or participate, in whole or in part.
4. Representations and Warranties of Assignee. Assignee hereby represents and warrants to the Assignor that the Assignee (a) is duly organized and validly existing under the laws of its jurisdiction of organization or incorporation, (b) is in good standing under such laws, (c) has full power and authority to execute, deliver and perform its obligations under this Agreement, (d) is not a Disqualified Transferee, (e) is acquiring the Assigned Interest for Assignee’s own account, for investment and not with a view to the distribution thereof, and (f) acknowledges that the sale and assignment of the Assigned Interest have not been registered under the Securities Act or the securities laws of any state of the United States or any other jurisdiction, and such Assigned Interest may not be offered or sold by it unless subsequently registered under the Securities Act and any other applicable securities laws or unless exemptions from the registration or other requirements thereof are available for the transaction.
5. Notice Information. All notices, requests and consents to be sent to the Assignee shall be sent or made at the following address:
[insert address]
6. Third Party Beneficiaries. The Company and each of its Members are express third-party beneficiaries of the representations made in Sections 3(a) and 4 of this Agreement. Such rights are in addition to the Company’s and Members’ rights under the LLCA, none of which are waived hereby. 7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAWS.
8. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall constitute an original, but all of which counterparts together shall constitute one and the same instrument.
(Signature pages follow)
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the date set forth above.
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ASSIGNOR: | [INSERT ASSIGNOR] |
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| By |
| Name: |
| Title: |
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ASSIGNEE: | [INSERT ASSIGNEE] |
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| By: |
| Name: |
| Title: |
EXHIBIT F
Form of Monthly Report
(See attached)
EXHIBIT G
Form of Quarterly Report
(See attached)
EXHIBIT H
Form of Annual Report
(See attached)
EXHIBIT I
Form of Certificate of Interest
THE INTERESTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES LAWS. ACCORDINGLY, SUCH INTERESTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH STATE SECURITIES LAWS, AND THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO IT THAT NO VIOLATION OF SUCH ACT AND SUCH STATE SECURITIES LAWS WILL RESULT FROM ANY PROPOSED SALE, TRANSFER, OR OTHER DISPOSITION OF SUCH INTERESTS.
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No. [___] | [Class A] [Class B] Units | |
American Beech Solar Holdings LLC,
a Delaware Limited Liability Company
Certificate of Interest
This certifies that [___________] is the owner of a [Class A] [Class B] limited liability company interest in American Beech Solar Holdings LLC (the “Company”), represented by [_________________] [Class A] [Class B] Units, which limited liability company interest is subject to the terms of the Amended and Restated Limited Liability Company Agreement of the Company, dated as of August 27, 2025, as the same may be further amended from time to time in accordance with the terms thereof (the “Limited Liability Company Agreement”), and which represents all [Class A] [Class B] Units held by [_________] as reflected on Exhibit B to the Limited Liability Company Agreement. The Company maintains books for the purpose of registering the transfer of Membership Interests.
This Certificate shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws.
This Certificate of Interest may be transferred by the lawful holders hereof only in accordance with the provisions of the Limited Liability Company Agreement.
Each limited liability company interest in the Company shall constitute a “security” within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial Code (including Section 8-102(a)(15) thereof) as in effect from time to time in the State of Delaware, and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995.
IN WITNESS WHEREOF, the said Company has caused this Certificate of Interest to be signed by its duly authorized officer this [_____] day of [_____], 20 .
INSTRUMENT OF TRANSFER OF
LIMITED LIABILITY COMPANY INTEREST IN
AMERICAN BEECH SOLAR HOLDINGS LLC
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer unto
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(print or type name of assignee) |
the limited liability company interest evidenced by and within the Certificate of Interest herewith, and does hereby irrevocably constitute and appoint __________________ as attorney to transfer said interest on the books of American Beech Solar Holdings LLC with full power of substitution in the premises.
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| Dated as of: | | | | | |
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| | [______________________________________] | |
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| | By: | | | |
| | Name: | |
| | Title: | | |
Schedule 2
Insurance
[See attached]
Schedule 3
Permitted Debt Service
[See attached]
EXHIBIT C
ECCA
EQUITY CAPITAL CONTRIBUTION AGREEMENT
Dated as of August 27, 2025
among
AMERICAN BEECH SOLAR HOLDINGS LLC
(as Company),
TENASKA AMERICAN BEECH HOLDINGS, LLC
(as Investor),
and
AMERICAN BEECH CLASS B LLC
(as Class B Member)
CONTENTS
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| ARTICLE 1 DEFINED TERMS AND INTERPRETATION | 1 |
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| 1.1. | Defined Terms | 1 |
| 1.2. | Principles of Interpretation | 1 |
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| ARTICLE 2 CAPITAL CONTRIBUTIONS; MEMBERSHIP INTERESTS | 2 |
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| 2.1. | Capital Contributions; Membership Interests | 2 |
| 2.2. | Use of Proceeds | 4 |
| 2.3. | Tax Reporting | 5 |
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| ARTICLE 3 REPRESENTATIONS AND WARRANTIES | 6 |
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| 3.1. | Representations and Warranties of Class B Member | 6 |
| 3.2. | Representations and Warranties of the Investor | 23 |
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| ARTICLE 4 CONDITIONS TO OBLIGATIONS OF INVESTOR | 25 |
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| 4.1. | Effective Date | 25 |
| 4.2. | MC Funding Date | 28 |
| 4.3. | SC Funding Date | 33 |
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| ARTICLE 5 CONDITIONS TO OBLIGATIONS OF CLASS B MEMBER | 39 |
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| 5.1. | Effective Date | 39 |
| 5.2. | MC Funding Date | 40 |
| 5.3. | SC Funding Date | 41 |
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| ARTICLE 6 COVENANTS | 42 |
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| 6.1. | Covenants | 42 |
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| ARTICLE 7 TERMINATION | 42 |
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| 7.1. | Termination | 42 |
| 7.2. | Effect of Termination | 43 |
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| ARTICLE 8 GENERAL PROVISIONS | 43 |
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| 8.1. | Notices | 43 |
| 8.2. | Amendment and Waiver | 44 |
| 8.3. | Binding Nature; Assignment | 44 |
| 8.4. | GOVERNING LAW | 44 |
| 8.5. | Submission to Jurisdiction | 44 |
| 8.6. | No Third Party Beneficiaries | 45 |
| 8.7. | Entire Agreement | 45 |
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| 8.8. | Counterparts; Electronic Signatures | 45 |
| 8.9. | Confidentiality | 45 |
| 8.10. | Exclusivity | 45 |
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| ARTICLE 9 INDEMNIFICATION | 46 |
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| 9.1. | Indemnification by the Class B Member | 46 |
| 9.2. | Limitation on Liability | 47 |
| 9.3. | Procedure for Indemnification | 49 |
| 9.4. | No Right of Contribution | 50 |
| 9.5. | Reserved. | 50 |
| 9.6 | No Duplication | 50 |
| 9.7 | Sole Remedy | 50 |
EXHIBITS AND SCHEDULES
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| Exhibit A Definitions |
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| Exhibit B Base Case Model |
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| Exhibit C Warranty Standards |
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| Exhibit D Independent Engineer Certificate (MC Funding Date) |
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| Exhibit E Independent Engineer Certificate (SC Funding Date) |
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| Exhibit F-1 Form of Estoppel (PV EPC Contractor) |
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| Exhibit F-2 Form of Estoppel (HV EPC Contractor) |
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| Exhibit F-3 Form of Estoppel (Operator) |
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| Exhibit F-4 (Reserved) |
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| Exhibit F-5 Form of Estoppel (Asset Manager) |
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| Exhibit F-6 Form of Estoppel (Module Supplier) |
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| Exhibit F-7 Form of Estoppel (Power Purchaser) |
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| Exhibit F-8 Form of Estoppel (Energy Manager) |
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| Exhibit F-9 Form of Estoppel (Real Property Document Counterparties) |
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| Exhibit G Form of LLCA |
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| Exhibit H Form of Class A DRO Guaranty |
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| Exhibit I Form of LLCA Legal Opinion |
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| Exhibit J-1 Form of Beginning of Construction Certificate (Effective Date) |
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| Exhibit J-2 Form of Beginning of Construction Certificate (MC Funding) |
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| Exhibit J-3 Form of Beginning of Construction Certificate (SC Funding) |
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| Schedule 1 Responsible Persons |
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| Schedule 2 Real Property Documents |
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| Schedule 2.1 (d) Target Parameters |
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| Schedule 3 Support Obligations |
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| Schedule 3.1(g) Governmental Approvals |
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| Schedule 3.1(i) Project Documents |
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| Schedule 3.1(i)(v) Force Majeure |
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| Schedule 3.1(p) Environmental Matters |
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| Schedule 3.1(q) Insurance |
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| Schedule 3.1(r) Regulatory Matters |
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| Schedule 3.1(aa) Bank Accounts |
EQUITY CAPITAL CONTRIBUTION AGREEMENT
THIS EQUITY CAPITAL CONTRIBUTION AGREEMENT (this “ECCA”) is made and entered into as of August 27, 2025 (the “Effective Date”), by and among American Beech Solar Holdings LLC, a Delaware limited liability company (the “Company”), Tenaska American Beech Holdings, LLC, a Delaware limited liability company (the “Investor”), and American Beech Class B LLC, a Delaware limited liability company (“Class B Member”, and together with the Company and the Investor, the “Parties”).
RECITALS
1. American Beech Solar LLC, a North Carolina limited liability company (the “Project Company”), is developing an approximately 196 MW (dc) photovoltaic power generation project located in Halifax County, North Carolina known as the American Beech Project (the “Project”).
2. Pursuant to that certain Membership Interest Purchase Agreement (the “MIPA”) entered into as of the Effective Date between MN8 DevCo 3 LLC, a Delaware limited liability company (the “Seller”), and the Company, Seller shall sell, and the Company shall use the proceeds from the MC Funding Date to purchase, one hundred percent (100%) of the membership interests in the Project Company, which shall occur concurrently with the MC Funding Date.
3. Class B Member owns 100% of the membership interests in the Company, and, following the transactions contemplated by the MIPA, the Company will own 100% of the membership interests in the Project Company on the MC Funding Date.
4. On the MC Funding Date, (a) the Investor will make a contribution to the Company, and Class B Member will cause the Company to issue to the Investor, the Class A Membership Interests, and (b) Class B Member will designate Class B Member’s retained interests in the Company as Class B Membership Interests.
Now, therefore, in consideration of the respective representations, warranties, covenants, agreements and conditions in this ECCA, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:
ARTICLE 1
DEFINED TERMS AND INTERPRETATION
1.1. Defined Terms. Capitalized terms not otherwise defined in this ECCA are defined in Exhibit A. 1.2. Principles of Interpretation. All the agreements, contracts or documents defined or referred to in this ECCA will mean such agreements, contracts or documents as the same may from time to time be supplemented or amended or their terms waived or modified to the extent permitted by, and in accordance with, or not prohibited by, the terms of the agreement and this ECCA, and will disregard any supplement, amendment or waiver made in breach of this ECCA.
Defined terms in this ECCA will include in the singular number the plural and in the plural number the singular. Wherever from the context it appears appropriate, pronouns stated in the masculine, feminine or neuter gender will include the masculine, feminine and neuter genders. All references to Articles, Sections, Schedules and Exhibits will be references to Articles, Sections, Schedules and Exhibits of this ECCA, unless otherwise specified. The words “will” and “shall” have the same meaning. The words “include,” “includes” and “including” are not limiting, and are in all cases to be construed as followed by the words “without limitation” (whether or not expressly so followed); the word “or” is not exclusive; references to Persons include their respective successors and assigns or, in the case of Governmental Authorities, Persons succeeding to the relevant functions of such Persons; and all references to statutes and related regulations will include any amendments of the same and any successor statutes and regulations. The words “herein,” “hereof” and “hereunder” will refer to this ECCA as a whole and not to any particular section or subsection of this ECCA. Documents, files and materials that are posted to the Data Site or otherwise delivered in writing in accordance with Section 8.1 to the Investor will be deemed delivered for purposes of this ECCA. ARTICLE 2
CAPITAL CONTRIBUTIONS; MEMBERSHIP INTERESTS
2.1. Capital Contributions; Membership Interests.
(a) On the first date on or after the Effective Date that all the conditions in Sections 4.1 and 4.2 have been satisfied or waived in writing by Investor (the “MC Funding Date”), the Investor will make a Capital Contribution to the Company in an amount equal to 20% of the estimated aggregate Capital Contributions to be made by the Investor as set forth in the Base Case Model, as updated in connection with the MC Funding Date (the “MC Funding Date Contribution”), which amount will be paid in cash in immediately available funds into an account of the Company for application in accordance with Section 2.2(a). On the MC Funding Date, the Class B Member shall make a Capital Contribution to the Company in cash in immediately available funds into an account of the Company in such amount, if any, as is necessary, after taking into account the MC Funding Date Contribution, to enable all payments required to be made pursuant to Section 2.2(a) to be paid. (b) Simultaneously with the payment of the MC Funding Date Contribution, (i) the Class B Member will cause the Company to issue to the Investor all of the Class A Membership Interests in the Company, (ii) the Investor will be admitted as a Member of the Company and (iii) the Investor and the Class B Member will execute the LLCA, pursuant to which the Investor will become the record and beneficial owner of 100% of the Class A Membership Interests, and Class B Member will continue as the record and beneficial owner of 100% of the Class B Membership Interests.
(c) On the first date that all the conditions in Section 4.3 have been satisfied or waived in writing by Investor (the “SC Funding Date”), the Investor will make a Capital Contribution to the Company in an amount as indicated in the Base Case Model delivered to the Investor on the SC Funding Date (the “SC Funding Date Contribution”), which amount will be paid in cash in immediately available funds into an account of the Company for application in
accordance with Section 2.2(b). In no event shall the sum of the MC Funding Date Contribution and the SC Funding Date Contribution be greater than the amount of the Commitment. On the SC Funding Date, the Class B Member shall make a Capital Contribution to the Company in cash in immediately available funds into an account of the Company in such amount, if any, as is necessary, after taking into account the SC Funding Date Contribution, to enable all payments required to be made pursuant to Section 2.2(b)(i) through (iv) to be paid. (d) Adjustments to Base Case Model and Capital Contributions. In connection with each Funding Date, the Base Case Model, the Investor’s Capital Contributions and the Class B Member’s Capital Contributions will be updated and adjusted as follows:
(i) Base Case Model. At least five (5) Business Days before each of the MC Funding Date and the SC Funding Date, the Class B Member shall deliver to the Investor an updated Base Case Model for the Project, which is reasonably satisfactory to the Investor and has been updated to take into account: (1) any Change in Tax Law that can be reflected in the Base Case Model that (A) is reasonably expected to have a material adverse effect on the Target Parameters shown in the Base Case Model in respect of Investor’s investment in the Company, the Project Company or the Project or (B) the Class A Member has consented in writing to including in the Base Case Model; (2) any Proposed Change in Tax Law that can be reflected in the Base Case Model that is reasonably expected to have a material adverse effect on the Target Parameters shown in the Base Case Model in respect of Investor’s investment in the Company, the Project Company or the Project; (3) the anticipated or actual MC Funding Date, SC Funding Date, Placed In Service Date of each Block included in the Project, date of Substantial Completion and Commercial Operation Date (under and as defined in the PPA); (4) any changes to the actual costs incurred or reasonably expected to be incurred to acquire, develop, or construct the Project, including transaction costs, any purchase price adjustments, the cost attributable to or that result from any amendment of or default under any Material Project Document, Support Obligation or Construction Financing Document, insurance costs, taxes, regulatory costs, operating expenses, decommissioning expenses, or other expenses of the Company or the Project Company with respect to the Project; (5) the contents of the Independent Engineer Report bring-down delivered in connection with the MC Funding Date or any changes to the Independent Engineer Report reflected in the construction supplement and bring-down Independent Engineer Report (including electrical production and revenues) delivered in connection with the SC Funding Date, including any restrictions on the ability of the Project Company to make power sales other than pursuant to the PPA; (6) with respect to the MC Funding Date, any change to the Appraisal or Cost Segregation Report from that delivered in connection with the Effective Date, and with respect to the SC Funding Date, any change to the Appraisal or Cost Segregation Report from that delivered in connection with the MC Funding Date, including the fair market value of the Project and asset cost segregation (including the portion of the Project that is ITC Eligible Property); (7) the contents of the Insurance Report bring-down delivered in connection with the MC Funding Date or changes to the Insurance Report reflected in the bring-down report delivered in connection with the SC Funding Date and any changes to the actual insurance coverage obtained for the post construction period; (8) the contents of the bring-down Transmission Report delivered in connection with the SC Funding Date (if applicable); (9) any terminations of, amendments to, replacements of, or additions to, Material Project Documents, the AC Subsidiary LLCA, or Construction Financing
Document, if any, and any liquidated damages accrued and received or accrued and reasonably expected to be received or paid or reasonably expected to be paid (whether or not accrued) by the Company or the Project Company under the terms of any Material Project Document, the AC Subsidiary LLCA, or a Construction Financing Document; (10) the composition of the Project as anticipated to be constructed or actually constructed; and (11) the correction of any manifest errors and clerical inaccuracies including to incorporate or appropriately reflect the calculations required by the LLCA.
(ii) Calculation of Equity Capital Contributions. The Capital Contributions for the SC Funding Date shall be adjusted up or down to result in the Base Case Model demonstrating the achievement of the Target Parameters and, to the extent necessary to achieve the Target Parameters, the distributions and allocations in the LLCA will be adjusted (up or down) and incorporated into the Base Case Model, and the LLCA will be amended as necessary to reflect any such adjustment; provided, that each item of Company income, gain, loss, deduction and credit must be allocated at least 5.00% to the Investor and at least 1% to the Class B Member. In no event shall any adjustment made pursuant to this Section 2.1(d)(ii) result in the projected deficit restoration obligation of the Investor exceeding the Class A DRO Cap or result in the Investor being unable to receive a bring-down of the opinion referenced in Section 4.1(e)(i) in form and substance reasonably satisfactory to Investor. 2.2. Use of Proceeds. The proceeds of each Capital Contribution made pursuant to Section 2.1 will be applied as follows: (a) On the MC Funding Date, the MC Funding Date Contribution and any Capital Contribution made by Class B Member shall be used by the Company to pay (i) all then due and owing Transaction Expenses and (ii) to Seller any and all amounts then due and owing by the Company under the MIPA.
(b) On the SC Funding Date, the SC Funding Date Contribution and any Capital Contribution made by Class B Member shall be used by the Company:
(i) first, to pay all amounts due and owing by the Project Company and the Company and their respective Affiliates under the Construction Financing Documents, including with respect to the Construction Loans (as defined in the Construction Financing Agreement);
(ii) second, to pay all amounts then due and owing by the Company, the Project Company or an Affiliate thereof under the MIPA and any Project Document;
(iii) third, to pay all then due and owing Transaction Expenses;
(iv) fourth, to fund the Final Completion Account in an amount equal to the Final Completion Reserve Requirement;
(v) fifth, if and only if the Project is Placed in Service after December 31, 2025, to fund a separate cash reserve with an amount sufficient to pay the PWA Reserve Amounts;
(vi) sixth, to fund the PJM DAT Account in an amount equal to $500,000; and
(vii) seventh, any remaining amount shall be distributed to the Class B Member.
2.3. Tax Reporting. For federal income tax purposes, the Parties agree to report the Transaction as follows:
(a) Prior to the MC Funding Date, for federal income Tax purposes, (i) each of the Company and the Class B Member is treated as an entity disregarded as separate from MN8 Energy Operating Company LLC, a Delaware limited liability company, and (ii) the Project Company is treated as an entity disregarded as separate from MN8 Energy Development Company LLC, a Delaware limited liability company.
(b) (i) the Investor will be treated on the MC Funding Date as making a Capital Contribution to a disregarded limited liability company in exchange for a membership interest, thereby causing the Company to be classified as a partnership for purposes of Section 721 of the Code, (ii) the Class B Member will be treated as contributing property and liabilities to the Company for purposes of Section 721 of the Code consisting of (A) the assets and liabilities of the Company as of the time immediately prior to the MC Funding Date Contribution and (B) any Capital Contribution pursuant to the last sentence of Section 2.1(a), and (iii) the Company will be treated as purchasing the Project from the Seller on the MC Funding Date in exchange for the consideration set forth in the MIPA, subject to adjustment, if any, pursuant to Section 6.4 of the MIPA (the “MIPA Purchase Price”). (c) The Parties agree that the MIPA Purchase Price shall be allocated among the assets comprising the Project in a manner consistent with the Cost Segregation Report as of the SC Funding Date.
(d) On the SC Funding Date, each of the SC Funding Date Contribution and any Capital Contribution made by Class B Member to the Company shall be treated as a capital contribution for purposes of Section 721 of the Code.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of Class B Member. The following representations and warranties are made by Class B Member to the Investor on the Effective Date, the MC Funding Date and the SC Funding Date, unless specifically limited to only certain dates:
(a) Organization, Good Standing, Etc.; Officers. Each of Class B Member, the Project Company, each Affiliate Party and the Company (i) is a Delaware limited liability company, duly organized and existing under the laws of the state of its formation and is in good standing under such laws and (ii) is duly qualified and in good standing in each jurisdiction where such qualification is necessary. The Class B Member, the Project Company, and the Company each have the requisite power and authority to own, lease, and operate their respective properties and Assets. The Investor has received true and correct copies of the charter documents and operating agreement of the Class B Member, the Company and the Project Company currently in effect. The persons listed on Schedule 1 are the individuals who have primary responsibility for all day-to-day operations and management of the Project and the matters to which representations and warranties are made in this ECCA.
(b) Company Membership Interests. On the Effective Date and on the MC Funding Date prior to the transactions contemplated in Section 2.1 and the execution and delivery of the LLCA, Class B Member is the sole member of the Company and holds 100% of the ownership interests in the Company (subject to no Encumbrances other than those granted pursuant to the Construction Financing Documents and Permitted Encumbrances set forth in clause (e) of the definition thereof), which are validly issued and duly authorized, and there has never been any other member of the Company. The Company is the sole member of the Project Company and holds 100% of the ownership interests in the Project Company (subject to no Encumbrances other than those granted pursuant to the Construction Financing Documents and Permitted Encumbrances set forth in clause (e) of the definition thereof), which are validly issued and duly authorized. Upon the issuance of the Class A Membership Interests pursuant to Section 2.1, (x) the Investor and Class B Member will hold all of the ownership interests in the Company, (y) the Class A Membership Interests and Class B Membership Interests will be validly issued and duly authorized and there will be no membership interests in the Company other than the Class A Membership Interests and the Class B Membership Interests, and (z) the Investor will have good title to its ownership interests free and clear of all Encumbrances (other than Permitted Encumbrances solely to the extent set forth in clause (e) of the definition thereof). Other than pursuant to this ECCA, the MIPA or the LLCA or the Construction Financing Documents, there is no agreement or other arrangement to issue, sell, transfer, convert or dispose of any ownership interest in the Company or the Project Company. (c) Sole Purpose. Since the date of acquisition by Class B Member Guarantor or one of its Affiliates of the Project Company, the Project Company has been engaged solely in the development, construction and ownership of the Project and has incurred no Liabilities except those incurred under the Project Documents, the Construction Financing Documents and Governmental Approvals and Liabilities incidental to the development, construction and
ownership of the Project that are not material. Since its formation, the Company has been engaged solely in the development, construction and ownership of the Project and has incurred no Liabilities except those incurred under the Project Documents and the Construction Financing Documents. Neither the Company nor the Project Company is a party to any agreement or contract having a value over its term in excess of $250,000, other than the Project Documents, the Construction Financing Documents and the Transaction Documents to which it is a party.
(d) Authority; Enforceability. Each of Class B Member, the Project Company, the Company and each Affiliate Party has the requisite power and authority to execute, deliver and enter into the Transaction Documents and Project Documents to which it is a party and to perform its obligations thereunder and consummate the Transaction. The execution and delivery by each of Class B Member, the Project Company, the Company and each Affiliate Party of the Transaction Documents and Project Documents to which it is a party, and the consummation by such persons of the Transaction, have been duly authorized by all necessary entity action. Each Transaction Document and Project Document to which Class B Member, the Project Company, the Company or each Affiliate Party is a party has been duly authorized, validly executed and delivered and constitutes the legal, valid and binding obligations of Class B Member, the Project Company, the Company or such Affiliate Party, as applicable, enforceable against such person in accordance with its terms, except as its enforceability may be limited by Bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and general equitable principles (whether in a proceeding in equity or at law).
(e) No Conflicts. The execution and delivery of the Transaction Documents and the Project Documents to which Class B Member, the Project Company, any Affiliate Party or the Company is a party do not, and the consummation of the transactions contemplated thereby will not, (i) violate or require any filing or notice under any Applicable Law (other than filings or notices that have been made or can reasonably be expected to be made in the ordinary course of business when needed); (ii) conflict with or cause a breach of any provision in such person’s organizational documents; (iii) violate in any material respect, cause a material breach or default, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel (except to the extent that such acceleration, termination, modification or cancellation is not material), or require any authorization or approval (other than those already obtained or made, those to be obtained or made in the ordinary course of business or those that are not required to be obtained or made prior to such date) under, any contract to which Class B Member, the Project Company, such Affiliate Party or the Company is a party or by which it is bound or to which any of its Assets are subject; or (iv) result in the creation of an Encumbrance upon any of the Assets of Class B Member, the Project Company, such Affiliate Party or the Company (other than Permitted Encumbrances), except (in the case of clauses (i), (ii), (iii), and (iv)) for any such event that would not reasonably be expected to have a Material Adverse Effect.
(f) Title; Assets; Indebtedness. (i) The Project Company has good and marketable title to and is the sole owner of the Project and the Assets comprising the Project free and clear of all Encumbrances other than Permitted Encumbrances (other than title to any Assets for which title only transfers from the applicable EPC Contractor to the Project Company at Substantial Completion), and all Assets owned by the Company are free and clear of all
Encumbrances other than Permitted Encumbrances and (ii) except for any services that are required to be performed or parts that are required to be provided in accordance with a Project Document in order to achieve Final Completion or are reasonably expected to be available when required on commercially reasonable terms, no additional parts or services from any other Persons are required in order to (A) install the Project and place it in service for U.S. federal income tax purposes in accordance with each of the Project Documents for the Project and all Applicable Law and Governmental Approvals and (B) operate and maintain the Project in accordance in all material respects with Prudent Industry Practice. On and as of the Effective Date and each Funding Date, none of the Class B Member, the Company, the Project Company or, to the Knowledge of the Class B Member, the AC Subsidiary has Indebtedness other than (1) under the Construction Financing Documents and (2) amounts not yet due under Material Project Documents which may be construed as Indebtedness.
(g) Governmental Approvals.
(i) Neither the Company nor the Project Company is, or will be, required under Applicable Law to give any notice, make any filing, or obtain any consent or approval from any Governmental Authority to execute, deliver or perform any of the Transaction Documents to which it is a party or to consummate the transactions contemplated thereby other than any Governmental Approvals that (A) have been obtained or made (1) as of the Effective Date, each of which is set forth on Part I of Schedule 3.1(g) (or can reasonably be expected to be obtained or made by the MC Funding Date or the SC Funding Date, each of which is set forth on Part II or III of Schedule 3.1(g)), (2) as of the MC Funding Date, each of which is set forth on Part I or II of Schedule 3.1(g) (or can reasonably be expected to be obtained or made by the SC Funding Date, each of which is set forth on Part III of Schedule 3.1(g)), (3) as of the time when any energy generated by the Project (including test power) is first delivered or sold, the Governmental Approvals described in Part III of Schedule 3.1(g) (which shall include MBR Authority and EWG status) as being required to be obtained as of such date, or (4) as of the SC Funding Date, each of which is set forth on Part I, II or III of Schedule 3.1(g) or, (B) are ministerial in nature, can reasonably be expected to be obtained or made in the ordinary course of business on commercially reasonable terms and conditions when needed and the absence of which could not be reasonably expected to adversely affect the consummation of the transactions contemplated by this ECCA or any of the Transaction Documents or result in a Material Adverse Effect (collectively, “Ministerial Approvals and Filings”).
(ii) True and correct copies of each Governmental Approval that is necessary under Applicable Law for the execution, delivery or, except those Governmental Approvals which relate solely to the construction or operation of the Project that are not required until a later date and are reasonably expected to be obtained in the ordinary course on commercially reasonable terms as and when required, performance of the Transaction Documents to which the Company or the Project Company is a party and the consummation of the transactions thereunder that have been directly obtained by or for the benefit of the Company or the Project Company, as applicable, and copies thereof have been delivered to the Investor, other than Ministerial Approvals and Filings.
(iii) As of the Effective Date, all Governmental Approvals necessary for the construction, development, ownership and operation of the Project are set forth in Part I of Schedule 3.1(g) and have been obtained and are held by the Project Company, its Affiliates, other contractors hired by or on behalf of the Project Company or any EPC Contractor, as applicable, except Ministerial Approvals and Filings or Governmental Approvals that are not required as of the Effective Date, which are, as of the Effective Date, set forth in Part II and Part III of Schedule 3.1(g). As of the MC Funding Date, all Governmental Approvals necessary for the construction, development, ownership and operation of the Project are set forth in Part I or II of Schedule 3.1(g) and have been obtained and are held by the Project Company, its Affiliates, other contractors hired by or on behalf of the Project Company or any EPC Contractor, as applicable, except Ministerial Approvals and Filings or Governmental Approvals that are not required as of the MC Funding Date, which are, as of the MC Funding Date, set forth in Part III of Schedule 3.1(g). As of the SC Funding Date, all Governmental Approvals, other than Ministerial Approvals and Filings, necessary for the construction, development, ownership and operation of the Project as of the SC Funding Date are set forth in Part I, II or III of Schedule 3.1(g), and have been obtained and are held by the Project Company, its Affiliates, other contractors hired by or on behalf of the Project Company or any EPC Contractor, as applicable, and each such Governmental Approval is valid, in full force and effect, and the statutory and administrative appeal periods related thereto have expired. There are no proceedings pending or, to the Knowledge of Class B Member, threatened (in writing), which would reasonably be expected to result in the material adverse modification, revocation or termination of any such Governmental Approval or the imposition of any material penalty thereunder. None of the Project Company or any of its Affiliates is in violation of a material requirement of any such Governmental Approval that is or could reasonably be expected to have a Material Adverse Effect. To the Knowledge of Class B Member, no event has occurred and is continuing that, after notice or lapse of time or both would reasonably be expected to constitute, a material violation of any such Governmental Approval, or would reasonably be expected to result in a material adverse modification (including the imposition of any new material adverse conditions, but not including any new compliance conditions that generally apply on an industry-wide basis), revocation or termination of, or any other material adverse change in, any such Governmental Approval. To the Knowledge of Class B Member, no Governmental Authority intends to cancel, revoke, terminate, suspend, deny or not renew any such Governmental Approval or application for any such Governmental Approval. No Proceeding is pending or, to the Knowledge of Class B Member, threatened, by or before any Governmental Authority regarding any revocation, withdrawal, suspension, cancellation or termination of any such Governmental Approval or any actual, alleged, possible or potential violation of, or failure to comply with, any such Governmental Approval.
(iv) Notwithstanding anything herein to the contrary, the Class B Member may, with the written consent of the Investor (not to be unreasonably withheld or delayed), update Schedule 3.1(g) between the MC Funding Date and the SC Funding Date as required to reflect the development of the Project during such time period, however no such update to Schedule 3.1(g) shall be deemed to cure any breach of this Section 3.1(g) that has occurred prior to the MC Funding Date.
(h) Absence of Litigation.
(i) There is no pending or, to the Knowledge of Class B Member, threatened (A) Proceeding involving the Company, to which the Company is a party or that adversely affects the Project, (B) Proceeding involving the Project Company, to which the Project Company is a party or that adversely affects the Project, or (C) Proceeding that could reasonably be expected to adversely affect its ability to complete the Transaction. None of the Company, the Project Company, nor Class B Member is subject to any Order adversely affecting the Project, the Company, the Project Company or the Transaction. To the Knowledge of Class B Member, the Class B Member has delivered to the Investor a true, correct and complete copy of each material contract to which the AC Subsidiary is a party.
(ii) There is no pending or threatened Proceeding to which any Affiliate Party is a party or that affects any Affiliate Party that has had or could reasonably be expected to have a Material Adverse Effect, and no Affiliate Party is subject to any Order that has or could reasonably be expected to have a Material Adverse Effect. To the Knowledge of Class B Member, no Bankruptcy has occurred with respect to any Material Contract Party.
(i) Transaction Documents and Project Documents.
(i) Schedule 3.1(i) lists each Material Project Document, and Class B Member has delivered a true, correct, and complete copy of each such Material Project Document and each Construction Financing Document to the Investor.
(ii) None of Class B Member, the Project Company, any Affiliate Party or the Company has materially breached or is in material default under any Transaction Document, Construction Financing Document or Material Project Document, which breach or default remains uncured. To the Knowledge of Class B Member, no event or circumstance has occurred that would, with the passage of time or notice, reasonably be expected to result in such a material breach or default. To the Knowledge of Class B Member, no other party to a Transaction Document, Construction Financing Document or Material Project Document (other than the Investor, Tenaska Energy, Inc. or Tenaska Energy Holdings, LLC) has materially breached or is in material default under any Transaction Document, Construction Financing Document or Material Project Document, which breach or default remains uncured, and, to the Knowledge of Class B Member, no event or circumstance has occurred that would, with the passage of time, be expected to result in such a material breach or material default.
(iii) The materials to be supplied and the interests and other rights granted pursuant to the Material Project Documents comprise all of the interests necessary to secure any right that is material to the acquisition, development, construction, installation, completion, operation, maintenance or replacement or removal of the Project (including the interconnection and transmission of electricity therefrom), in accordance with all Applicable Law, Prudent Industry Practice, the Material Project Documents and in accordance with the schedule for construction and completion of the Project, other than those rights which are reasonably expected to be obtained in due course and on commercially reasonable terms at or before the time when such rights are reasonably necessary to be so obtained.
(iv) No Project Party has, except as set forth on Part I of Schedule 3.1(i)(iv) (A) provided written notice to the Company, the Project Company, Class B Member, any Affiliate Party or any of their respective Affiliates of its intention to amend or terminate a Material Project Document or (B) made any claims against, or sought indemnification from, the Company, the Project Company, Class B Member, any Affiliate Party or any of their respective Affiliates pursuant to a Material Project Document that is not otherwise the subject of a reasonable reserve or otherwise accounted for with reasonable credit support, and none of Class B Member, the Company, the Project Company, any Affiliate Party or any of their respective directors, managers, members or officers has been advised in writing that any such claims may be asserted or initiated. No Person party to a Construction Financing Document has, except as set forth on Part II of Schedule 3.1(i)(iv), (x) provided written notice to the Company, the Project Company, or Class B Member, or any of their respective Affiliates of its intention to amend or terminate a Construction Financing Document (other than in connection with Term Conversion (as defined in the Construction Financing Agreement)) or (y) made any claims against, or sought indemnification from, the Company, the Project Company, Class B Member, or any of their respective Affiliates pursuant to a Construction Financing Document that is not otherwise the subject of a reasonable reserve or otherwise accounted for with reasonable credit support, and none of Class B Member, the Company, the Project Company, any Affiliate Party or any of their respective directors, managers, members or officers has been advised in writing that any such claims may be asserted or initiated. Notwithstanding anything herein to the contrary, the Class B Member may, with the written consent of the Investor (not to be unreasonably withheld or delayed), update Schedule 3.1(i)(iv) between the MC Funding Date and the SC Funding Date as required to reflect the development of the Project during such time period, however no such update to Schedule 3.1(i)(iv) shall be deemed to cure any breach of this Section 3.1(i)(iv) that occurred prior to the MC Funding Date.
(v) Except as set forth on Schedule 3.1(i)(v), to the Knowledge of Class B Member, no event, act, circumstance or condition exists that constitutes or could reasonably be expected to constitute a force majeure event under any Material Project Document.
(vi) All representations, warranties and other material factual statements made by the Company, the Project Company, each Affiliate Party and Class B Member in each of the Material Project Documents to which it is a party are true and correct in all material respects as of the date made (except for representations and warranties or other factual statements that refer only to an earlier date).
(vii) Other than the Transaction Documents, the Assignment Agreement (as defined in the MIPA), the Construction Financing Documents, the O&M Agreement, and the Asset Management Agreement, there are no Affiliate Contracts.
(viii) Other than as disclosed in Schedule 3, there are no Support Obligations with respect to the Project. Part A of Schedule 3 sets out all of the Support Obligations required as of the MC Funding Date. Part B of Schedule 3 sets out all of the Support Obligations required as of the SC Funding Date.
(ix) On and after the consummation of the transactions contemplated by the MIPA on the SC Funding Date, the Company does not have any outstanding payment obligations under the MIPA.
(x) All utility services (including electricity and telecommunications) reasonably necessary and sufficient, in quality and quantity, for the construction, development, ownership, operation and maintenance of the Project for its intended purposes are currently available at the Site, or can reasonably be expected to be commercially available as and when required upon commercially reasonable terms and consistent with the schedule for the Project.
(xi) To the Knowledge of Class B Member and solely with respect to the Project and the Project Company, no event or condition exists that would either immediately or with the passage of any applicable grace period or giving of notice, or otherwise, enable either PSA Buyer or PSA Seller to terminate or suspend its applicable obligations under the PSA or entitle PSA Seller to any claim, counterclaim, offset or defense against PSA Buyer in respect of the PSA (provided, for purposes of clarity, there are non-Project and non-Project Company assets and operations that were sold under the PSA and nothing in this Section 3.1(i) shall take any such non-Project or non-Project Company assets or operations into account). (xii) As of the MC Funding Date and the SC Funding Date and solely with respect to the Project and the Project Company, all amounts then due and payable by each of PSA Buyer and PSA Seller under the PSA have been paid (subject to any offset payments and bona fide disputes and claims made thereunder), and neither the Company nor the Project Company has any obligations or liabilities (including contingent obligations) to PSA Buyer, PSA Seller or any of their respective Affiliates in connection with the purchase of a direct or indirect ownership interest in any of the Class B Member, the Company, the Project Company or any of their respective Affiliates, and PSA Seller does not own any direct or indirect ownership interest in the Class B Member, the Company or the Project Company.
(xiii) Neither PSA Buyer nor PSA Seller under the PSA, have or have granted to any other person, any outstanding option, lien, warrant, put, call, buy-back, repurchase right, right of first refusal, right of first offer or other agreement to acquire any equity interest in Project Company or ownership of any assets of the Project.
(xiv) PSA Seller has no right under the PSA which, if exercised, would be reasonably likely to result in (x) the reduction, loss disallowance or recapture of the ITC claimed or projected to be claimed with respect to the Project or any component thereof within the meaning of Section 50(a) of the Code, or (y) the Investor failing to satisfy any of the Target Parameters shown in the Base Case Model.
(j) Consents and Approvals. No filings, consents, waivers, authorizations or approvals are required for the Class B Member, the Project Company, any Affiliate Party or the Company to execute, deliver and perform its obligations under this ECCA, the other Transaction Documents or the Project Documents to which it is a party, or for the consummation of the Transaction, other than those already obtained or made, those to be obtained or made in the ordinary course of business, those that are not required to be obtained or made prior to such date.
(k) Taxes.
(i) (A) All Tax Returns required to be filed with any Tax authority by, or with respect to, each of the Project Company and the Company have been duly and timely filed, and all such Tax Returns were prepared in compliance with all Applicable Laws and are true, correct and complete in all material respects, (B) all Taxes due and payable by, or with respect to, the Project Company or the Company and their respective assets or activities (whether or not shown as due on any Tax Return) have been timely paid to the applicable Governmental Authority, (C) all unpaid taxes that have accrued, but are not yet due and payable, by the Company or the Project Company on or before the Effective Date, the MC Funding Date or the SC Funding Date, as applicable, are reflected in the Base Case Model, (D) no written claim, and no other claim to the Knowledge of Class B Member, has been made by a Tax authority in a jurisdiction where the Company or the Project Company does not file a Tax Return that the Company or the Project Company is or may be subject to taxation by that jurisdiction, (E) there are no liens for Taxes upon any of the Assets of the Company or the Project Company, other than Permitted Encumbrances, (F) there are no agreements or consents currently in effect for the extension or waiver of the time for the filing of any Tax Return or the assessment or collection of any Taxes relating to the Company, the Project Company or the Project, and no Person has been asked to enter into any such agreement or consent, (G) neither the Company nor the Project Company is a party to any Tax sharing or allocation agreement, Tax indemnity agreement or similar agreement or arrangement regarding Taxes, other than agreements entered into in the ordinary course of business that do not have as their principal purpose the allocation of liabilities for Taxes and under which any liability of the Company or Project Company for Taxes is pursuant only to customary tax gross-up, tax indemnity or tax allocation provisions contained therein, (H) there are no audits, examinations, claims, assessments, levies, administrative proceedings or lawsuits with respect to Taxes or Tax Returns in progress, pending or threatened in writing against the Company, the Project Company or the Assets of the Company or the Project Company, (I) none of Class B Member, the Company, the Project Company and any of their Affiliates has had a pre-submission conference with the IRS or applied to the IRS for a private letter ruling, pre-filing agreement or determination letter with respect to the Project, including any application for a private letter ruling that has been withdrawn, (J) neither the Company nor the Project Company has any liability for the Taxes of any other Person as a result of having been a member of an affiliated, consolidated, combined, unitary or similar group, succeeding to such liability as a result of a merger, conversion or asset transfer, or otherwise as a transferee or successor (by contract or otherwise), (K) all material amounts required to be withheld or collected by the Company or the Project Company have been duly withheld, collected and paid to the appropriate Tax authorities within the time and in the manner required under Applicable Law and (L) no power of attorney currently in force has been granted by the Company or the Project Company in respect of Taxes;
(ii) Each of the Company (prior to the MC Funding Date), the Project Company, and the AC Subsidiary has been treated as either a “partnership” for U.S. federal income tax purposes under Treasury Regulations § 301.7701-3(b)(1)(i) (and for applicable state, and local income tax purposes) or a “disregarded entity” for U.S. federal income tax purposes under Treasury Regulations § 301.7701-3(b)(1)(ii) and for applicable state, and local income tax purposes at all times since its formation. No election has been filed with the IRS or any state or
other jurisdiction to treat the Company, the Project Company, or the AC Subsidiary as an association taxable as a corporation.
(iii) Seller is and has since its formation been treated as a disregarded entity for U.S. federal income tax purposes and as a separate taxpayer from the Class B Member for federal income tax purposes. Seller does not own, directly or indirectly, any interest in the Class B Member or the Company for U.S. federal income tax purposes.
(iv) Each contract, agreement, or other arrangement entered into between the Company or the Project Company, on the one hand, and the Class B Member (or its affiliates) on the other hand, if any, is on arm’s length terms and conditions.
(v) The aggregate tax basis of the ITC Eligible Property included in the Project will be equal to the eligible basis shown in the Appraisal, Cost Segregation Report and Base Case Model, each as of the SC Funding Date, and the aggregate tax basis of the Assets included in the Project will be allocated for depreciation purposes among the Project assets as specified in the Appraisal, Cost Segregation Report and Base Case Model, each as of the SC Funding Date (as reduced, for depreciation purposes, by one-half of the ITC).
(vi) All equipment comprising the Project will be considered new equipment for which the Company will be considered the original user. None of the equipment is imported property covered by an executive order described in section 168(g)(6) of the Code. No preliminary application was filed with the U.S. Department of the Treasury for a section 1603 payment, and no such payment will be claimed on the Project. As of the MC Funding Date, no Person has claimed on any Tax Return any depreciation or amortization deductions, ITCs, renewable energy production tax credits pursuant to Section 45 of the Code or any other tax credits or deductions that are available with respect to ownership or operation of the Project or any property that is part of the Project. No portion of the assets comprising the Project has benefited from the proceeds of any grant or rebate program that would cause a reduction in the amount of the ITC for the Project, and no application with respect to any such grant or rebate has been filed or submitted. No Person has made the election under Section 6417 or 6418 of the Code (or entered into an agreement to make such an election) with respect to the Project.
(vii) All state and local sales, use and property taxes with respect to the Transaction and the Project, including such taxes for which the Project Company is responsible under the EPC Contracts, are reflected properly in the Base Case Model. No Capital Contribution pursuant to Article 2 will have an adverse effect on the continuing validity and effectiveness of any state or local Tax exemption, Tax holiday, Tax abatement or Tax incentives for which the Project Company is currently eligible. (viii) The Project will not be used to generate electricity for the purpose of heating a swimming pool within the meaning of section 48(a)(3)(A)(i) of the Code.
(ix) As of the MC Funding Date, no Block nor the Project has been Placed In Service and none of the factors in clauses (B), (C), (D) or (E) in the definition of “Placed in Service Factors” have occurred for any such Blocks or the Project.
(x) As of the SC Funding Date, all Blocks and the Project have been Placed In Service and with respect to each Block and the Project, all of the five factors in the definition of “Placed in Service Factors” have occurred.
(xi) The Class B Member (or, if it is a disregarded entity for U.S. federal income tax purposes, the Person treated for U.S. federal income tax purposes as the owner of the assets of the Class B Member) is not a Disqualified Entity or a Related Person and none of the Class B Member Guarantor, the Class B Member or, prior to the MC Funding Date, Seller is a Disqualified Entity or Related Person. The Company and the Project Company are not “related” (within the meaning of Section 6418(a)) to any purchaser of ITCs for purposes of Section 6418 of the Code. The Class B Member is a United States Person that is not subject to withholding under Section 1446 of the Code.
(xii) None of the property included in the Project is leased to a “tax-exempt entity” within the meaning of Section 168(h)(2)(A) of the Code, is “tax-exempt bond financed property” within the meaning of Section 168 of the Code, imported property of the kind described in Section 168(g)(6) of the Code, or “public utility property” within the meaning of Section 168(f)(2) of the Code or Treasury Regulations Section 1.46-3(g). No election has been made to cause the “alternative depreciation system” described in Section 168(g) of the Code to apply to any of the property included in the Project. The Project is located in its entirety in the United States.
(xiii) Except as set forth in the Construction Financing Documents, neither the Class B Member nor the Company guarantees, or has guaranteed, any indebtedness or other obligation of the Project Company.
(xiv) Either (x)(a) for purposes of Section 48(a)(9)(B)(ii) of the Code, construction of the Project began before January 29, 2023, (b) the Project is exempt from the prevailing wage and apprenticeship requirements of Section 48(b)(9)-(10), and (c) all property included in the Project has been or will be Placed In Service by December 31, 2025 or (y)(a) for purposes of Section 48(a) of the Code, construction of the Project began before December 31, 2024 by complying with the Five Percent Safe Harbor (as defined in IRS Notice 2018-59) as of such date, and (b) the Project has complied or is in the process of complying with the PWA Requirements (and such compliance may be achieved by making payments (including for any penalty and interest owed to the IRS and any backpay wages owed to any applicable wage earner) to cure any failure to have satisfied such requirements).
(xv) The Project (i) will be owned by a single legal entity, (ii) will have been constructed and installed on contiguous pieces of land, (iii) will be described in common power purchase agreements, (iv) will have a common intertie, (v) has a common substation, (vi) will be described in one or more common environmental or other regulatory permits, (vii) will have been constructed pursuant to a single master construction contract, and (viii) will have been financed pursuant to a single loan agreement.
(xvi) As of the Effective Date, the Beginning of Construction Certificate (Effective Date) is true, correct, and complete. As of the MC Funding Date, the Beginning of
Construction Certificate (MC Funding) is true, correct, and complete. As of the SC Funding Date, the Beginning of Construction Certificate (SC Funding) is true, correct, and complete.
(xvii) The Class B Member is not aware of any reason that the Project would fail to satisfy the “Prevailing Wage Requirements” and the “Apprenticeship Requirements” set forth in Code Sections 48(a)(10) and 48(a)(11), respectively, prior to being Placed In Service.
(xviii) The interconnection property identified as ITC eligible property in the Appraisal constitutes “qualified interconnection property” under Section 48(a)(8) of the Code. All such interconnection property: (i) is part of an addition, modification, or upgrade to a transmission or distribution system that is required at or beyond the point at which the Project interconnects to such transmission or distribution system in order to accommodate such interconnection, (ii) was either (A) constructed, reconstructed, or erected by the Company (as defined in Treas. Reg. §1.48-9(b)(1)), or (B) the cost with respect to the construction, reconstruction, or erection of such property was paid or incurred by the Company, (iii) is properly chargeable to the capital account of the Company, and (iv) the original use (as defined in Treas. Reg. §1.48-9(b)(3)), of which, pursuant to the Interconnection Agreement, commences with a utility (as defined in Treas. Reg. §1.48-14(h)(5)). The Class B Member does not reasonably anticipate any reimbursement of the cost of such interconnection property by the applicable utility or any other Person.
(l) Compliance with Applicable Law.
(i) (A) The Project Company is and, since the Acquisition Date has been, in material compliance with all Applicable Law and Governmental Approvals, (B) each of the Company, the Class B Member, and to the Knowledge of the Class B Member, the AC Subsidiary, is and always has been in material compliance with all Applicable Law and Governmental Approvals and (C) none of Class B Member, its Affiliates, the Project Company, the Company, or to the Knowledge of the Class B Member, the AC Subsidiary, has received any written notice from any Governmental Authority of an actual or potential material violation of any Applicable Law with respect to the Project, the Company, the AC Subsidiary, the Project Company or the Transaction, which violation has not been remedied or cured.
(ii) None of the Company, the Project Company or any Covered Entity relating to the Class B Member, the Company or the Project Company is a Sanctioned Person, has any of its Assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person or does business in or with, or derives any of its operating income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority. The proceeds of any Transaction Document will not be used to fund any operations in, finance any investments or activities in or make any payments to a Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority. The funds used for the Project are not derived from any unlawful activity. Each of the Company, the Project Company and each Covered Entity relating to the Class B Member, the Company and the Project Company is in compliance with and does not engage in any dealings or transactions prohibited by any Anti-Terrorism Laws.
(m) Personal Property. To the Knowledge of Class B Member, all goods, equipment, parts, materials and facilities furnished in connection with the Project are or will be in good repair and operating condition and suitable for the purposes for which they are employed, including, without limitation, for the construction, development, ownership, operation and maintenance of the Project for its intended purposes, and to the Knowledge of Class B Member, there is no material defect or dangerous condition of such equipment or facilities.
(n) Information Provided. The information delivered by or for Class B Member or its Affiliates to the Investor and any Consultants or advisors engaged in connection with the Transactions (including on the electronic Data Site maintained by Class B Member and its Affiliates to which the Investor has been given access and including any information and excerpts pertaining to the price paid to the PSA Seller under the PSA and the terms and conditions of the PSA) is true and complete in all material respects, and contains no and does not omit to state a material fact that was necessary in order to make the statements therein, in light of the circumstances under and at the time which they were made, not misleading. The Base Case Model has been prepared in good faith based upon assumptions that are consistent with the Project Documents and Construction Financing Documents, and are believed by Class B Member to be reasonable at the time made and at the time so furnished. Notwithstanding anything to the contrary, no representation or warranty is made with respect to (i) any projected financial information or other forward-looking statement (except that such projections and the Base Case Model were made and prepared in good faith) or (ii) conclusions contained in any third-party reports, except as specifically provided herein. The Investor acknowledges and agrees that any assumptions that are projections are subject to uncertainties and contingencies, many of which are beyond the control of Class B Member and the Company, and that no assurance can be given that any such projections will be realized and actual results may differ and the differences may be material.
(o) Financial Statements.
(i) Class B Member has provided to the Investor complete copies of the most recent unaudited, non-consolidated balance sheet of the Project Company and the Company and the most recent unaudited, consolidated balance sheet of the Class B Member Guarantor (each a “Current Balance Sheet”), in each case dated on or about the end of the month prior to the month in which the Effective Date or the applicable Funding Date occurs.
(ii) As of the MC Funding Date, Class B Member has provided to the Investor the most recent quarterly unaudited and annual audited financial statements of the Class B Member Guarantor and the most recent quarterly and annual unaudited financial statements of the Project Company.
(iii) As of the SC Funding Date, Class B Member has provided to the Investor (1) quarterly unaudited financial statements of the Class B Member Guarantor, the Company and the Project Company (which financial statements may be in the form of consolidated financial statements of Class B Member Guarantor, so long as consolidating statements of each of the Company and the Project Company are included therewith), for the most recent calendar quarter ending seventy-five (75) days preceding the SC Funding Date, and (2) unless previously delivered in connection with the MC Funding Date, annual audited financial statements of the
Class B Member Guarantor and the Project Company (which financial statements may be in the form of consolidated financial statements of Class B Member Guarantor, so long as consolidating statements of the Project Company are included therewith) for the calendar year ending December 31, 2024.
(iv) Each Current Balance Sheet and financial statement has been prepared in accordance with GAAP and presents fairly in all material respects the financial position of the Class B Member Guarantor, the Project Company, or the Company, as applicable, as of the date or for the period set forth therein, subject to normal year-end audit adjustments and the absence of footnotes.
(v) Since December 31, 2024, no event, change, fact, condition or circumstance has occurred and is continuing, that has had, or could reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.
(p) Environmental Matters. Except as set forth on Schedule 3.1(p):
(i) Each of Class B Member, the Project Company, and the Company is, and its businesses and operations are, in compliance in all material respects with all applicable Environmental Laws. To the Knowledge of Class B Member, no Hazardous Substances have been Released on the Site in violation of Environmental Laws. None of Class B Member, the Project Company or the Company has received written notice from any Governmental Authority of an actual or potential violation of or liability under any Environmental Laws. To the Knowledge of Class B Member, there are no material Liabilities arising from Environmental Laws with respect to the Project.
(ii) Class B Member has delivered to the Investor complete copies of any and all material reports, site assessments, audits, and studies concerning environmental conditions or media sampling results prepared by or on behalf of, or otherwise in the possession or control of Class B Member, the Project Company or the Company concerning the Project.
(iii) The Project Company has not nor, to the Knowledge of Class B Member, has any third party used, Released, generated, manufactured, produced, or stored in, on, under, or about the Site, or transported thereto or therefrom, or has caused or is otherwise responsible for any human exposure to, any Hazardous Substances that could reasonably be expected to subject the Project Company to any Environmental Claim.
(iv) To the Knowledge of Class B Member, no Environmental Claim is pending or threatened (in writing) against the Project Company. To the Knowledge of Class B Member, there is no condition, circumstance, occurrence, action, activity or event at the Site that could reasonably be expected to form the basis of an Environmental Claim. Neither the Company nor the Project Company is conducting, paying for or performing, in whole or in part, any clean-up, removal, remediation, excavation, or other corrective action pursuant to any Environmental Law at the Site; nor is the Project Company subject or a party to any order, judgment, or decree, or a contract or agreement with a Governmental Authority that imposes any obligation or liability under any Environmental Law.
(q) Insurance. The insurance policies listed in Schedule 3.1(q) are the policies held by the Company and the Project Company and constitute all of the insurance coverage required under Schedule 2 of the LLCA and under each Project Document. All such policies are in full force and effect, and there are no unpaid claims or premiums for any such insurance.
(r) Regulatory Matters.
(i) As of the Effective Date, neither the Class B Member nor the Company or is a “public utility” within the meaning of Section 201(e) of the FPA or an “electric utility company,” a “public-utility company,” or a “holding company,” as such terms are defined in PUHCA. As of the Effective Date, the Project Company is a “public utility,” as such term is defined in Section 201(e) of the FPA, with MBR Authority. From and after the time when any energy generated by the Project (including test power) is first delivered or sold, (1) the Project Company will (A) have MBR Authority, (B) be an “electric utility company,” and a “public-utility company,” as such terms are defined in PUHCA, and (C) be an Exempt Wholesale Generator; and (2) each of the Class B Member and the Company will either not be a “holding company,” as such term is defined in PUHCA, or will be a “holding company,” as that term is defined in PUHCA, exempt from PUHCA to the extent provided in 18 C.F.R. § 366.3(a).
(ii) None of the Class B Member, Company or Project Company has received any notice, claim, complaint, protest, or assertion either from, or directed to, any Governmental Authority stating or finding that any of them is in violation of or has failed to comply with any requirement under the FPA or PUHCA.
(iii) Neither Investor nor any of its “affiliates” (as defined in PUHCA) would become, solely as a result of entering into, or the performance of its obligations under, this ECCA, subject to regulation as an “public utility” under the FPA or as a “holding company” under PUHCA, other than as a “holding company” exempt from PUHCA to the extent provided in 18 C.F.R. § 366.3(a).
(iv) The Project Company is not subject to regulation as a “public utility” as defined in N.C. Gen. Stat. § 62-3(23), or the NCUC’s administrative rules or other laws or regulations of the State of North Carolina respecting the rates charged by, or the financial or organizational regulation of “public utilities” or “electric utilities”. The Project Company is not subject to regulation as an “alternative retail electric supplier” or an “electric supplier” under the NCUC’s administrative rules or other laws or regulations of the State of North Carolina respecting the rates charged by, or the financial or organizational regulation of “public utilities” or “electric utilities”.
(v) None of the Company, the Class B Member, or the Investor would become, solely as a result of entering into, or the performance of its obligations under, this ECCA, subject to regulation as a “public utility” as defined in N.C. Gen. Stat. § 62-3(23) or “alternative retail electric supplier”, or by the NCUC as a “public utility” or an “electric supplier”, or become subject to other laws or regulations of the State of North Carolina respecting the rates charged by, or the financial or organizational regulation of “public utilities” or “electric suppliers”.
(vi) Each of the Company and the Project Company is in compliance in all material respects with all applicable Laws, judgments, decrees, consents, requirements, orders and rules and regulations of PJM, FERC, NERC and NCUC, applicable to each of the Company and the Project Company.
(s) Site.
(i) There are no Encumbrances affecting the use or occupancy of the Project or the Site, other than Permitted Encumbrances. To the Knowledge of Class B Member, there are no soil, structural, subsurface or other natural or artificial conditions affecting the applicable Site that could reasonably be expected to adversely affect the Project Company’s ability to conduct its operations on such real property materially in accordance with the Project Documents and the Base Case Model or otherwise have a Material Adverse Effect, and the Site is otherwise sufficient for the construction, development, operation and maintenance of the Project. The portions of the Site on which the buildings, improvements and fixtures comprising the Project (the “Facilities”) are being built are not located in an area that has been identified by the Director of the Federal Emergency Management Agency as a special flood hazard area in which flood insurance has been delivered under the National Flood Insurance Act of 1968, as amended. The Project Company has good and valid fee simple, leasehold and easement or other real property interests in the Site and all such valid, irrevocable and permanent easements, rights of way and other property rights as are reasonably necessary for the construction, development, ownership, operation and maintenance of the Project for its intended purposes. The Real Property Documents listed on Schedule 2 are all of the agreements to which the Project Company is a party pertaining to the Project or the Site and grant all rights sufficient in all material respects to enable (A) the Project to be located, constructed, operated, maintained, removed and replaced on the Site and (B) the Project Company to construct, operate, maintain, remove and replace the Project in accordance with all Governmental Approvals and Transaction Documents, including, without limitation, providing sufficient ingress and egress in connection with the construction, operation, maintenance, removal and replacement of the Project. Other than pursuant to the Real Property Documents listed on Schedule 2, the Project Company does not have any interest in real property, whether owned, leased or otherwise occupied or used, and the Project Company is not a party to any agreement to acquire or sell any interest in real property. The Real Property Documents are in full force and effect and are valid, binding and enforceable against the Project Company and the other parties thereto. The Project Company has not assigned any interest in the Real Property Documents, subleased or granted a sub-easement, in whole or in part, or otherwise granted any third party the right to use or occupy, to any portion of the Site or the appurtenances thereto, and there are no parties in possession of the Site that are not entitled to such possession, unless otherwise shown in any of the Project Contracts. All rents and monetary obligations due and payable by the Project Company under the Real Property Documents have been paid in full and the Project Company is not in breach or default beyond any applicable notice or cure periods of its obligations under the Real Property Documents. The Project Company is not in breach or default beyond any applicable notice or cure periods of its obligations, if any, under those documents or instruments listed in the Title Policy and not otherwise listed as a Real Property Document. Except as may be described in the Title Policy or shown on the ALTA Survey, to the Knowledge of Class B Member, there are no unrecorded interests in any portion of the Site, including oil, gas or other
mineral rights leases, easements, options, rights to purchase, tenancies, licenses, occupancies, rights of possession claims, encroachments or prescriptive easements. All roads necessary for the construction, development, operation and maintenance of the Project have either been completed or the Project Company possesses all necessary real property rights for the construction and completion thereof. The Site is not subject to any conservation reserve program or other agricultural preserve program.
(ii) The Site is either (a) freely accessible directly from public streets, or (b) uses adjoining private land to access the same in accordance with valid, permanent, irrevocable and appurtenant easements benefiting such land. To the Knowledge of Class B Member, there is no condition that would result in the termination or impairment of such access, and such access is sufficient for the operation of the Project.
(iii) With regard to the Real Property Documents and the Site: (i) the Project Company’s possession and quiet enjoyment of the Site has not been disturbed, the Class B Member has not received written notice of any disputes with respect to any Real Property Documents, and, to the Knowledge of Class B Member, there are no facts or circumstances that would give rise to any disputes with respect to any Real Property Documents; (ii) no security deposit or portion thereof, if any, has been applied in respect of a breach or default under any Real Property Document that has not been redeposited in full; (vi) the other party to each Real Property Document is not in any way affiliated with Class B Member; and (vii) the Project Company has not collaterally assigned or granted any security interest in any of the Real Property Documents or any interest therein.
(t) Intellectual Property. The Project Company owns, has a valid license to or other contractual right to use all material intellectual property that is reasonably necessary to install, operate and maintain the Project. There are no pending Proceedings concerning any such intellectual property to which Class B Member or the Company is a party, and to the Knowledge of Class B Member, no such Proceeding is threatened. To the Knowledge of Class B Member, there is not now and has never been any infringement or misappropriation by the Company of any patent, trademark, trade name, domain name, service mark, copyright or trade secret that is owned by any third party.
(u) Warranties. When the Project reaches Substantial Completion, the Warranties and the warranty of the EPC Contractors under the EPC Contracts, the warranty of the Module Supplier under the Module Supply Agreements and the warranty of the Operator under the O&M Agreement will in each case be in full force and effect, have been assigned to or are directly for the benefit of the Project Company, are enforceable by the Project Company in all material respects, and will satisfy the standards in Exhibit C. (v) Payment of All Costs. As of each of the MC Funding Date and the SC Funding Date for the Project, all costs and expenses then due and payable by the Project Company, the Class B Member, the Company, and to the Knowledge of the Class B Members, the AC Subsidiary, including all payments then due and payable under the relevant Material Project Documents, AC Subsidiary LLCA, Transaction Documents and Construction Financing Documents have been paid.
(w) Mechanical Completion. The Project has achieved Mechanical Completion as of the MC Funding Date.
(x) Substantial Completion. The Project has achieved Substantial Completion as of the SC Funding Date.
(y) Condemnation; Unrepaired Casualty. No condemnation is pending or, to the Knowledge of Class B Member, threatened with respect to all or part of the Project or the Site, and no unrepaired Substantial Casualty exists with respect to all or part of the Project or the Site.
(z) Brokers. None of the Project Company, the Company or their Affiliates has incurred any liability for any broker, agent or finder with respect to the Transaction Documents, Transaction or Project Documents.
(aa) Banks and Accounts. Schedule 3.1(aa) contains a true and correct list of the names of all banks and other financial institutions with which the Company and the Project Company currently has an account, deposit or safe deposit box, along with the account numbers and the names of the persons holding check signing or withdrawal power.
(bb) Books and Records. True, correct and complete copies of all records of the Company and the Project Company have been delivered to the Investor on the MC Funding Date. Such records have been maintained in accordance with good business practices.
(cc) Employees. None of Class B Member, the Project Company or the Company has or, since the Effective Date, has had any employees, any “employee benefit plan” as defined in section 3(3) of ERISA or any liabilities or obligations in connection with such a plan.
(dd) Powers of Attorney. Except as set forth in the Construction Financing Documents, there are no outstanding powers of attorney executed by or with respect to the Company, the Project Company or the Project.
(ee) Prior Owner Obligations. Since the Acquisition Date, the Project has not been owned by a Person other than the Project Company.
(ff) Investment Company Act. Neither the Company nor Class B Member is or, after giving effect to the Transaction, will be an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.
(gg) Regulation D Compliance. Neither Class B Member nor anyone acting on its behalf has offered any or all of the Class A Membership Interests or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any person other than institutional accredited investors and not more than thirty-five (35) non-accredited investors (each of whom meet, or together with their purchaser representatives meet, the criteria specified in 17 CFR 230.506(b)(2)), each of which has been offered the Class A Membership Interests for investment purposes only in a manner not involving
any form of general solicitation or general advertisement. Neither Class B Member nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of any or all of the Class A Membership Interests or any similar securities to the registration requirements of section 5 of the Securities Act.
(hh) Real Property. Class B Member has delivered true, complete and accurate copies of all of the Real Property Documents to the Investor. Schedule 2 sets forth a true and complete list of (i) a description of all Real Property Documents, (ii) the street address and tax parcel number of such real property pertaining to each Real Property Document; (ii) the counterparties to each Real Property Document; and (iii) the use of the real property pertaining to each Real Property Document. Except as set forth on Schedule 2, (i) all available options to acquire additional real property interests contained in the Real Property Documents necessary to enable the Project to be owned, located, constructed, developed, operated, maintained, removed and replaced at the Site have been exercised, and (ii) the Real Property Documents provide all of the real property interests sufficient to (A) enable the Project to be owned, located, constructed, developed, operated, maintained, removed and replaced for a period of the Term (as such term is defined in the PPA) and (B) provide sufficient ingress to and egress from the Project for the construction, development, ownership, operation, maintenance, removal or replacement of the Project, all without any further consent or approval from any third party. Except as otherwise expressly provided herein, neither the Project Company nor the Company owns or leases any real property other than each of the Sites that are described in the Real Property Documents.
(ii) No Subsidiaries. Other than its minority interests in AC Subsidiary, the Project Company does not own any capital stock, security, partnership interest or other equity interest of any kind in any corporation, partnership, limited liability company, joint venture, association or other entity. The Company does not own any capital stock, security, partnership interest or other equity interest of any kind in any corporation, partnership, limited liability company, joint venture, association or other entity, other than, from and after the MC Funding Date, the Project Company.
(jj) No Additional Projects. None of the Class B Member Guarantor, the Class B Member, or their Affiliates currently intends to develop or acquire any direct or indirect interest in any solar energy project other than the Project in Halifax County in the state of North Carolina prior to the Flip Date.
(kk) No Other Representations or Warranties. Class B Member is not relying on any representations or warranties whatsoever, express, implied, at common law, statutory or otherwise, except for the representations or warranties expressly set out in this ECCA and the other Transaction Documents to which it is a party.
3.2. Representations and Warranties of the Investor. The Investor represents and warrants the following to Class B Member on the Effective Date, the MC Funding Date and the SC Funding Date:
(a) Organization, Good Standing, Authority, Etc. The Investor is a limited liability company duly organized, validly existing and in good standing under the laws of the State
of Delaware and has the requisite power and authority to own, lease and operate its properties and to carry on its business as being conducted.
(b) No Conflicts. The execution and delivery by the Investor of the Transaction Documents to which it is a party do not, and the performance of its obligations under such agreements, will not (i) violate any laws, statutes, rules, regulations, ordinances, judgments, settlements, orders, decrees, injunctions, and writs of any Governmental Authority having jurisdiction over the Investor, (ii) conflict with or cause a breach of any provision in the charter, bylaws or other organizational document of the Investor, or (iii) cause a breach of, constitute a default under, cause the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any authorization, consent, waiver or approval under any contract, license, instrument, decree, judgment or other arrangement to which the Investor is a party or under which it is bound or to which any of its Assets are subject (or result in the imposition of an Encumbrance upon any such Assets) except (in the case of clause (i), (ii) and (iii)) for any such event that would not reasonably be expected to have a Material Adverse Effect or adversely affect the ability of the Class A Member or its Affiliate to timely execute, deliver and perform any of its material respective obligations under any Transaction Document to which it is a party. (c) Absence of Litigation. There is no action, suit, claim, investigation or proceeding of any kind pending or, to the Knowledge of the Investor, threatened, before any court, arbitration panel or Governmental Authority having jurisdiction against the Investor that could reasonably be expected to adversely affect the Investor’s ability to execute, deliver and perform its obligations under this ECCA and each Transaction Document to which it is a party and consummate the Transaction.
(d) Authority; Enforceability. The Investor has the requisite power and authority to execute, deliver and enter into the Transaction Documents to which it is a party and to perform its obligations thereunder and consummate the Transaction. The execution and delivery by the Investor of the Transaction Documents to which it is a party and the consummation of the Transaction have been duly authorized by all necessary entity action. Each Transaction Document to which the Investor is a party has been duly authorized, validly executed and delivered and constitutes the legal, valid and binding obligations of the Investor, enforceable against such person in accordance with its terms, except as its enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and general equitable principles (whether in a proceeding in equity or at law).
(e) Consents and Approvals. Other than (i) the consents and approvals set forth in Section 4.2(k) and (ii) the FERC 203 Approval, no filings, consents, waivers, authorizations or approvals are required for the Investor to execute, deliver and perform its obligations under the Transaction Documents to which it is a party, or for the consummation of the Transaction, other than Ministerial Approvals and Filings. (f) Brokers. None of Investor or its Affiliates has retained or incurred any liability for any other broker, agent or finder with respect to the Transaction Documents or the Transaction.
(g) Transaction Documents. The Investor has not materially breached and is not in material default under any Transaction Document, which breach or default remains uncured. To the Knowledge of the Investor, no event or circumstance has occurred that would, with the passage of time or notice, be expected to result in such a material breach or default.
(h) Investor Regulatory Status. The Investor is not (i) subject to regulation as a “public utility” under the FPA or (ii) a “holding company,” as defined in PUHCA, other than a “holding company,” as defined in PUHCA exempt from PUHCA to the extent provided in 18 C.F.R. § 366.3(a). The Investor is not subject to regulation under any state laws or regulations regarding the rates or the financial or organizational regulation of public utilities or electric utilities.
(i) Tax Status. Neither Investor nor the Class A Member (or, if it is a disregarded entity for U.S. federal income tax purposes, the Person treated for U.S. federal income tax purposes as the owner of the assets of Investor or the Class A Member) is a Disqualified Entity or a Related Person.
(j) Compliance with Applicable Law. None of the Investor or any Covered Entity relating to the Investor is a Sanctioned Person, has any of its Assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person or does business in or with, or derives any of its operating income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority. The Capital Contributions of the Investor are not derived from any unlawful activity. Each of the Investor and each Covered Entity relating to the Investor is in compliance with and does not engage in any dealings or transactions prohibited by any Anti-Terrorism Laws.
(k) No Other Representations or Warranties. The Investor is not relying on any representations or warranties whatsoever, express, implied, at common law, statutory or otherwise, except for the representations or warranties expressly set out in this ECCA and the other Transaction Documents to which it is a party.
ARTICLE 4
CONDITIONS TO OBLIGATIONS OF INVESTOR
4.1. Effective Date. The obligations of the Investor to execute this ECCA will be subject to fulfillment of the following conditions, in each case in form and substance satisfactory to Investor, each of which may be waived by the Investor in writing, provided that once Investor executes this ECCA the following conditions shall be deemed fulfilled to the satisfaction of Investor:
(a) The Investor has received executed counterparts of each Transaction Document to be executed on or before the Effective Date.
(b) Each of the representations and warranties of Class B Member, the Company, the Project Company and each Affiliate Party made in this ECCA on the Effective Date
or in any other Transaction Document entered into on the Effective Date is true and correct as of the date made.
(c) The Investor has received via the Data Site true, complete and correct copies of each Construction Financing Document and each Project Document (other than the PSA); provided, that delivery of the Energy Management Services Agreement shall be subject to reasonable redactions, provided that the redacted Energy Management Services Agreement made available to Investor via upload to the Data Site shall be deemed acknowledged and accepted by Investor unless Investor provides written confirmation to the contrary. All Project Documents and Construction Financing Documents are in full force and effect, and no default, event of default or material breach exists under any such document by the Company, the Project Company, any Affiliate Party or, to the Knowledge of Class B Member, any Material Contract Party.
(d) No suit, action or other proceeding has been instituted or threatened in writing by any Governmental Authority or other person against any Party that seeks to impair, restrain, prohibit or invalidate the Transaction or the Transaction Documents.
(e) The Investor has received (i) a legal opinion of Latham & Watkins LLP addressing certain federal tax matters, (ii) a legal opinion of Holland & Knight LLP as special New York counsel to the Company, the Project Company, Class B Member and the Class B Member Guarantor addressing customary corporate and enforceability matters, (iii) a legal opinion from Rock Creek Energy Group, LLP as special regulatory counsel to the Project Company addressing federal regulatory matters; (iii) a legal opinion of Fox Rothschild LLP as special North Carolina counsel to the Project Company addressing customary corporate matters, and (iv) a legal opinion of Fox Rothschild LLP as special North Carolina counsel to the Company and the Project Company addressing state and local regulatory and permitting matters.
(f) There has been no (i) material event of condemnation, (ii) material unrepaired casualty or (iii) to the Knowledge of Class B Member, event of force majeure under the Material Project Documents, in each case with respect to the Project, except as set forth on Schedule 3.1(i)(v).
(g) No Bankruptcy has occurred with respect to Class B Member, the Company, the Project Company, any Affiliate Party or the Class B Member Guarantor.
(h) Each of Class B Member, the Company and the Project Company shall have obtained all necessary third party consents, waivers, notices, authorizations, and approvals in connection with the execution, delivery and, to the extent required on the Effective Date, performance of the Transaction Documents and the transactions contemplated hereunder and thereunder (including, without limitation, all such documentation required to be delivered to or obtained from third parties under the Real Property Documents), copies of which have been delivered to the Investor.
(i) The Investor shall have received the Base Case Model.
(j) The Investor shall have received all documentation and other information requested by the Investor or required by regulatory authorities in order for the Investor to comply with requirements of any Anti-Money Laundering Laws, including the USA PATRIOT Act and any applicable “know your customer” rules and regulations. Each of the Parties shall have received any necessary approval from its respective internal investment committee(s) and board of directors or other governing body to enter into the transactions contemplated hereunder.
(k) No portion of the Project has been Placed In Service.
(l) The Class B Member (or, if such Person is disregarded as separate from its owner for federal income tax purposes, the Person that is treated as the owner of that Person’s assets for federal income tax purposes) shall have delivered to the Investor a duly executed IRS Form W-9 or affidavit of non-foreign status that complies with Section 1445 of the Code and the Treasury Regulations promulgated thereunder (which may include, for the avoidance of doubt, a valid executed IRS Form W-9).
(m) The Investor shall have received (i) an officer’s certificate from each of the Project Company, the Company, the Class B Member, and the Class B Member Guarantor (A) certifying that all representations and warranties made by such person in the Transaction Documents to which it is a party are true and correct as of the Effective Date or, if a representation or warranty was expressly made only as of an earlier date, such earlier date, and (B) attaching the incumbency certificate and, except for the Class B Member Guarantor, the resolutions and formation documents of such person and (ii) a good standing certificate or certificate of status for Class B Member, Class B Member Guarantor, the Company, the Project Company, the EPC Contractors, Module Supplier, Energy Manager, Asset Manager, Operator and Seller (which shall be certified except in the case of each such Material Contract Party) and (iii) an officer’s certificate from Class B Member certifying (A) that the conditions in clauses (c), (d), (f), (g), (h) and (k) of this Section 4.1 have been satisfied or otherwise waived, and (B) that, to the knowledge of the Class B Member (after making reasonable enquiries), the organizational documents of AC Subsidiary (including the AC Subsidiary LLCA) delivered to the Investor are correct and complete. (n) The Investor shall have received the following items: (i) the Independent Engineer Report, and, if not directly addressed to the Investor, a reliance letter with respect thereto for the benefit of the Investor dated as of the Effective Date, (ii) the Insurance Report, and, if not directly addressed to the Investor, a reliance letter with respect thereto for the benefit of the Investor dated as of the Effective Date, (iii) the Environmental Report, and, if not directly addressed to the Investor, a reliance letter with respect thereto for the benefit of the Investor dated as of the Effective Date, (iv) an Appraisal and Cost Segregation Report for the Project, and, if not directly addressed to the Investor, a reliance letter with respect thereto for the benefit of the Investor dated as of the Effective Date, (v) the Market Report, and (vi) the Transmission Report, and, if not directly addressed to the Investor, a reliance letter with respect thereto for the benefit of the Investor dated as of the Effective Date.
(o) The Investor shall have received the Beginning of Construction Certificate (Effective Date).
(p) The Class B Member shall have reimbursed the Investor for its invoiced Transaction Expenses incurred on or before the Effective Date or such Transaction Expenses will be paid or reimbursed on the Effective Date, as set forth in the Flow of Funds Memorandum for the Effective Date, and in any case shall be capped as set forth in, and subject to the terms and conditions of, the Fee Letter.
4.2. MC Funding Date. The obligation of the Investor to make its MC Funding Date Contribution will be subject to fulfillment of the following conditions, in each case in form and substance satisfactory to Investor, each of which the Investor may waive in writing in its sole discretion, provided that once Investor makes its MC Funding Date Contribution the following conditions shall be deemed fulfilled to the satisfaction of Investor:
(a) Each of the representations and warranties made by Project Company, the Company, the Class B Member, and the Class B Member Guarantor and their respective Affiliates in the Transaction Documents as of the MC Funding Date is true and correct in all material respects (except with respect to any such representations and warranties which are subject to qualification by materiality or Material Adverse Effect, which representations are true and correct in all respects).
(b) The Investor has received executed counterparts of each Transaction Document to be executed after the Effective Date and on or before the MC Funding Date.
(c) The Project has reached Mechanical Completion, but the Project has not yet reached Substantial Completion and the Project has not been Placed In Service. The Investor shall have received a certificate of the Independent Engineer substantially in the form of Exhibit 0. (d) The Investor shall have received (i) a Circuit Mechanical Completion Certificate with respect to the first Circuit (each as defined in the PV EPC Contract), duly executed by the PV EPC Contractor stating the Circuit Mechanical Completion Date (as defined in the PV EPC Contract) and (ii) a Mechanical Completion Certificate (as defined in the HV EPC Contract), duly executed by the HV EPC Contractor stating the Mechanical Completion Date (as defined in the HV EPC Contract).
(e) All Material Project Documents (other than the PSA), Construction Financing Documents and Transaction Documents for the Project have been executed, and copies of each have been delivered to Investor; provided, that delivery of the Energy Management Service Agreement shall be subject to reasonable redactions, provided that the redacted Energy Management Services Agreement made available to Investor via upload to the Data Site shall be deemed acknowledged and accepted by Investor unless Investor provides written confirmation to the contrary. All Material Project Documents and Transaction Documents for the Project are in full force and effect, and no material default, event of default or material breach exists under any such document by the Company, the Project Company, any Affiliate Party or, to the Knowledge of Class B Member, any Material Contract Party.
(f) The Investor shall have received the following items: (i) a bring-down of the Independent Engineer Report and, if not directly addressed to the Investor, a reliance letter
with respect thereto for the benefit of the Investor dated as of the MC Funding Date, (ii) a bring- down of the Insurance Report, and, if not directly addressed to the Investor, a reliance letter with respect thereto for the benefit of the Investor dated as of the MC Funding Date, (iii) an Environmental Report (if the Environmental Report delivered pursuant to Section 4.1(n) is dated six or more months prior to the MC Funding Date), and, if not directly addressed to the Investor, a reliance letter with respect thereto for the benefit of the Investor dated as of the MC Funding Date, and (iv) an updated Appraisal and an updated Cost Segregation Report for the Project (if the Appraisal and Cost Segregation Report delivered pursuant to Section 4.1(n) are dated more than 60 days prior to the MC Funding Date), and, if not directly addressed to the Investor, a reliance letter with respect thereto for the benefit of the Investor dated as of the MC Funding Date. (g) The Investor shall have received (i) each Current Balance Sheet and the most recent unaudited annual and unaudited quarterly financial statements of the Project Company and (ii) each Current Balance Sheet and the most recent audited annual and unaudited quarterly financial statements of the Class B Member Guarantor.
(h) The Investor shall have received (i) if necessary due to a material change in facts or Applicable Law, a bring-down legal opinion of Rock Creek Energy Group, LLP as federal regulatory counsel to the Project Company addressing customary federal regulatory matters, (ii) a legal opinion of Delaware counsel to the Class B Member addressing customary matters relating to the LLCA, substantially in the form of Exhibit I, (iii) to the extent that any Transaction Document is executed or materially amended following the date of the legal opinions delivered pursuant to Section 4.1(e), a legal opinion of Holland & Knight LLP as special New York counsel to the Company, the Project Company, the Class B Member and the Class B Member Guarantor, as applicable (to the extent any Person is a party thereto), addressing enforceability matters relating to the relevant Transaction Document governed by New York law, and (iv) if necessary due to a material change in facts or Applicable Law, a legal opinion of Fox Rothschild LLP as special North Carolina counsel to the Project Company addressing state and local regulatory and permitting matters. (i) The Investor shall have received (i) an officer’s certificate from each of the Project Company, the Company, the Class B Member, and the Class B Member Guarantor (A) certifying that all representations and warranties made by such person in the Transaction Documents to which it is a party are true and correct in all material respects (except with respect to any such representations and warranties which are subject to qualification by materiality or Material Adverse Effect, which representations are true and correct in all respects) as of the MC Funding Date or, if a representation or warranty was expressly made only as of an earlier date, such earlier date, and (B) attaching the incumbency certificate and, except for the Class B Member Guarantor, the resolutions and formation documents of such person or certifying no change to such items since the certificate delivered pursuant to Section 4.1(m)(i)(B) and (ii) a good standing certificate or certificate of status for Class B Member, Class B Member Guarantor, the Company, the Project Company, the EPC Contractors, Module Supplier, Energy Manager (if the Energy Management Services Agreement has been executed), Asset Manager, Construction Manager, Operator and Seller (which shall be certified except in the case of each such Material Contract Party) and (iii) an officer’s certificate from Class B Member certifying that the conditions in
clauses (e), (k), (l), (m), (o), (p), (q)(i), (r), (s), (u), (v), (aa)(i), (dd), and (ee) of this Section 4.2 have been satisfied or otherwise waived. (j) The Investor shall have received the following items: (i) evidence that the required property and casualty, liability and other insurance policies for the Project are in effect, including true, correct and complete copies of all of the insurance certificates from the insurance broker or, if requested, insurance policies, (ii) estoppel certificates, in each case in the applicable form attached within Exhibit F and dated no earlier than fifteen (15) days prior to the MC Funding Date (except for estoppel certificates executed by the counterparties to the Real Property Documents, which shall be dated no earlier than thirty (30) days prior to the MC Funding Date), executed by the EPC Contractors, the Operator, the Energy Manager, the Asset Manager, the Module Supplier, the Power Purchaser, and counterparties to the Real Property Documents and the landowners that have granted leasehold, easement or other interests in the Site, and (iii) searches of all financing statements of public record and of judgment, litigation and tax lien records reasonably requested by the Investor with respect to the Project, Class B Member, the Project Company and the Company.
(k) The Project Company has obtained all Governmental Approvals required to be obtained by it for the construction, installation, operation, ownership and maintenance of the Project and the sale at wholesale of electric energy and sale of RECs therefrom, except for Ministerial Approvals and Filings and any such Governmental Approvals not yet required to be obtained as of the MC Funding Date but which can reasonably be expected to be obtained on commercially reasonable terms when required, and all such Governmental Approvals are valid and in full force and effect and non-appealable; and each of the Class B Member, the Company and the Project Company shall have obtained all third party consents, waivers, notices, authorizations, and approvals required for the execution, delivery and, to the extent required on the MC Funding Date, performance of the Transaction Documents and the transactions contemplated hereunder (including, without limitation, all such documentation required to be delivered to or obtained from third parties under the Real Property Documents), and thereunder, copies of which have been delivered to the Investor.
(l) Each of Class B Member, Company and Project Company has obtained all other Governmental Approvals required to be obtained by it for the execution, delivery and, to the extent required on the MC Funding Date, performance of the Transaction Documents to which it is party, and all such Governmental Approvals have been obtained, made or filed, as required, and are in full force and effect and copies thereof have been delivered to Investor.
(m) No suit, action or other proceeding has been instituted or threatened in writing by any Governmental Authority or other person against Class B Member or the Company that seeks to impair, restrain, prohibit or invalidate the Transaction or the Transaction Documents.
(n) The Investor has received at least five Business Days’ notice of the proposed MC Funding Date and at least three Business Days’ notice of the actual MC Funding Date (or notice in such shorter periods as the Investor may agree in its sole discretion after all of the conditions in this Section 4.2 have been satisfied or waived, other than those conditions that by their nature will be satisfied as of the MC Funding Date).
(o) All Taxes and other amounts due and payable by the Company, the Project Company and the Class B Member (solely with respect to the Project and the Company) with respect to their respective activities that are due and payable have been paid, and any Taxes due and payable in connection with the execution and delivery, recording and filing of the Transaction Documents, Construction Financing Documents and the Project Documents have been paid or will be paid on the MC Funding Date, as set forth in the Flow of Funds Memorandum for the MC Funding Date.
(p) No Material Adverse Change has occurred and is continuing and no Material Adverse Effect has occurred and is continuing.
(q) (i) (A) To the Knowledge of Class B Member, all work that has been done on the Project has been done in a good and workmanlike manner and in accordance with the EPC Contracts and Prudent Industry Practice, and (B) there has not been filed or served upon the Company, the Project Company or the Project (or any part thereof) notice of any Encumbrance, claim of lien or attachment upon or claim affecting the right to receive payment of any of the monies payable to any of the persons named on such request that have not been released, other than Permitted Encumbrances. (ii) The Investor has received copies of conditional lien waivers, in the form as may be required by Applicable Law from each EPC Contractor, Module Supplier and subcontractors of the EPC Contractors and Module Supplier to the extent such subcontractor is required to provide and has provided a lien waiver pursuant to the EPC Contracts or Module Supply Agreements, and evidence that all recorded mechanics’ liens of the EPC Contractors, Module Supplier or any subcontractor, if any, have been released or secured by bonds or other security acceptable to the Investor, and that there are no past due lien claims from any EPC Contractor, Module Supplier or any subcontractor that are not (A) the subject of a conditional lien waiver, (B) the subject of a recorded lien that has been released or secured by bonds or other security acceptable to the Investor, or (C) a Permitted Encumbrance.
(r) All amounts then required to be paid and deposited under the Material Project Documents, the AC Subsidiary LLCA, and Construction Financing Documents, and all reserves then required to be established under the Material Project Documents, AC Subsidiary LLCA, and Construction Financing Documents, have been paid, deposited or established, as the case may be, and all amounts due and payable prior to MC Funding Date that are required under the Material Project Documents, AC Subsidiary LLCA, and the Construction Financing Documents have been paid in full.
(s) The covenants and obligations of Class B Member hereunder to be complied with on or prior to the MC Funding Date have been complied with in all material respects.
(t) The Base Case Model has been rerun and updated in accordance with Section 2.1 and no Change in Tax Law or Proposed Change in Tax Law has occurred unless reflected in such updated Base Case Model. (u) The consummation of the transactions contemplated by the Transaction Documents and the Material Project Documents to which Class B Member, the Project Company, any Affiliate Party or the Company is a party at the MC Funding Date will not violate any
Applicable Law. There has been no material adverse change in law (excluding any change in law relating to income taxes that is not a Change in Tax Law) that (A) with respect to the Investor, would make it illegal for Investor to purchase the Class A Membership Interests or acquire, own or hold a Class A Membership Interest in the Company or (B) is not reflected in the Base Case Model.
(v) The Commitment Expiration Date has not occurred and is not expected to occur prior to the SC Funding Date.
(w) Class B Member shall have made all Capital Contributions to the Company to the extent required pursuant to Section 2.1 or such Capital Contributions will be made on the MC Funding Date, as set forth in the Flow of Funds Memorandum for the MC Funding Date. (x) The Class B Member shall have reimbursed the Investor for its invoiced Transaction Expenses incurred on or before the MC Funding Date or such Transaction Expenses will be paid or reimbursed on the MC Funding Date, as set forth in the Flow of Funds Memorandum for the MC Funding Date, and in any case shall be capped as set forth in, and subject to the terms and conditions of, the Fee Letter.
(y) The Investor shall have received an operating budget of the Company and the Project Company for the balance of Fiscal Year 2025 and for Fiscal Year 2026.
(z) Each of the Parties shall have received a flood zone determination for the Site.
(aa) (i) All amounts due and payable by the Company on the MC Funding Date under the MIPA have been paid or will be paid on the MC Funding Date, as set forth in the Flow of Funds Memorandum for the MC Funding Date and (ii) the Investor shall have received a copy of an assignment agreement, to become effective immediately following consummation of the MC Funding Date transactions, assigning 100% of the membership interests in the Project Company to the Company in accordance with the MIPA.
(bb) Investor has received copies of all amendments to the Construction Financing Documents.
(cc) There has been no (i) material event of condemnation, (ii) Minor Casualty, unless the Independent Engineer has provided a certification that there are sufficient funds reserved to repair and restore the Project, (iii) Substantial Casualty that remains unrepaired, or (iv) to the Knowledge of Class B Member, pending or continuing force majeure under the Material Project Documents (except as set forth on Schedule 3.1(i)(v)), in each case with respect to the Project. No action or proceeding has been instituted or threatened in writing by or before any Governmental Authority (A) that challenges the validity of, seeks to restrain, enjoin, prohibit or invalidate the transactions contemplated by the Transaction Documents or the Material Project Documents for the Project or (B) regarding the effectiveness or validity of any Governmental Approval for the Project, in each case, unless Class B Member has provided evidence to the Investor, which shall be reasonably acceptable to the Investor, that such proceeding is no longer viable and has been
fully adjudicated and dismissed in a final judgment of a court of competent jurisdiction as of such date.
(dd) To the extent there are any (i) new facts or (ii) changes in Applicable Law, in each case, following the Effective Date that could affect the conclusion of the tax opinion delivered at the Effective Date, the Investor has received a bring-down of the legal opinion of Latham & Watkins LLP about certain federal tax matters.
(ee) No Bankruptcy has occurred with respect to Class B Member, the Company, the Project Company, any Affiliate Party or the Class B Member Guarantor.
(ff) The Investor shall have received the Beginning of Construction Certificate (MC Funding).
(gg) Either (a) the Investor is reasonably satisfied, and has received a report of the Independent Engineer certifying, that all Blocks comprising the Project are reasonably expected to be Placed In Service prior to December 31, 2025; or (b) the Investor has received a PWA Compliance Report from the PWA Consultant and a PWA Certificate from the Class B Member, in each case, reasonably satisfactory to the Investor.
4.3. SC Funding Date. The obligation of the Investor to make its SC Funding Date Contribution will be subject to fulfillment of the following conditions, in each case in form and substance reasonably satisfactory to Investor, each of which the Investor may waive in writing in its sole discretion, provided that once Investor makes its SC Funding Date Contribution the following conditions shall be deemed fulfilled to the satisfaction of Investor:
(a) Each of the representations and warranties made by Project Company, the Company, the Class B Member, and the Class B Member Guarantor and their respective Affiliates in the Transaction Documents as of the SC Funding Date is true and correct in all material respects (except with respect to any such representations and warranties which are subject to qualification by materiality or Material Adverse Effect, which representations are true and correct in all respects).
(b) The Base Case Model has been rerun and updated in accordance with Section 2.1 and no Change in Tax Law or Proposed Change in Tax Law has occurred unless reflected in such updated Base Case Model. (c) The Project has reached Substantial Completion. Each Block and the Project has been Placed In Service. Investor has received each of the “Substantial Completion Certificates” for Substantial Completion within the meaning of Section 10.7 of the PV EPC Contract and Section 10.6 of the HV EPC Contract, duly executed by the applicable EPC Contractor. The Commercial Operation Date (under and as defined in the PPA) has occurred. Investor has received a copy of the notice delivered to Power Purchaser pursuant to Section 2.4(c) of the PPA. The Investor has received a certificate of the Independent Engineer substantially in the form of Exhibit E.
(d) (i) True, complete and correct copies of all Material Project Documents (other than the PSA), Construction Financing Documents and Transaction Documents for the Project that have been executed after the MC Funding Date and on or prior to the SC Funding Date, if any, have been delivered to Investor via the Data Site; provided, that delivery of the Energy Management Service Agreement shall be subject to reasonable redactions, provided that the redacted Energy Management Services Agreement made available to Investor via upload to the Data Site shall be deemed acknowledged and accepted by Investor unless Investor provides written confirmation to the contrary, and (ii) all Material Project Documents, Construction Financing Documents and Transaction Documents for the Project are in full force and effect, and no material default, event of default or material breach exists under any such document by the Company, the Project Company, any Affiliate Party or, to the Knowledge of Class B Member, any Material Contract Party.
(e) The Investor shall have received the following items: (i) a bring-down of the Independent Engineer Report and, if not directly addressed to the Investor, a reliance letter with respect thereto for the benefit of the Investor dated as of the SC Funding Date, (ii) a bring-down of the Insurance Report, and, if not directly addressed to the Investor, a reliance letter with respect thereto for the benefit of the Investor dated as of the SC Funding Date, (iii) an Environmental Report (if the most recently delivered Environmental Report pursuant to Section 4.1(n) or Section 4.2(f) is dated six or more months prior to the SC Funding Date), and, if not directly addressed to the Investor, a reliance letter with respect thereto for the benefit of the Investor dated as of the SC Funding Date, (iv) an updated Appraisal and an updated Cost Segregation Report for the Project, and, if not directly addressed to the Investor, a reliance letter with respect thereto for the benefit of the Investor dated as of the SC Funding Date, and (v) either (A) a bring-down of the Transmission Report (which shall not include any methodology changes from the Transmission Report delivered on the Effective Date), and, if not directly addressed to the Investor, a reliance letter with respect thereto for the benefit of the Investor dated as of the SC Funding Date or (B) a letter from the Transmission Consultant addressed to the Investor, certifying that there have been no adverse change to the conclusions included in the Transmission Report delivered under Section 4.1(n). (f) The Investor shall have received (i) a date down endorsement to the Title Policy (or a similar endorsement or modification thereto), or an executed escrow letter irrevocably obligating the Title Company to issue such endorsement, which shall, among other things, (A) extend the effective date of the Title Policy to the SC Funding Date, (B) include the ALTA 15.1-06 15.2-06 endorsements, and (C) reference the as-built ALTA Survey, and (ii) the final, signed and sealed as-built ALTA Survey, in each case, in form and substance reasonably satisfactory to the Investor and the Title Company, together with any and all documentation reasonably required by the Title Company, including, without limitation, any and all owner’s affidavits, memoranda of lease, affidavits of non-foreign status, non-imputation affidavits, GAP affidavits, survey certifications, tax affidavits, certificates of good standing and due authorization and articles of incorporation, and any other documentation reasonably required by the title company to issue the foregoing date down endorsement.
(g) The Investor shall have received each Current Balance Sheet and (1) quarterly unaudited financial statements of the Class B Member Guarantor, the Company and the Project Company (which financial statements may be in the form of consolidated financial statements of Class B Member Guarantor, so long as consolidating statements of each of the Company and the Project Company are included therewith), for the most recent calendar quarter ending seventy-five (75) days preceding the SC Funding Date, and (2) unless previously delivered in connection with the MC Funding Date, annual audited financial statements of the Class B Member Guarantor and the Project Company (which financial statements may be in the form of consolidated financial statements of Class B Member Guarantor, so long as consolidating statements of the Project Company are included therewith) for the calendar year ending December 31, 2024.
(h) The Investor shall have received (i) if necessary due to a material change in facts or Applicable Law, a bring-down legal opinion of Rock Creek Energy Group, LLP as federal regulatory counsel to the Project Company addressing customary federal regulatory matters, (ii) if necessary due to a material change in facts or Applicable Law, a legal opinion of Fox Rothschild LLP as special North Carolina counsel to the Project Company addressing state and local regulatory and permitting matters, and (iii) to the extent that any Transaction Document is executed or materially amended following the date of the legal opinions delivered pursuant to Section 4.1(e) or Section 4.2(h), as applicable, a legal opinion of Holland & Knight LLP as special New York counsel to the Company, the Project Company, the Class B Member and the Class B Member Guarantor, as applicable (to the extent any Person is a party thereto), addressing enforceability matters relating to the relevant Transaction Document governed by New York law. (i) The Investor shall have received (i) an officer’s certificate from each of the Project Company, the Company, the Class B Member, and the Class B Member Guarantor (A) certifying that all representations and warranties made by such person in the Transaction Documents to which it is a party are true and correct in all material respects (except with respect to any such representations and warranties which are subject to qualification by materiality or Material Adverse Effect, which representations are true and correct in all respects) as of the SC Funding Date or, if a representation or warranty was expressly made only as of an earlier date, such earlier date, and (B) attaching the incumbency certificate and, except for the Class B Member Guarantor, the resolutions and formation documents of such person or certifying no change to such items since the certificate delivered pursuant to Section 4.2(i)(i)(B) and (ii) a good standing certificate or certificate of status for Class B Member, Class B Member Guarantor, the Company, the Project Company, the EPC Contractors, Module Supplier, Energy Manager (if the Energy Management Services Agreement has been executed), Asset Manager, Operator and Seller (which shall be certified except in the case of each Material Contract Party) and (iii) an officer’s certificate from Class B Member certifying the conditions in clauses (c) (first sentence), (d), (k), (l), (n), (o), (p)(i), (q), (r), (t)(i) and (u) of this Section 4.3 have been satisfied or otherwise waived. (j) The Investor has received the following items: (i) estoppel certificates, in each case in the applicable form attached within Exhibit F and dated no earlier than fifteen (15) days prior to the SC Funding Date (except, if applicable, for estoppel certificates executed by the counterparties to the Real Property Documents, which shall be dated no earlier than sixty (60) days
prior to the SC Funding Date), executed by the EPC Contractors, the Operator, the Asset Manager, the Module Supplier, the Power Purchaser, the Energy Manager, and, to the extent that the SC Funding Date occurs on or after the date that is sixty (60) days after the MC Funding Date, counterparties to the Real Property Documents and the landowners that have granted leasehold, easement, or other interests in the Site, (ii) the insurance broker’s certificate attaching true, correct, and complete certificates of insurance for each insurance policy maintained by or for the benefit of the Project, (iii) searches of all financing statements of public record and of judgment, litigation and tax lien records reasonably requested by the Investor with respect to the Project, Class B Member, the Project Company and the Company, (iv) evidence of the status of the Project Company as an Exempt Wholesale Generator and (v) evidence of the Project Company’s MBR Authority.
(k) The Project Company has obtained all Governmental Approvals required to be obtained by it for the construction, installation, operation, ownership and maintenance of the Project and the sale at wholesale of electric energy and sale of RECs therefrom, except for Ministerial Approvals and Filings, and all such Governmental Approvals are valid and in full force and effect and non-appealable, and the Company and the Project Company shall have obtained all third party consents, waivers, notices, authorizations, and approvals required for the execution, delivery and, to the extent required on the SC Funding Date, performance of the Transaction Documents and the transactions contemplated hereunder and thereunder (including, without limitation, all such documentation required to be delivered to or obtained from third parties under the Real Property Documents). Each of Class B Member, the Company and the Project Company has obtained all other Governmental Approvals required to be obtained by it for the execution, delivery and, to the extent required on the SC Funding Date, performance of the Transaction Documents to which it is party, and all such Governmental Approvals have been obtained, made or filed, as required, and are in full force and effect and copies thereof have been delivered to Investor.
(l) There has been no (i) material event of condemnation, (ii) Minor Casualty, unless the Independent Engineer has provided a certification that there are sufficient funds reserved to repair and restore the Project, (iii) Substantial Casualty that remains unrepaired or, (iv) to the Knowledge of Class B Member, pending or continuing force majeure under the Material Project Documents (except as set forth on Schedule 3.1(i)(v)), in each case with respect to the Project. No action or proceeding has been instituted or threatened in writing by or before any Governmental Authority (A) that challenges the validity of, seeks to restrain, enjoin, prohibit or invalidate the transactions contemplated by the Transaction Documents or the Material Project Documents for the Project or (B) regarding the effectiveness or validity of any Governmental Approval for the Project, in each case, unless Class B Member has provided evidence to the Investor, which shall be reasonably acceptable to the Investor, that such proceeding is no longer viable and has been fully adjudicated and dismissed in a final judgment of a court of competent jurisdiction as of such date.
(m) The Investor has received at least five Business Days’ notice of the proposed SC Funding Date and at least three Business Days’ notice of the actual SC Funding Date (or notice in such shorter periods as the Investor may agree in its sole discretion after all of the
conditions in this Section 4.3 have been satisfied or waived, other than those conditions that by their nature will be satisfied as of the SC Funding Date). (n) All Taxes and other amounts due and payable by the Company, the Project Company and the Class B Member (solely with respect to the Project and the Company) with respect to their respective activities that are due and payable have been paid, and any Taxes due in connection with the execution, delivery, recording and filing of the Transaction Documents, Construction Financing Documents and the Project Documents have been paid or will be paid on the SC Funding Date, as set forth in the Flow of Funds Memorandum for the SC Funding Date.
(o) No Material Adverse Change has occurred and is continuing and no Material Adverse Effect has occurred and is continuing.
(p) (i) (A) To the Knowledge of Class B Member, all work that has been done on the Project has been done in a good and workmanlike manner and in accordance with the EPC Contracts, and (B) there has not been filed or served upon the Company, the Project Company or the Project (or any part thereof) notice of any Encumbrance, claim of lien or attachment upon or claim affecting the right to receive payment of any of the monies payable to any of the persons named on such request that have not been released, other than Permitted Encumbrances. (ii) The Investor has received copies of lien waivers, in the form as may be required by Applicable Law, from the EPC Contractors, Module Supplier and from subcontractors of the EPC Contractors and Module Supplier to the extent such subcontractor is required to provide and has provided a lien waiver pursuant to the applicable EPC Contract or Module Supply Agreements, and evidence that all recorded mechanics’ liens of the EPC Contractors, Module Supplier or any subcontractor, if any, have been released or secured by bonds or other security acceptable to the Investor, and that there are no past due lien claims from the EPC Contractors, Module Supplier or any subcontractor that are not (A) the subject of a conditional lien waiver, (B) the subject of a recorded lien that has been released or secured by bonds or other security acceptable to the Investor, or (C) a Permitted Encumbrance.
(q) All amounts required to be paid and deposited under the Material Project Documents, the AC Subsidiary LLCA, and Construction Financing Documents, and all reserves required to be established under the Material Project Documents and Construction Financing Documents, in each case solely for the Project, have been paid, deposited or established, as the case may be, and all amounts due and payable prior to SC Funding Date that are required under the Material Project Documents, the AC Subsidiary LLCA, and Construction Financing Documents have been paid in full, in each case except for amounts being contested in good faith. All Support Obligations required to be posted by or on behalf of the Project Company as of the SC Funding Date for the Project pursuant to any Material Project Document or Governmental Approval shall have been delivered; and no penalty, indemnities or damages shall be due and owing by the Project Company in connection with any Material Project Document or Construction Financing Documents, unless, in the case of any Material Project Document, any such penalty, indemnities or damages that are being contested in good faith and by appropriate proceedings, reserved for in the Final Completion Account in an amount no less than the amount due and owing.
(r) The covenants and obligations of Class B Member hereunder to be complied with on or prior to the SC Funding Date have been complied with in all material respects.
(s) Delivery of an amendment to the LLCA to amend Exhibit D (Tracking Model) thereto, each in form and substance reasonably satisfactory to the Investor.
(t) (i) The consummation of the transactions contemplated by the Transaction Documents and the Material Project Documents to which Class B Member, the Project Company, any Affiliate Party or the Company is a party at the SC Funding Date will not violate any Applicable Law. (ii) There has been no material adverse change in law (excluding any change in law relating to income taxes that is not a Change in Tax Law) that (A) with respect to the Investor, would make it illegal for Investor to purchase the Class A Membership Interests or acquire, own or hold a Class A Membership Interest in the Company or (B) is not reflected in the Base Case Model.
(u) The MC Funding Date occurred and the Commitment Expiration Date has not occurred.
(v) To the extent there are any (i) new facts (including, for clarity, the application of the PWA Requirements to any part of the Project) or (ii) changes in Applicable Law, in each case, following the MC Funding Date, that could affect the conclusion of the tax opinion delivered at the Effective Date, the Investor has received a bring-down of the legal opinion of Latham & Watkins LLP about certain federal tax matters;
(w) Class B Member shall have made all Capital Contributions to the Company to the extent required pursuant to Section 2.1 or such Capital Contributions will be made on the SC Funding Date, as set forth in the Flow of Funds Memorandum for the SC Funding Date. (x) Class B Member shall have reimbursed the Investor for its invoiced Transaction Expenses incurred after the MC Funding Date and on or before the SC Funding Date or, if not previously paid, such Transaction Expenses are reflected in the Flow of Funds Memorandum for the SC Funding Date, and in any case shall be capped as set forth in, and subject to the terms and conditions of, the Fee Letter.
(y) The Investor shall have received an updated operating budget of the Company and the Project Company for the balance of Fiscal Year 2025 and for Fiscal Year 2026.
(z) The Class B Member shall have delivered to the Investor evidence that, upon the funding of the SC Funding Date Contribution, all liens or encumbrances granted in favor of the Collateral Agent for the benefit of the Secured Parties (as defined in the Construction Financing Agreement) with respect to the Assets of the Company or the Project Company have been released, and the Company and the Project Company have been released and discharged from all obligations under the Construction Financing Documents, and the lien searches delivered pursuant to Section 4.3(h)(iii) shall reveal that the only Encumbrances on the Assets of the Company and the Project Company in existence on the SC Funding Date are Permitted Encumbrances.
(aa) Funds sufficient to cover the Final Completion Reserve Requirement have been deposited in the Final Completion Account or such funds will be deposited on the SC Funding Date, as set forth in the Flow of Funds Memorandum for the SC Funding Date.
(bb) The Investor has received copies of the Warranties for the Project and evidence of assignment of the Warranties to the Project Company.
(cc) The Investor shall have received the Beginning of Construction Certificate (SC Funding).
(dd) Either (a) each Block comprising the Project was Placed In Service prior to December 31, 2025 and the Investor has received a reasonably satisfactory report from the Independent Engineering certifying thereto; or (b) (x) the Project began construction prior to December 31, 2024 and the Investor has been provided with evidence of such matter reasonably satisfactory to it, and (y) the PWA Compliance Requirements have been satisfied.
(ee) The Class B Member shall have funded the PJM DAT Account in an amount not less than $500,000.
(ff) The Class B Member shall, if applicable, use commercially reasonable efforts to obtain a duly executed SNDA from any lender or ground lessor that holds a monetary Encumbrance or ground lease on any portion of the Site leased to the Project Company, provided, however, if any such lender or ground lessor is unwilling to provide such an SNDA on commercially reasonable terms then the Class B Member’s failure to obtain such an SNDA shall not result in a violation of this Section 4.3(ff).
ARTICLE 5
CONDITIONS TO OBLIGATIONS OF CLASS B MEMBER
5.1. Effective Date. The obligation of the Class B Member to execute this ECCA will be subject to fulfillment of the following conditions, each of which may be waived by Class B Member in writing:
(a) The Class B Member has received executed counterparts of each Transaction Document to be executed by the Investor or a Covered Entity relating to the Investor on or before the Effective Date.
(b) Each of the representations and warranties of the Investor made in this ECCA on the Effective Date or in any other Transaction Document entered into on the Effective Date is true and correct in all material respects (except if such representation and warranty is already qualified by materiality or a similar materiality qualification, in which case such representation and warranty is true in all respects).
(c) No suit, action or other proceeding has been instituted or threatened in writing by any Governmental Authority or other person against any Party that seeks to impair, restrain, prohibit or invalidate the Transaction or the Transaction Documents.
(d) The Class B Member shall have received one or more legal opinions of counsel to the Investor, Tenaska Energy, Inc. and Tenaska Energy Holdings, LLC, and addressing customary corporate and enforceability matters with respect to this ECCA and Class A Guaranty.
(e) The Class B Member shall have received all documentation and other information requested by the Class B Member or required by regulatory authorities in order for the Class B Member to comply with requirements of any Anti-Money Laundering Laws, including the USA PATRIOT Act and any applicable “know your customer” rules and regulations. Each of the Parties shall have received any necessary approval from its respective internal investment committee(s) and board of directors or other governing body to enter into the transactions contemplated hereunder.
(f) The Investor shall have obtained all necessary third party consents, waivers, authorizations, and approvals in connection with the execution, delivery and, to the extent required on the Effective Date, performance of the Transaction Documents and the transactions contemplated hereunder and thereunder, copies of which have been delivered to the Class B Member.
(g) The Class B Member shall have received the Base Case Model, in form and substance reasonably satisfactory to the Class B Member.
(h) No Bankruptcy has occurred with respect to Class A Member, Tenaska Energy, Inc. or Tenaska Energy Holdings, LLC.
(i) The Class B Member shall have received complete copies of the most recent audited annual and unaudited quarterly financial statements (if any) of each of Tenaska Energy, Inc. and Tenaska Energy Holdings, LLC.
(j) The Class B Member shall have received (i) an officer’s certificate from the Investor, Tenaska Energy, Inc. and Tenaska Energy Holdings, LLC (A) with respect to each of Investor, Tenaska Energy, Inc. and Tenaska Energy Holdings, LLC, certifying that all representations and warranties made by such person in the Transaction Documents entered into on the Effective Date to which it is a party are true and correct in all material respects (except if such representation and warranty is already qualified by materiality or a similar materiality qualification, in which case such representation and warranty is true in all respects) as of the Effective Date or, if a representation or warranty was expressly made only as of an earlier date, such earlier date, and (B) attaching the incumbency certificate of such person, (ii) a good standing certificate or certificate of status for the Investor, Tenaska Energy, Inc. and Tenaska Energy Holdings, LLC and (iii) an officer’s certificate from Investor certifying that the conditions in clauses (b), (f) and (h) of this Section 5.1 have been satisfied or otherwise waived.
5.2. MC Funding Date. The obligation of the Class B Member to perform its covenants on the MC Funding Date will be subject to fulfillment of the following conditions, each of which may be waived by Class B Member in writing:
(a) Each of the representations and warranties of the Investor made in this ECCA or in any other Transaction Document as of the MC Funding Date is true and correct in all material respects (except if such representation and warranty is already qualified by materiality or a similar materiality qualification, in which case such representation and warranty is true in all respects).
(b) No suit, action or other proceeding has been instituted or threatened in writing by any Governmental Authority or other person against any Party that seeks to impair, restrain, prohibit or invalidate the Transaction or the Transaction Documents.
(c) The Investor shall have obtained all necessary third party consents, waivers, authorizations, and approvals in connection with the execution, delivery and, to the extent required on the MC Funding Date, performance of the Transaction Documents and the transactions contemplated hereunder and thereunder, copies of which have been delivered to the Class B Member.
5.3. SC Funding Date. The obligation of the Class B Member to perform its covenants on the SC Funding Date will be subject to fulfillment of the following conditions, each of which may be waived by Class B Member in writing:
(a) Each of the representations and warranties of the Investor made in this ECCA or in any other Transaction Document as of the SC Funding Date is true and correct in all material respects (except if such representation and warranty is already qualified by materiality or a similar materiality qualification, in which case such representation and warranty is true in all respects).
(b) No suit, action or other proceeding has been instituted or threatened in writing by any Governmental Authority or other person against any Party that seeks to impair, restrain, prohibit or invalidate the Transaction or the Transaction Documents.
(c) The Investor shall have obtained all necessary third party consents, waivers, authorizations, and approvals in connection with the execution, delivery and, to the extent required on the SC Funding Date, performance of the Transaction Documents and the transactions contemplated hereunder and thereunder, copies of which have been delivered to the Class B Member.
ARTICLE 6
COVENANTS
6.1. Covenants.
(a) Taxes. Except as otherwise required pursuant to Section 8.8 of the LLCA, the Company, the Investor and Class B Member will treat (i) the Company as having a tax basis in the property comprising the Project consistent with the Base Case Model, the Appraisal and the Cost Segregation Report, each as of the SC Funding Date, for purposes of the ITC and depreciation, (ii) the Company as the original user of the property comprising the Project, and (iii) each Block and the Project as having been Placed In Service no earlier than when the Project reaches Mechanical Completion.
(b) Transfer Taxes. Any transfer, documentary, sales, use, real property transfer, recording, gains, registration and other similar taxes and fees (“Transfer Taxes”) incurred in connection with the issuance of the Class A Membership Interests to the Class A Member pursuant to this ECCA shall be borne by the Class B Member, and the Class B Member , at its own expense, shall file (to the extent required or permitted by Applicable Law) all necessary Tax Returns and other documentation with respect to all such Transfer Taxes.
(c) If at any point following the MC Funding Date, it becomes reasonably likely that all or any portion of the Project may be Placed In Service after December 31, 2025, the Class B Member shall promptly (i) notify the Class A Member thereof within three (3) Business Days; (ii) engage a PWA Consultant to track and evaluate compliance with the PWA Requirements; (iii) cause the Project to satisfy the PWA Requirements, including by maintaining (or causing to be maintained) records, including the information set forth in Treasury Regulations Sections 1.45-12, sufficient to enable the Company to demonstrate compliance with, and to correct any failure to comply with the PWA Requirements by paying backpay, penalties and interest, as required; and (iv) keep the Class A Member informed with respect to the Project’s ongoing compliance with the PWA Requirements.
ARTICLE 7
TERMINATION
7.1. Termination. This ECCA may be terminated:
(a) by the Investor, upon a Bankruptcy of Class B Member, the Class B Member Guarantor, the Project Company or the Company;
(b) by the Class B Member, upon a Bankruptcy of the Investor, the Class A Member or Tenaska Energy, Inc. or Tenaska Energy Holdings, LLC;
(c) by the Investor if the SC Funding Date has not occurred by the Commitment Expiration Date due to a failure of the Company or the Class B Member (as applicable) to satisfy a condition (to the extent not waived by the Investor) set forth in Section 4.2 or Section 4.3; provided that the Investor is not then in material breach of this Agreement;
(d) by the Company or the Class B Member if the SC Funding Date has not occurred by the Commitment Expiration Date due to a failure of the Investor to satisfy a condition (to the extent not waived by the Company and the Class B Member) set forth in Section 5.2 or Section 5.3; provided, that neither the Company nor the Class B Member is then in material breach of this Agreement; (e) automatically by either Party if the LLCA is terminated (following execution thereof); or
(f) by the mutual written consent of the Parties.
7.2. Effect of Termination. The Party terminating this ECCA will give written notice to the other Party. In the event of a termination, this ECCA will cease to have force and effect, and there will be no further Liability or obligation on the part of Class B Member, the Company or Investor, except that (a) the provisions of Article 7 and Article 8 will survive after any such termination, and (b) each Party will continue to be liable for any breach by such Party of its covenants contained in this ECCA occurring prior to such termination (which will survive termination hereof in the case of any breach). ARTICLE 8
GENERAL PROVISIONS
8.1. Notices. All notices and communications will be in writing and deemed given if delivered by email (subject to confirmation of receipt), delivered personally, by a nationally recognized overnight courier, or mailed by registered or certified mail (return receipt requested) (or if any such delivery is refused) to the Parties at the following addresses:
| | | | | | | | | | | |
| (a) If to the Investor, to: |
| | | |
| | | Tenaska American Beech Holdings, LLC |
| | | as Investor |
| | | 14302 FNB Parkway |
| | | Omaha, NE 68154 |
| | | Attention: David Kirkwood |
| | | Telephone: (402) 691-9555 |
| | | Email: dkirkwood@tenaska.com; |
| | | taxequityinvestments@tenaska.com |
| | | |
| (b) If to the Company, to: |
| | | |
| | | American Beech Solar Holdings LLC |
| | | c/o MN8 Energy LLC |
| | | 1155 Avenue of the Americas, 27th Floor |
| | | New York, NY 10036 |
| | | Attn: Legal |
| | | Email: notices@mn8.com |
| | | |
| | | | | | | | | | | |
| | If to Class B Member, to: |
| | | |
| | | American Beech Class B LLC |
| | | c/o MN8 Energy LLC |
| | | 1155 Avenue of the Americas, 27th Floor |
| | | New York, NY 10036 |
| | | Attn: Legal |
| | | Email: notices@mn8.com |
| | | |
| | With a copy to: |
| | | |
| | | Holland & Knight LLP |
| | | 811 Main St, Suite 2500 |
| | | Houston, TX 77002 |
| | | Attn: Ram Sunkara and Elizabeth Crouse |
| | | Email: Ram.Sunkara@hklaw.com; Elizabeth.Crouse@hklaw.com |
Each Party may change the place to which notices are sent or delivered or to specify one additional address to which copies of notices may be sent, in either case by similar notice sent or delivered in like manner to the other Party.
8.2. Amendment and Waiver. Neither this ECCA 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). No failure or delay on the part of a Party hereto in the exercise of any right hereunder will operate as a waiver thereof, nor will any single or partial exercise of any such right preclude any other or further exercise thereof or of any other right.
8.3. Binding Nature; Assignment. This ECCA will bind and inure to the benefit of the Parties hereto and their respective successors and legal representatives and permitted assigns. No Party will assign its rights and obligations under this ECCA, without the prior written consent of the other Parties hereto, and any such assignment contrary to the terms hereof will be null and void and of no force and effect; provided, however, that the Investor may assign its rights and obligations under this ECCA to an Affiliate and to an assignee of its interests pursuant to a disposition made in accordance with the LLCA so long as the Investor, such assignee, and each other person party to the Class A Guaranty sign an acknowledgement stating the Class A Guaranty shall continue in full force and effect as credit support for the satisfaction of the obligations of such assignee.
8.4. GOVERNING LAW. THIS ECCA WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CHOICE OF LAW RULES (OTHER THAN SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
8.5. Submission to Jurisdiction. Each of the Parties irrevocably consents to the non-exclusive jurisdiction of the courts of the State of New York and of any federal court located
in the Southern District of New York in connection with any suit, action or other proceeding arising out of or relating to this ECCA or the transactions contemplated hereby, agrees to waive any objection to venue in the State and County of New York, and agrees that, to the extent permitted by law, service of process in connection with any such proceeding may be effected by mailing in the same manner provided in Section 8.1. Each party hereto hereby waives, to the fullest extent permitted by Applicable Law, any right it may have to a trial by jury in respect of any litigation directly or indirectly arising out of, under or in connection with this ECCA. 8.6. No Third Party Beneficiaries. This ECCA is solely for the benefit of the Parties and their respective successors and permitted assigns, and this ECCA shall not otherwise be deemed to confer upon or give to any other third party any right, claim, cause of action or other interest herein.
8.7. Entire Agreement. This ECCA, together with each other Transaction Document, constitutes the entire understanding of the Parties with respect to the subject matter hereof, and supersedes all prior statements or agreements, whether oral or written, among the Parties with respect to such subject matter.
8.8. Counterparts; Electronic Signatures. This ECCA may be executed in counterparts (which may be delivered by use of a facsimile machine or an e-mail which attaches a portable document format (.pdf) document), each of which will be an original, but each of which, when taken together, will constitute one and the same instrument. The words “execution”, “execute”, “signed”, “signature”, and words of like import in or related to any document signed or to be signed in connection with this ECCA 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 Parties, 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.
8.9. Confidentiality. The confidentiality provisions of Section 7.7 of the LLCA apply to this ECCA as though they were set out in full in this ECCA, except that references to the LLCA therein shall be construed as references to this ECCA.
8.10. Exclusivity. Class B Member hereby covenants and agrees that, after the Effective Date and prior to the earliest to occur of the SC Funding Date, the Commitment Expiration Date, and the date this ECCA is terminated pursuant to Article 7, neither it nor its Affiliates shall enter into any transaction (other than as contemplated by this ECCA, the other Transaction Documents or the Construction Financing Documents) for the permanent, term financing, sale or other transfer of the Company, the Project Company or the Project.
ARTICLE 9
INDEMNIFICATION
9.1. Indemnification by the Class B Member.
(a) The Class B Member (the “Indemnifying Party”) agrees to indemnify, defend, reimburse and hold harmless the Investor and its parent or subsidiary companies, shareholders, partners, members and other Affiliates, and their respective officers, directors, managing members, employees, attorneys, contractors and agents (collectively, the “Indemnified Parties”) from and against, without duplication, any and all Damages (the “Losses”), asserted against, resulting to, imposed upon, or incurred by any or all of the Indemnified Parties, directly or indirectly, by reason of, arising out of or resulting from any of the following (collectively, clauses (A) through (E), the “Indemnification Claims”):
(A)the inaccuracy, breach or failure of any representation or warranty or covenant contained in any Transaction Document by the Class B Member Guarantor, the Company, the Class B Member or the Seller (solely with respect to the inaccuracy, breach or failure of any representation or warranty under the MIPA);
(B)the inaccuracy, breach or failure of any representation or warranty or covenant contained in any Project Document by any Affiliate Party;
(C)fraud, willful misconduct or gross negligence, in each case by the Class B Member;
(D)(I) the failure of the SC Funding Date to occur on or prior to the Commitment Expiration Date (including as a result of the failure of any condition precedent set forth in Section 4.3 to be satisfied as of the Commitment Expiration Date) and (II) from and after the MC Funding Date, the Company ceasing to own one hundred percent (100%) of the membership interests of the Project Company, the Company ceasing to own one hundred percent (100%) of the assets of the Company or the Project Company ceasing to own one hundred percent (100%) of the assets of the Project Company, including in each case as a result of an exercise of remedies under the Construction Financing Documents; or (E)the ownership by the Project Company of the AC Subsidiary, including all obligations of the AC Subsidiary to any Person, and without duplication of clause (A), any breach of Section 6.12 of LLCA.
If any Losses are not timely paid after a claim has been made in accordance with Section 5.2 of the LLCA, then distributions payable to the Class B Member under the LLCA will be used to satisfy the obligations of the Indemnifying Parties as directed under Section 5.2 of the LLCA.
(b) Completion Indemnity and Liquidated Damages. Notwithstanding anything in this ECCA to the contrary, in the event that no portion of the Project has been Placed In Service, the Losses suffered by the Indemnified Parties (without any requirement of the Class A Member to prove actual Losses), and the amount payable by the Indemnifying Parties for any Indemnification Claim under Section 9.1(a)(i)(D), including all out-of-pocket costs, expenses or fees (including reasonable and documented attorneys’ fees and costs) incurred by the Class A Member in connection with any Third Party claim or the costs of collection and the enforcement of this ECCA or the Guaranty, with or without the filing of any legal action or proceeding, shall be deemed to be an amount equal to 110% of the aggregate Capital Contributions made by the Class A Member (the “Completion Indemnity Amount”), which shall be payable as liquidated damages in United States dollars in immediately available funds and shall constitute full and complete satisfaction of all amounts due and payable to the Class A Member as a result of such claim. In the event that any portion of the Project has been Placed In Service, the Completion Indemnity Amount shall be calculated and adjusted as necessary to take into account (i) the amount, timing and present value of any distributions (including all periodic distributions or other amounts) paid, or projected to be paid, to the Class A Member as a member of Company, (ii) the value and timing of any Tax Benefits received, or projected to be received, by the Class A Member, and (iii) any and all Losses arising out of or resulting from disputes or settlements of claims or foreclosure or exercise of other rights or remedies by Collateral Agent or any contractor or subcontractor or cures taken by or on behalf of the Project Company, the Company or the Class A Member. Solely to the extent that no portion of the Project has been Placed In Service, upon receipt by the Class A Member of the Completion Indemnity Amount on or prior to five (5) days after the Commitment Expiration Date, the Class A Member shall transfer, assign and convey to the Class B Member, and the Class B Member shall accept and assume, one hundred percent (100%) of the Class A Membership Interests, without any representation or warranty other than that such Class A Membership Interests shall be transferred, assigned and conveyed to the Class B Member free of any Encumbrances (other than Permitted Encumbrances set forth in clause (e) of the definition thereof). 9.2. Limitation on Liability.
(a) Other than as set forth under Section 9.1(b), the aggregate liability of the Indemnifying Parties for Indemnification Claims will not exceed the aggregate Capital Contributions made by the Class A Member plus an additional amount calculated as of the date payment is made hereunder that, when added to the foregoing amount, causes the Class A Member to achieve an After-Tax IRR equal to the Target IRR for the applicable period ending in each case on such payment date (in accordance with the calculation methodologies and conventions set forth in the LLCA), less (1) any Indemnification Claims previously paid by the Indemnifying Parties or the Class B Member Guarantor to any Indemnified Party or paid pursuant to Section 5.2 of the LLCA, (2) distributions made to the Class A Member pursuant to Section 5.1 of the LLCA and (3) the excess of Tax Benefits over Tax Costs allocated to the Class A Member pursuant to Section 4.1 of the LLCA from and after the date such tax benefits or investment tax credits are no longer subject to challenge, disallowance or recapture, as such excess is reduced by any recapture, disallowance, or reduction of any Tax Benefits not resulting from or arising out of (x) the breach by a Class A Member of a representation or covenant in the Transaction Documents or (y) a failure
of the Fixed Tax Assumptions not caused by a breach or default of a relevant representation or covenant by the Class B Member or any Affiliate thereof; provided, that the caps in this Section 9.2(a) will not apply to (i) a claim resulting from fraud, gross negligence or willful misconduct of the Class B Member or any Affiliate of the Class B Member, (ii) any claim of a Third Party, (iii) any costs of collection and enforcement by any Indemnified Party; (iv) any costs that are required to be paid by the Class B Member for the Project to comply with the PWA Requirements or (v) any claim under Section 9.1(a)(E). (b) No Indemnification Claim may be made under this Article 9 based on the inaccuracy, breach or failure of any representation or warranty after a period of fifteen (15) months following the SC Funding Date (or, with respect to any breach or failure of any representation or warranty under the LLCA and with respect to any Class B Member which becomes a Class B Member after the SC Funding Date, for a period of fifteen (15) months following the date on which such Person becomes a Member under the LLCA); provided, that an Indemnification Claim may be brought with respect to (i) any Fundamental Representation and any Tax Loss or Tax Representation, within sixty (60) days after the expiration of the applicable statute of limitations (giving effect to any waivers or extensions thereof) and (ii) any Environmental Representation, within a period of five (5) years following the SC Funding Date, provided, further, that if written notice of an Indemnification Claim has been given by the Indemnified Party on or prior to the last day of the respective foregoing period, then the obligation of the Indemnifying Parties to indemnify such Indemnified Party pursuant to this Article 9 shall survive with respect to such claim until such claim is finally resolved.
(c) To the extent the Indemnified Party receives from the Indemnifying Party or otherwise a written opinion reasonably acceptable to the Indemnified Party at a “should” level or higher from a nationally-recognized U.S. tax counsel chosen by the Indemnifying Party and reasonably acceptable to the Indemnified Party, supporting such position, any indemnity payment shall be treated as a nontaxable return of capital for federal income tax purposes. Otherwise, indemnity payments made pursuant to this Section 9.2(c) shall be treated as taxable and grossed-up and paid on an After-Tax Basis. If an indemnity payment is treated by the parties as a nontaxable return of capital and such position is subsequently disallowed by the IRS and as a result such indemnity payment is included in the recipient’s taxable income, the gross-up described in the preceding sentence will be promptly paid to the Indemnified Party. (d) No Indemnifying Party will be required to indemnify any Indemnified Party for any Loss covered by Section 9.1 that results from any of the following: (i) the breach by the Class A Member of any of its representations, warranties, or covenants in this ECCA or the LLCA, (ii) a Final Determination after a federal income tax audit, to which the Company or the Class A Member is a party, to the extent that the Final Determination specifically provides that the Loss results from the inaccuracy of one or more of the Fixed Tax Assumptions, except, in each case, to the extent such inaccuracy directly or indirectly occurs by reason of, arises out of or results from a Specified Exception, or (iii) the fraud, gross negligence or willful misconduct of the Class A Member or its Affiliates.
(e) The amount of any Indemnification Claim required to be paid by the Indemnifying Party to the Indemnified Party pursuant to this Article 9 shall be reduced to the extent of any amounts actually received by such Indemnified Party (net of any cost of collection) after the Effective Date (a) pursuant to the terms of the insurance policies obtained and maintained by the Company covering such claim (but in no instance shall any insurance proceeds from policies obtained and maintained by any Class A Member or any Affiliate thereof be considered in connection with a reduction of damages pursuant to this Section 9.2), or (b) received from Third Parties (net of any costs of collection) arising out of the indemnified matters, and if any such recoveries are received after the payment of the applicable indemnity amount (for example, by the Company pursuing a third party for damages), the Indemnified Party shall promptly refund the amounts so received, but not in excess of the indemnity amount originally received by such Indemnified Party; provided, that the parties agree that nothing in this Section 9.2(e) shall imply any duty or obligation of Class A Member or any other Indemnified Party to pursue any claim or seek any recovery under any such policy or from any Third Party. (f) No claim for indemnification may be made with respect to any Losses of the Indemnified Parties (other than with respect to Third Party claims, fraud, gross negligence, and willful misconduct) until the aggregate amount of such Losses sought by (or previously sought by) the Indemnified Parties under this ECCA exceeds $250,000 in the aggregate; provided, that once such threshold amount of claims has been reached, then the Indemnified Parties shall have the right to be indemnified with respect to all such claims in excess of such amount. Claims for indemnification under this ECCA and the other Transaction Documents shall not be duplicative of one another and shall not allow for duplicative recoveries.
(g) EXCEPT CLAIMS RESULTING FROM FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AND CLAIMS OF A THIRD PARTY, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY UNDER THIS AGREEMENT OR OTHERWISE FOR CONSEQUENTIAL, SPECIAL, INCIDENTAL, EXEMPLARY, STATUTORY OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, WHETHER ANY ACTION OR CLAIM IS BASED ON WARRANTY, CONTRACT, TORT OR OTHERWISE; PROVIDED, THAT ANY ADVERSE TAX CONSEQUENCES, INCLUDING A LOSS OF OR INABILITY TO CLAIM TAX CREDITS OR OTHER TAX BENEFITS, SHALL NOT BE TREATED AS CONSEQUENTIAL, SPECIAL, INCIDENTAL, EXEMPLARY, STATUTORY OR PUNITIVE DAMAGES.
9.3. Procedure for Indemnification.
(a) After learning of an Indemnification Claim, an Indemnified Party will give prompt written notice to the Indemnifying Party. In the case of an action brought by a Third Party against an Indemnified Party, other than any Tax Contest (as defined in the LLCA) (which shall be governed by Section 8.7 of the LLCA) for which an Indemnifying Party bears ultimate liability under Section 9.1, each such Indemnifying Party will be entitled to participate and to assume the defense of the action with counsel reasonably satisfactory to the Indemnified Party; provided, that the Indemnified Party will have the right to employ separate counsel at its own expense and to
participate in the defense of the action. If the Indemnifying Party chooses not to assume, fails to assume or fails to pursue diligently the defense of the action, or in the case of a conflict of interest between the Indemnifying Party and the Indemnified Party, the Indemnified Party may assume the defense of the action with counsel of its choice, at the expense of the Indemnifying Party. If the Indemnifying Party assumes defense of an action, no compromise or settlement may be effected by the Indemnifying Party without the Indemnified Party’s written consent.
(b) Uncontested claims with respect to Taxes must be paid within five days after the Indemnifying Party receives notice of the claim. Contested claims with respect to Taxes must be paid in accordance with Section 8.7(f) of the LLCA or otherwise upon the settlement, final resolution (through the U.S. Tax Court, federal district court, or the U.S. Court of Federal Claims, if taken to court, but not appeals from any court) or withdrawal of the contest. The Indemnifying Party’s rights to contest or defend any claim with respect to Taxes (including any Tax Contest (as defined in the LLCA)) will be governed by Section 8.7 of the LLCA. All other Indemnification Claims shall be paid in immediately available funds within thirty (30) days after receipt of the corresponding claims under Section 9.3, unless any such Indemnification Claim is disputed in good faith within such thirty (30) day period. 9.4. No Right of Contribution. The Company will have no liability to indemnify the Class B Member on account of the breach of any representation or warranty or the nonfulfillment of any covenant or agreement of the Company under this ECCA or the other Transaction Documents or Project Documents, and no Class B Member will have any right of contribution against the Company.
9.5. Reserved.
9.6 No Duplication. The Class A Member, for itself and the Indemnified Parties agrees that, notwithstanding anything to the contrary herein or in any other agreement, any liability for indemnification under Section 9.1 shall be determined without duplication of recovery by the Class A Member and the Indemnified Parties under this ECCA, the LLCA, the Guaranty or any other Transaction Document. Without limiting the generality of the prior sentence, if a statement of facts, condition or event constitutes a breach of more than one cause, representation, warranty, covenant or agreement which is subject to an indemnification obligation in Section 9.1, only one recovery thereof shall be allowed. 9.7 Sole Remedy. Without limiting any rights of the Class A Member under the Guaranty, the Indemnified Parties will not bring any action or proceeding, or take any other action, in respect of Indemnification Claims to the extent recoverable and addressed by the payment of money except as provided by this Article 9 and the Class A Member hereby agrees, for itself and the Indemnified Parties the only relief and remedy available to the Indemnified Parties in respect of Indemnification Claims to the extent recoverable and addressed by the payment of money shall be as set forth in this Article 9; provided, that (a) the foregoing limitation shall not apply to a cause of action relating to fraud or willful misconduct, in relation to any breach, default, or nonperformance by any Indemnifying Party or any of its Affiliates of its or their respective representations and warranties, covenants or obligations, made in whatever capacity pursuant to, and under the terms of, this ECCA or any of the other Transaction Documents to which it or any
of them is a party, or any certificate, instrument, or document delivered pursuant hereto or thereto and (b) no Indemnified Party has waived any rights to pursue non-monetary or equitable remedies under this ECCA or the other Transaction Documents, or to pursue any other remedy expressly provided herein or under any other Transaction Document.
(Signature pages follow.)
IN WITNESS WHEREOF, the parties hereto have caused this ECCA to be duly executed and delivered as of the day and year first above written.
| | | | | | | | | | | |
| INVESTOR: | |
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| TENASKA AMERICAN BEECH HOLDINGS, LLC | |
| | | |
| | | |
| By: | | |
| | Name: | |
| | Title: | |
Equity Capital Contribution Agreement
American Beech
| | | | | | | | |
| COMPANY: |
| | |
| AMERICAN BEECH SOLAR HOLDINGS LLC |
| | |
| | |
| By: | |
| | Name: |
| | Title: |
| | |
| | |
| CLASS B MEMBER: |
| | |
| AMERICAN BEECH CLASS B LLC |
| | |
| | |
| By: | |
| | Name: |
| | Title: |
Equity Capital Contribution Agreement
American Beech
Exhibit A
Definitions
“AC Subsidiary” means AC1 ASOA LLC, a Delaware limited liability company.
“AC Subsidiary LLCA” means that certain Second Amended and Restated Limited Liability Company Agreement of AC1 ASOA LLC, dated as of January 10, 2023, by and among the Project Company and the other parties from time to time thereto.
“Act” means the Delaware Limited Liability Company Act, 6 Del. Code §§ 18-101 et seq.
“Acquisition Date” means October 29, 2024.
“Additional Material Project Document” means any Contract entered into, or to be entered into, by the Project Company or the Company (other than any Transaction Document) (i) that replaces or substitutes any Material Project Document, (ii) under which the Project Company or the Company could reasonably be expected to have obligations, liabilities or revenues equal to or in excess of five hundred thousand dollars ($500,000) in any year or seven hundred fifty thousand dollars ($750,000) in the aggregate or (iii) that is between the Company or the Project Company, on the one hand, and the Class B Member or any Affiliate of the Class B Member, on the other hand.
“Affiliate” means, with respect to a Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is Controlled by or under common Control with such first Person; provided, that with respect to the Company and the Project Company, “Affiliate” shall not include the Investor or any other Person that, directly or indirectly through one or more intermediaries, Controls, is Controlled by or under common Control with the Investor.
“Affiliate Contract” means any Contract between or among the Company or the Project Company, on the one hand, and any Affiliate of the Company or the Project Company, on the other hand.
“Affiliate Parties” means, collectively, (a) any counterparty to an Affiliate Contract other than the Company or the Project Company and (b) AC Subsidiary.
“After-Tax Basis” means a payment will be “grossed up” by dividing the underlying Damages or Losses or other amount by one minus the highest marginal composite federal, state and local income tax rate to which the recipient of the payment is subject at time of payment.
“After-Tax IRR” means, with respect to the Class A Member and at the time of any determination, the discount rate (calculated and compounded on a daily basis using the Microsoft Excel XIRR function or a similar software package and calculated in accordance with Section 10.1(c) of the LLCA) that sets A equal to B, where A is the present value as of the MC Funding Date of (a) all Tax Benefits, plus (b) the cash distributed to the Class A Member, plus (c) any indemnity payments (net of any tax gross-up) received by the Class A Member under Article XI of the LLCA or Article 9 of this ECCA that compensate for loss of any item that would otherwise
have been counted in clause (a) or (b), minus (d) the present value as of the MC Funding Date of all Tax Costs, and B is the present value as of the MC Funding Date of the Class A Member’s Capital Contributions. Section 10.1(c) of the LLCA contains additional assumptions and conventions that will be used when calculating the After-Tax IRR (including determining the amount and timing of Tax Benefits and Tax Costs).
“ALTA Survey” means, an ALTA/NSPS land title survey of the real property interests comprising the Site, including all easements, related rights of way and other appurtenances thereto identified in accordance with the 2021 ALTA/NSPS Minimum Standard Detail Requirements, whether owned, licensed or leased, certified to the Title Company, the Company, the Project Company and the Investor, and as revised, updated, or reissued pursuant to the terms of this ECCA.
“Anti-Terrorism Laws” means any laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering, or bribery, all as amended, supplemented or replaced from time to time.
“Applicable Law” means any federal, state or local treaty, constitution, law, statute, ordinance, rule, injunction, writ, order, decree, regulation or other directive that is legally binding and has been enacted, issued or promulgated in final form by any Governmental Authority, including all protocols and other binding rules of any relevant independent system operator.
“Appraisal” means a report, dated as of [ ò ], from the Appraiser regarding the fair market value of the Project, the division of that value among eligible and ineligible assets for the ITC and among the various depreciation classes and the projected residual value and remaining economic life at the end of the PPA.
“Appraiser” means Marshall & Stevens Incorporated.
“Asset Management Agreement” means that certain Management Services Agreement, dated as of August 27, 2025, by and between the Project Company and the Asset Manager.
“Asset Manager” means GSRP Services LLC.
“Assets” means all right, title and interest of a Person in land, properties, buildings, improvements, fixtures, foundations, assets and rights of any kind, whether tangible or intangible, real, personal or mixed, including contracts, leases, easements, equipment, systems, books, data, reports, studies and records, proprietary rights, intellectual property, Governmental Approvals, rights under or pursuant to all warranties, representations and guarantees, cash, accounts receivable, deposits and prepaid expenses, in each case used for the Project.
“Bankruptcy” means, with respect to any Person: (a) that such Person (i) files in any court pursuant to any statute of the United States or of any state a voluntary petition in bankruptcy or insolvency, (ii) files a petition or answer seeking for such Person a reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law or the appointment of a receiver or a trustee of all or substantially all of such Person’s Assets, (iii) makes a general assignment for the benefit of creditors, (iv) becomes the subject of an order for relief or
is declared insolvent in any federal or state bankruptcy or insolvency proceedings, (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against such Person in a proceeding of the type described in subclauses (i) through (iv) of this clause (a), (vi) admits in writing its inability to pay its debts (other than debts subject to a bona fide dispute) as they fall due or (vii) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for all or substantially all of its Assets; or (b) a petition in bankruptcy or insolvency, or a proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any law has been commenced against such Person, and (i) 60 days have expired since the service of such petition on the Person without dismissal thereof or (ii) with respect to which, without such Person’s consent or acquiescence, a trustee, receiver, or liquidator of such Person or of all or substantially all of such Person’s properties has been appointed and (x) 60 days have expired without the appointment’s having been vacated or stayed, or (y) 60 days have expired after the date of expiration of a stay, if the appointment has not previously been vacated; or (c) if a Member, the whole or any material portion of such Person’s Membership Interest is levied or attached, and such levy or attachment is not released or discharged within 60 days. “Base Case Model” means the financial model attached as Exhibit B as updated in accordance with the express terms of this ECCA and the LLCA. “Beginning of Construction Certificate (Effective Date)” means a certificate in the form of Exhibit J-1, delivered by the Class B Member setting forth factual representations with respect to beginning of construction.
“Beginning of Construction Certificate (MC Funding)” means a certificate in the form of Exhibit J-2, delivered by the Class B Member setting forth factual representations with respect to beginning of construction.
“Beginning of Construction Certificate (SC Funding)” means a certificate in the form of Exhibit J-3, delivered by the Class B Member setting forth factual representations with respect to beginning of construction.
“Block” has the meaning given to the term “Circuit” in the PV EPC Contract.
“Business Day” means any day other than Saturday, Sunday, or a day on which banks in New York City are authorized or required by law or other governmental action to be closed.
“Capital Contribution” means, with respect to any Member, the amount of money and the initial Gross Asset Value (as such term is defined in the LLCA) of any property (other than money) contributed to the Company with respect to such Member’s Membership Interest. Any reference to the Capital Contribution of a Member shall include the Capital Contribution of its predecessors in interest.
“Certified Public Accountant” means PricewaterhouseCoopers, or another firm with national reputation and demonstrated expertise in renewable energy approved by Investor.
“Change in Tax Law” means: (a) any amendment or change enacted to the Code or other federal income tax law; (b) any issuance, promulgation or amendment of any proposed, temporary or final Treasury Regulations, (c) any change in the interpretation of the Code or temporary or final Treasury Regulations by a controlling decision of the United States Tax Court, United States District Court, United States Court of Federal Claims, a United States Court of Appeals or the United States Supreme Court, (d) any published guidance, advice, statement, notice, announcement, proclamation, revenue ruling, revenue procedure, technical advice memorandum, private letter ruling directly on point, chief counsel advice, legal memorandum, examination directive or other similar written guidance, in each case, to the extent such guidance is directly applicable to the matters described in clause (ii) below and issued by the Treasury, IRS or any other Governmental Authority, or (e) any Executive Order or similar directive from the Executive Branch, which order or directive is reasonably expected to be enforceable, in each case with respect to clauses (a) through (e), which (i) is enacted, promulgated or issued on or after the Effective Date and (ii) that would materially affect the federal income tax treatment of or federal income tax consequences (in each case as set forth in the Base Case Model), to (x) the Company or its ownership of the Project Company or (y) the Investor in connection with the acquisition or ownership of a Class A Membership Interest or the allocations with respect thereto, including a change that affects the Investor’s legal ability to be allocated and claim any federal income tax benefits, but without regard to any effect on the Investor’s capacity to utilize such tax benefits or realize actual tax savings therefrom (including as a result of a member level limitation or the imposition of any minimum tax), except that a Change in Tax Law shall take into account a change that imposes a member-level limitation that would apply broadly to corporate taxpayers or financial institutions to limit utilization of Tax benefits from the Project.
“Class A DRO Cap” is defined in Section 12.3(c) of the LLCA.
“Class A DRO Guaranty” means the Guaranty (DRO) to be dated as of the MC Funding Date, made by Tenaska Energy, Inc. and Tenaska Energy Holdings, LLC in favor of the Company, in the form attached hereto as Exhibit H.
“Class A Guaranty” means the Guaranty, dated as of the Effective Date, made by Tenaska Energy, Inc. and Tenaska Energy Holdings, LLC, in favor of Class B Member.
“Class A Member” means, initially, Investor.
“Class A Membership Interests” means (a) the Class A Member’s status as the Class A Member; (b) Class A Member’s share of the income, gain, loss, deduction and credits of, and the right to receive distributions from, the Company with respect to Class A Units; (c) all other rights, benefits and privileges enjoyed by that Class A Member (under the Act, the LLCA, or otherwise) in its capacity as the Class A Member, including Class A Member’s rights to consent and approve and otherwise to participate in the management of the Company, to the extent provided in the LLCA; and (d) all obligations, duties and liabilities imposed on that Class A Member (under the Act, the LLCA or otherwise) in its capacity as the Class A Member, including any obligations to make Capital Contributions.
“Class A Units” means units in the Company representing the Class A Membership Interest having the rights, preferences and designations provided for Class A Units in the LLCA.
“Class B Member” is defined in the preamble.
“Class B Member Guarantor” means MN8 Energy LLC, a Delaware limited liability company.
“Class B Membership Interests” means (a) Class B Member’s status as a Class B Member; (b) Class B Member’s share of the income, gain, loss, deduction and credits of, and the right to receive distributions from, the Company with respect to Class B Units; (c) all other rights, benefits and privileges enjoyed by that Class B Member (under the Act, the LLCA, or otherwise) in its capacity as a Class B Member, including Class B Member’s rights to consent and approve and otherwise to participate in the management of the Company, to the extent provided in the LLCA; and (d) all obligations, duties and liabilities imposed on that Class B Member (under the Act, the LLCA or otherwise) in its capacity as a Class B Member, including any obligations to make Capital Contributions.
“Class B Units” means units in the Company representing the Class B Membership Interests having the rights, preferences and designations provided for Class B Units in the LLCA.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral Agent” means Natixis, New York Branch.
“Commitment” means the Investor’s investment amount for the Project shown in the Base Case Model, which will be updated on each Funding Date, which shall in no event exceed $129,098,700.15.
“Commitment Expiration Date” means April 30, 2026.
“Company” is defined in the recitals.
“Completion Indemnity Amount” is defined in Section 9.1(b). “Compliance Authority” means the (a) U.S. Department of the Treasury /Office of Foreign Assets Control, (b) U.S. Department of the Treasury /Financial Crimes Enforcement Network, (c) U.S. Department of State /Directorate of Defense Trade Controls, (d) U.S. Department of Commerce /Bureau of Industry and Security, (e) U.S. Internal Revenue Service, (f) U.S. Department of Justice and (g) U.S. Securities and Exchange Commission.
“Construction Financing Agreement” means that certain Credit Agreement, dated as of December 31, 2024, by and among MN8 DevCo 3 LLC and MN8 Bleeker LLC, as borrowers, Natixis, New York Branch, as administrative agent and collateral agent, and the financial institutions party thereto as lenders and LC issuers, as amended, amended and restated, supplemented, or otherwise modified from time to time.
“Construction Financing Documents” is defined in the LLCA.
“Construction Management Agreement” means that certain Construction Management and Administrative Services Agreement, dated October 29, 2024, between the Project Company and the Construction Manager.
“Construction Manager” means BayWa r.e. Solar Projects LLC.
“Consultants” means the Appraiser, the Independent Engineer, the Insurance Consultant, the Environmental Consultant, the Title Company and other persons who may be retained by the Investor to help evaluate the Project.
“Contract” means any written agreement, contract, lease, sublease, promise, evidence of indebtedness (including any promissory note), mortgage, indenture, security agreement, bond, guaranty, deed of trust, purchase order, letter of credit, license, sublicense, instrument, obligation, commitment, or undertaking of any nature, but not including any Governmental Approvals.
“Control” means the possession, directly or indirectly, of either of the following: (a) (i) in the case of a corporation, more than 50% of the outstanding voting securities, (ii) in the case of a limited liability company, partnership, limited partnership or joint venture, the right to more than 50% of the distributions (including liquidating distributions) or more than 50% of the economic or outstanding voting securities, (iii) in the case of a trust or estate, including a business trust, more than 50% of the beneficial interest and (iv) in the case of any other entity, more than 50% of the economic or beneficial interest, or (b) 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. “Controlled” and “Controlling” each have a correlative meaning.
“Cost Segregation Report” means the cost segregation report prepared by the Appraiser, and included as part of the Appraisal, allocating the Company’s basis in the Project among the assets of the Project (including the portion that is eligible for the ITC).
“Covered Entity” means any Person and its Affiliates.
“Current Balance Sheet” is defined in Section 3.1(o). “Damages” means any and all judgments, awards, claims, actions, demands, liabilities, causes of action, lawsuits, suits, proceedings, damages (including liquidated damages), losses (including amounts paid in settlement of claims), Taxes, Tax Losses, costs and expenses (including litigation costs and documented attorneys’ and experts’ fees and expenses), assessments, fines, penalties, settlements, administrative orders or injunctions (including any loss of profits or consequential, punitive, incidental or special damages recovered by any Third Party, but excluding loss of future profits or consequential, punitive, incidental or special damages asserted by any Party or an Affiliate; provided, that lost ITCs and other lost tax benefits contemplated by the Base Case Model shall not constitute lost future profits or consequential, punitive, incidental or special damages), including interest, penalties, disbursements and costs of investigations, deficiencies, levies, duties and imposts.
“Data Site” means that certain data room named “American Beech” located on https://app.idealsvdr.com.
“Disqualified Entity” is defined in the LLCA.
“ECCA” is defined in the preamble.
“Effective Date” is defined in the preamble.
“Encumbrance” means any lien (statutory or otherwise), mortgage, deed of trust, security deed, deed to secure debt, claim, option, lease, occupancy or use agreement, grant, right of way, charge, easement, charge, pledge, security interest, hypothecation, assignment, restriction (whether on voting, sale, transfer or disposition), purchase right or option, right of first refusal, encroachment, deficiency, defect, adverse claim or other encumbrance of any kind or nature, whether voluntary or involuntary, or imposed by law (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement), understanding or otherwise, and whether or not of record, impairing or adversely affecting the title to real or personal property (including membership interests).
“Energy Management Services Agreement” is defined in the LLCA.
“Energy Manager” is defined in the LLCA.
“Environmental Claim” means any suit, action, notice of violation or non-compliance, investigation, notice of liability or potential liability, consent order, consent decree, consent agreement, or proceeding before any Governmental Authority or arbitral body, or otherwise brought or made by a Governmental Authority relating to the Project or the Project Company: (a) arising pursuant to any Environmental Law; (b) in connection with any actual or alleged violation of, or liability pursuant to, any Environmental Law; (c) in connection with the presence or Release of, or exposure to, any Hazardous Substance, including claims to report, clean up, remove, remediate, contain, confine, excavate, treat, monitor, assess, evaluate, investigate, delineate, study, test, analyze or in any other way address Hazardous Substances in the environment, including the Project Site; or (d) in connection with any actual or alleged damage, injury, threat or harm to: (i) health or safety regulated under any Environmental Law; (ii) natural resources; (iii) endangered, threatened, listed or protected species or habitat; or (iv) the environment.
“Environmental Consultant” means Kimley-Horn and Associates, Inc.
“Environmental Law” means any Applicable Law (both statutory and common law) pertaining to, regulating, relating to or imposing liability, standards or obligations of conduct concerning pollution or protection of health, safety (including the health and safety of workers under the U.S. Occupational Safety and Health Act of 1970 (29 U.S.C. §§ 651 et seq.)), the environment, wildlife, wildlife habitat or natural resources, including without limitation (a) any Applicable Law relating to any actual or threatened emission, discharge, Release, manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of any hazardous
waste (as defined by 42 U.S.C. § 6903(5)), hazardous substance (as defined by 42 U.S.C. § 9601(14)), hazardous material (as defined by 49 U.S.C. § 5102(2)), toxic pollutant (as listed pursuant to 33 U.S.C. § 1317), pollutant or contaminant (as pollutant or contaminant is defined in 42 U.S.C. § 9601(33)), or oil (as defined by 33 U.S.C. § 2701(23)) and (b) the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§ 9601 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.), and the Endangered Species Act of 1973 (16 U.S.C. §§ 1531 et seq.), with any amendments or reauthorization thereto or thereof, and any and all regulations promulgated thereunder, and all analogous state and local counterparts or equivalents.
“Environmental Report” means the Phase I Environmental Site Assessment, dated as of May 28, 2025, by the Environmental Consultant.
“Environmental Representations” means the representations set forth in Section 3.1(p). “EPC Contractor” means, individually or collectively as the context may require, the HV EPC Contractor and the PV EPC Contractor.
“EPC Contracts” means the HV EPC Contract and the PV EPC Contract.
“Equity Investors” means the Investor and the Class B Member.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Exempt Wholesale Generator” means an “exempt wholesale generator” under PUHCA and the implementing regulations of FERC at 18 C.F.R. Part 366.
“Fee Letter” means the Fee Letter, dated as of the Effective Date, between Investor and Class B Member.
“FERC” means the Federal Energy Regulatory Commission or any successor agency.
“FERC 203 Approval” means the order issued by FERC pursuant to FPA Section 203 authorizing the Investor to assume its obligations as the Operations Manager (as defined in the LLCA) with respect to the Project Company and the Company under the LLCA.
“Final Completion” has the meaning given in the applicable EPC Contract.
“Final Completion Account” means the Final Completion Account of the Company listed on Part B of Schedule 3.1(aa).
“Final Completion Reserve Requirement” means an amount of funds sufficient to establish reasonable reserves for (a) all hold-back arrangements under any Project Document; (b) other than (x) the cost of any goods or services that are to be provided under any agreement in exchange for the holdback amount specified therein that has been reserved pursuant to the foregoing clause (a) and (y) the invoiced amounts under the EPC Contracts, plus an amount equal to the fixed costs necessary to achieve Final Completion (including all invoiced amounts, other
than for the EPC Contracts) under all Project Documents plus one-hundred fifty percent (150%) of the reasonably estimated costs necessary to achieve Final Completion, which amount shall include, without limitation, (i) the cost to satisfy all punch list items and (ii) the cost of repair of any roads or other infrastructure for which the Company or the Project Company may be liable pursuant to Applicable Law, any Governmental Approval, or any Contract; (c) previously incurred but unpaid Taxes of the Company or the Project Company (but only to the extent that such Taxes are not included in the Base Case Model as of the SC Funding Date); and (d) without duplication of any of the foregoing, an amount equal to all liabilities, costs and expenses of the Company or the Project Company accrued or incurred but not paid as of the SC Funding Date and which are due and payable on or within the sixty (60) day period subsequent to the SC Funding Date.
“Final Determination” means (a) a final decision, judgment, decree or other order by any court of competent jurisdiction, that has become final after all allowable appeals (other than appeals to the United States Supreme Court) by the parties to the action have been exhausted or the time for filing such appeals has expired; (b) a decision, judgment, decree or other order of an administrative official or agency of competent jurisdiction, which decision, judgment, decree or order has become final and non-appealable; (c) the execution of an IRS Form 870 or IRS Form 870 AD, the execution of an IRS Form 906 or other closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code or a comparable arrangement made with the IRS; (d) the expiration of time for instituting a claim for refund or of the applicable statute of limitations; (e) any agreement of the Members not to take further action with respect to a tax matter affecting the Class A Member or the Company, or (f) the filing of a partnership tax return (or amended tax return) of the Company that reflects the recapture or disallowance of ITCs.
“Fiscal Year” means (a) the period starting on the MC Funding Date and ending on December 31, 2025, (b) any subsequent calendar year except that (c) the final Fiscal Year of the Company will end on the date the Company is terminated under Article XII of the LLCA.
“Fixed Tax Assumptions” is defined in the LLCA.
“Flip Date” means the last day of the calendar month in which the Class A Member reaches an After-Tax IRR equal to the Target IRR, but not before the end of the month in which the Recapture Period ends.
“Flow of Funds Memorandum” means, for each of the Effective Date, the MC Funding Date and the SC Funding Date, a flow of funds memorandum for such date, in form and substance agreed by the Parties.
“FPA” means the Federal Power Act, as amended, and FERC’s rules and regulations thereunder.
“Fundamental Representation” is defined in the LLCA.
“Funding Dates” means the MC Funding Date and the SC Funding Date.
“GAAP” means United States generally accepted accounting principles as in effect from time to time, applied on a consistent basis.
“Governmental Approvals” means filings and registrations with, and licenses, permits, notices, approvals, grants, easements, exemptions, variances and authorizations from, any Governmental Authority, other than those licenses, permits, notices, approvals, grants, easements, exemptions, variances and authorizations that are ministerial in nature and can be obtained in the ordinary course of business.
“Governmental Authority” means any foreign, domestic, federal, territorial, state or local governmental or quasi-governmental authority, court, commission, board, bureau, agency or instrumentality, or any regulatory, administrative or other department, agency, or any political or other subdivision, department or branch of any of the foregoing, and any taxing authority and any electric reliability organization, regional transmission organization or independent system operator, including FERC, NERC, PJM, and NCUC or any successor thereto, in each case, with legal jurisdiction over the matter or Person in question.
“Guaranty” means the Guaranty, dated as of the Effective Date, made by Class B Member Guarantor in favor of the Investor.
“Hazardous Substances” means all substances, materials, or chemicals (whether solid, liquid or gaseous) that (a) require removal, remediation or reporting under any Environmental Law or (b) are defined, listed, classified, or regulated as a “pollutant,” “contaminant,” “hazardous material,” “hazardous substance,” “hazardous waste,” “toxic substance,” or any word, term, or phrase of similar meaning or regulatory effect under any Environmental Law. Hazardous Substances include asbestos or asbestos containing materials, radioactive materials, lead, polychlorinated biphenyls, any petroleum or petroleum product, mold, mycotoxins, urea formaldehyde foam insulation and radon gas.
“HV EPC Contract” means that certain HV Balance of Plant Agreement, dated as of September 27, 2024, by and between the Project Company and the HV EPC Contractor, as supplemented by Third Amended and Restated Limited Notice to Proceed, dated August 30, 2024.
“HV EPC Contractor” means RES America Construction Inc.
“Indebtedness” means (a) any indebtedness for borrowed money; (b) any indebtedness evidenced by any note, bond, debenture, mortgage or other debt instrument or debt security; (c) amounts owing as the deferred purchase price for the purchase of property or services other than accounts payable incurred in the ordinary course of business which are less than thirty (30) days past due; (d) liabilities under any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement or other similar agreement designed to protect the Company or Project Company against fluctuations in interest rates or other currency fluctuations and all net ordinary course settlement or other obligations under any other hedging arrangement; (e) all contingent reimbursement obligations with respect to letters of credit; (f) any obligations under leases which are or should be, in accordance with GAAP, recorded as capital leases, conditional sales contracts and other similar title retention instruments whether short
term or long term; (g) all obligations to purchase securities (or other property) which arise out of or in connection with the sale of the same or substantially similar securities (or property); (h) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to acquired property (even though the rights and remedies of the seller or lender under such agreement are limited to repossession or sale of such property); (i) any obligations of the types referred to in clauses (a) – (h) secured by a lien on any property or Assets of the Company or Project Company and/or any off-balance sheet financings, whether or not such indebtedness is assumed by such Person or is non-recourse to such Person; and (j) all guarantees (or obligations that are substantially the economic equivalent of a guarantee) of obligations of a type referred to in clauses (a) – (i). “Indemnification Claims” is defined in Section 9.1(a). “Indemnified Parties” is defined in Section 9.1(a). “Indemnifying Party” is defined in Section 9.1(a). “Independent Engineer” means Black & Veatch Management Consulting, LLC.
“Independent Engineer Report” means the Independent Engineer’s Report, dated August 25, 2025, prepared by the Independent Engineer.
“Insurance Consultant” means Moore-McNeil, LLC.
“Insurance Report” means the Independent Insurance Consultant’s Report, dated as of August 25, 2025, prepared by the Insurance Consultant.
“Interconnecting Utility” means Virginia Electric and Power Company.
“Interconnection Agreement” means that certain Interconnection Service Agreement, dated as of March 25, 2022, by and among PJM, the Project Company and the Interconnecting Utility, as amended by that certain Agreement to Amend, dated as of May 4, 2023, by and among PJM, the Project Company and the Interconnecting Utility.
“Interconnection Construction Services Agreement” means that certain Interconnection Construction Service Agreement, dated as of May 2, 2022, by and among PJM, the Project Company, and the Interconnecting Utility, as amended by that certain Agreement to Amend, dated as of May 4, 2023, by and among PJM, the Project Company, and the Interconnecting Utility.
“Inverter Supply Agreement” means that certain Purchase Order No. P-0284-6245 for PCS Skids and Commissioning, dated as of July 17, 2024, by and between the Project Company and Sungrow USA Corporation.
“Investor” is defined in the preamble.
“IRS” means the Internal Revenue Service or any successor agency.
“ITC” means the investment tax credit allowed pursuant to Section 48 of the Code.
“ITC Eligible Property” means property that is “energy property” within the meaning of Section 48(a)(3)(A)(i) of the Code and described in Treasury Regulation Section 1.48-9(e)(1).
“Knowledge of Class B Member” means actual knowledge after due inquiry of the persons listed on Schedule 1.
“Knowledge of the Investor” means actual knowledge after due inquiry of the following persons: Corey Kopiasz and Nicholas Prudhomme.
“Lender Consent” means that certain Consent and Agreement, dated as of the Effective Date, by and among the Investor, the Class B Member, the Company and the Collateral Agent.
“Liability” means any liability, indebtedness, adverse claim or other obligation, direct or indirect, absolute or contingent, whether accrued, vested or otherwise and whether or not reflected or required to be reflected in the financial statements of a person.
“LLCA” means the Amended and Restated Limited Liability Company Agreement of the Company to be entered into by and between the Equity Investors on the MC Funding Date in the form attached hereto as Exhibit G.
“Losses” is defined in Section 9.1(a).
“Market Consultant” means Wood Mackenzie.
“Market Report” means the merchant curve, dated as of July 3, 2025, prepared by the Market Consultant, attached in excel model titled “3.15.9.2 2025-h1-decarbonization-headwinds_Energy REC Capacity_7_3_2025”.
“Material Adverse Change” means a material adverse change with respect to the financial condition or credit quality of Class B Member Guarantor or any Material Contract Party (other than any counterparty to a Real Property Document).
“Material Adverse Effect” means any change, circumstance, event or effect that has a material adverse effect on (a) the Project, (b) the business, earnings, Assets, liabilities, results of operations or financial condition of the Class B Member, the Company, the Project Company, any Affiliate Party or the Class B Member Guarantor that, in the case of any Affiliate Party or the Class B Member Guarantor, affects the ability of such Affiliate Party or the Class B Member Guarantor in any materially adverse respect to meet its financial obligations under the Affiliate Contracts or Transaction Documents to which it is a party in a timely manner, (c) the ability of the Class B Member, the Class B Member Guarantor, the Company, the Project Company, or any Affiliate Party to timely perform any of its material respective obligations under any Transaction Document, any Material Project Document, any Affiliate Contract, or prior to the SC Funding Date, any Construction Financing Document to which it is a party, or (d) has a materially adverse impact on the validity or enforceability of any Transaction Document, any Material Project Document, or prior to the SC Funding Date, any Construction Financing Document.
“Material Contract Party” means a counterparty to a Material Project Document other than the Company or the Project Company.
“Material Project Documents” means the PPA, the Interconnection Agreement, the Interconnection Construction Services Agreement, the EPC Contracts, the Module Supply Agreements, the Energy Management Services Agreement, the Asset Management Agreement, the O&M Agreement, the O&M Guaranty, the Warranties, the Real Property Documents, the Construction Management Agreement, the Inverter Supply Agreement, the Tracker Supply Agreement, the Transformer Supply Agreement, each Additional Material Project Document, the Support Obligations in connection with any Material Project Document, and each other agreement replacing or entered into in connection with any Material Project Document; provided, however, that any Material Project Document shall cease to be a Material Project Document when all material obligations thereunder have been performed and paid in full, other than contingent indemnity and reimbursement obligations that survive the expiration of the applicable Material Project Document.
“MBR Authority” means an order issued by FERC, without any restriction or condition that could reasonably be expected to result in a Material Adverse Effect, authorizing the sale at wholesale of electric energy, capacity and specified ancillary services at market-based rates pursuant to Section 205 of the FPA, accepting a tariff for filing providing for such sales, and granting such regulatory waivers and blanket authorizations as FERC customarily grants to persons authorized to sell electric energy and capacity at market-based rates, including blanket authorization to issue securities and assume liabilities under Section 204 of the FPA and FERC’s applicable regulations at 18 C.F.R. Part 34.
“MC Funding Date” is defined in Section 2.1(a). “MC Funding Date Contribution” is defined in Section 2.1(a). “Mechanical Completion” has the same meaning, collectively, given to the terms “Circuit Mechanical Completion” as defined in the PV EPC Contract and “Mechanical Completion” as defined in the HV EPC Contract, as the context may require.
“Member” means any Person who executes the signature page of the LLCA as of the MC Funding Date or thereafter agrees to be bound thereby and is admitted to the Company as a Member pursuant to the LLCA, but excluding any Person that has ceased to be a Member.
“Membership Interest” means a Class A Membership Interest or a Class B Membership Interest.
“Ministerial Approvals and Filings” is defined in Section 3.1(g)(i). “Minor Casualty” means, with regard to the Project, any event that results in physical damage or loss to property, assets, or infrastructure, with losses and/or damages valued at less than $5,000,000 as mutually determined and agreed to by the Parties (in consultation with the
Independent Engineer). This includes, but is not limited to, damage caused by fire, flood, storm, vandalism, or other insured perils, and typically requires repair, replacement, or restoration.
“MIPA” is defined in the recitals.
“Module Supplier” means Jinko Solar (U.S.) Industries Inc.
“Module Supply Agreements” means, collectively, (a) that certain Project Module Supply Agreement, dated as of May 16, 2024, by and between the Project Company and the Module Supplier, as amended by that certain First Amendment to Project Module Supply Agreement, dated as of September 24, 2024 and (b) that certain Project Module Supply Agreement, dated as of September 27, 2024, by and between the Project Company the Module Supplier.
“NCUC” means the North Carolina Utilities Commission or any successor entity.
“NERC” means the North American Electric Reliability Corporation or any successor thereto and any applicable regional entity thereof.
“O&M Agreement” means that certain Operation and Maintenance Agreement, dated August 27, between Project Company and MN8 Solutions LLC.
“O&M Guaranty” means that certain Operator Parent Guaranty, dated August 27, 2025, by MN8 Energy Operating Company LLC for the benefit of the Project Company, in connection with the O&M Agreement.
“Operator” means MN8 Solutions LLC, a Delaware limited liability company.
“Order” means any order, injunction (whether temporary, preliminary or permanent), ruling, decree (including any consent decree), writ, judgment, or award entered, issued, made or rendered by any court or other Governmental Authority or by any arbitrator.
“Party” means, as applicable, the Class B Member, the Company or the Class A Member.
“Permitted Encumbrances” means (a) Encumbrances imposed by any Governmental Authority for taxes (i) that are not yet due or (ii) that are being contested in good faith by appropriate proceedings diligently conducted so long as (x) such proceeding will not involve any material risk of the sale, forfeiture or loss of any part of the Project or any Asset of the Company or the Project Company and (y) the payment thereof is (A) reserved for in accordance with GAAP, (B) fully covered by bonds or (C) fully covered by other security that in the case of this clause (C) is reasonably acceptable to the Investor, (b) carrier’s, warehouse’s, mechanics’, materialmen’s, landlord’s, repairmen’s, contractor’s, operator’s, vendor’s and other similar liens arising in the ordinary course of business or incident to the construction, improvement or restoration of the Project in respect of obligations (i) that are not past due or (ii) that are being contested in good faith by appropriate proceedings so long as (x) such proceedings will not involve any material risk of forfeiture, sale or loss of any part of the Project or any Asset of the Company and (y) the payment thereof is (A) reserved for in accordance with GAAP, (B) fully covered by bonds or (C) fully
covered by other security that in the case of this clause (C) is reasonably acceptable to the Investor, (c) Encumbrances created by any Project Document and any Transaction Document, (d) obligations or duties to any Governmental Authority or utility arising in the ordinary course of business (including under Governmental Approvals), (e) restrictions on transfer imposed by applicable securities laws, applicable energy regulatory laws or as set forth in the organizational documents of the Company and Project Company, (f) prior to the SC Funding Date, liens created pursuant to, and securing any Indebtedness under the Construction Financing Documents, (g) Encumbrances on the Site that are (i) exceptions listed on the Title Policy, or (ii) defects in title, easements, rights-of-way, restrictions, including land use and zoning restrictions, covenants, licenses, encroachments, protrusions and other similar charges or encumbrances on or with respect to real property that do not, individually or in the aggregate, (i) materially and adversely affect the use by the Project Company of the real property for the Project or (ii) materially and adversely interfere with the construction, development, operation or maintenance of the Project for its intended use, (h) pledges or deposits to secure the performance of bids, tenders, trade contracts and leases (other than for the repayment of borrowed money) incurred in the ordinary course of business, (i) pledges or deposits to secure regulatory or statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business securing the payment of amounts not yet due and payable or amounts being contested in good faith and by appropriate proceedings, including (without limitation) in connection with workers’ compensation, unemployment or other social security, (j) Encumbrances securing Indebtedness of the type described in clause (c) of the definition thereof, (k) Encumbrances and any right of setoff in favor of a bank or other financial institution arising by operation of Applicable Laws or in the ordinary course of business encumbering deposits held by such bank or financial institution and (l) judgment Encumbrances that do not involve any immediate risk of forfeiture of the Project and are being contested in good faith and by appropriate proceedings, and adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP or the Encumbrance is covered by insurance, bonds or other reasonable security. “Person” means an individual, corporation, limited liability company, partnership, association, joint venture, Governmental Authority, trust or any other entity or organization.
“PJM” means PJM Interconnection, L.L.C., or any successor regional transmission organization.
“PJM DAT Account” means a segregated account maintained by the Project Company to be funded with the PJM DAT Required Amount.
“PJM DAT Required Amount” has the meaning given in the LLCA.
“Placed In Service” means, with respect to a Block (or the Project, as applicable), that such Block (or the Project, as applicable) is placed in service for tax purposes within the meaning of Section 48(a)(1) of the Code.
“Placed In Service Date” means, with respect to a Block (or the Project, as applicable), the date on which such Block (or the Project, as applicable) was Placed In Service.
“Placed in Service Factors” means, with respect to a Block (or the Project, as applicable), (A) all licenses and permits necessary for operation thereof and the generation and sale of electricity therefrom have been obtained; (B) all critical tests necessary for the proper operation thereof have been performed; (C) such Block and/or the Project are capable of operating in a reliable and continuous manner for their intended purpose and/or have commenced daily and regular operations; (D) care, custody and control of, risk of loss and legal title thereto have transferred to the Project Company; and (E) such Block and/or the Project have been synchronized to the grid.
“Power Purchaser” means Microsoft Corporation.
“PPA” means that certain Renewable Energy Purchase Agreement, dated as of February 1, 2024, between the Project Company and the Power Purchaser, as amended, restated, or supplemented from time to time.
“Proceeding” means any action, claim, complaint, charge, arbitration, audit, hearing, investigation, inquiry, suit, litigation or other proceeding (whether civil, criminal, administrative or investigative) commenced, brought, conducted or heard by or before any Governmental Authority or arbitrator.
“Project” is defined in the recitals.
“Project Company” is defined in the recitals.
“Project Documents” means, without duplication, the Material Project Documents and any other Contract relating to the development, construction or operation of the Project to which the Company or the Project Company is a party (other than any Transaction Document) under which the Project Company or the Company could reasonably be expected to have obligations, liabilities or revenues equal to or in excess of five hundred thousand dollars ($500,000) in any year or seven hundred fifty thousand dollars ($750,000) in the aggregate; provided, however, that any Project Document shall cease to be a Project Document when all material obligations thereunder have been performed and paid in full, other than contingent indemnity and reimbursement obligations that survive the expiration of the applicable Project Document.
“Project Party” means a counterparty to a Project Document other than the Company or the Project Company.
“Proposed Change in Tax Law” means (a) any proposed change in or amendment to the Code or another federal income tax statute that is either (i) enacted, passed, adopted or engrossed by either the United States House of Representatives or the United States Senate or (ii) introduced or sponsored by the chairman or ranking member of, or included in a bill or mark reported, released, or discharged by, the United States House of Representatives Ways and Means Committee or the United States Senate Committee on Finance; or (b) a formal written proposal by the executive office of the President including in an executive order or included in a formal written proposal such as the General Explanation of the Administration’s Fiscal Year Revenue Proposals, a written proposal by the U.S. Department of the Treasury, or the IRS, that in each case of clauses
(a) through (b), (x) is reasonably likely to become law and (y) if enacted would be a Change in Tax Law.
“Prudent Industry Practices” means, with respect to the Project, the practices, standards, designs, methods, means, techniques, equipment and acts, as they may change from time to time, that (a) are generally used to own, operate and maintain utility scale solar photovoltaic power generation projects, safely, reliably and efficiently and in compliance with Applicable Law (including Environmental Laws), manufacturers’ warranties, manufacturers’ recommendations and the Material Project Documents and (b) are consistent with the exercise of the reasonable judgment, skill, diligence and care expected of an operator of utility scale solar photovoltaic power generation projects of a type and size similar to the Project in order to efficiently accomplish the desired result consistent with applicable standards of safety, output, dependability, efficiency and economy, including recommended practice, of a good, safe, prudent and workman-like character, in each case, taking into account the location of the Project, including climatic, environmental and general conditions. Prudent Industry Practices are not intended to be limited to the optimum or minimum practice or method to the exclusion of all others, but rather to be a spectrum of reasonable and prudent practices and methods as commonly practiced in the solar photovoltaic industry in the same region of the Project during the relevant time.
“PSA” means that certain Membership Interest Purchase Agreement, dated as of October 20, 2024, by and between PSA Buyer and PSA Seller.
“PSA Buyer” means Seller.
“PSA Seller” means, collectively, BayWa r.e. Development Portfolio I LLC and BayWa r.e. USA LLC.
“PUHCA” means the Public Utility Holding Company Act of 2005, as amended, and FERC’s rules and implementing regulations thereunder.
“PV EPC Contract” means that certain PV Engineering, Procurement and Construction Agreement, dated as of September 24, 2024, by and between the Project Company and the PV EPC Contractor, as amended by that certain Change Order No. 2, dated January 9, 2025, that certain Change Order No. 3, dated April 22, 2025 and that certain Change Order No. 4, dated February 10, 2025, as supplemented by Limited Notice to Proceed, dated January 24, 2024, Limited Notice to Proceed No. 2, dated May 31, 2024, Limited Notice to Proceed No. 3, dated June 24, 2024, Limited Notice to Proceed No. 4, dated August 8, 2024, Limited Notice to Proceed No. 5, dated August 14, 2024 and Limited Notice to Proceed No. 6, dated October 10, 2024.
“PV EPC Contractor” means Pure Power Contractors, LLC.
“PWA Compliance Report” means a report from the PWA Consultant in form and substance reasonably satisfactory to the Investor addressing the Project’s compliance with the PWA Requirements that either (a) concludes that the Project has satisfied the PWA Requirements through the date on which the Project is Placed in Service, or (b) concludes that it has satisfied the PWA Requirements through the date on which the Project is Placed in Service except for one or
more specified violations and, in the case of each such violation, identifies and explains in reasonable detail each such violation and a remediation plan for correcting each such violation, which remediation plan is reasonably satisfactory to the Investor.
“PWA Compliance Requirements” means (a) the Investor has received each of the following: (i) a PWA Compliance Report from the PWA Consultant, in form and substance reasonably satisfactory to the Investor (ii) a PWA Certificate from the Class B Member, in form and substance reasonably satisfactory to the Investor, (iii) an opinion of Latham & Watkins, LLP with respect to the Project’s compliance with PWA Requirements, eligibility to claim the ITC under Section 48 of the Code, and any reasonably related matters, in form and substance satisfactory to the Investor, and (iv) a certificate, in form and substance reasonably satisfactory to the Investor delivered by the Class B Member setting forth factual representations with respect to the Project’s satisfaction of the Five Percent Safe Harbor (within the meaning of IRS 2018-59) prior to December 31, 2024; and (b) the Investor is satisfied that the Class B Member has paid, or has escrowed sufficient amounts to enable it to pay, the PWA Reserve Amount.
“PWA Certificate” means a certificate in form and substance reasonably satisfactory to the Investor, delivered by the Class B Member setting forth factual representations with respect to the PWA Requirements.
“PWA Consultant” means a Big 4 accounting firm or other nationally-recognized accounting or consulting firm reasonably acceptable to the Investor.
“PWA Requirements” means the prevailing wage and apprenticeship requirements described in Sections 48(a)(10)-(11) of the Code, including any Treasury Regulations, IRS Notices, or other issued guidance with respect thereto.
“PWA Reserve Amount” means that the amount that the PWA Consultant has determined is reasonably necessary to be paid to ensure that the Project complies (or will comply) with the PWA Requirements in all material respects, including, without limitation, all correction payments to wage earners, and any penalties and interest payable to the IRS.
“Real Property Documents” means those certain leases, subleases, licenses, sublicenses, easements, deeds, occupancy or use agreements, crossing agreements, letters of no objection, subordination agreements and other documents (together with all amendments, modifications, supplements, guaranties, extensions, renewals and other agreements with respect thereto) listed on Schedule 2.
“Recapture Period” means the period beginning on the MC Funding Date and ending on the last day of the calendar year of the fifth (5th) anniversary of the Placed In Service Date of the last Block Placed In Service.
“RECs” means any credits, credit certificates, green tags or similar environmental or green energy attributes created by a Governmental Authority or independent certification board or group
generally recognized in the electric power generation industry and generated by or associated with the Project or the electricity it produces, but not ITCs or any other tax benefits.
“Related Person” means a Person that has a relationship with a purchaser of electricity from the Project that results in the purchaser being a “related person” to such Person or to the Company for purposes of application of the loss disallowance rules of Section 267(a) or Section 707(b)(1) of the Code.
“Release” means any release, spill, leak, emission, deposit, pumping, pouring, emptying, discharging, injecting, escaping, leaching, disposing, dumping, dispersion or migration of Hazardous Substances into the environment. “Released” has a correlative meaning.
“Sanctioned Country” means a country subject to a sanctions program maintained by any Compliance Authority.
“Sanctioned Person” means any individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person or entity, or subject to any limitations or prohibitions (including but not limited to the blocking of property or rejection of transactions), under any order or directive of any Compliance Authority or otherwise subject to, or specially designated under, any sanctions program maintained by any Compliance Authority.
“SC Funding Date” is defined in Section 2.1(c). “SC Funding Date Contribution” is defined in Section 2.1(c). “Securities” means, with respect to any Person, such Person’s capital stock or limited liability company interests or any options, warrants or other securities which are directly or indirectly convertible into, or exercisable or exchangeable for, such Person’s capital stock or limited liability company interests, whether or not such derivative securities are issued by such Person, and any reference herein to “Securities” refers also to any such derivative securities and all underlying securities directly or indirectly issuable upon conversion, exchange or exercise of such derivative securities.
“Securities Act” means the Securities Act of 1933 or any successor statute, as amended from time to time.
“Seller” is defined in the recitals.
“Site” means the real property on which the Project is located.
“SNDA” means a subordination, non-disturbance and attornment agreement between the Project Company, on the one hand, and any lender or ground lessor that holds an monetary Encumbrance or ground lease on any portion of the Site leased to the Project Company, on the other hand, dated on or before the SC Funding Date, in a form mutually agreeable to Investor and each such lender or ground lessor, whereby, in the event that the lender forecloses, or ground lessor terminates the ground lease, on any such leased portion of the Site, such lender or ground lessor
agrees not to disturb the Project Company’s (or its assignee’s) occupancy and use of such leased portion of the Site pursuant to the terms and conditions of the Real Property Document between the Project Company and the lessor or sublessor of the leased portion of the Site, and the Project Company (or its assignee) shall attorn to such lender’s or third party purchaser’s rights as lessor or sublessor thereunder.
“Specified Exception” means (a) the inaccuracy, breach or failure of any representation or warranty or covenant contained in this ECCA or any other Transaction Document by the Class B Member Guarantor, the Class B Member (whether in its capacity as a Class B Member under this ECCA or as a party to any of the Transaction Documents), or any Affiliate of the Class B Member, the Company or the Seller (including, for the avoidance of doubt, a breach of the representation in Section 3.1(k)(iv)), (b) the inaccuracy, breach or failure of any representation or warranty or covenant contained in any Project Document by any Affiliate Party and (c) fraud, willful misconduct or gross negligence, in each case by a Class B Member (whether in its capacity as a Class B Member under this ECCA or as a party to any of the other Transaction Documents) or any Affiliate of the Class B Member. “Substantial Casualty” means, with regard to the Project, any event that results in physical damage or loss to property, assets, or infrastructure, with losses and/or damages valued at $5,000,000 or more as mutually determined and agreed to by the Parties (in consultation with the Independent Engineer). This includes, but is not limited to, damage caused by fire, flood, storm, vandalism, or other insured perils, and typically requires repair, replacement, or restoration.
“Substantial Completion” has the meaning given in the applicable EPC Contract.
“Support Obligations” means all letters of credit, guarantees, deposits, payment or performance bonds or other credit support from the Company, the Project Company or other Person relating to the ownership or operation of the Project or use of the Site, in each case as set forth on Schedule 3.
“Target IRR” means 7.25%.
“Target Parameters” means those parameters set forth in Schedule 2.1(d) attached hereto.
“Tax” or “Taxes” means all taxes, including all charges, fees, duties, imposts, levies or other assessments in the nature of taxes, now or hereafter imposed by any Governmental Authority, including income, gross receipts, excise, property, sales, gain, use, license, custom duty, unemployment, inheritance, corporation, capital stock, transfer, franchise, payroll, withholding, social security, minimum estimated, profit, gift, severance, value added, escheat, disability, premium, recapture, credit, occupation, service, leasing, employment, stamp, goods and services, ad valorem, utility, utility users and other taxes, and shall include interest, penalties or additions attributable thereto or attributable to any failure to comply with any requirement regarding Tax Returns.
“Tax Benefits” means, with respect to the Class A Member, the periodic federal income tax savings resulting from (i) the Class A Member’s distributive share of ITCs and (ii) the Class
A Member’s distributive share of tax losses, in each case, determined in accordance with Section 10.1(c) of the LLCA.
“Tax Costs” means, with respect to the Class A Member, the periodic federal income tax liability resulting from (i) the Class A Member’s distributive share of taxable income and gain, determined without regard to any provision of law that applies at the level of such holder, (ii) any gain recognized by the Class A Member under Section 731(a) of the Code and (iii) any reduction, denial, deferral, recapture, disallowance, or loss of the ITC, or a portion thereof, by any Governmental Authority, at either the Company level or from any individual Member, in each case as calculated in accordance with Section 10.1(c) of the LLCA.
“Tax Loss” means the loss, reduction, unavailability, delay or recapture of ITCs assumed in the Base Case Model or loss, reduction, unavailability, or delay of tax depreciation benefits as measured against those assumed in the Base Case Model.
“Tax Representations” means the representations contained Section 3.1(k). “Tax Return” means any report, return, declaration, claim for refund, or other information supplied or required to be supplied to a Tax authority in connection with Taxes, including any schedule or attachment thereto, including estimated returns and reports of every kind, and including any amendment thereof.
“Third Party” means a Person other than a Party or an Affiliate of a Party.
“Title Company” means Chicago Title Insurance Company.
“Title Policy” means that certain ALTA Owner’s Policy of Title Insurance dated February 10, 2025, issued by Chicago Title Insurance Company with Policy Number 34 512 20-00066DU, in the amount of $365,687,000.00.
“Tracker Supply Agreement” means that certain Tracker Supply Agreement, dated as of September 6, 2024, by and between the Project Company and Nextracker, LLC, as amended by that certain Change Order No 1, dated December 11, 2024.
“Transaction” means the transactions contemplated by the Transaction Documents.
“Transaction Documents” means: (a) this ECCA, (b) the LLCA, (c) the Guaranty, (d) the Class A DRO Guaranty, (e) the Lender Consent, (f) the Fee Letter, (g) the Class A Guaranty and (h) the MIPA.
“Transaction Expenses” means reasonable and documented legal and Consultant expenses incurred by the Class A Member and its Affiliates in connection with the negotiation, execution and closing of the Class A Member’s investment in, and review of satisfaction of the conditions precedent to each Funding Date in connection with, the Company and the diligence and capital contributions in respect of the Class B Member, the Company, the Project Company and the Project; provided, however, that notwithstanding anything herein to the contrary, the aggregate Transaction Expenses for which Seller, the Class B Member, and their Affiliates (as applicable)
are responsible under the Transaction Documents shall be capped as set forth in, and subject to the terms and conditions in, the Fee Letter.
“Transformer Supply Agreement” means that certain Purchase Order No. P-0234-911, dated as of August 16, 2019, by and between Virginia Transformer Corporation and the Project Company (as assignee of the Construction Manager pursuant to the Assignment and Assumption Agreement, dated as of October 20, 2024), as amended by that certain Change Order No. 1, dated February 28, 2020, that certain Change Order No. 2, dated April 20, 2023, and that certain Change Order No. 3, dated January 7, 2025.
“Transmission Consultant” means PowerGEM LLC.
“Transmission Report” means that certain Congestion & Basis Analysis Solar Facilities in PJM, MISO and NYISO , dated as of March 20, 2025, prepared by the Transmission Consultant.
“Treasury Regulations” means regulations issued by the IRS to implement the Code.
“Warranties” means the warranties with respect to inverters, modules, trackers, and transformers for the Project.
Exhibit B
Base Case Model
See the following excel file: “MN8_American Beech – TE Model_v18.xlsm”
Exhibit C
Warranty Standards
The Project must have the following Warranties and such Warranties must meet the following standards:
1. All modules must be warranted against defects in workmanship for a period of not less than 12 years and against defects in performance for a period of not less than 30 years from the Warranty Start Date, as such term is defined in the corresponding Module Supply Agreement.
2. All inverters must be warranted against defects in workmanship and against defects in performance for a period of not less than 10 years from the delivery dateearlier of (i) the first-time commissioning date, or (ii) 6 months after the delivery date.
3. All trackers must be warranted against defects in workmanship and against defects in performance for a period of (i) not less than 10 years for their structural components and (ii) not less than 5 years for the motor, gear and controller, starting on the earlier of (a) completion of commissioning, or (b) 120 days from final delivery.
4. Initial 5 year availability guaranty under the O&M Agreement backed by the O&M Guaranty.
5. The transformer must be warranted in that they satisfy all applicable law, be new, unused and undamaged at the time of delivery, suitable for intended use, free from defects in design, engineering, materials, construction and workmanship, for a period of 18 months after operational startup or 24 months from delivery, whichever happens first. All equipment provided by Virginia Transformer Corp. shall have a warranty as described in the Standard Terms and Conditions of Sale dated August 2020, and extend to 12 months from the date of equipment installation or 18 months from date of shipment, whichever occurs first, provided that coils and cores shall be warranted for failure in the normal operation of the transformer for 60 months.
6. All work performed under the HV BoP Agreement must be warranted as provided in Section 13.1 thereof, for a period of 2 years after the Substantial Completion Date, provided that the warranty shall be extended for any corrected defect as provided thereunder.
7. All work performed under the PV EPC Agreement must be warranted as provided in Section 13.1 thereof, for a period of 2 years after the Substantial Completion Date, provided that the warranty shall be extended for any corrected defect as provided thereunder.
Exhibit D
Independent Engineer Certificate (MC Funding Date)
(See attached)
Exhibit E
Independent Engineer Certificate (SC Funding Date)
(See attached)
Exhibit F-1
Form of Estoppel (PV EPC Contractor)
(See attached)
Exhibit F-2
Form of Estoppel (HV EPC Contractor)
(See attached)
Exhibit F-3
Form of Estoppel (Operator)
(See attached)
Exhibit F-4
(Reserved)
Exhibit F-5
Form of Estoppel (Asset Manager)
(See attached)
Exhibit F-6
Form of Estoppel (Module Supplier)
(See attached)
Exhibit F-7
Form of Estoppel (Power Purchaser)
(See attached)
Exhibit F-8
Form of Estoppel (Energy Manager)
(See attached)
Exhibit F-9
Form of Estoppel (Real Property Document Counterparties)
(See attached)
Exhibit G
Form of LLCA
(See attached)
Exhibit H
Form of Class A DRO Guaranty
(See attached)
Exhibit I
Form of LLCA Legal Opinion
(See attached)
Exhibit J-1
Form of Beginning of Construction Certificate (Effective Date)
(See attached)
Exhibit J-2
Form of Beginning of Construction Certificate (MC Funding)
(See attached)
Exhibit J-3
Form of Beginning of Construction Certificate (SC Funding)
(See attached)
EXHIBIT D
Class A Guaranty
GUARANTY OF
TENASKA ENERGY, INC. AND
TENASKA ENERGY HOLDINGS, LLC
This Guaranty (this “Guaranty”), dated as of August 27, 2025 (the “Effective Date”), by TENASKA ENERGY, INC., a Delaware corporation, and TENASKA ENERGY HOLDINGS, LLC, a Delaware limited liability company (each, a “Guarantor” and, collectively, the “Guarantors”), in favor of AMERICAN BEECH CLASS B LLC, a Delaware limited liability company (the “Guarantied Party”). Capitalized terms used but not defined in this Guaranty shall have the meanings given thereto in the Agreement and, if not defined therein, the LLCA (each as defined below) or the Lender Consent (as defined in the LLCA).
WHEREAS, Tenaska American Beech Holdings, LLC, a Delaware limited liability company (the “Class A Equity Investor”), is an affiliate of each Guarantor;
WHEREAS, each Guarantor expects to receive direct or indirect benefits arising from the transactions contemplated by the Agreement; and
WHEREAS, each Guarantor is executing and delivering this Guaranty for the benefit of the Guarantied Party.
NOW THEREFORE, for valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, each Guarantor, jointly and severally, hereby covenants with the Guarantied Party as follows:
1. Guaranty. To induce the Guarantied Party to enter into that certain (i) Equity Capital Contribution Agreement, dated as of the Effective Date (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), by and among the Class A Equity Investor, American Beech Solar Holdings, LLC, a Delaware limited liability company (the “Company”) and the Guarantied Party and (ii) Amended and Restated Limited Liability Company Agreement of the Company (the “LLCA”), to be dated as of the MC Funding Date, by and between the Guarantied Party and the Class A Equity Investor, the Guarantors jointly, severally, absolutely, unconditionally and irrevocably guaranty to the Guarantied Party and its successors and permitted assigns, as primary obligor and not merely as surety, the prompt payment when due of all Capital Contribution obligations of the Class A Equity Investor under Article 2 of the Agreement, up to a maximum aggregate limit, as to the Guarantors collectively, of one hundred and twenty nine million ninety eight thousand seven hundred dollars and fifteen cents ($129,098,700.15 ) (the “Liability Cap”), arising as a result of any failure by the Class A Equity Investor to pay such amounts when due on a Funding Date upon the satisfaction or waiver of the conditions precedent set forth in Section 4.2 of the Agreement or Section 4.3 of the Agreement, as applicable (collectively, the “Obligations”), subject to (a) any applicable grace period expressly provided for in the Agreement and (b) the terms, conditions, limitations, defenses, and provisions of the Class A Equity Investor under the Agreement. The Liability Cap shall not apply to claims arising from or related to fraud, gross negligence, or willful misconduct of the Class A Equity Investor or its Affiliates. Each Guarantor agrees that a separate action may be brought against such
American Beech - Class A Tenaska Parent Guaranty
Guarantor for any of the Obligations, whether or not action is brought against the Class A Equity Investor or the Class A Equity Investor is joined in any such action. All payments hereunder shall be made in lawful money of the United States, in immediately available funds. Notwithstanding anything herein or in the LLCA to the contrary, the Guarantors acknowledge and agree that if the Class A Investor Transfers any or all of its Membership Interest to any of its Affiliates, then this Guaranty shall extend to cover all Obligations of such Affiliate.
2. Nature of Guaranty. The Guarantors’ obligations hereunder shall not be affected by the existence, validity, enforceability, perfection or extent of any collateral therefor or by any other circumstance relating to the Obligations that might otherwise constitute a legal or equitable discharge of or defense to the Guarantors not available to the Class A Equity Investor, other than payment in full of the Obligations. This is a guaranty of payment and not of performance or collectability. The Guarantied Party shall not be obligated to file any claim relating to the Obligations in the event that the Class A Equity Investor becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Guarantied Party to so file shall not affect the Guarantors’ obligations hereunder. In the event that any payment to the Guarantied Party in respect of any Obligations is rescinded or must otherwise be returned for any reason whatsoever (including an insolvency, bankruptcy, reorganization or other similar proceeding affecting the Class A Equity Investor), the Guarantors shall remain jointly and severally liable hereunder with respect to such Obligations as if such payment had not been made. The Guarantors shall have the right to assert defenses which the Class A Equity Investor may have under the Agreement to payment of any Obligations other than defenses based upon or arising out of any proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation, dissolution or arrangement of the Class A Equity Investor, any lack of power or authority of the Class A Equity Investor to enter into the Agreement, defenses relating to the execution and delivery by the Class A Equity Investor of the Agreement or any failure of the Agreement to constitute a legal, valid and binding obligation, enforceable against the Class A Equity Investor in accordance with its terms, and other defenses expressly waived in this Guaranty.
3. Changes in Obligations and Agreements Relating thereto; Waiver of Certain Notices. The Guarantors agree that their obligations hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (a) the failure or delay of the Guarantied Party to assert any claim or demand or to enforce any right or remedy against the Class A Equity Investor, the Guarantors or any other Person liable with respect to the Obligations, (b) any change in the time, place or manner of payment of the Obligations or any rescission, waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of the Agreement made in accordance with the Agreement, or any agreement or instrument related thereto, any taking, exchange, substitution, release, impairment or non-perfection of any collateral or any other guaranty for the Obligations, or the failure of any other Person to execute or deliver any other guaranty or agreement or the release or reduction of liability of any other guarantor or surety with respect to the Obligations, (c) any change in the legal existence, structure, ownership or financial condition of the Guarantied Party or any Person (including the Guarantors) now or hereafter liable with respect to the Obligations or otherwise interested in the transactions contemplated by the Agreement, (d) the value, genuineness, validity, regularity, illegality or enforceability of the Agreement or any agreement or instrument related thereto, in each case in
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American Beech - Class A Tenaska Parent Guaranty
accordance with its terms, (e) any defense that may arise by reason of the lack of authority of either Guarantor or any other Person or (f) any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Guarantied Party or any Person now or hereafter liable with respect to the Obligations or otherwise interested in the transactions contemplated by the Agreement. To the fullest extent permitted by law, the Guarantors hereby expressly waive any and all rights or defenses arising by reason of any law which would otherwise require any election of remedies by the Guarantied Party. The Guarantors waive promptness, diligence, notice of the acceptance of this Guaranty and of the Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and protest and all other notices of any kind (other than notices required to be made to the Class A Equity Investor pursuant to the Agreement). The Guarantors acknowledge that they will receive substantial direct and indirect benefits from the transactions contemplated by the Agreement and that this Guaranty, including specifically the waivers set forth in this Guaranty, are knowingly made in contemplation of such benefits.
4. Termination. This Guaranty is an absolute, irrevocable, unconditional and continuing guaranty and shall, subject to Section 13, remain in full force and effect until the earliest of (a) the date the SC Funding Date Contribution is made, (b) the date on which the Agreement terminates pursuant to its terms, (c) the date on which all of the Obligations due and payable have been paid in full in accordance with this Guaranty, and (d) the Commitment Expiration Date. Notwithstanding anything in this Guaranty to the contrary, any such termination of this Guaranty shall not affect the Guarantors’ liability with respect to any Obligations validly arising under the Agreement prior to such termination, which Obligations shall remain guarantied pursuant to the terms of this Guaranty until resolved or in respect of any unpaid claims prior to the date of termination, in which case this Guaranty shall remain in full force and effect with respect to any such claim until such claim is finally adjudicated by a court of competent jurisdiction or settled by the parties thereto.
5. Payment; Expenses. All payments made by the Guarantors hereunder shall be paid promptly, and in any event within twenty (20) calendar days after receipt by the Guarantors from the Guarantied Party of written demand for such payment. The Guarantors agree to pay on demand all fees and out-of-pocket expenses (including the reasonable and documented, out-of-pocket fees and expenses of the Guarantied Party’s counsel) in any way relating to the enforcement or protection of the rights of the Guarantied Party hereunder; provided, that the Guarantors shall not be liable for any fees or expenses of the Guarantied Party if, in any action or proceeding brought by the Guarantied Party giving rise to a demand for payment of such fees or expenses, it is finally adjudicated by a court of competent jurisdiction that no payment under this Guaranty is due. All payments under this Guaranty shall be made without reduction, whether by offset or counterclaim against any amounts which may be owed by Guarantied Party to the Guarantors or the Class A Equity Investor for any reason, and shall be made free of any deductions or withholdings for any and all taxes, fees or other similar costs imposed by any Governmental Authority of any jurisdiction through which payment is made.
6. Subrogation. Each of the Guarantors hereby agrees not to assert any rights that it may now have or hereafter acquire against the Class A Equity Investor that arise from the existence, payment, performance or enforcement of the Guarantors’ obligations under or in respect
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American Beech - Class A Tenaska Parent Guaranty
of this Guaranty or any other agreement in connection therewith, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Guarantied Party against the Class A Equity Investor, whether or not such claim, remedy, or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Class A Equity Investor, directly or indirectly, in cash or other property or by setoff or in any other manner, payment or security on account of such claim, remedy or right, unless and until all amounts payable by Guarantors under this Guaranty shall have been paid in full in immediately available funds and this Guaranty shall have been terminated in accordance with Section 4. If any amount shall be paid to the Guarantors on account of such subrogation rights at any time when this Guaranty has not terminated, such amount shall be held by the Guarantors in trust for the benefit of the Guarantied Party and shall forthwith be promptly paid to the Guarantied Party to be credited and applied to the Obligations, whether matured or unmatured, in accordance with the terms hereof and of the Agreement.
7. No Waiver; Cumulative Rights. No failure on the part of the Guarantied Party to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Guarantied Party of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power. Each and every right, remedy and power hereby granted to the Guarantied Party or allowed to it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Guarantied Party at any time or from time to time. The Guarantied Party shall not have any obligation to proceed at any time or in any manner against, or exhaust any or all of the Guarantied Party’s rights against, the Class A Equity Investor or any other Person prior to proceeding against the Guarantors hereunder.
8. Representations and Warranties. As of the date hereof, each Guarantor hereby jointly and severally represents and warrants that:
(a) it is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has full corporate or limited liability company power to execute, deliver and perform this Guaranty;
(b) the execution, delivery and performance of this Guaranty by it have been and remain duly authorized by all necessary corporate or limited liability company action and do not contravene any provision of its certificate of incorporation, by-laws, operating agreement or other organizational documents, as amended to date, or any law, regulation, rule, decree, order, judgment or contractual restriction binding on it or its assets;
(c) all consents, licenses, clearances, authorizations and approvals of, and registrations and declarations with, any governmental authority or regulatory body necessary for the due execution, delivery and performance by it of this Guaranty have been obtained and remain in full force and effect and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental authority or regulatory body is required in connection with the execution, delivery or performance by it of this Guaranty;
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American Beech - Class A Tenaska Parent Guaranty
(d) this Guaranty constitutes a legal, valid and binding obligation of it enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles;
(e) the Guarantors have the financial capacity to pay and perform their obligations under this Guaranty, and all funds necessary for the Guarantors to fulfill their obligations under this Guaranty shall be available to the Guarantors for so long as this Guaranty shall remain in effect in accordance with Section 4 hereof; and (f) there is no pending or, to the knowledge of the Guarantors, threatened (in writing) litigation, claim, action, suit, proceeding or Governmental Authority investigation against any Guarantor which seeks the issuance of an order restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Guaranty.
9. Assignment. Neither any Guarantor nor the Guarantied Party may assign its rights, interests or obligations hereunder to any other person (except by operation of law) without the prior, written consent of the Guarantied Party or the Guarantors, respectively; provided, that the Guarantied Party may collaterally assign this Guaranty to the Collateral Agent pursuant to the Construction Financing Documents and to the Collateral Agent and any Subsequent Transferee that has succeeded to Class B Member’s rights under the LLCA, the Agreement and this Guaranty in connection with a Transfer upon foreclosure and an initial Transfer after such foreclosure (or in lieu of such foreclosure) under an Encumbrance held by the Collateral Agent pursuant to the Construction Financing Documents, so long as in each case the Collateral Agent, any Subsequent Transferee and any Transfer upon foreclosure and any such initial Transfer after foreclosure of any such Encumbrance (or Transfer in lieu of such foreclosure) complies with the express terms and conditions of the Lender Consent with respect to any Transfer upon foreclosure and any such initial Transfer after foreclosure of the Encumbrance (or Transfer in lieu of such foreclosure) held by the Collateral Agent in the LLCA, the Agreement and the Assigned Collateral Interest.
10. Amendment. This Guaranty may be amended or modified only by a written instrument signed by the Guarantors and the Guarantied Party.
11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given: (i) when delivered personally, (ii) when received if sent by registered or certified mail, return receipt requested, or delivery service, or (iii) when delivered if
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American Beech - Class A Tenaska Parent Guaranty
sent via electronic mail or facsimile, in each case at the following addresses (or at such other address as a party may specify by like notice):
| | | | | |
| Guarantied Party: |
| |
| c/o MN8 Energy LLC |
| 1155 Avenue of the Americas, 27th Floor |
| New York, NY 10036 |
| Attn: Legal |
| Email: notices@mn8.com |
| |
| With a copy (which shall not constitute notice) to: |
| |
| Holland & Knight LLP |
| 811 Main St, Suite 2500 |
| Houston, TX 77002 |
| Attn: Ram Sunkara and Elizabeth Crouse |
| Email: Ram.Sunkara@hklaw.com; Elizabeth.Crouse@hklaw.com |
| |
| Guarantors: |
| |
| c/o Tenaska, Inc. |
| 14302 FNB Parkway |
| Omaha, Nebraska 68154 |
| Attention: Messrs: Fossum and Hengen |
| Email: legalnotices@tenaska.com; taxequityinvestments@tenaska.com |
Any notice, demand, or request sent pursuant to clause (i) above shall be deemed received upon such delivery, if sent pursuant to clause (ii) above, shall be deemed received five (5) Business Days following deposit in the mail, and if sent pursuant to clause (iii) above, shall be deemed received on the next Business Day after sent via electronic mail or facsimile.
12. Governing Law; Jurisdiction. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAWS RULE (OTHER THAN SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW). EACH GUARANTOR AND, BY ITS ACCEPTANCE OF THIS GUARANTY, THE GUARANTIED PARTY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, U.S.A., OVER ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY, WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT, AND AGREES THAT, TO THE EXTENT PERMITTED BY LAW, SERVICE OF PROCESS IN CONNECTION WITH ANY SUCH PROCEEDING MAY BE EFFECTED BY MAILING IN THE SAME MANNER PROVIDED IN SECTION 11. EACH
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American Beech - Class A Tenaska Parent Guaranty
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE GUARANTIED PARTY TO BRING PROCEEDINGS AGAINST THE GUARANTORS IN THE COURTS OF ANY OTHER JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
13. Reinstatement of Guaranty. This Guaranty shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is avoided, rescinded or must otherwise be restored or returned by the Guarantied Party to a Guarantor or their representatives or to any other guarantor for any reason including as a result of any insolvency, bankruptcy or reorganization proceeding with respect to a Guarantor or the Class A Equity Investor, all as though such payment had not been made.
14. Headings. The headings of the Sections of this Guaranty are inserted for purposes of convenience only and shall not be construed to affect the meaning or construction of any of the provisions hereof.
15. Counterparts; Electronic Signatures. This Guaranty and any amendments, waivers, consents or supplements hereto or in connection herewith may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. Signatures delivered by facsimile or by PDF shall have the same effect as original signatures. The words “execution”, “execute”, “signed”, “signature”, and words of like import in or related to any document signed or to be signed in connection with this Guaranty 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 parties hereto, 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.
16. Entire Agreement. This Guaranty constitutes the entire agreement and understanding among the Guarantors and the Guarantied Party with respect to the Obligations and all other prior agreements, understandings and statements, oral or written, with respect to the Obligations are merged into and superseded by this Guaranty.
17. Severability. If any term or provision of this Guaranty or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Guaranty, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected
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American Beech - Class A Tenaska Parent Guaranty
thereby, and each term and provision of this Guaranty shall be valid and enforced to the fullest extent permitted by law.
18. Financial Statements. Each Guarantor will deliver or cause to be delivered to the Guarantied Party, the following items at the times indicated below:
(a) annually, within 120 days after the end of each Fiscal Year, audited financial statements for such Guarantor prepared in accordance with GAAP effective as of the end of the immediately-preceding year, including a consolidated balance sheet and consolidated statements of income, members’ equity and changes in cash flows and accompanied by a report of a certified public auditor with a national reputation stating that their examination was made in accordance with generally accepted auditing standards and that in their opinion such financial statements of such Guarantor and its consolidated subsidiaries fairly present such Guarantor’s and its consolidated subsidiaries’ cash flows, results of operations and changes in financial position on a GAAP basis; and
(b) quarterly within 60 days after the end of each calendar quarter, unaudited quarterly financial statements of such Guarantor for the calendar quarter then ended (including a balance sheet, income statement, statement of cash flows and statement of changes in capital schedule) all in reasonable detail and fairly presenting the financial position of such Guarantor as of the end of such calendar quarter, prepared on a GAAP basis, subject to lack of footnotes and normal year-end adjustment.
[signature pages follow]
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American Beech - Class A Tenaska Parent Guaranty
IN WITNESS WHEREOF, this Guaranty has been duly executed and delivered by the Guarantors to the Guarantied Party as of the date first above written to be effective as of the Effective Date.
| | | | | | | | |
| TENASKA ENERGY, INC. |
| | |
| | |
| By: | |
| | Name: |
| | Title: |
| | |
| | |
| TENASKA ENERGY HOLDINGS, LLC |
| By: | Tenaska Energy, Inc., its Manager |
| | |
| | |
| By: | |
| | Name: |
| | Title: |
American Beech - Class A Tenaska Parent Guaranty
| | | | | | | | |
| ACKNOWLEDGED AND ACCEPTED: | |
| | |
| | |
AMERICAN BEECH CLASS B LLC | |
| | |
| | |
By: | | |
| Name: | |
| Title: | |
American Beech - Class A Tenaska Parent Guaranty
EXHIBIT E
Sponsor Guaranty
SPONSOR GUARANTY
THIS SPONSOR GUARANTY (this “Guaranty”), dated as of August 27, 2025, is made by MN8 Energy LLC, a Delaware limited liability company (the “Guarantor”), in favor of Tenaska American Beech Holdings, LLC, a Delaware limited liability company (the “Beneficiary”).
WHEREAS, the Guarantor enters into this Guaranty in consideration of and as an inducement for the Beneficiary to enter into (i) that certain Amended and Restated Limited Liability Company Agreement of the Company (as amended, amended and restated, supplemented or otherwise modified from time to time, the “LLCA”), of even date hereto, between the Beneficiary and American Beech Class B LLC, a Delaware limited liability company (“Sponsor Member”), and (ii) that certain Equity Capital Contribution Agreement, (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ECCA”), of even date hereto, among American Beech Solar Holdings LLC, a Delaware limited liability company (the “Company”), the Beneficiary and Sponsor Member. The ECCA and the LLCA are each referred to herein as an “Agreement” and collectively as the “Agreements,” and Sponsor Member is referred to herein as the “Obligor.”
NOW, THEREFORE, intending to be legally bound hereby and in accordance herewith, the Guarantor agrees as follows:
1.Guaranty. Subject to the terms and provisions hereof, the Guarantor hereby irrevocably and unconditionally guarantees to the Beneficiary, as primary obligor and not merely as a surety, the prompt and complete payment when and as due of the Obligor’s payment obligations to the Beneficiary under the Agreements that are now or may hereafter become due and payable, including, without limitation, all collection costs and documented, out-of-pocket legal and other fees and expenses reasonably incurred by Beneficiary in enforcing the obligations under this Guaranty, subject to (a) any applicable grace period expressly provided for in the Agreements, and (b) the terms, conditions, limitations, defenses, and provisions of the Obligor under the Agreements and of this Guaranty (such costs and expenses collectively, “Enforcement Costs”, and such guaranteed obligations, collectively, the “Guaranteed Obligations”).
(a)Notwithstanding anything to the contrary in this Guaranty or in the Agreements, the aggregate amount of Guaranteed Obligations at any time or from time to time payable by the Guarantor, collectively, to the Beneficiary under this Guaranty, shall not exceed an amount (such amount, the “Liability Cap”) equal to one hundred ten percent (110%) of the total Capital Contributions actually made by the Beneficiary under the LLCA plus an additional amount calculated as of the date payment is made hereunder that, when added to the foregoing amount, causes the Class A Member to achieve an After-Tax IRR equal to the All-In Yield for the applicable period ending in each case on such payment date (in accordance with the calculation methodologies and conventions set forth in the LLCA), less the sum of (a) cash distributions actually received by the Beneficiary under the LLCA, and (b) the Beneficiary’s actual distributive share of tax credits allocated under the LLCA that
are no longer subject to audit or recapture risk, and (c) without duplication to subclause (b), any other Tax Benefits actually allocated to the Beneficiary under the LLCA that are no longer subject to audit or recapture risk, and (d) without duplication to subclause (a) or subclause (b), any amounts otherwise paid to the Beneficiary by the Company pursuant to terms of the LLCA. The Liability Cap shall not apply to (i) Enforcement Costs or (ii) any claim resulting from fraud, gross negligence or willful misconduct of the Obligor (whether in its capacity as a Member, the Managing Member, the Operator or the Partnership Representative), the Guarantor, or any of their Affiliates (collectively, “Fraud Claims”, and together with Enforcement Costs, the “Excluded Claims”). Further, the aggregate amount of the Guaranteed Obligations at any time or from time to time payable by the Guarantor to the Beneficiary under this Guaranty and guaranteed hereunder by the Guarantor to the Beneficiary shall, except in respect of payments made in satisfaction of any Excluded Claims, be reduced by any amounts paid by an Obligor to the Beneficiary pursuant to and in accordance with Article XI (Indemnification) of the LLCA or Article 9 (Indemnification) of the ECCA and any amounts distributed to the Beneficiary after payment by MN8 DevCo 3, LLC, a Delaware limited liability company (“Seller”), to the Company pursuant to Article Six (Indemnification and Remedies) of that certain Membership Interest Purchase Agreement dated as of the date hereof by and between Seller and the Company. Guarantor shall not be liable to the Beneficiary hereunder for any consequential, special, incidental, exemplary, punitive, or indirect damages (including loss of profits), except for Fraud Claims; provided, that the loss, disallowance or reduction of Tax Benefits shall not be considered as special, incidental, consequential, indirect, punitive or exemplary damages and shall be included in the damages recoverable under this Guaranty. Notwithstanding anything herein to the contrary, if the Sponsor Member is removed from its position as the Managing Member of the Company, then losses, obligations, or other liabilities that may arise from or are related to any contracts or other written or oral agreements entered into by the Company without the consent of the Sponsor Member after such removal shall not be included in the definition of Guaranteed Obligations.
(b)The Guarantor hereby irrevocably and unconditionally covenants and agrees that it is liable for the Guaranteed Obligations, and that this Guaranty is a guaranty of payment when due, and not of collectability or performance. The Guarantor agrees that a separate action may be brought against the Guarantor for any of the Guaranteed Obligations, whether action is brought against the Obligor or whether the Obligor is joined in any such action. In the event any Guaranteed Obligation has not been paid by any Obligor when due that is uncured (after taking into account any applicable cure period), then the Beneficiary shall send the Guarantor a demand notice for payment of such Guaranteed Obligation at the address set forth in Section 7 below; provided, that no such demand shall be required in the event that the Beneficiary is restrained from making such demand pursuant to any applicable bankruptcy, insolvency or other laws affecting creditors’ rights generally. The Guarantor shall make each payment hereunder promptly and in any event within
ten (10) Business Days after the Guarantor’s receipt of the written demand referred to in this sentence.
(c)The demand notice shall reasonably specify in what manner and what exact amount the Obligor has failed to pay a Guaranteed Obligation together with a statement that the Beneficiary is calling upon the Guarantor to make payment under this Guaranty. In no event shall the obligations and liabilities of the Guarantor hereunder exceed the aggregate obligations and liabilities of the Obligor under the Agreements, as if the Guarantor were itself a party to the Agreements instead of the Obligor (as applicable). The Guarantor shall have all rights and defenses, set-offs, counterclaims, reductions, diminutions, or limitations of the Obligor under the terms of the Agreements.
2.Term. This Guaranty shall be an absolute, unconditional, and continuing guaranty of payment, and not of collection or performance, and will remain in full force and effect until the earliest of (i) the date the Beneficiary ceases to be a member of the Company; (ii) the date that both the Beneficiary no longer has a right to make a claim with respect to the Guaranteed Obligations hereunder and under the Agreements and all of the Guaranteed Obligations have been satisfied in full; and (iii) the date this Guaranty is replaced in connection with a Transfer of Class B Membership Interests in accordance with Article IX of the LLCA (the “Guaranty Termination Date”); provided, however, that any such termination of this Guaranty shall not affect the Guarantor’s obligations for Guaranteed Obligations incurred or arising out of the Agreements prior to the termination or expiry hereof; provided, further, that if the Beneficiary has made a good faith demand for payment under this Guaranty prior to the Guaranty Termination Date, then the Guaranty Termination Date shall be extended until such good faith demand, if valid, has been fully resolved pursuant to the terms hereof. Termination and expiration shall be effective whether or not the Guaranty has been returned to the Guarantor in New York, NY or to any of its Affiliates at their respective headquarters.
3.Waivers of Notice; Certain Defenses; Reinstatement. The Guarantor waives: (a) all defenses that it may have under applicable law as a guarantor or surety (other than any defenses and rights to set off that the Obligor is entitled to that arise out of the Agreements that are not (i) otherwise expressly waived hereunder, (ii) waived under the Agreements or (iii) based upon the insolvency, bankruptcy, or reorganization of the Obligor, the power or authority to enter into and perform under the Agreements, the unenforceability of, or illegality with respect to, the Agreements, any lack or limitation of status or of power, or any incapacity or disability of the Obligor or any trustee or agent thereof, or the failure of the Obligor to have authorized, or to have obtained any approval necessary to enter into or perform under, the Agreements) and (b) notice of acceptance, presentment, demand, dishonor, protest, any sale of collateral security and all other notices whatsoever, except for those expressly required hereunder; provided, however, that any delay in the delivery of notice shall in no way invalidate the enforceability of this Guaranty. This Guaranty shall continue to be effective or be reinstated, as the case may be, without any release or discharge of any obligations if at any time any payment of any of the Guaranteed
Obligations is rescinded, avoided, recovered or must otherwise be returned by the Beneficiary upon the insolvency, bankruptcy, or reorganization of the Obligor, the Guarantor or any other guarantor or any other person or entity or otherwise, all as though such payment had not been made.
4.Representations and Warranties. The Guarantor hereby represents and warrants to the Beneficiary as of the date hereof that:
(a)the Guarantor is duly organized and validly existing under the laws of the jurisdiction of formation and in good standing;
(b)the Guarantor has the power to execute, deliver, and perform its obligations under this Guaranty, and it has taken all necessary limited liability company action to authorize such execution, delivery, and performance. Such execution, delivery, and performance do not (i) violate or conflict with any material law applicable to Guarantor, any provision of its organizational or constitutional documents, or any material order, decree, ruling, rule, promulgation, or judgment of any court or other agency of government applicable to it or any of its assets or (ii) breach or constitute a default or event of default under, any material agreement or instrument binding on or affecting it or any of its assets;
(c)all governmental and other consents, approvals, authorizations, licenses, clearances, registrations and declarations that are required to have been obtained by the Guarantor with respect to this Guaranty have been obtained and are in full force and effect and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental authority or regulatory body is required in connection with the execution, delivery or performance by it of this Guaranty;
(d)the Guarantor’s obligations under this Guaranty constitute legal, valid, and binding obligations, enforceable in accordance with its terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium, or similar laws affecting creditors’ rights generally and to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law));
(e)there is no pending or, to the knowledge of Guarantor, threatened (in writing) litigation, claim, action, suit, proceeding or Governmental Authority investigation against the Guarantor which seeks the issuance of an order restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Guaranty; and
(f)the Guarantor has the financial capacity to pay and perform its obligations under this Guaranty and all funds necessary for the Guarantor to fulfill its obligations hereunder are and shall be available to Guarantor for so long as this Guaranty shall remain in effect.
5.Effect of Modifications. Subject to the terms and provisions hereof, the Guarantor acknowledges that its liability under this Guaranty shall be absolute and unconditional and, without limiting the generality of the foregoing, shall not be affected or impaired by, and Guarantor hereby irrevocably waives any defenses it may have or hereafter acquire based upon or in any way relating to, (i) any change in the financial condition, objects, constituencies, or business of the Guarantor, the Obligor, or the Beneficiary; (ii) any change in the corporate existence, structure, form, name, or ownership of the Obligor or the Guarantor or any dissolution, liquidation, reorganization, readjustment, merger, spin-off, consolidation, transformation of corporate form, transfer of establishment or other alteration of the legal status or structure of the Obligor or the Guarantor; (iii) the bankruptcy, winding-up, liquidation, dissolution, insolvency, reorganization, or other similar proceeding affecting the Obligor or its assets or any resulting release, stay or discharge of any Guaranteed Obligations; (iv) any transfer or purported transfer of any property to or from the Obligor, the Guarantor or any other person or entity, other than a Transfer of the Class B Membership Interest resulting in the termination of this Guaranty pursuant to Section 2; (v) the existence of any claim, set-off or other right which Guarantor may have at any time against the Beneficiary or any of its Affiliates; (vi) any lack or limitation of power, incapacity, or disability on the part of the Obligor or of their applicable managers, members, or agents or any other irregularity, defect, or informality on the part of the Obligor in respect of the Guaranteed Obligations; (vii) any lack of validity or enforceability of the Agreements or any of the other Transaction Documents; (viii) any renewal, extension, modification, amendment, acceleration, compromise, waiver, indulgence, rescission, discharge, surrender or release, in whole or in part, of the Agreements, the other Transaction Documents or the Guaranteed Obligations or any other instrument or agreement evidencing, relating to, securing or guaranteeing any of the Guaranteed Obligations, or the liability of any party to any of the foregoing or for any part thereof; (ix) any act or omission of the Beneficiary relating in any way to the Guaranteed Obligations or to the Obligor, including any failure to bring an action against any party liable on the Guaranteed Obligations, or any party liable on any guaranty of the Guaranteed Obligations, or to apply any funds of any such party held by the Beneficiary; (x) any default, failure, omission or delay, willful or otherwise, on the part of the Obligor to perform or comply with, or the impossibility of performance by the Obligor or any other person of any of the Guaranteed Obligations; (xi) any change in the time, place or manner of payment of any of the Guaranteed Obligations; (xii) any taking, exchange, substitution, release, impairment or non-perfection of any collateral or any other guaranty for the Guaranteed Obligations; (xiii) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (xiv) any defense based on the failure of any other Person to execute or deliver any other guaranty or agreement or the release or reduction of liability of any other guarantor or surety with respect to the Guaranteed Obligations; or (xv) any defense based on any suit or other action brought by, or any judgment in favor of, any beneficiaries or creditors of the Obligor or any other person for any reason whatsoever, including any suit or action in any way attaching or involving any issue, matter or thing in respect of the Guaranteed Obligations or any other agreement.
The Guarantor further agrees and consents that the Beneficiary may at any time and from time to time, without notice to or further consent of the Guarantor, and without in any way discharging, releasing or reducing the obligations (except as expressly agreed) of the Guarantor hereunder or affecting the validity or enforceability of this Guaranty, (i) make any agreement with Obligor for the acceleration, addition, acceptance, exchange, receipt, realization, settlement, perfection, extension, renewal, payment, compromise, discharge, release or surrender thereof or composition, forbearance or concession in respect of any or all of the Guaranteed Obligations, in whole or in part, or for any amendment, waiver or other modification of the terms of the Agreements or of the Guaranteed Obligations and (ii) enter into any other current or future agreement between or among the Beneficiary, the Obligor and/or any other person or entity. The Beneficiary shall apply all amounts constituting payment of the Guaranteed Obligations that it receives from Obligor, Guarantor, or any other person or entity towards such Guaranteed Obligations.
6.Independent Obligations; Subrogation. The Beneficiary shall not be required to proceed first against the Obligor or any other person or entity or any assets thereof or collateral before proceeding against the Guarantor under this Guaranty. The Beneficiary is not bound or obligated to exhaust its recourse against Obligor or any other person or entity or take any other action before being entitled to receive payment from the Guarantor.
Guarantor shall not be subrogated to any of the rights of the Beneficiary as the result of any payment or enforcement of any of the Guaranteed Obligations until the earlier of (i) the Guaranty Termination Date and (ii) the date the Sponsor Member acquires all of the Class A Membership Interests from the Beneficiary in accordance with the LLCA and, until such time, the Guarantor hereby waives, releases, and relinquishes the right to bring any claim based on any right of subrogation, any claim for unjust enrichment, or any other theory that would entitle the Guarantor to a claim against the Company based on any payment made hereunder or otherwise on account of the amounts or obligations due hereunder. Effective as of the date described in the preceding sentence, the Guarantor shall be subrogated to the rights of the Beneficiary against Obligor with respect to any and all such payments made by the Guarantor hereunder, and the Beneficiary agrees, at the Guarantor’s reasonable request and expense, to execute and deliver to the Guarantor, without recourse or representation or warranty, appropriate documents necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment.
7.Notices. All notices and other communications under this Guaranty must be in writing and will be deemed to have been duly given when (i) delivered by hand (with written confirmation of receipt), (ii) sent by electronic mail, or (iii) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested) or by mailing, certified mail (return receipt requested), in each case to the appropriate addresses
and electronic mail addresses set forth below (or to such other addresses and electronic mail addresses as either party may designate by notice to the other party):
| | | | | |
| If to the Guarantor: |
| |
| MN8 Energy LLC |
| 1155 Avenue of the Americas, 27th Fl |
| New York, NY 10036 |
| Attn: Legal |
| Email: notices@mn8.com |
| |
| With a copy (which shall not constitute notice) to: |
| |
| Holland & Knight LLP |
| 811 Main St, Suite 2500 |
| Houston, TX 77002 |
| Attn: Ram Sunkara |
| Elizabeth Crouse |
| Email: Ram.Sunkara@hklaw.com |
| Elizabeth.Crouse@hklaw.com |
| |
| If to the Beneficiary: |
| |
| Tenaska American Beech Holdings, LLC |
| 14302 FNB Parkway |
| Omaha, NE 68154 |
| Attention: David Kirkwood |
| Telephone: (402) 691 9555 |
| Email: dkirkwood@tenaska.com; |
| taxequityinvestments@tenaska.com |
8.Miscellaneous. Each and every right, remedy and power hereby granted to the Beneficiary or afforded it by applicable law or agreement shall be cumulative and not exclusive of any other and may be exercised by the Beneficiary from time to time. This Guaranty and each of its provisions may be waived, modified, or varied, in whole or in part, only pursuant to a duly authorized written instrument signed by an authorized officer of the Beneficiary and the Guarantor. No failure, delay or single or partial exercise by the Beneficiary of its rights or remedies under this Guaranty shall operate as a waiver of such rights or remedies or give rise to any estoppel against the Beneficiary or excuse the Guarantor from performing under this Guaranty. No waiver by the Beneficiary of performance by Guarantor under any of the provisions of this Guaranty shall be construed as a waiver of any subsequent performance by the Guarantor under the same or any other provisions of this Guaranty. The headings used in this Guaranty are for convenience of reference only and are not to
affect the construction of, or to be taken into consideration in interpreting, this Guaranty. A signature delivered by email shall be deemed to be an original signature for purposes of this Guaranty and shall be binding upon Guarantor as an original signature.
9.Successors; Assignment. This Guaranty shall be binding upon the successors and permitted assigns of the Guarantor and inure to the benefit of the Beneficiary and its successors and permitted assigns. Neither the Beneficiary nor the Guarantor shall assign this Guaranty or delegate any of its duties hereunder without the express prior written consent of the other party hereto (which consent shall not be unreasonably withheld, conditioned, or delayed), and any such purported assignment without such consent shall be null and void, provided, however, that Guarantor may assign this Guaranty to a partnership, corporation, trust, or other organization in whatever form that succeeds to all or substantially all of the Guarantor’s assets and business and that assumes such obligations by contract, operation of law, or otherwise, and upon any such delegation and assumption of obligations, the Guarantor shall be relieved of and fully discharged from all obligations hereunder, provided that written notice of such assignment is provided to the Beneficiary and evidence of the assumption of this Guaranty is provided to the Beneficiary. The Beneficiary may only assign its rights under this Guaranty to a party to whom the Beneficiary transfers all of its rights under and as permitted by the LLCA, and only to the extent of such transfer.
10.Governing Law. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD OTHERWISE DIRECT THE APPLICATION OF THE LAWS OF A DIFFERENT JURISDICTION. THIS GUARANTEE IS PREPARED AND EXECUTED IN THE ENGLISH LANGUAGE ONLY AND ANY TRANSLATIONS OF THIS GUARANTY INTO ANY OTHER LANGUAGE SHALL HAVE NO EFFECT.
11.Consent to Jurisdiction; Service of Process.
(a)THE GUARANTOR AND THE BENEFICIARY SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN NEW YORK COUNTY IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY, THE GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, THE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION, CLAIM, OR DEFENSE WHICH THEY MAY NOW OR HEREAFTER HAVE IN ANY SUCH ACTION OR PROCEEDING BASED ON ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE, OR FORUM NON CONVENIENS OR ANY SIMILAR BASIS IN ANY DISPUTE ARISING UNDER OR RELATING TO THIS GUARANTY BROUGHT IN SUCH COURT. EACH PARTY HERETO
AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
(b)EACH PARTY HERETO FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY COMPLAINT, SUMMONS, NOTICE, OR OTHER PROCESS RELATING TO ANY LEGAL ACTION OR PROCEEDING BY DELIVERY THEREOF TO IT BY HAND OR BY MAIL TO THE ADDRESS SET FORTH IN SECTION 7 HEREOF OR AT SUCH OTHER ADDRESS OF WHICH THE OTHER PARTIES SHALL HAVE BEEN NOTIFIED PURSUANT THERETO, AND THAT SUCH SHALL BE GOOD AND VALID SERVICE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. (c)THE GUARANTOR AND THE BENEFICIARY AGREE THAT FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
12.Payment. The Guarantor hereby unconditionally and irrevocably agrees that any payments made pursuant to this Guaranty will be paid to the Beneficiary in lawful money of the United States in immediately available funds, free and clear of, and without deduction for, any and all taxes, levies, imposts, deductions and withholdings whatsoever imposed, levied, collected or assessed. If such payments are subject to any such tax, levy, impost, deduction or withholding, then such payments shall be increased to such amount which, after provision for such tax, levy, impost, deduction or withholding, is necessary to yield and remit to the Beneficiary the amount which would have been received absent such tax, levy, impost, deduction or withholding, and the Guarantor shall furnish the Beneficiary such evidence or certification of making such tax, levy, impost, deduction or withholding as the Beneficiary may request.
13.Entire Agreement. This writing is the complete and exclusive statement of the terms of this Guaranty and supersedes all prior oral or written representations, understandings, and agreements between the Beneficiary and the Guarantor with respect to the subject matter hereof. The Beneficiary and the Guarantor agree that there are no conditions to the full effectiveness of this Guaranty.
14.Waiver of Jury Trial. THE GUARANTOR AND THE BENEFICIARY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION, OR PROCEEDING RELATING TO THIS GUARANTY.
15.Unenforceable Provisions. Any provision contained in this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
16.Certain Terms. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the ECCA and, if not defined therein, in the LLCA.
17.Additional Covenants.
(a)The Guarantor shall deliver to the Beneficiary the financial statements of the Guarantor as and when required pursuant to Section 8.4 of the LLCA;
(b)The Guarantor covenants and agrees that the Guarantor shall not materially change the nature of its business for so long as this Guaranty has not terminated pursuant to Section 2; and (c)The Guarantor covenants and agrees that it shall maintain a Tangible Net Worth (as defined in the LLCA) under GAAP of at least five hundred million dollars ($500,000,000).
[Signature pages follow]
IN WITNESS WHEREOF, the Guarantor has duly signed this Guaranty as of the first date written above.
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| MN8 ENERGY LLC | |
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| | | |
By: | | | |
Name: | | | |
Title: | | | |
[SPONSOR GUARANTY SIGNATURE PAGE]
| | | | | | | | | | | |
| Accepted and agreed to: | |
| | | |
TENASKA AMERICAN BEECH HOLDINGS, LLC |
| | | |
| | | |
By | | | |
Name: | | | |
Title: | | | |
[SPONSOR GUARANTY SIGNATURE PAGE]
EXHIBIT F
Sponsor MIPA Guaranty
SPONSOR MIPA GUARANTY
THIS SPONSOR MIPA GUARANTY (this “Guaranty”), dated as of August 27, 2025, is made by MN8 Energy LLC, a Delaware limited liability company (the “Guarantor”), in favor of American Beech Solar Holdings LLC, a Delaware limited liability company (the “Beneficiary”).
WHEREAS, the Guarantor enters into this Guaranty in consideration of and as an inducement for the Beneficiary to enter into that certain Membership Interest Purchase Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time, the “MIPA”), of even date hereto, between Beneficiary and MN8 DevCo 3 LLC, a Delaware limited liability company (“Obligor”).
NOW, THEREFORE, intending to be legally bound hereby and in accordance herewith, the Guarantor agrees as follows:
1.Guaranty. Subject to the terms and provisions hereof, the Guarantor hereby irrevocably and unconditionally guarantees to the Beneficiary, as primary obligor and not merely as a surety, the prompt and complete payment when and as due of the Obligor’s payment obligations to the Beneficiary under the MIPA that are now or may hereafter become due and payable, including, without limitation, all collection costs and documented, out-of-pocket legal and other fees and expenses reasonably incurred by Beneficiary in enforcing the obligations under this Guaranty, subject to (a) any applicable grace period expressly provided for in the MIPA, and (b) the terms, conditions, limitations, defenses, and provisions of the Obligor under the MIPA and of this Guaranty (such costs and expenses collectively, “Enforcement Costs”, and such guaranteed obligations, collectively, the “Guaranteed Obligations”).
(a)Notwithstanding anything to the contrary in this Guaranty or in the MIPA, the aggregate amount of Guaranteed Obligations at any time or from time to time payable by the Guarantor, collectively, to the Beneficiary under this Guaranty, shall not exceed an amount (such amount, the “Liability Cap”) equal to the Purchase Price actually paid by Beneficiary to Obligor, less the sum of any amounts paid to the Beneficiary by the Obligor pursuant to the terms of the MIPA. The Liability Cap shall not apply to (i) Enforcement Costs or (ii) any claim resulting from fraud, gross negligence or willful misconduct of the Obligor, the Guarantor, or any of their Affiliates (collectively, “Fraud Claims”, and together with Enforcement Costs, the “Excluded Claims”). Further, the aggregate amount of the Guaranteed Obligations at any time or from time to time payable by the Guarantor to the Beneficiary under this Guaranty and guaranteed hereunder by the Guarantor to the Beneficiary shall, except in respect of payments made in satisfaction of any Excluded Claims, be reduced by any amounts paid by Obligor to the Beneficiary pursuant to and in accordance with Article Six (Indemnification and Remedies) of the MIPA and by American Beech Class B LLC, a Delaware limited liability company (“Class B Member”) to Tenaska American Beech Holdings, LLC, a Delaware limited liability company (“Class A Member”), or any of its Affiliates pursuant to Article XI (Indemnification) of that certain Limited Liability Company Agreement of
American Beech Solar Holdings LLC (as amended, amended and restated, supplemented or otherwise modified from time to time), of even date hereto, by and between Class A Member and Class B Member or Article 9 (Indemnification) of that certain Equity Capital Contribution Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time), of even date hereto, by and among Class A Member, Class B Member, and American Beech Solar Holdings LLC, a Delaware limited liability company, in each case of the foregoing, in connection with the inaccuracy, breach or failure of any representation or warranty of the Obligor under the MIPA. Guarantor shall not be liable to the Beneficiary hereunder for any consequential, special, incidental, exemplary, punitive, or indirect damages (including loss of profits), except for Fraud Claims; provided, that the loss, disallowance or reduction of Tax Benefits shall not be considered as special, incidental, consequential, indirect, punitive or exemplary damages and shall be included in the damages recoverable under this Guaranty.
(b)The Guarantor hereby irrevocably and unconditionally covenants and agrees that it is liable for the Guaranteed Obligations, and that this Guaranty is a guaranty of payment when due, and not of collectability or performance. The Guarantor agrees that a separate action may be brought against the Guarantor for any of the Guaranteed Obligations, whether action is brought against the Obligor or whether the Obligor is joined in any such action. In the event any Guaranteed Obligation has not been paid by any Obligor when due that is uncured (after taking into account any applicable cure period), then the Beneficiary shall send the Guarantor a demand notice for payment of such Guaranteed Obligation at the address set forth in Section 7 below; provided, that no such demand shall be required in the event that the Beneficiary is restrained from making such demand pursuant to any applicable bankruptcy, insolvency or other laws affecting creditors’ rights generally. The Guarantor shall make each payment hereunder promptly and in any event within ten (10) Business Days after the Guarantor’s receipt of the written demand referred to in this sentence. (c)The demand notice shall reasonably specify in what manner and what exact amount the Obligor has failed to pay a Guaranteed Obligation together with a statement that the Beneficiary is calling upon the Guarantor to make payment under this Guaranty. In no event shall the obligations and liabilities of the Guarantor hereunder exceed the aggregate obligations and liabilities of the Obligor under the MIPA, as if the Guarantor were itself a party to the MIPA instead of the Obligor (as applicable). The Guarantor shall have all rights and defenses, set-offs, counterclaims, reductions, diminutions, or limitations of the Obligor under the terms of the MIPA.
2.Term. This Guaranty shall be an absolute, unconditional, and continuing guaranty of payment, and not of collection or performance, and will remain in full force and effect until the date that both the Beneficiary no longer has a right to make a claim with respect to the Guaranteed Obligations hereunder and under the Agreements and all of the Guaranteed Obligations have been satisfied in full (the “Guaranty Termination Date”); provided,
however, that any such termination of this Guaranty shall not affect the Guarantor’s obligations for Guaranteed Obligations incurred or arising out of the MIPA prior to the termination or expiry hereof; provided, further, that if the Beneficiary has made a good faith demand for payment under this Guaranty prior to the Guaranty Termination Date, then the Guaranty Termination Date shall be extended until such good faith demand, if valid, has been fully resolved pursuant to the terms hereof. Termination and expiration shall be effective whether or not the Guaranty has been returned to the Guarantor in New York, NY or to any of its Affiliates at their respective headquarters.
3.Waivers of Notice; Certain Defenses; Reinstatement. The Guarantor waives: (a) all defenses that it may have under applicable law as a guarantor or surety (other than any defenses and rights to set off that the Obligor is entitled to that arise out of the MIPA that are not (i) otherwise expressly waived hereunder, (ii) waived under the MIPA or (iii) based upon the insolvency, bankruptcy, or reorganization of the Obligor, the power or authority to enter into and perform under the MIPA, the unenforceability of, or illegality with respect to, the MIPA, any lack or limitation of status or of power, or any incapacity or disability of the Obligor or any trustee or agent thereof, or the failure of the Obligor to have authorized, or to have obtained any approval necessary to enter into or perform under, the MIPA) and (b) notice of acceptance, presentment, demand, dishonor, protest, any sale of collateral security and all other notices whatsoever, except for those expressly required hereunder; provided, however, that any delay in the delivery of notice shall in no way invalidate the enforceability of this Guaranty. This Guaranty shall continue to be effective or be reinstated, as the case may be, without any release or discharge of any obligations if at any time any payment of any of the Guaranteed Obligations is rescinded, avoided, recovered or must otherwise be returned by the Beneficiary upon the insolvency, bankruptcy, or reorganization of the Obligor, the Guarantor or any other guarantor or any other person or entity or otherwise, all as though such payment had not been made.
4.Representations and Warranties. The Guarantor hereby represents and warrants to the Beneficiary as of the date hereof that:
(a)the Guarantor is duly organized and validly existing under the laws of the jurisdiction of formation and in good standing;
(b)the Guarantor has the power to execute, deliver, and perform its obligations under this Guaranty, and it has taken all necessary limited liability company action to authorize such execution, delivery, and performance. Such execution, delivery, and performance do not (i) violate or conflict with any material law applicable to Guarantor, any provision of its organizational or constitutional documents, or any material order, decree, ruling, rule, promulgation, or judgment of any court or other agency of government applicable to it or any of its assets or (ii) breach or constitute a default or event of default under, any material agreement or instrument binding on or affecting it or any of its assets;
(c)all governmental and other consents, approvals, authorizations, licenses, clearances, registrations and declarations that are required to have been obtained by
the Guarantor with respect to this Guaranty have been obtained and are in full force and effect and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental authority or regulatory body is required in connection with the execution, delivery or performance by it of this Guaranty;
(d)the Guarantor’s obligations under this Guaranty constitute legal, valid, and binding obligations, enforceable in accordance with its terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium, or similar laws affecting creditors’ rights generally and to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law));
(e)there is no pending or, to the knowledge of Guarantor, threatened (in writing) litigation, claim, action, suit, proceeding or Governmental Authority investigation against the Guarantor which seeks the issuance of an order restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Guaranty; and
(f)the Guarantor has the financial capacity to pay and perform its obligations under this Guaranty and all funds necessary for the Guarantor to fulfill its obligations hereunder are and shall be available to Guarantor for so long as this Guaranty shall remain in effect.
5.Effect of Modifications. Subject to the terms and provisions hereof, the Guarantor acknowledges that its liability under this Guaranty shall be absolute and unconditional and, without limiting the generality of the foregoing, shall not be affected or impaired by, and Guarantor hereby irrevocably waives any defenses it may have or hereafter acquire based upon or in any way relating to, (i) any change in the financial condition, objects, constituencies, or business of the Guarantor, the Obligor, or the Beneficiary; (ii) any change in the corporate existence, structure, form, name, or ownership of the Obligor or the Guarantor or any dissolution, liquidation, reorganization, readjustment, merger, spin-off, consolidation, transformation of corporate form, transfer of establishment or other alteration of the legal status or structure of the Obligor or the Guarantor; (iii) the bankruptcy, winding-up, liquidation, dissolution, insolvency, reorganization, or other similar proceeding affecting the Obligor or its assets or any resulting release, stay or discharge of any Guaranteed Obligations; (iv) any transfer or purported transfer of any property to or from the Obligor, the Guarantor or any other person or entity; (v) the existence of any claim, set-off or other right which Guarantor may have at any time against the Beneficiary or any of its Affiliates; (vi) any lack or limitation of power, incapacity, or disability on the part of the Obligor or of their applicable managers, members, or agents or any other irregularity, defect, or informality on the part of the Obligor in respect of the Guaranteed Obligations; (vii) any lack of validity or enforceability of the MIPA; (viii) any renewal, extension, modification, amendment, acceleration, compromise, waiver, indulgence, rescission, discharge, surrender or release, in whole or in part, of the MIPA or the Guaranteed Obligations or any other instrument or agreement evidencing, relating to,
securing or guaranteeing any of the Guaranteed Obligations, or the liability of any party to any of the foregoing or for any part thereof; (ix) any act or omission of the Beneficiary relating in any way to the Guaranteed Obligations or to the Obligor, including any failure to bring an action against any party liable on the Guaranteed Obligations, or any party liable on any guaranty of the Guaranteed Obligations, or to apply any funds of any such party held by the Beneficiary; (x) any default, failure, omission or delay, willful or otherwise, on the part of the Obligor to perform or comply with, or the impossibility of performance by the Obligor or any other person of any of the Guaranteed Obligations; (xi) any change in the time, place or manner of payment of any of the Guaranteed Obligations; (xii) any taking, exchange, substitution, release, impairment or non-perfection of any collateral or any other guaranty for the Guaranteed Obligations; (xiii) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (xiv) any defense based on the failure of any other Person to execute or deliver any other guaranty or agreement or the release or reduction of liability of any other guarantor or surety with respect to the Guaranteed Obligations; or (xv) any defense based on any suit or other action brought by, or any judgment in favor of, any beneficiaries or creditors of the Obligor or any other person for any reason whatsoever, including any suit or action in any way attaching or involving any issue, matter or thing in respect of the Guaranteed Obligations or any other agreement.
The Guarantor further agrees and consents that the Beneficiary may at any time and from time to time, without notice to or further consent of the Guarantor, and without in any way discharging, releasing or reducing the obligations (except as expressly agreed) of the Guarantor hereunder or affecting the validity or enforceability of this Guaranty, (i) make any agreement with Obligor for the acceleration, addition, acceptance, exchange, receipt, realization, settlement, perfection, extension, renewal, payment, compromise, discharge, release or surrender thereof or composition, forbearance or concession in respect of any or all of the Guaranteed Obligations, in whole or in part, or for any amendment, waiver or other modification of the terms of the MIPA or of the Guaranteed Obligations and (ii) enter into any other current or future agreement between or among the Beneficiary, the Obligor and/or any other person or entity. The Beneficiary shall apply all amounts constituting payment of the Guaranteed Obligations that it receives from Obligor, Guarantor, or any other person or entity towards such Guaranteed Obligations.
6.Independent Obligations; Subrogation. The Beneficiary shall not be required to proceed first against the Obligor or any other person or entity or any assets thereof or collateral before proceeding against the Guarantor under this Guaranty. The Beneficiary is not bound or obligated to exhaust its recourse against Obligor or any other person or entity or take any other action before being entitled to receive payment from the Guarantor.
Guarantor shall not be subrogated to any of the rights of the Beneficiary as the result of any payment or enforcement of any of the Guaranteed Obligations until the Guaranty Termination Date and, until such time, the Guarantor hereby waives, releases, and relinquishes the right to bring any claim based on any right of subrogation, any claim for
unjust enrichment, or any other theory that would entitle the Guarantor to a claim against Obligor based on any payment made hereunder or otherwise on account of the amounts or obligations due hereunder. Effective as of the date described in the preceding sentence, the Guarantor shall be subrogated to the rights of the Beneficiary against Obligor with respect to any and all such payments made by the Guarantor hereunder, and the Beneficiary agrees, at the Guarantor’s reasonable request and expense, to execute and deliver to the Guarantor, without recourse or representation or warranty, appropriate documents necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment.
7.Notices. All notices and other communications under this Guaranty must be in writing and will be deemed to have been duly given when (i) delivered by hand (with written confirmation of receipt), (ii) sent by electronic mail, or (iii) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested) or by mailing, certified mail (return receipt requested), in each case to the appropriate addresses and electronic mail addresses set forth below (or to such other addresses and electronic mail addresses as either party may designate by notice to the other party):
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| If to the Guarantor: |
| |
| MN8 Energy LLC |
| 1155 Avenue of the Americas, 27th Fl |
| New York, NY 10036 |
| Attn: Legal |
| Email: notices@mn8.com |
| |
| With a copy (which shall not constitute notice) to: |
| |
| Holland & Knight LLP |
| 811 Main St, Suite 2500 |
| Houston, TX 77002 |
| Attn: Ram Sunkara |
| Elizabeth Crouse |
| Email: Ram.Sunkara@hklaw.com |
| Elizabeth.Crouse@hklaw.com |
| |
| If to the Beneficiary: |
| |
| American Beech Solar Holdings LLC |
| c/o MN8 Energy LLC |
| 1155 Avenue of the Americas, 27th Floor |
| New York, NY 10036 |
| Attn: Legal |
| Email: notices@mn8.com |
8.Miscellaneous. Each and every right, remedy and power hereby granted to the Beneficiary or afforded it by applicable law or agreement shall be cumulative and not exclusive of any other and may be exercised by the Beneficiary from time to time. This Guaranty and each of its provisions may be waived, modified, or varied, in whole or in part, only pursuant to a duly authorized written instrument signed by an authorized officer of the Beneficiary and the Guarantor. No failure, delay or single or partial exercise by the Beneficiary of its rights or remedies under this Guaranty shall operate as a waiver of such rights or remedies or give rise to any estoppel against the Beneficiary or excuse the Guarantor from performing under this Guaranty. No waiver by the Beneficiary of performance by Guarantor under any of the provisions of this Guaranty shall be construed as a waiver of any subsequent performance by the Guarantor under the same or any other provisions of this Guaranty. The headings used in this Guaranty are for convenience of reference only and are not to affect the construction of, or to be taken into consideration in interpreting, this Guaranty. A signature delivered by email shall be deemed to be an original signature for purposes of this Guaranty and shall be binding upon Guarantor as an original signature.
9.Successors; Assignment. This Guaranty shall be binding upon the successors and permitted assigns of the Guarantor and inure to the benefit of the Beneficiary and its successors and permitted assigns. Neither the Beneficiary nor the Guarantor shall assign this Guaranty or delegate any of its duties hereunder without the express prior written consent of the other party hereto (which consent shall not be unreasonably withheld, conditioned, or delayed), and any such purported assignment without such consent shall be null and void, provided, however, that Guarantor may assign this Guaranty to a partnership, corporation, trust, or other organization in whatever form that succeeds to all or substantially all of the Guarantor’s assets and business and that assumes such obligations by contract, operation of law, or otherwise, and upon any such delegation and assumption of obligations, the Guarantor shall be relieved of and fully discharged from all obligations hereunder, provided that written notice of such assignment is provided to the Beneficiary and evidence of the assumption of this Guaranty is provided to the Beneficiary. The Beneficiary may only assign its rights under this Guaranty to a party to whom the Beneficiary transfers all of its rights under and as permitted by the MIPA, and only to the extent of such transfer.
10.Governing Law. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD OTHERWISE DIRECT THE APPLICATION OF THE LAWS OF A DIFFERENT JURISDICTION. THIS GUARANTEE IS PREPARED AND EXECUTED IN THE ENGLISH LANGUAGE ONLY AND ANY TRANSLATIONS OF THIS GUARANTY INTO ANY OTHER LANGUAGE SHALL HAVE NO EFFECT.
11.Consent to Jurisdiction; Service of Process.
(a)THE GUARANTOR AND THE BENEFICIARY SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN NEW YORK COUNTY IN THE STATE OF NEW YORK, AND
BY EXECUTION AND DELIVERY OF THIS GUARANTY, THE GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, THE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION, CLAIM, OR DEFENSE WHICH THEY MAY NOW OR HEREAFTER HAVE IN ANY SUCH ACTION OR PROCEEDING BASED ON ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE, OR FORUM NON CONVENIENS OR ANY SIMILAR BASIS IN ANY DISPUTE ARISING UNDER OR RELATING TO THIS GUARANTY BROUGHT IN SUCH COURT. EACH PARTY HERETO AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
(b)EACH PARTY HERETO FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY COMPLAINT, SUMMONS, NOTICE, OR OTHER PROCESS RELATING TO ANY LEGAL ACTION OR PROCEEDING BY DELIVERY THEREOF TO IT BY HAND OR BY MAIL TO THE ADDRESS SET FORTH IN SECTION 7 HEREOF OR AT SUCH OTHER ADDRESS OF WHICH THE OTHER PARTIES SHALL HAVE BEEN NOTIFIED PURSUANT THERETO, AND THAT SUCH SHALL BE GOOD AND VALID SERVICE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. (c)THE GUARANTOR AND THE BENEFICIARY AGREE THAT FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
12.Payment. The Guarantor hereby unconditionally and irrevocably agrees that any payments made pursuant to this Guaranty will be paid to the Beneficiary in lawful money of the United States in immediately available funds, free and clear of, and without deduction for, any and all taxes, levies, imposts, deductions and withholdings whatsoever imposed, levied, collected or assessed. If such payments are subject to any such tax, levy, impost, deduction or withholding, then such payments shall be increased to such amount which, after provision for such tax, levy, impost, deduction or withholding, is necessary to yield and remit to the Beneficiary the amount which would have been received absent such tax, levy, impost, deduction or withholding, and the Guarantor shall furnish the Beneficiary such evidence or certification of making such tax, levy, impost, deduction or withholding as the Beneficiary may request.
13.Entire Agreement. This writing is the complete and exclusive statement of the terms of this Guaranty and supersedes all prior oral or written representations, understandings, and agreements between the Beneficiary and the Guarantor with respect to the subject matter hereof. The Beneficiary and the Guarantor agree that there are no conditions to the full effectiveness of this Guaranty.
14.Waiver of Jury Trial. THE GUARANTOR AND THE BENEFICIARY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION, OR PROCEEDING RELATING TO THIS GUARANTY.
15.Unenforceable Provisions. Any provision contained in this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
16.Certain Terms. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the MIPA.
17.Additional Covenants.
(a)The Guarantor covenants and agrees that the Guarantor shall not materially change the nature of its business for so long as this Guaranty has not terminated pursuant to Section 2; and (b)The Guarantor covenants and agrees that it shall maintain a Tangible Net Worth (as defined in the LLCA) under GAAP of at least five hundred million dollars ($500,000,000).
[Signature pages follow]
IN WITNESS WHEREOF, the Guarantor has duly signed this Guaranty as of the first date written above.
| | | | | | | | | | | |
| MN8 ENERGY LLC | |
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| | | |
| | | |
| | | |
By: | | | |
Name: | | | |
Title: | | | |
[SPONSOR MIPA GUARANTY SIGNATURE PAGE]
| | | | | | | | | | | |
| Accepted and agreed to: | |
| | | |
| AMERICAN BEECH SOLAR HOLDINGS LLC |
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By | | | |
Name: | | | |
Title: | | | |
[SPONSOR MIPA GUARANTY SIGNATURE PAGE]
EXHIBIT G
Interparty Agreement
CONSENT AND AGREEMENT
(Equity Investor)
This CONSENT AND AGREEMENT (as amended, amended and restated, supplemented or otherwise modified from time to time, this “Consent”), dated as of August 27, 2025, is executed by and among TENASKA AMERICAN BEECH HOLDINGS, LLC, a Delaware limited liability company (together with its successors, designees and assigns, the “Investor”), AMERICAN BEECH SOLAR HOLDINGS LLC, a Delaware limited liability company (together with its successors, designees and assigns, “Holdco”), AMERICAN BEECH CLASS B LLC, a Delaware limited liability company (together with its successors, designees and assigns, “Class B Member”, and together with Holdco, “Collateral Assignors”, and each individually, a “Collateral Assignor”), and NATIXIS, NEW YORK BRANCH, in its capacity as the collateral agent (together with its permitted successors, designees and assigns, in such capacity, “Collateral Agent”) for the Secured Parties (as defined in the Financing Agreement defined below). Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Financing Agreement and, if not defined therein, in the Assigned Agreement (defined below) and the LLCA (defined below).
RECITALS
A. In connection with the execution of that certain Amended and Restated Limited Liability Company Agreement of Holdco, to be entered into by and between the Investor and Class B Member, on the MC Funding Date (in each case used herein, as defined in the Assigned Agreement), in the form of Exhibit G attached to the Assigned Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time, the “LLCA”), the Investor shall own one hundred percent (100%) of the Class A Units (as defined therein) and Class B Member shall own one hundred percent (100%) of the Class B Units (in each case used herein, as defined in the Assigned Agreement) in Holdco, which will, in turn, on and after the MC Funding Date, own all of the membership interests in American Beech Solar LLC, a North Carolina limited liability company (“Project Company”), which is constructing and will own, operate and maintain an approximately 196 MWdc solar energy project to be located in Halifax County, North Carolina (the “Project”).
B. Collateral Agent has entered into that certain Credit Agreement, dated as of December 31, 2024 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Financing Agreement”), by and among MN8 DevCo 3 LLC, a Delaware limited liability company (“Devco Borrower”), MN8 FMG Class B LLC, a Delaware limited liability company (“OpCo Borrower 1”) and MN8 Bleeker 2 LLC, a Delaware limited liability company (“OpCo Borrower 2” and together with Devco Borrower and OpCo Borrower 1, the “Borrowers”), the financial institutions from time to time party thereto as lenders and as issuers of letters of credit (collectively, the “Lenders”), Natixis, New York Branch, in its separate capacities as Administrative Agent and as Collateral Agent, and any other agents and Persons from time to time party thereto, pursuant to which, among other things, the Lenders have agreed to extend financing to the Borrowers with respect to the ownership, construction, operation and maintenance of the Project.
C. (a) OpCo Borrower 2 owns one hundred percent (100%) of the direct ownership interests in Class B Member and (b) the Class B Member owns one hundred percent (100%) of the direct ownership interests in Holdco.
D. Holdco has entered into that certain Membership Interest Purchase Agreement, dated as of the date hereof (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms hereof, the “MIPA”) with Devco Borrower, pursuant to which Holdco will purchase from Devco Borrower and Devco Borrower will sell to Holdco, one hundred percent (100%) of the ownership interests in the Project Company on the Closing Date under and as defined in the MIPA.
E. Class B Member and Holdco have entered into that certain Equity Capital Contribution Agreement, dated as of the date hereof (as amended in accordance with the terms thereof or as may be further amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms hereof, the “Assigned Agreement”) with the Investor.
F. As a condition to the extension of credit under the Financing Agreement, (a) the Borrowers, the Class B Member, Holdco and the Project Company, among others, have entered into that certain Guarantee, Pledge and Security Agreement, dated as of December 31, 2024 (as amended, amended and restated, supplemented or otherwise modified and in effect from time to time, the “Guarantee, Pledge and Security Agreement”), with Collateral Agent, pursuant to which (i) the Project Company has collaterally assigned and granted to Collateral Agent, for the benefit of the Secured Parties, a first-priority security interest in all of the membership interests in AC1 ASOA LLC owned by the Project Company, as collateral security for satisfaction of all Obligations under the Financing Agreement and the related financing documents entered into in connection therewith (the “Financing Documents”), (ii) Devco Borrower has collaterally assigned and granted to Collateral Agent, for the benefit of the Secured Parties, a first-priority security interest in all of the membership interests in the Project Company owned by Devco Borrower prior to the MC Funding Date, as collateral security for satisfaction of all Obligations under the Financing Documents, (ii) Holdco has collaterally assigned and granted to Collateral Agent, for the benefit of the Secured Parties, a first-priority security interest in all of the membership interests in the Project Company owned by Holdco upon Holdco’s acquisition of such membership interests on the MC Funding Date, as collateral security for satisfaction of all Obligations under the Financing Documents, (iii) Class B Member has collaterally assigned and granted to Collateral Agent, for the benefit of the Secured Parties, a first-priority security interest in (A) prior to the MC Funding Date, all of the membership interests in Holdco owned by Class B Member and (B) on and after the MC Funding Date, all of the Class B Units in Holdco owned by Class B Member (the “Holdco Class B Member Membership Interests”), as collateral security for satisfaction of all Obligations under the Financing Documents, and (iv) Opco Borrower 2 has collaterally assigned and granted to Collateral Agent, for the benefit of the Secured Parties, a first-priority security interest in all of the membership interests in the Class B Member owned by Opco Borrower 2, as collateral security for satisfaction of all Obligations under the Financing Documents, (b) MN8 Energy Development Company LLC (“Devco Pledgor”) has entered into that certain Pledge Agreement, dated as of December 31, 2024 (as amended, amended and restated, supplemented or
otherwise modified and in effect from time to time, the “Devco Pledge Agreement”) with Collateral Agent, pursuant to which the Devco Pledgor has collaterally assigned and granted to Collateral Agent, for the benefit of the Secured Parties, a first-priority security interest in all of the membership interests in the Devco Borrower owned by the Devco Pledgor, as collateral security for satisfaction of all Obligations under the Financing Documents, and (c) MN8 Bleeker 2 HoldCo LLC (“Opco Pledgor 2”) has entered into that certain Pledge Agreement, dated as of July 9, 2025 (as amended, amended and restated, supplemented or otherwise modified and in effect from time to time, the “Opco 2 Pledge Agreement” and, together with the Guarantee, Pledge and Security Agreement, the Devco Pledge Agreement and the Opco 1 Pledge Agreement, the “Security Agreements”) with Collateral Agent, pursuant to which Opco Pledgor 2 has collaterally assigned and granted to Collateral Agent, for the benefit of the Secured Parties, a first-priority security interest in all of the membership interests in the Opco Borrower 2 owned by Opco Pledgor 2, as collateral security for satisfaction of all Obligations under the Financing Documents (all collateral referred to in clauses (a) through (c), collectively, the “Assigned Collateral Interests”).
G. It is a requirement under the Financing Agreement and the Assigned Agreement that the Investor and the other parties hereto shall have executed this Consent.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereto hereby agree, notwithstanding anything to the contrary in the Assigned Agreement and the LLCA, as follows:
1. Consent and Agreement. Subject to the terms and conditions set forth herein, until the termination of this Consent in accordance with Section 12, the Investor: (a) acknowledges and consents in all respects to the collateral assignment of the Assigned Collateral Interests as collateral security to Collateral Agent, for the benefit of the Secured Parties, pursuant to the Security Agreements and the terms hereof;
(b) acknowledges the right (but not the obligation) of Collateral Agent, in the exercise of its rights and remedies under the Financing Agreement and the other Financing Documents, upon written notice to the Investor that an Event of Default (in each case used herein, as defined in the Financing Agreement) has occurred and is continuing under the Financing Agreement, to cure any defaults of Collateral Assignors, make all demands, give all notices, take all actions, and exercise all rights of Collateral Assignors, in each case under the Assigned Agreement and the LLCA, as applicable, and the Investor agrees to accept any such exercise in accordance with and subject to the terms and conditions of this Consent, the LLCA and the Assigned Agreement, and thereby, subject to the terms and conditions of this Consent, the terms and conditions of the LLCA and the Assigned Agreement applicable to such rights or claims shall apply to Collateral Agent to the same extent as to Collateral Assignor; and
(c) agrees not to cancel, suspend or terminate the Assigned Agreement other than in accordance with Section 7.1 of the Assigned Agreement.
2. Collateral Assignors’ Acknowledgement. Each of Holdco (solely with respect to the Assigned Agreement) and Class B Member acknowledges and agrees that the Investor is authorized to perform its obligations under the Assigned Agreement and the LLCA upon Collateral Agent exercising its rights under this Consent in accordance with and subject to the terms and conditions of this Consent, the LLCA and the Assigned Agreement, and that the Investor shall not bear any liability to any Collateral Assignor in connection therewith (except as expressly set forth herein or therein).
3. Collateral Agent and Subsequent Transferee.
(a) Assigned Agreement. Notwithstanding anything to the contrary in the Assigned Agreement, subject to satisfaction of the conditions in Section 3(b), the Investor agrees that, if Collateral Agent shall notify the Investor in writing that an Event of Default under the Financing Agreement has occurred and is continuing and that Collateral Agent has elected to exercise its rights and remedies pursuant to the Financing Agreement with respect to substitution under the Assigned Agreement or the foreclosure (whether judicial or nonjudicial) or sale of the Assigned Collateral Interests (or any portion thereof), then the Collateral Agent or a Person that is its nominee, transferee, designee or assignee, including any purchaser in the foreclosure or sale in lieu thereof, so long as, as prior to such foreclosure, transfer or substitution, as applicable, the following conditions are satisfied: such Person (i) is the Collateral Agent, a Person that is owned and controlled by the Collateral Agent (or the other Secured Parties) (such Person, the “Collateral Agent Designee”) or a Person that has the Required Creditworthiness (as defined below), or is owned by a Person who has the Required Creditworthiness and such owner provides a guaranty of the obligations of such entity under the Assigned Agreement in the form of the Guaranty (in each case used herein, as defined in the Assigned Agreement), or such other form satisfactory to the Investor (such Person, including any Collateral Agent Designee, the “Subsequent Transferee”) and (ii) has the Required Experience (as defined below) or, in the case of the Collateral Agent or a Collateral Agent Designee, the Collateral Agent or such Collateral Agent Designee has complied with the requirements set forth in Section 3(b)(v) hereof, in which case such Person shall have the right to be substituted for the applicable Collateral Assignor under the Assigned Agreement in which case, the Investor shall (A) recognize the Collateral Agent or the Subsequent Transferee, as applicable, as the applicable counterparty under the Assigned Agreement and (B) continue to perform its obligations under the Assigned Agreement in favor of the Collateral Agent or the Subsequent Transferee, as applicable, in accordance with and subject to the terms and conditions of the Assigned Agreement; provided, however, that the Collateral Agent or the Subsequent Transferee, as applicable, has assumed in writing all of the applicable Collateral Assignor’s rights and obligations under the Assigned Agreement; provided, further, that such assumption of rights and obligations shall not include the assumption of any liabilities for claims of the Investor against such Collateral Assignor arising from such Collateral Assignor’s failure to perform during the period prior to the Collateral Agent’s or the Subsequent Transferee’s, as applicable, succession to such Collateral Assignor’s interest in and under the Assigned Agreement or during the period prior to when such transferee becomes the owner (directly or indirectly) of the Holdco Class B Member Membership Interests owned by Class B Member (it being understood that a breach shall be treated as occurring prior to such date such transferee becomes the owner of the Holdco Class B Member Membership Interests if such breach occurred before such date, whether or not such breach was
known as of such date), as applicable. For the avoidance of doubt, Collateral Agent hereby agrees that the foregoing proviso shall have no effect on Investor’s rights under the LLCA or the Assigned Agreement as it relates to indemnity claims under Article XI of the LLCA or under Article 9 of the Assigned Agreement arising prior to or after any transfer or assignment to the Collateral Agent or its Subsequent Transferee. As used herein, “Required Creditworthiness” shall mean any entity with (a) a long-term senior unsecured credit rating of at least “BBB-” by S&P or “Baa3” by Moody’s and such credit ratings are not on the Watchlist (Moody’s) (if rated by Moody’s) or on CreditWatch (S&P) (if rated by S&P) for a possible ratings downgrade and are not the subject of a negative credit or ratings outlook issued by the relevant agency, or, if either agency is not then in the business of providing ratings, any other entity that is then a nationally recognized statistical rating organization or (b) if such entity does not have a credit rating, a consolidated Tangible Net Worth (as defined in the LLCA, in the form attached to the Assigned Agreement as in effect on the date hereof) under GAAP of at least five hundred million dollars ($500,000,000).
(b) LLCA. Notwithstanding anything to the contrary in the LLCA, subject to the satisfaction of the applicable conditions in Section 3(a), the Investor agrees that, on and after the MC Funding Date, if Collateral Agent shall notify the Investor in writing that an Event of Default under the Financing Agreement has occurred and is continuing and that Collateral Agent has elected to exercise its rights and remedies pursuant to the Financing Agreement with respect to substitution under the Assigned Agreement or the foreclosure (whether judicial or nonjudicial) or sale of the Assigned Collateral Interests (or any portion thereof), then (x) the Collateral Agent (or its Subsequent Transferee), acting on behalf of the Secured Parties, shall have the right to foreclose on, or otherwise dispose of, the Class B Units held by Class B Member in Holdco, (y) Collateral Agent (or its Subsequent Transferee), acting on behalf of the Secured Parties, shall have the right to foreclose on, or otherwise dispose of, the Opco Borrower 2’s ownership interests in Class B Member, or (z) the Collateral Agent (or its Subsequent Transferee), acting on behalf of the Secured Parties, shall have the right to be substituted for Class B Member under the LLCA, in each such case of clauses (x), (y) and (z), so long as, as prior to such foreclosure, transfer or substitution, as applicable, the following conditions are satisfied: (i) Any Subsequent Transferee of the Collateral Agent (other than any Collateral Agent Designee) (A) shall be a Person that has owned and operated at least 250 MW(dc) of solar assets in North America for the immediately preceding three (3) years (the “Required Experience”) and (B) has the Required Creditworthiness, or is owned by a Person who has the Required Creditworthiness and such owner provides a guaranty of the obligations of such entity under the LLCA in the form of the Guaranty, or such other form satisfactory to the Investor;
(ii) Such transfer to the Collateral Agent and any Subsequent Transferee shall (A) not be to any Person who, or is an Affiliate of any Person who, is a Sanctioned Person, (B) not be to any Person that is a Disqualified Entity or a Related Person, (C) not be to any Person who is Bankrupt and (D) not result in a Regulatory Problem (in each case in this clause (ii), as defined in the LLCA, in the form attached to the Assigned Agreement as in effect on the date hereof);
(iii) Such transfer to the Collateral Agent and any Subsequent Transferee shall be to a Person that is not a Disqualified Transferee (as defined in the LLCA, in the form attached to the Assigned Agreement as in effect on the date hereof);
(iv) Such transfer (to either the Collateral Agent or its Subsequent Transferee) shall satisfy the requirements of Section 9.3(a) of the LLCA, in the form attached to the Assigned Agreement as in effect on the date hereof; provided that the credit support or guarantee required pursuant to Section 9.3(a)(iii) of the LLCA shall not be required in connection with any such transfer to (x) the Collateral Agent or any Collateral Agent Designee or (y) any Subsequent Transferee that has the Required Creditworthiness;
(v) If the Collateral Agent or a Collateral Agent Designee does not possess the Required Experience, the Collateral Agent or such Collateral Agent Designee shall engage a qualified manager that has the Required Experience to provide management services for Holdco and the Project Company pursuant to a management services agreement in form and substance reasonably satisfactory to Investor; and
(vi) Such transferee (either the Collateral Agent or its Subsequent Transferee) shall only be liable for any breach or indemnity under the LLCA from and after the date upon which the transferee becomes the owner (directly or indirectly) of the Class B Units owned by Class B Member (it being understood that a breach shall be treated as occurring prior to such date such transferee becomes the owner of the Class B Units if such breach occurred before such date, whether or not such breach was known as of such date); provided, that (A) the transfer shall not effect a release of Class B Member from any liabilities to the Investor arising from events occurring prior to or in connection with the transfer and (B) the foregoing clause (A) shall have no effect on Investor’s rights under the LLCA or the Assigned Agreement as it relates to indemnity claims under Article XI of the LLCA or under Article 9 of the Assigned Agreement arising prior to or after any transfer or assignment to the Collateral Agent or its Subsequent Transferee.
Upon the satisfaction of all of the conditions set forth above and the foreclosure on, or disposition of, the Class B Units held by Class B Member (directly or indirectly) in Holdco, the Collateral Agent or its Subsequent Transferee, as applicable, shall succeed, directly or indirectly, to all of the Class B Units in Holdco held by Class B Member and, in the case of a foreclosure of the Class B Units held by Class B Member in Holdco, be admitted as a Member (as defined in the LLCA) of Holdco and to act as the “Managing Member” (in each case used herein, as defined in the LLCA) of Holdco, including by, without limitation, participating in the management of the business and affairs of Holdco, exercising voting and other consensual rights with respect to Holdco and sharing in the profits and losses of Holdco and receiving distributions of assets of Holdco, all subject to and in accordance with the terms and conditions of the LLCA. For the avoidance of doubt, in no event shall the Collateral Agent or any Collateral Agent Designee be required to comply with Section 9.8(b) of the LLCA in connection with an initial foreclosure on any Assigned Collateral Interest and the transfer by the Collateral Agent or any Collateral Agent Designee to such Subsequent Transferee; provided, that any Subsequent Transferee of the
Collateral Agent shall be bound by Section 9.8(b) of the LLCA in connection with a transfer made by such Subsequent Transferee.
4. Right to Cure. In the event of a default or breach by any Collateral Assignor in the performance of any of its obligations under the Assigned Agreement, or upon the occurrence or non-occurrence of any event or condition under the Assigned Agreement which would immediately or with the passage of any applicable grace period or the giving of notice, or both, enable the Investor to terminate or suspend performance under the Assigned Agreement (including, without limitation, the Investor’s rights under Section 7.1 of the Assigned Agreement) (hereinafter, a “Default”), the Investor shall not suspend its performance thereunder or terminate the Assigned Agreement if the Collateral Agent has cured such Default prior to the Commitment Expiration Date (in each case used herein, as defined in the Assigned Agreement). Notwithstanding anything to the contrary set forth in this Consent, the parties hereto agree and acknowledge that under no circumstance will the Investor be required to make the MC Funding Date Contribution (in each case used herein, as defined in the Assigned Agreement) or the SC Funding Date Contribution (in each case used herein, as defined in the Assigned Agreement) under the Assigned Agreement unless all conditions precedent thereto set forth in the Assigned Agreement have been satisfied to the satisfaction or the reasonable satisfaction of the Investor, as required under the Assigned Agreement, or waived by the Investor in accordance with the terms of the Assigned Agreement and in no circumstance shall the Investor be required to pay the MC Funding Date Contribution or the SC Funding Date Contribution after the Commitment Expiration Date.
5. Replacement Agreement. The Investor hereby agrees that, prior to the Commitment Expiration Date (as defined in the Assigned Agreement), in the event that the Assigned Agreement is rejected or terminated as a result of any bankruptcy or insolvency proceeding involving any Collateral Assignor and, if after such rejection or termination, the Collateral Agent shall so request and shall certify in writing to the Investor that it intends to perform all of the obligations of such Collateral Assignor thereunder, the Investor shall execute and deliver to the Collateral Agent a new agreement (the “Replacement Agreement”), pursuant to which Replacement Agreement the Investor (and the Collateral Agent) shall agree to perform the obligations contemplated to be performed by the Investor (and the Collateral Agent) under the Assigned Agreement and which shall be for the balance of the remaining term under the Assigned Agreement before giving effect to such rejection or termination (but in no event beyond the Commitment Expiration Date) and shall contain the same conditions, agreements, terms, provisions and limitations as the Assigned Agreement (except for any requirements which have been fulfilled by the Collateral Assignors or the Investor prior to such rejection or termination and any immaterial conforming changes necessitated by the substitution of parties).
6. No Liability. The Investor acknowledges and agrees that neither Collateral Agent nor the Secured Parties (nor any successor(s), assignee(s), designee(s), nor other representative of Collateral Agent or the Secured Parties) shall have any liability or obligation under the Assigned Agreement or the LLCA as a result of exercising its rights under this Consent (other than under Section 3 or, as counterparty to a Replacement Agreement, pursuant to Section 5), the Financing Agreement or any other Financing Document, nor shall Collateral Agent nor the Secured Parties
(nor any successor(s), assignee(s), designee(s), nor other representative of Collateral Agent or the Secured Parties), be obligated or required to perform any of Collateral Assignors’ obligations under the Assigned Agreement or Class B Member’s obligations under the LLCA, except in each case during any period in which Collateral Agent or any Secured Party (or any successor(s), assignee(s), designee(s), or other representative of Collateral Agent or any Secured Party) has elected to become the Subsequent Transferee pursuant to Section 3 or counterparty to a Replacement Agreement pursuant to Section 5, in which case the Subsequent Transferee shall assume in writing all of Collateral Assignors’ rights and obligations under the Assigned Agreement and Class B Member’s rights and obligations under the LLCA in accordance with Section 3. 7. LLCA.
(a) Notwithstanding anything to the contrary set forth in Section 9.7 of the LLCA, if, prior to the exercise by the Investor of any rights it may have under Section 9.7 of the LLCA in respect of the Class B Units, the Collateral Agent has delivered irrevocable written notice to the Investor of the Collateral Agent’s intention to exercise its rights under Section 3(b) hereof and stating that such foreclosure would cure the event giving rise to the Buyout Event (as defined in the LLCA) due to the fact that the Collateral Agent or its Subsequent Transferee will be the holder of the Class B Units after the foreclosure, the Collateral Agent shall have the right to exercise its rights under Section 3(b) hereof prior to the Investor exercising its rights under Section 9.7 of the LLCA; provided, however, that the obligation of the Investor to forbear in exercising its options under Section 9.7 of the LLCA shall be tolled for a period of one hundred twenty (120) days from the date of such notice so long as the Collateral Agent is continuing to diligently pursue such foreclosure (it being understood that, subject to clause (b) below, the Investor shall be permitted to exercise its rights under Section 6.3 of the LLCA during such period) and, if no foreclosure is consummated within such 120-day period, then Investor may exercise its options in Section 9.7 of the LLCA. (b) Notwithstanding anything to the contrary set forth in Section 6.3 or otherwise in the LLCA, Investor acknowledges and agrees that prior to the removal of Collateral Assignor as the Managing Member under the LLCA, subject to Section 3 above, Collateral Agent (or its Subsequent Transferee) shall have the right to foreclose, directly or indirectly, on the Class B Units prior to Investor’s replacement of Class B Member as the Managing Member under the LLCA; provided, however, that, such obligation of the Investor to forbear from removing Managing Member shall only apply to the extent the Collateral Agent has delivered written notice to the Investor within fifteen (15) Business Days after the occurrence of any such event that would permit removal stating that (i) Collateral Agent has commenced foreclosing on the Class B Units or the membership interests in Class B Member and exercising its rights set forth in Section 3(b) above, (ii) Collateral Agent is using commercially reasonable efforts to exercise its power of attorney rights under the Financing Documents in respect of Class B Member, and (iii) Collateral Agent is performing the actions Class B Member is required to take as the Managing Member under the LLCA; provided, that such obligation of the Investor to forbear shall continue only for so long as the Managing Member is performing its obligations under the LLCA during such period in accordance with the terms of the LLCA, the Collateral Agent is using commercially reasonable efforts to exercise its power of attorney rights under the Financing Documents, the Collateral
Agent is continuing to diligently pursue such foreclosure and the Collateral Agent has cured, or is diligently pursuing the cure of, the applicable event that has triggered the Investor’s right to remove the Managing Member, solely to the extent that such event is reasonably capable of cure, and in no event shall Investor be required to forbear from removing Managing Member for a period greater than one hundred twenty (120) days from the date of such notice.
8. ECCA.
(a) Notwithstanding anything to the contrary set forth in Section 4.2 of the ECCA, to the extent the Class B Member, the Company, the Project Company, any Affiliate Party or the Class B Member Guarantor, as applicable, has been replaced by a different entity (“Replacement Entity”) in connection with the Collateral Agent’s exercise of its rights under Section 3(a) hereof, the condition to MC Funding Date set forth in Section 4.2(ee) of the Assigned Agreement shall apply with respect to the applicable Replacement Entity rather than the replaced entity.
(b) Notwithstanding anything to the contrary set forth in Section 4.2 or 4.3 of the ECCA, if, prior to the MC Funding Date or the SC Funding Date, as applicable, the Collateral Agent or a Subsequent Transferee has become party to the Assigned Agreement or the owner of the direct or indirect equity interests in the Class B Member pursuant to the Collateral Agent’s exercise of its rights under Section 3(a) hereof, the condition to MC Funding Date set forth in Section 4.2(p) and the condition to SC Funding Date set forth in Section 4.3(o) shall cease to apply solely with respect to any Material Adverse Effect as it relates to MN8 Energy LLC, as the original Class B Member Guarantor, and shall continue to apply with respect to any Replacement Entity or any other Person that becomes the Class B Member Guarantor following such transfer.
9. Forbearance, Redemption and Purchase Right.
(a) For so long as the Investor owns any Class A Units (as defined in the LLCA), to the extent that an Event of Default under the Financing Agreement has occurred and is continuing and the Back-Leverage Date with respect to the Project has not occurred, the Collateral Agent shall not exercise any remedies with respect to the assets of the Project Company or Holdco or the direct membership interests in the Project Company, unless, prior to exercising any such remedies, Collateral Agent shall have paid to the Investor an amount equal to the Completion Indemnity Amount (as defined in the Assigned Agreement); provided that the Collateral Agent shall not be required to pay or cause to be paid to the Investor any Completion Indemnity Amount in excess of the Investor Capital Contribution Amount (as defined below). The Collateral Agent acknowledges and agrees that to the extent that an Event of Default has occurred and is continuing, as a condition to exercising any foreclosure remedies in respect of the assets of the Project Company or Holdco or the direct membership interests in Project Company on and after the MC Funding Date but prior to the SC Funding Date with respect to the Project, the Collateral Agent shall comply with this Section 9(a) (and the Secured Parties shall be required to comply with Section 9(a) as well) and, notwithstanding anything to the contrary in any Financing Document, on and after the MC Funding Date but prior to the Back-Leverage Date with respect to the Project, the Collateral Agent shall only be permitted to use the amount of the Capital Contributions made
by the Investor to Holdco pursuant to the Assigned Agreement and deposited into the Tax Equity / Tax Credit Transfer Proceeds Account (American Beech) (as defined in the Depositary Agreement) (“Investor Capital Contribution Amount”) as set forth in this Section 9(a), and shall not be permitted to use such funds for any other purpose, including upon any exercise of remedies (and the Secured Parties shall be required to comply with this as well). (b) From and after the MC Funding Date and until the Back-Leverage Date with respect to the Project, to the extent the Administrative Agent or the Collateral Agent provides any written notice of an Event of Default (under the Financing Agreement) to the Class B Member, the Collateral Agent shall, and shall cause Administrative Agent to, provide a copy of such notice to the Investor and the Investor shall have the right to cure any such default on behalf of Class B Member during any applicable cure period provided to the Class B Member under the Financing Agreement.
(c) Without prejudice to the enforcement of the rights and remedies of the Collateral Agent or any other Secured Party under the Financing Documents, the Collateral Agent, on behalf of the Secured Parties, agrees that, at any time prior to the SC Funding Date (as defined in the Assigned Agreement), following the occurrence of an Event of Default, the Investor shall have the right (but not the obligation) to purchase (without warranty or representation or recourse other than as to title) the entire (but not part) aggregate amount of outstanding Obligations (including unfunded commitments thereunder and the total aggregate amount of all fees then accrued) at par (including all outstanding principal, accrued and unpaid interest, and any other amounts due and payable to the Secured Parties in respect of the Loans in accordance with the terms of the Financing Documents, including any matured indemnities and expenses) that are needed to cause the Discharge Date to occur under the Financing Agreement. The purchase right of the Investor under this Section 9(c) shall expire five (5) Business Days after the Collateral Agent provides notice to the Investor of the Secured Parties’ intent to exercise any foreclosure rights under the Financing Documents; provided, however, if, within such 5-Business Day period, the Investor provides the Collateral Agent with written notice of its irrevocable intent to exercise such purchase right, the Investor shall have an additional twenty (20) days after it provides the Collateral Agent with such notice to consummate the purchase of the Obligations pursuant to this Section 9(c).
10. Representations and Warranties. The Investor hereby represents and warrants to each Collateral Assignor and Collateral Agent as of the date of this Consent that:
(a) The Investor is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and has the requisite power and authority to execute, deliver and perform its obligations under the Assigned Agreement and this Consent;
(b) The execution, delivery and performance by the Investor of the Assigned Agreement and this Consent (i) have been duly authorized by all necessary limited liability company action, (ii) do not and will not require any further consents or approvals that Investor is required to obtain and which have not been obtained, other than the consents and approvals set forth in Section 4.2(l) of the Assigned Agreement and the FERC 203 Approval, (iii) do not violate
any applicable law, regulation, order, judgment or injunction and (iv) do not breach any agreement presently in effect with respect to or binding on the Investor except (in the case of the above clauses (ii) through (iv)) for any breaches that would not reasonably be expected to have a material adverse effect on the ability of the Investor to perform its obligations under this Consent and the Assigned Agreement;
(c) There are no disputes between any Collateral Assignor and the Investor with respect to the Assigned Agreement; and
(d) This Consent and the Assigned Agreement are legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with their respective terms except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium and other laws affecting creditors’ rights in general and except to the extent that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefor may be brought.
11. Notices. Any communications between the parties hereto or notices provided herein to be given, may be given to the following addresses:
| | | | | | | | |
| If to Investor: | Tenaska American Beech Holdings, LLC |
| | as Investor |
| | 14302 FNB Parkway |
| | Omaha, NE 68154 |
| | Attention: David Kirkwood |
| | Telephone: (402) 691-9555 |
| | Email: dkirkwood@tenaska.com; |
| | taxequityinvestments@tenaska.com |
| | |
| If to Collateral Agent: | Natixis, New York Branch, |
| | as Collateral Agent |
| | 1251 Avenue of the Americas, 5th Floor |
| | New York, NY 10020 |
| | Attention: Daniel Fahey |
| | Email: adminagency@natixis.com; |
| | daniel.fahey@natixis.com |
| | |
| If to Collateral Assignors: | American Beech Solar Holdings LLC |
| | American Beech Class B LLC |
| | c/o MN8 Energy LLC |
| | 1155 Avenue of the Americas, 27th Floor |
| | New York, NY 10036 |
| | Attn: Legal |
| | Email: notices@mn8energy.com |
All notices or other communications required or permitted to be given hereunder shall be in writing and shall be considered as properly given (a) if delivered in person, (b) if sent by overnight delivery service, (c) in the event overnight delivery services are not readily available, if mailed by first-class mail, postage prepaid, registered or certified with return receipt requested, (d) if sent by facsimile, confirmed by telephone and (e) if sent by email, receipt confirmed. Notice so given shall be effective upon receipt by the addressee, except that communication or notice so transmitted by facsimile, email or other direct written electronic means shall be deemed to have been validly and effectively given on the day (if a Business Day and, if not, on the next following Business Day) on which it is transmitted if transmitted before 4:00 p.m., recipient’s time, and if transmitted after that time, on the next following Business Day; provided, however, that if any notice is tendered to an addressee and the delivery thereof is refused by such addressee, such notice shall be effective upon such tender. Any party shall have the right to change its address for notice hereunder by providing thirty (30) days’ prior written notice to the other parties in the manner set forth herein above.
12. Binding Effect; Amendments; Termination. This Consent shall be binding upon and shall inure to the benefit of the successors and assigns of the Investor, Collateral Assignors, Collateral Agent and the Secured Parties and their respective successors, transferees and permitted assigns. The Investor also agrees to cause any successor-in-interest or assignee of the Investor with respect to its interest in the Assigned Agreement to assume, in writing, the obligations of such Investor hereunder. No termination, amendment, variation or waiver of any provisions of this Consent shall be effective unless in writing and signed by the Investor, Collateral Agent, Holdco (prior to the Back-Leverage Date with respect to the Project) and Class B Member; provided, that this Consent and all rights and obligations hereunder of the parties hereto shall automatically terminate upon the earliest to occur of (i) the Discharge Date, acknowledgment of which will be provided to the Investor by Collateral Agent after the occurrence thereof at the sole expense of Class B Member, (ii) the date of the termination of both of the Assigned Agreement and the LLCA (solely on and after its execution thereof on the MC Funding Date) in accordance with their respective terms and (iii) the date of any payment made pursuant to Section 9(a). 13. Governing Law. THIS CONSENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW EXCEPT SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW). THE INVESTOR, COLLATERAL ASSIGNORS, AND COLLATERAL AGENT HEREBY SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK COUNTY FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS CONSENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE INVESTOR, COLLATERAL ASSIGNORS AND COLLATERAL AGENT IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL AT ITS NOTICE ADDRESS PROVIDED PURSUANT TO SECTION
11 HEREOF. EACH OF THE INVESTOR, COLLATERAL ASSIGNORS, AND COLLATERAL AGENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE INVESTOR, COLLATERAL ASSIGNORS, AND COLLATERAL AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, LEGAL PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CONSENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 14. Severability. If any provision of this Consent is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Consent 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.
15. Counterparts; Electronic Signatures. This Consent may be executed in any number of counterparts and by different parties hereto on separate counterparts and by electronic transmission and when executed and delivered by all of the parties listed below shall constitute a single binding agreement. A facsimile or portable document format (“pdf”) signature page shall constitute an original for purposes hereof. The words “execution”, “execute”, “signed”, “signature”, and words of like import in or related to any document signed or to be signed in connection with this Consent 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 parties hereto, 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.
16. Headings. The headings of the several sections and subsections of this Consent are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Consent.
17. Interpretation. All references in this Consent to any document, instrument or agreement (a) shall include all contract variations, change orders, exhibits, schedules and other attachments thereto, and (b) shall include all documents, instruments or agreements issued or executed in replacement or as predecessor thereto, as amended, modified and supplemented from time to time and in effect at any given time. In the event of any conflict between the terms,
conditions and provisions of this Consent, the LLCA and the Assigned Agreement (as in effect on the date hereof), the terms, conditions and provisions of this Consent shall prevail.
[SIGNATURE PAGES TO FOLLOW]
IN WITNESS WHEREOF, the undersigned, by its officer thereunto duly authorized, has duly executed this Consent as of the date first written above.
| | | | | | | | | | | |
| TENASKA AMERICAN BEECH HOLDINGS, LLC, |
| a Delaware limited liability company, as the Investor | |
| | | |
| | | |
| | | |
| By: | | |
| Name: | |
| Title: | |
Signature Page
Equity Investor Consent
American Beech Solar Holdings LLC | American Beech Class B LLC
Tenaska American Beech Holdings, LLC | Natixis, New York Branch
| | | | | | | | | | | |
| AMERICAN BEECH SOLAR HOLDINGS LLC, |
| a Delaware limited liability company, as a Collateral Assignor | |
| | | |
| | | |
| | | |
| By: | | |
| Name: | |
| Title: | |
| | | | | | | | | | | |
| AMERICAN BEECH CLASS B LLC, | |
| a Delaware limited liability company, as a Collateral Assignor | |
| | | |
| | | |
| | | |
| By: | | |
| Name: | |
| Title: | |
Signature Page
Equity Investor Consent
American Beech Solar Holdings LLC | American Beech Class B LLC
Tenaska American Beech Holdings, LLC | Natixis, New York Branch
| | | | | | | | | | | |
| NATIXIS, NEW YORK BRANCH, | |
| as Collateral Agent | |
| | | |
| | | |
| | | |
| By: | | |
| Name: | |
| Title: | |
Signature Page
Equity Investor Consent
American Beech Solar Holdings LLC | American Beech Class B LLC
Tenaska American Beech Holdings, LLC | Natixis, New York Branch
EXHIBIT H
Schedule 6.1(d) (Consents to Collateral Assignment)
SCHEDULE 6.1(d)
TO CREDIT AGREEMENT
CONSENTS TO COLLATERAL ASSIGNMENT
Part I
1.Consent and Agreement by and between American Beech Project Company, Pure Power Contractors, LLC and Collateral Agent, dated as of the Financial Closing Date, with respect to the American Beech EPC Contract.
2.Consent and Agreement by and between Prairie Project Company, Teradyne, Inc. and Collateral Agent, dated as of as of the Financial Closing Date, with respect to that certain Renewable Energy Product Purchase Agreement, dated as of December 16, 2022, by and between Prairie Project Company and Teradyne, Inc., as amended by that certain First Amendment to Renewable Energy Product Purchase Agreement, dated June 20, 2023, that certain Second Amendment to Renewable Energy Product Purchase Agreement, dated July 21, 2023, that certain Third Amendment to Renewable Energy Product Purchase Agreement, dated August 19, 2023, that certain Fourth Amendment to Renewable Energy Product Purchase Agreement, dated August 25, 2023, that certain Fifth Amendment To Renewable Energy Product Purchase Agreement, dated September 1, 2023, and that certain Sixth Amendment to Renewable Energy Product Purchase Agreement, dated September 8, 2023.
3.Consent and Agreement by and between Bluebird Project Company, J. Aron & Company LLC and Collateral Agent, dated as of as of the Financial Closing Date, with respect to the Bluebird Power Purchase Agreement.
Part II
4.Consent and Agreement by and between American Beech Project Company, RES American Construction Inc. and Collateral Agent, with respect to the American Beech HV BOP Agreement.
5.Consent and Agreement by and between American Beech Project Company, Microsoft Corporation and Collateral Agent, with respect to the American Beech Power Purchase Agreement.
6.Consent and Agreement by and between American Beech Project Company, Bluebird Project Company, Prairie Project Company, BayWa r.e. Solar Projects LLC and Collateral Agent, with respect to the Construction Management Agreements.
7.Consent and Agreement by and between American Beech Project Company, Bluebird Project Company, Sungrow USA Corporation and Collateral Agent, with respect to the American Beech PCS Skid and Commissioning Purchase Order and the Bluebird Inverter Supply Agreement.
8.Consent and Agreement by and between American Beech Project Company (as assignee of BayWa r.e. Solar Projects LLC), Bluebird Project Company (as assignee of BayWa r.e. Solar Projects LLC), Prairie Project Company (as assignee of BayWa r.e. Solar Projects LLC), Virginia Transformer Corporation and Collateral Agent, with respect to the American Beech Transformer Purchase Agreement, Bluebird Transformer Purchase Agreement and Prairie Transformer Purchase Agreement.
9.Consent and Agreement by and between American Beech Project Company, Nextracker, LLC and Collateral Agent, with respect to the American Beech Tracker Supply Agreement.
10.Collateral Access Agreement by and between American Beech Project Company, Hellmann Worldwide Logistics and Collateral Agent, with respect to that certain Warehousing Services Agreement, dated September 30, 2024, between American Beech Project Company and Hellmann Worldwide Logistics.
11.Collateral Access Agreement by and between American Beech Project Company, Premier Global Logistics and Collateral Agent, with respect to that certain Warehouse Agreement, dated September 30, 2024, between American Beech Project Company and Premier Global Logistics.
12.Collateral Access Agreement by and between American Beech Project Company, Weida Freight Systems, Inc. and Collateral Agent, with respect to that certain Logistics and Warehouse Agreement, dated September 30, 2024, between American Beech Project Company and Weida Freight Systems, Inc.
13.Consent and Agreement by and between Bluebird Project Company, DEPCOM Power, Inc. and Collateral Agent, with respect to the Bluebird EPC Contract.
14.Consent and Agreement by and between Bluebird Project Company, RES System 3, LLC and Collateral Agent, with respect to the Bluebird HV EPC Contract.
15.Consent and Agreement by and between Prairie Project Company, Runergy USA Trading LLC and Collateral Agent, with respect to the Prairie Module Supply Agreement.
16.Consent and Agreement by and between Bluebird Project Company, Tenaska Power Services Co. and Collateral Agent, with respect to the Bluebird Energy Management Agreement.
17.Consent and Agreement by and between Prairie Project Company, BayWa r.e. Power Solutions, Inc. and Collateral Agent, with respect to the Prairie EPC Contract.
18.Consent and Agreement by and between Prairie Project Company, Akamai Technologies, Inc. and Collateral Agent, with respect to that certain Renewable Energy Product Purchase Agreement, dated as of September 26, 2023, by and between Prairie Project Company and Akamai Technologies, Inc.
19.Consent and Agreement by and between Prairie Project Company, City of Cambridge and Collateral Agent, with respect to that certain Renewable Energy Product Purchase Agreement, dated as of September 14, 2023, by and between Prairie Project Company and City of Cambridge.
20.Consent and Agreement by and between Prairie Project Company, Wayfair LLC and Collateral Agent, with respect to that certain Renewable Energy Product Purchase Agreement, dated as of December 22, 2022, by and between Prairie Project Company and Wayfair LLC, as amended by that certain First Amendment to Renewable Energy Product Purchase Agreement, dated June 16, 2023, that certain Second Amendment to Renewable Energy Product Purchase Agreement, dated July 21, 2023, that certain Third Amendment to Renewable Energy Product Purchase Agreement, dated August 19, 2023, that certain Fourth Amendment to Renewable Energy Product Purchase Agreement, dated August 31, 2023, and that certain Fifth Amendment To Renewable Energy Product Purchase Agreement, dated September 8, 2023.
21.Consent and Agreement by and between Prairie Project Company, GE Grid Solutions, LLC and Collateral Agent, with respect to the Prairie PCU Supply Agreement.
22.Consent and Agreement by and between Prairie Project Company, Array Tech, Inc. and Collateral Agent, with respect to the Prairie Tracker Supply Agreement.
23.Consent and Agreement by and between Prairie Project Company, Unimacts Global, LLC and Collateral Agent, with respect to the Prairie Tracker Pile Purchase Order.
24.Collateral Access Agreement by and between Prairie Project Company, C.H. Robinson Worldwide, Inc. and Collateral Agent, with respect to the Prairie Warehouse Agreement.
25.Consent and Agreement by and between Prairie Project Company, Little Prairie Solar LLC and Collateral Agent, with respect to the Prairie Shared Facilities Agreement.
26.Interparty Agreement (Tax Equity Investor) by and between Affiliated FM Insurance Company, the Opco Borrower, the Bluebird Project Company, the Class B Member (Bluebird), the HoldCo (Bluebird), the Administrative Agent and the Collateral Agent, with respect to the Bluebird Project Tax Equity Documents.
27.Consent and Agreement (Equity Investor) by and among Tenaska American Beech Holdings, LLC, American Beech TE Partnership, Class B Member (American Beech) and the Collateral Agent, with respect to the Tax Equity Documents of the American Beech Project.
EXHIBIT I
Amended Security Agreement
Execution Version
AMENDED AND RESTATED
GUARANTY, PLEDGE AND SECURITY AGREEMENT
(as amended by that certain Consent and Second Omnibus Amendment, dated as of
August 27, 2025)
Dated as of July 9, 2025
by and between
MN8 DEVCO 3 LLC, a Delaware limited liability company,
MN8 BLEEKER 2 LLC, a Delaware limited liability company,
AMERICAN BEECH SOLARCLASS B LLC, a North CarolinaDelaware limited liability company,
AMERICAN BEECH SOLAR HOLDINGS LLC, a Delaware limited liability company,
AMERICAN BEECH SOLAR LLC, a North Carolina limited liability company,
MN8 FMG CLASS B LLC, a Delaware limited liability company,
MN8 FMG LLC, a Delaware limited liability company,
BLUEBIRD SOLAR LLC, a Kentucky limited liability company,
BLUEBIRD SOLAR INVESTMENTS LLC, a Kentucky limited liability company,
PRAIRIE SOLAR HOLDINGS1, LLC, a Delaware limited liability company,
PRAIRIE SOLAR 1,HOLDINGS LLC, a Delaware limited liability company,
MN8 FMGPRAIRIE CLASS B LLC, a Delaware limited liability company,
MN8 FMG LLC, a Delaware limited liability company
(as the Grantors)
and
AMENDED AND RESTATED
GUARANTY, PLEDGE & SECURITY AGREEMENT
(MN8 BRIDGE CONSTRUCTION FINANCING)
| | |
|
| NATIXIS, NEW YORK BRANCH, |
| as the Collateral Agent for the Secured Parties |
|
TABLE OF CONTENTS
| | | | | | | | | | | |
| | | Page |
| | | |
| ARTICLE I DEFINITIONS | 2 |
| | | |
| Section 1.01 | Certain Defined Terms | 2 |
| | | |
| ARTICLE II THE COLLATERAL | 9 |
| | | |
| Section 2.01 | Grant of Collateral | 9 |
| Section 2.02 | Perfection | 12 |
| Section 2.03 | Delivery and Other Perfection | 12 |
| Section 2.04 | Other Financing Statements and Liens | 14 |
| Section 2.05 | Preservation and Protection of Security Interests | 14 |
| Section 2.06 | Attorney-in-Fact | 15 |
| Section 2.07 | Intellectual Property | 16 |
| Section 2.08 | Use of Collateral | 16 |
| Section 2.09 | Rights and Obligations | 17 |
| Section 2.10 | Termination | 17 |
| Section 2.11 | Commercial Tort Claims | 19 |
| Section 2.12 | Governmental Authorities | 19 |
| Section 2.13 | Special Provisions Relating to Pledged Ownership Interests | 20 |
| | | |
| ARTICLE III REPRESENTATIONS | 21 |
| | | |
| Section 3.01 | Organization; Power; Authorization; Validity | 21 |
| Section 3.02 | Title | 21 |
| Section 3.03 | Intellectual Property | 22 |
| Section 3.04 | Commercial Tort Claims | 22 |
| Section 3.05 | Deposit and Securities Accounts | 22 |
| Section 3.06 | Pledged Ownership Interests | 22 |
| Section 3.07 | Consent to Transfer | 23 |
| | | |
| ARTICLE IV COVENANTS | 26 |
| | | |
| Section 4.01 | Further Assurances | 26 |
| Section 4.02 | Covenants | 26 |
| Section 4.03 | Consent to Transfer | 26 |
| Section 4.04 | Preservation of Collateral | 26 |
| | | |
| ARTICLE V REMEDIES | 27 |
| | | |
| Section 5.01 | Events of Default, Etc | 27 |
| Section 5.02 | Deficiency | 28 |
| Section 5.03 | Private Sale | 28 |
| Section 5.04 | Cash Proceeds of Collateral | 29 |
| Section 5.05 | Application of Proceeds | 29 |
| | | |
| | | | | | | | | | | |
| ARTICLE VI GUARANTY | 30 |
| | | |
| Section 6.01 | Guaranty | 30 |
| Section 6.02 | Guaranty and Grant of Security Interest Absolute | 30 |
| Section 6.03 | Waivers and Acknowledgments | 33 |
| Section 6.04 | Subrogation | 35 |
| Section 6.05 | General Limitation on Guarantee Obligations | 35 |
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| ARTICLE VII MISCELLANEOUS PROVISIONS | 35 |
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| Section 7.01 | Communication | 35 |
| Section 7.02 | Amendments | 37 |
| Section 7.03 | Successors and Assigns | 38 |
| Section 7.04 | Survival | 38 |
| Section 7.05 | No Waiver; Remedies Cumulative | 38 |
| Section 7.06 | Counterparts | 38 |
| Section 7.07 | Captions | 39 |
| Section 7.08 | Severability | 39 |
| Section 7.09 | Governing Law; Waiver of Jury Trial; Jurisdiction and Process | 39 |
| Section 7.10 | Entire Agreement | 40 |
| Section 7.11 | Independent Obligations | 40 |
| Section 7.12 | Expenses | 40 |
| Section 7.13 | Collateral Agent | 40 |
| Section 7.14 | Reinstatement | 41 |
| Section 7.15 | Amendment and Restatement | 41 |
| | | | | |
| Annex 1 | Organization and Chief Executive Office of the Grantors |
| Annex 2 | Copyrights |
| Annex 3 | Patents |
| Annex 4 | Trademarks |
| Annex 5 | Commercial Tort Claims |
| Annex 6 | Deposit and Securities Accounts |
| Annex 7 | Pledged Ownership Interests |
| Annex 8 | Form of Guarantor Supplement |
AMENDED AND RESTATED GUARANTY, PLEDGE AND SECURITY AGREEMENT
This AMENDED AND RESTATED GUARANTY, PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated as of July 9, 2025, is made by and between MN8 DEVCO 3 LLC, a limited liability company duly formed and validly existing under the laws of the State of Delaware (together with its successors and permitted assigns, “Devco Borrower”), MN8 BLEEKER 2 LLC a limited liability company duly formed and validly existing under the laws of the State of Delaware (together with its successors and permitted assigns, “Opco Borrower 2”), MN8 FMG CLASS B LLC, a limited liability company duly formed and validly existing under the laws of the State of Delaware (together with its successors and permitted assigns, “Opco Borrower 1” and, together with Opco Borrower 2, “Opco Borrowers”), AMERICAN BEECH CLASS B LLC, a limited liability company duly formed and validly existing under the laws of the State of Delaware (together with its successors and permitted assigns, “Class B Member (American Beech)”), AMERICAN BEECH SOLAR LLC, a limited liability company duly formed and validly existing under the laws of the State of North Carolina (together with its successors and permitted assigns, the “American Beech Project Company”), AMERICAN BEECH SOLAR HOLDINGS LLC, a limited liability company duly formed and validly existing under the laws of the State of Delaware (together with its successors and permitted assigns, “American Beech TE Partnership”), BLUEBIRD SOLAR LLC, a limited liability company duly formed and validly existing under the laws of the Commonwealth of Kentucky (together with its successors and permitted assigns, the “Bluebird Project Company”), BLUEBIRD SOLAR INVESTMENTS LLC, a limited liability company duly formed and validly existing under the laws of the Commonwealth of Kentucky (together with its successors and permitted assigns, the “Bluebird IRB SPV”), PRAIRIE SOLAR HOLDINGS LLC, a limited liability company duly formed and validly existing under the laws of the State of Delaware (together with its successors and permitted assigns, the “Prairie Holdings”), PRAIRIE CLASS B LLC, a Delaware limited liability company a limited liability company duly formed and validly existing under the laws of the State of Delaware (together with its successors and permitted assigns, the “Class B Member (Prairie)”), PRAIRIE SOLAR 1, LLC, a limited liability company duly formed and validly existing under the laws of the State of Delaware (together with its successors and permitted assigns, the “Prairie Project Company”), MN8 FMG LLC, a limited liability company duly formed and validly existing under the laws of the State of Delaware (together with its successors and permitted assigns, the “Bluebird TE Partnership” and together with Devco Borrower, Opco Borrowers, American Beech Project Company, American Beech TE Partnership, Bluebird Project Company, Bluebird IRB SPV, Prairie Holdings, Prairie Project Company and each Person that delivers a Guarantor Supplement in accordance with Section 4.04, the “Grantors”, and each a “Grantor”), and NATIXIS, NEW YORK BRANCH, in its capacity as collateral agent (in such capacity and together with its successors and permitted assigns, the “Collateral Agent”) for the Secured Parties under and as defined in the Credit Agreement (the “Secured Parties”).
R E C I T A L S:
A. Pursuant to that certain Credit Agreement, dated as of December 31, 2024 (the “Original Credit Agreement”) among Devco Borrower, MN8 Bleeker LLC, a Delaware limited
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liability company (“Former Borrower”), the financial institutions from time to time party thereto as lenders (the “Lenders”) and as issuers of letters of credit (the “LC Issuers”), the Collateral Agent, Natixis, New York Branch, as the Administrative Agent for the Lenders (the “Administrative Agent”), and the other parties party thereto, the Lenders agreed to extend credit to Devco Borrower and Former Borrower in the amounts specified and on the terms and subject to the conditions set forth therein.
B. The Original Credit Agreement was amended by (i) that certain First Amendment to Credit Agreement, dated as of May 6, 2025, (ii) that certain Second Amendment to Credit Agreement, dated June 12, 2025, (iii) that certain Consent and Omnibus Amendment, dated as of June 13, 2025 (the “Omnibus Amendment”), (iv) that certain Consent and Amendment, dated as of June 23, 2025, and (v) that certain Release, Joinder, Consent and Fifth Amendment to Credit Agreement (the “Fifth CA Amendment”) dated as of the date hereof, under which, among other things, each of the Opco Borrowers replaced the Former Borrower as Borrowers under the Credit Agreement (the Original Credit Agreement, as so amended and as may be further amended, amended and restated, modified or supplemented from time to time, the “Credit Agreement”).
C. Each of Devco Borrower, Opco Borrower 1, American Beech Project Company, Bluebird Project Company, Bluebird IRB SPV, Prairie Holdings, Prairie Project Company and Bluebird TE Partnership (collectively, the “Existing Grantors” and each, an “Existing Grantor”) and Former Borrower entered into that certain Security Agreement dated as of December 31, 2024 in favor of the Collateral Agent, as amended by the Omnibus Amendment (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “Existing Security Agreement”), to secure the Secured Obligations (as defined in the Existing Security Agreement).
D. The execution and delivery of this Agreement by the parties hereto is a condition to the effectiveness of the Fifth CA Amendment pursuant to Section 4(b) thereof.
NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, each Grantor hereby agrees with the Collateral Agent as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms.
(a) Each capitalized term used and not otherwise defined herein shall have the meaning assigned to such term (whether directly or by reference to another agreement or document) in Section 1.1 of the Credit Agreement as in effect on the date hereof (or as modified with the consent of the applicable Secured Parties). The Rules of Interpretation set forth in Section 1.2 of the Credit Agreement are hereby incorporated by reference as if fully set forth herein.
(b) The terms “Accounts”, “Chattel Paper”, “Commercial Tort Claims”, “Deposit Account”, “Document”, “Electronic Chattel Paper”, “Equipment”, “Fixture”, “General
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Intangible”, “Goods”, “Instrument”, “Inventory”, “Investment Property”, “Letter-of-Credit Right”, “Payment Intangible”, “Proceeds”, “Software”, and “Tangible Chattel Paper” have the respective meanings ascribed thereto in Article 9 of the UCC. The terms “Financial Assets”, “Securities Account” and “Security” have the respective meanings ascribed thereto in Article 8 of the UCC.
(c) In addition to the terms defined in the Credit Agreement, the preamble and the recitals, the following terms shall have the following respective meanings:
“AC1 ASOA” means AC1 ASOA LLC, a Delaware limited liability company.
“AC1 ASOA Pledged Ownership Interests” has the meaning assigned to that term in Section 2.01(l)(i)(C).
“Agreement” has the meaning assigned to that term in the Preamble.
“American Beech LLC Agreements” means collectively, (i) the Third Amended and Restated Operating Agreement of American Beech Solar LLC, dated December 27, 2024, with Devco Borrower as the Sole Member and (ii) the Second Amended and Restated Limited Liability Company Agreement of AC1 ASOA LLC, dated January 10, 2023, among the American Beech Project Company and Halifax County Solar LLC, as amended by Amendment to the Second Amended and Restated Limited Liability Company Agreement of AC1 ASOA LLC, dated April 14, 2023, among the American Beech Project Company, Edgecombe AC1 ASOA LLC and Halifax County Solar LLC.
“American Beech TE Partnership LLC Agreement” means (x) prior to the Transfer Date with respect to the American Beech Project, the Limited Liability Company Agreement of American Beech Solar Holdings LLC, dated as of June 30, 2025, with Class B Member (American Beech) as the sole member and (y) from and after the Transfer Date with respect to the American Beech Project, the Amended and Restated Limited Liability Company Agreement of American Beech Solar Holdings LLC, dated as of the Transfer Date with respect to the American Beech Project.
“American Beech TE Pledged Ownership Interests” means, the Opco Borrower 2 Subsidiary Pledged Ownership Interest that relate to the Class B Member (American Beech)’s ownership of the membership interests of the American Beech TE Partnership.
“American Beech Pledged Ownership Interests” means, (x) prior to the Transfer Date with respect to the American Beech Project, the Devco Borrower Subsidiary Pledged Ownership Interests that relate to Devco Borrower’s ownership of the membership interests of the American Beech Project Company and (y) from and after the Transfer Date with respect to the American Beech Project, the Opco Borrower 2 Subsidiary Pledged Ownership Interests that relate to the American Beech TE PartnershipPartnership’s ownership of the membership interests of the American Beech Project Company.
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“American Beech Project Company” has the meaning assigned to that term in the Preamble.
“American Beech TE Partnership” has the meaning assigned to that term in the Preamble.
“Assigned Agreements” shall mean all Project Documents to which a Grantor is a party and all other contracts, agreements, leases and other similar instruments related to the Projects and all amounts payable to any Grantor thereunder and all amendments, supplements, replacements, substitutions and renewals thereof and thereto.
“Bluebird TE Partnership LLC Agreement” means, the Amended and Restated Limited Liability Company Agreement of MN8 FMG LLC, dated as of the Omnibus Amendment Effective Date.
“Bluebird TE Pledged Ownership Interests” means, the Opco Borrower 1 Subsidiary Pledged Ownership Interest that relate to the Opco Borrower 1’s ownership of the membership interests of the Bluebird TE Partnership.
“Bluebird IRB SPV” has the meaning assigned to that term in the preamble.
“Bluebird IRB SPV LLC Agreement” means the Amended and Restated Operating Agreement of Bluebird Solar Investments LLC, a Kentucky limited liability company, dated December 27, 2024.
“Bluebird IRB SPV Pledged Ownership Interests” means, (x) prior to the Transfer Date with respect to the Bluebird Project, the Devco Borrower Subsidiary Pledged Ownership Interests and (y) from and after the Transfer Date with respect to the Bluebird Project, the Opco Borrower 1 Subsidiary Pledged Ownership Interests, in each case, that relate to the Bluebird Project Company’s ownership of the membership interests of the Bluebird IRB SPV.
“Bluebird LLC Agreements” means, collectively, the Bluebird Solar LLC Agreement and the Bluebird IRB SPV LLC Agreement.
“Bluebird Pledged Ownership Interests” means, (x) prior to the Transfer Date with respect to the Bluebird Project, the Devco Borrower Subsidiary Pledged Ownership Interests that relate to Devco Borrower’s ownership of the membership interests of the Bluebird Project Company and (y) from and after the Transfer Date with respect to the Bluebird Project, the Opco Borrower 1 Subsidiary Pledged Ownership Interests that relate to the Bluebird TE Partnership’s ownership of the membership interests of the Bluebird Project Company.
“Bluebird Project Company” has the meaning assigned to that term in the Preamble.
“Bluebird Solar LLC Agreement” means the Fourth Amended and Restated Operating Agreement of Bluebird Solar LLC, dated as of the Omnibus Amendment Effective Date, with Bluebird TE Partnership as the Sole Member.
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“Borrower” means, (a) prior to the date on which the Back-Leverage Date for all Projects shall have occurred, collectively, the Devco Borrower and each Opco Borrower, and each, a “Borrower”, and (b) from and after the date on which the Back-Leverage Date for all Projects shall have occurred, each Opco Borrower.
“Collateral” has the meaning assigned to that term in Section 2.01.
“Collateral Agent” has the meaning assigned to that term in the Preamble.
“Copyright Collateral” shall mean all Copyrights, whether now owned or hereafter acquired by a Grantor. Notwithstanding the foregoing, Copyright Collateral shall not include any Copyright which would be rendered invalid, abandoned, void or unenforceable by reason of its being included as part of the Copyright Collateral.
“Copyrights” shall mean, collectively, (a) all copyrights, copyright registrations and applications for copyright registrations, (b) all renewals and extensions of all copyrights, copyright registrations and applications for copyright registration and (c) all rights, now existing or hereafter coming into existence, (i) to all income, royalties, damages and other payments (including in respect of all past, present or future infringements) now or hereafter due or payable under or with respect to any of the foregoing, (ii) to sue for all past, present and future infringements with respect to any of the foregoing and (iii) otherwise accruing under or pertaining to any of the foregoing throughout the world.
“Credit Agreement” has the meaning assigned to that term in the Recitals.
“Devco Borrower” has the meaning assigned to that term in the Preamble.
“Devco Borrower Subsidiary” means, to the extent the following Persons are Subsidiaries of Devco Borrower, (a) until the Back-Leverage Date with respect to the American Beech Project, the American Beech Project Company, (b) until the Back-Leverage Date with respect to the Bluebird Project, the Bluebird Project Company and the Bluebird IRB SPV, (c) until the Back-Leverage Date with respect to the Prairie Project, Prairie Holdings and the Prairie Project Company and (d) until the Back-Leverage Date with respect to the Project directly or indirectly owned by such Subsidiary, any Subsidiary of the Devco Borrower who executes a Guarantor Supplement.
“Devco Borrower Subsidiary Pledged Ownership Interests” has the meaning assigned to that term in Section 2.01(l)(i)(A).
“Excluded Assets” shall mean (a) any license, lease, contract, property rights or agreement, Applicable Permits and other Permits, investment tax credits, production tax credits or similar rights to which a Grantor is a party (or to any of its rights or interests thereunder) if, and only to the extent and for so long as, the grant of a security interest would constitute or result in either (1) the abandonment, revocation, voidability, invalidation or unenforceability of any right, title or interest of such Grantor therein or (2) a breach or termination pursuant to the terms of or a default under, any such license, lease, contract, property rights or agreement, Applicable
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Permits and other Permits, investment tax credits, production tax credits or similar rights to which such Grantor is a party (other than to the extent that any such term would be rendered ineffective by Section 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code as in effect in the relevant jurisdiction and such ineffectiveness would not otherwise constitute a breach); (b) any property to the extent that a grant of a security interest in such property is prohibited by Applicable Law; (c) any “intent-to-use” applications for trademarks or service marks filed in the PTO pursuant to 15 U.S.C. §1051 Section 1(b) unless and until a “Statement of Use” or “Amendment to Allege Use” in respect of the mark is accepted by the PTO pursuant to 15 U.S.C. §1051 Section 1(c) or Section 1(d); (d) any Motor Vehicle; (e) any distribution or Restricted Payment or proceeds thereof that a Borrower distributes to any Person (other than a Grantor) that is permitted pursuant to the terms of the Credit Documents; and (f) any property obtained by a Grantor after the Financial Closing Date with respect to which the Administrative Agent determines in its reasonable discretion that the costs of obtaining security interests therein are excess in relation to the value of the security to be afforded thereby.
“First-Tier Subsidiaries” means, individually or collectively as the context may require, AC1 ASOA, the Bluebird IRB SPV and/or the Prairie Project Company.
“Grantor” has the meaning assigned to that term in the Preamble.
“Guaranteed Obligations” has the meaning assigned to that term in Section 6.01.
“Guarantor” shall mean, individually or collectively as the context may require, the American Beech Project Company, American Beech TE Partnership, the Bluebird Project Company, the Bluebird IRB SPV, Prairie Holdings, the Prairie Project Company, the Bluebird TE Partnership, and/or each Person that delivers a Guarantor Supplement, in accordance with Section 4.04.
“Guarantor Supplement” means a Guarantor Supplement, substantially in the form of Annex 8.
“Guaranty” has the meaning assigned to such term in Section 6.02(b)(i).
“Intellectual Property” shall mean all Copyright Collateral, all Patent Collateral and all Trademark Collateral, together with (a) all inventions, processes, production methods, proprietary information, know-how and trade secrets, (b) all licenses or user or other agreements granted to a Grantor with respect to any of the foregoing, in each case whether now or hereafter owned or used, (c) all information, customer lists, identification of suppliers, data, plans, blueprints, specifications, designs, drawings, recorded knowledge, surveys, engineering reports, test reports, manuals, materials standards, processing standards, performance standards, catalogs, computer and automatic machinery software and programs, (d) all field repair data, sales data and other information relating to sales or service of products now or hereafter manufactured, (e) all accounting information and all media in which or on which any information or knowledge or data or records may be recorded or stored and all computer programs used for the compilation or printout of such information, knowledge, records or data, (f) all Applicable Permits now held or hereafter obtained by a Grantor in respect of any of the foregoing, and (g) all causes of action,
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claims and warranties now owned or hereafter acquired by a Grantor in respect of any of the foregoing. It is understood that Intellectual Property shall include all of the foregoing owned or acquired by a Grantor on a worldwide basis.
“LC Issuers” has the meaning assigned to that term in the Recitals.
“Lenders” has the meaning assigned to that term in the Recitals.
“Motor Vehicles” shall mean motor vehicles, tractors, trailers and other like property, whether or not the title to any such property is governed by a certificate of title or ownership.
“Opco Borrower 1” has the meaning assigned to that term in the Preamble.
“Opco Borrower 1 Subsidiary” means, to the extent the following Persons are Subsidiaries of Opco Borrower 1 and solely until the Back-Leverage Date for such Person(s)’ Projects: (a) with respect to the Bluebird Project, the Bluebird TE Partnership, the Bluebird Project Company and the Bluebird IRB SPV and (b) any Subsidiary of the Opco Borrower 1 who executes a Guarantor Supplement.
“Opco Borrower 1 Subsidiary Pledged Ownership Interests” has the meaning assigned to that term in Section 2.01(l)(i)(B).
“Opco Borrower 2” has the meaning assigned to that term in the Preamble.
“Opco Borrower 2 Subsidiary” means, to the extent the following Persons are Subsidiaries of Opco Borrower 2 and solely until the Back-Leverage Date for such Person(s)’ Projects: (a) with respect to the American Beech Project, the American Beech Project Company and American Beech TE Partnership, (b) with respect to the Prairie Project, Prairie Holdings and the Prairie Project Company and (c) any Subsidiary of the Opco Borrower 2 who executes a Guarantor Supplement.
“Opco Borrower 2 Subsidiary Pledged Ownership Interests” has the meaning assigned to that term in Section 2.01(l)(i)(C).
“Opco Borrowers” has the meaning assigned to that term in the Preamble.
“Ownership Collateral” has the meaning assigned to that term in Section 2.01(l)(iv).
“Patent Collateral” shall mean all Patents, whether now owned or hereafter acquired by a Grantor. Notwithstanding the foregoing, Patent Collateral shall not include any Patents which would be rendered invalid, abandoned, void or unenforceable by reason of its being included as part of the Patent Collateral.
“Patents” shall mean, collectively, (a) all patents and patent applications, (b) all reissues, divisions, continuations, renewals, extensions and continuations-in-part of all patents or patent applications and (c) all rights, now existing or hereafter coming into existence, (i) to all income, royalties, damages, and other payments (including in respect of all past, present and future
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infringements) now or hereafter due or payable under or with respect to any of the foregoing, (ii) to sue for all past, present and future infringements with respect to any of the foregoing and (iii) otherwise accruing under or pertaining to any of the foregoing throughout the world, including all inventions and improvements described or discussed in all such patents and patent applications.
“Pledged Ownership Interests” has the meaning assigned to that term in Section 2.01(l)(i)(E).means, collectively, the Devco Borrower Subsidiary Pledged Ownership Interests, the Opco Borrower 1 Subsidiary Pledged Ownership Interests, the Opco Borrower 2 Subsidiary Pledged Ownership Interests, AC1 ASOA Pledged Ownership Interests, Prairie Holdings Pledged Ownership Interests, Prairie Pledged Ownership Interests, American Beech TE Pledged Ownership Interests, American Beech Pledged Ownership Interests, Bluebird IRB SPV Pledged Ownership Interests, Bluebird TE Pledged Ownership Interests and Bluebird Pledged Ownership Interests.
“Prairie Holdings” has the meaning assigned to that term in the preamble.
“Prairie Holdings LLC Agreement” means the Third Amended and Restated Operating Agreement of Prairie Solar Holdings LLC, dated December 27, 2024, with Devco Borrower as the Sole Member.
“Prairie Holdings Pledged Ownership Interests” means the Devco Borrower Subsidiary Pledged Ownership Interests that relate to Devco Borrower’s ownership of the membership interests of the Prairie Holdings.
“Prairie LLC Agreements” mean, collectively, the Prairie Solar LLC Agreement and the Prairie Holdings LLC Agreement.
“Prairie Pledged Ownership Interests” means, (x) prior to the Transfer Date with respect to the Prairie Project, the Devco Borrower Subsidiary Pledged Ownership Interests that relate to Prairie Holdings’ ownership of the membership interests of the Prairie Project Company and (y) from and after the Transfer Date with respect to the Prairie Project, the Opco Borrower 2 Subsidiary Pledged Ownership Interests that relate to the HoldCo (Prairie)’s ownership of the membership interests of the Prairie Project Company.
“Prairie Project Company” has the meaning assigned to that term in the Preamble.
“Prairie Solar LLC Agreement” means the Third Amended and Restated Operating Agreement of Prairie Solar 1, LLC, dated December 27, 2024, with Prairie Holdings as the Sole Member.
“Project Company” means, individually or collectively as the context may require, the American Beech Project Company, the Bluebird Project Company and/or the Prairie Project Company.
“PTO” shall mean the United States Patent and Trademark Office.
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“Second-Tier Subsidiaries” means, individually or collectively as the context may require, the American Beech Project Company, the Bluebird Project Company and/or Prairie Holdings.
“Secured Obligations” shall mean, collectively, any and all indebtedness and liabilities of the Borrowers and other Obligations (including, but not limited to, all such obligations in respect of principal, interest (including post-petition interest), fees, indemnities, costs and other expenses, whether due after acceleration or otherwise and whether incurred before or after a bankruptcy of any Loan Party), of whatever nature and however evidenced, held or acquired, or owed to the Secured Parties under or pursuant to any Credit Document, in each case, direct or indirect, primary or secondary, fixed or contingent, now existing or hereafter arising, due or to become due, absolute or contingent.
“Secured Parties” has the meaning assigned to that term in the Preamble.
“Trademark Collateral” shall mean all Trademarks, whether now owned or hereafter acquired by a Grantor. Notwithstanding the foregoing, Trademark Collateral shall not include any Trademark which would be rendered invalid, abandoned, void or unenforceable by reason of its being included as part of the Trademark Collateral.
“Trademarks” shall mean, collectively, (a) all trade names, trademarks and service marks, logos, trademark and service mark registrations and applications for trademark and service mark registrations, (b) all renewals and extensions of any of the foregoing and (c) all rights, now existing or hereafter coming into existence, (i) to all income, royalties, damages and other payments (including in respect of all past, present and future infringements) now or hereafter due or payable under or with respect to any of the foregoing, (ii) to sue for all past, present and future infringements with respect to any of the foregoing and (iii) otherwise accruing under or pertaining to any of the foregoing throughout the world, together, in each case, with the product lines and goodwill of the business connected with the use of, or otherwise symbolized by, each such trade name, trademark and service mark.
“Transfer Date” shall mean with respect to each Project, the date on which the membership interests in the applicable Project Company are transferred from the Devco Borrower or its subsidiaries to the applicable Opco Borrower or its subsidiaries pursuant to the Tax Equity Documents or TC Structure Documents, as applicable, for such Project.
“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York from time to time; provided that, if by reason of any mandatory provisions of law, the perfection, the effect of perfection or non-perfection or priority of the security interests granted to the Collateral Agent pursuant to this Agreement are governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, then “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of such perfection, effect of perfection or non-perfection or priority.
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ARTICLE II
THE COLLATERAL
Section 2.01 Grant of Collateral. As collateral security for the performance and prompt payment in full when due (whether at stated maturity, upon acceleration, upon any optional or mandatory prepayment or otherwise) of the Secured Obligations, (i) each Existing Grantor hereby reaffirms and confirms the security interest granted by it pursuant to the Existing Security Agreement and (ii) each Grantor hereby pledges and grants to the Collateral Agent, for the benefit of the Secured Parties, a security interest in all of such Grantor’s right, title and interest in, to and under the following property, assets and revenues, whether now owned or in the future acquired by such Grantor and whether now existing or in the future coming into existence (all of the property, assets and revenues described in this Article II, collectively, the “Collateral”):
(a) all Accounts, Instruments, Documents, Chattel Paper (whether Tangible Chattel Paper or Electronic Chattel Paper), Goods (including Inventory, Equipment and Fixtures), Payment Intangibles, Software and other General Intangibles and all Letter-of-Credit Rights;
(b) all Deposit Accounts;
(c) the Collateral Accounts and the assets from time to time therein;
(d) all Investment Property, Financial Assets and Securities Accounts;
(e) all Intellectual Property;
(f) all Commercial Tort Claims described in Annex 5;
(g) each and every easement and right-of-way in favor of such Grantor, including those relating to the Projects;
(h) all other tangible and intangible property of such Grantor, including all books, correspondence, credit files, records, invoices, tapes, cards, computer runs and other papers and documents in the possession or under the control of such Grantor or any computer bureau or service company from time to time acting for such Grantor;
(i) all Assigned Agreements;
(j) all Applicable Permits required or obtained in connection with the development, construction, ownership and/or operation of the Projects and/or in connection with any transaction contemplated by the Credit Agreement;
(k) all Proceeds and products in whatever form of all or any part of the other Collateral, including all rents, profits, income and benefits and all proceeds of insurance and all condemnation awards and all other compensation for any event of loss with respect to all or any part of the other Collateral (together with all rights to recover and proceed with respect to the
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same), and all accessions to, substitutions for and replacements of all or any part of the other Collateral; and
(l)
(i)
(A) all membership interests in each Devco Borrower Subsidiary and all other ownership interests of whatever class or character in each Devco Borrower Subsidiary, now or hereafter directly or indirectly owned by Devco Borrower, in each case, together with the original certificates evidencing the same (collectively, the “Devco Borrower Subsidiary Pledged Ownership Interests”);
(B) all membership interests in each Opco Borrower 1 Subsidiary and all other ownership interests of whatever class or character in each Opco Borrower 1 Subsidiary, now or hereafter directly or indirectly owned by Opco Borrower 1, in each case, together with the original certificates evidencing the same (collectively, the “Opco Borrower 1 Subsidiary Pledged Ownership Interests”);
(C) all membership interests in each Opco Borrower 2 Subsidiary and all other ownership interests of whatever class or character in each Opco Borrower 2 Subsidiary, now or hereafter directly or indirectly owned by Opco Borrower 2, in each case, together with the original certificates evidencing the same (collectively, the “Opco Borrower 2 Subsidiary Pledged Ownership Interests”);
(D) all membership interests in AC1 ASOA and all other ownership interests of whatever class or character in AC1 ASOA, now or hereafter owned by the American Beech Project Company (collectively, the “AC1 ASOA Pledged Ownership Interests”) and together with the Devco Borrower Subsidiary Pledged Ownership Interests, the Opco Borrower 1 Subsidiary Pledged Ownership Interests and the Opco Borrower 2 Subsidiary Pledged Ownership Interests, the “Pledged Ownership Interests”);;
(ii) all membership interests, securities, moneys or property representing a dividend on any of the Pledged Ownership Interests, or representing a distribution or return of capital upon or in respect of the Pledged Ownership Interests, or resulting from a split-up, revision, reclassification or other like change of the Pledged Ownership Interests or otherwise received in exchange therefor, and any subscription, warrants, rights or options issued to the holders of, or otherwise in respect of, the Pledged Ownership Interests;
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(iii) without affecting the obligations of any Grantor under any provision prohibiting that action under any Credit Document or other document pursuant to which any other Secured Obligation is incurred, as applicable, (A) in the event of any consolidation or merger in which any Devco Borrower Subsidiary, any Opco Borrower 1 Subsidiary or any Opco Borrower 2 Subsidiary is not the surviving entity, all ownership interests of any class or character of the successor entity (unless that successor entity is the applicable Grantor itself), formed by or resulting from such consolidation or merger and (B) in the event of any consolidation or merger in which AC1 ASOA is not the surviving entity, all ownership interests of any class or character of the successor entity (unless that successor entity is the applicable Grantor itself), formed by or resulting from such consolidation or merger which are owned by any Grantor; and
(iv) all proceeds of any of the foregoing (collectively, and together with the property described in clauses (i), (ii) and (iii) above, the “Ownership Collateral”).
IT BEING UNDERSTOOD, HOWEVER, that, notwithstanding anything contained herein to the contrary, the security interest granted under this Section 2.01 will not attach to, and the term “Collateral” shall not include, any Excluded Assets.
Section 2.02 Perfection. Concurrently with the execution and delivery of this Agreement, the Grantors shall file, or shall cause to be filed, and hereby authorizes the Collateral Agent to file, such financing statements and other documents in such offices as may be necessary or as the Collateral Agent may request to perfect the security interests granted by Section 2.01 of this Agreement and execute and deliver, or cause to be executed and delivered, such short-form assignments or security agreements relating to Collateral consisting of the Intellectual Property as may be necessary or as the Required Lenders may reasonably require. Without limiting the foregoing, each Grantor authorizes the filing of UCC financing statements describing the Collateral as “all assets whether now owned or hereafter acquired” or “all personal property” of such Grantor (provided that no such description shall be deemed to modify the description of Collateral set forth in Section 2.01) and hereby authorizes the filing of any UCC financing statements by or on behalf of the Required Lenders with such descriptions of collateral or describing the collateral using words of similar effect.
Section 2.03 Delivery and Other Perfection. Each Grantor shall:
(a) If any certificates or other instruments representing or evidencing any Pledged Ownership Interests constituting part of the Collateral are received by Devco Borrower, either Opco Borrower or any other Grantor, as applicable, forthwith (i) deliver to the Collateral Agent the certificates or other instruments representing or evidencing the same, duly endorsed in blank or accompanied by such instruments of assignment and transfer in such form and substance as the Collateral Agent (at the written direction of the Administrative Agent) may reasonably request, all of which thereafter shall be held by the Collateral Agent, pursuant to the terms of this Agreement, as part of the Collateral and (ii) take such other action as the Collateral Agent (at the written direction of the Administrative Agent) may reasonably deem necessary or
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appropriate to duly record or otherwise perfect the security interest created hereunder in such Collateral; provided, however, in order to facilitate the receipt of any certificates or instruments representing or evidencing replacement Pledged Ownership Interests, duly endorsed in blank or accompanied by such instruments of assignment and transfer, the Collateral Agent shall return to the applicable Grantor for cancellation the original certificates representing or evidencing such Pledged Ownership Interests being replaced and such instruments of assignment and transfer related thereto previously delivered to it;
(b) deliver to the Collateral Agent any and all Instruments constituting part of the Collateral in which such Grantor purports to grant a security interest hereunder, endorsed and/or accompanied by such instruments of assignment and transfer in such form and substance as the Collateral Agent may reasonably request; provided, that so long as no Event of Default shall have occurred and be continuing, such Grantor may retain for collection any Instruments, including performance bonds, received by such Grantor in the ordinary course of its business and the Collateral Agent shall, promptly upon request of such Grantor, at such Grantor’s expense, make appropriate arrangements for making any Instrument pledged by such Grantor available to such Grantor for purposes of presentation, collection or renewal (any such arrangement to be effected against trust receipt or like document);
(c) give, execute, deliver, file, record, authorize or obtain all such financing statements, notices, instruments, documents, agreements or consents or other papers as may be necessary or desirable, or as may be requested by the Collateral Agent (at the written direction of the Administrative Agent), to create, preserve, perfect or validate the security interest granted pursuant hereto or to enable the Collateral Agent to exercise and enforce its rights hereunder with respect to such pledge and security interest, including, without limitation, upon the occurrence and during the continuation of an Event of Default, causing any or all of the Pledged Ownership Interests to be transferred of record in the name of the Collateral Agent or its nominee (for the avoidance of doubt, the Collateral Agent agrees that if any Pledged Ownership Interests are transferred into its name or the name of its nominee prior to an Event of Default, the Collateral Agent will thereafter promptly give to the Pledgor copies of any notices and communications received by it with respect to the Pledged Ownership Interests pledged by the Pledgor hereunder, provided that notices to account debtors in respect of any Accounts, Chattel Paper or General Intangibles and to obligors on Instruments shall be subject to the provisions of clause (d) below);
(d) upon the occurrence and during the continuation of any Event of Default, upon request of the Collateral Agent (at the written direction of the Administrative Agent), promptly notify (and such Grantor hereby authorizes the Collateral Agent so to notify) each account debtor in respect of any Accounts, Chattel Paper, Instruments or General Intangibles of such Grantor that such Collateral has been assigned to the Collateral Agent hereunder, and that any payments due or to become due in respect thereof are to be made directly to the Collateral Agent;
(e) keep full and accurate books and records relating to the Collateral, and stamp or otherwise mark such books and records in such manner as the Collateral Agent (at the
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written direction of the Administrative Agent) may reasonably request in order to reflect the security interests granted by this Agreement;
(f) forward to the Collateral Agent copies of any notices or communications received by such Grantor with respect to the Collateral; and
(g) execute and deliver and cause to be filed, such continuation statements, and do such other acts and things, as may be necessary to maintain the perfection of the security interest granted pursuant hereto.
Section 2.04 Other Financing Statements and Liens. Without the written consent of the Collateral Agent (at the written direction of the Administrative Agent), no Grantor shall (a) file or suffer to be on file, or authorize or permit to be filed or to be on file, in any jurisdiction, any financing statement or like instrument with respect to any of the Collateral in which the Collateral Agent is not named as the sole secured party for the benefit of the Secured Parties, except for any such filings made solely in connection with Permitted Liens, or (b) cause or permit any Person other than the Collateral Agent to have “control” (as defined in Section 9-104, 9-105, 9-106 or 9-107 of the UCC), except in connection with Permitted Liens, of any Deposit Account, Electronic Chattel Paper, Investment Property or Letter-of-Credit Right constituting part of the Collateral.
Section 2.05 Preservation and Protection of Security Interests. Each Grantor shall:
(a) upon the acquisition after the date of this Agreement by such Grantor of any Instruments, Deposit Account, other Investment Property, Electronic Chattel Paper, Letter-of Credit Rights or other Equipment, in each case constituting part of the Collateral, covered by a certificate of title or ownership, promptly (i) take such action with respect to that Collateral as is specified for that type of Collateral in Section 2.03 and (ii) take all such other actions, and authenticate or sign and file or record such other records or instruments, as are necessary or as the Collateral Agent (at the written direction of the Administrative Agent) may reasonably request to create, perfect and establish the priority of the Liens granted by this Agreement in any and all of the Collateral, to preserve the validity, perfection or priority of the Liens granted by this Agreement in any and all of the Collateral or to enable the Collateral Agent to exercise its remedies, rights, powers and privileges under this Agreement;
(b) upon such Grantor’s acquiring, or otherwise becoming entitled to the benefits of, any Copyright (or copyrightable material), Patent (or patentable invention), Trademark (or associated goodwill) or other Intellectual Property or upon or prior to such Grantor’s filing, either directly or through the Collateral Agent, any licensee or any other designee, of any application with any Governmental Authority for any Copyright, Patent, Trademark or other Intellectual Property, in each case constituting part of the Collateral, and in each case after the date of this Agreement, execute and deliver such contracts, agreements and other instruments as the Collateral Agent (at the written direction of the Administrative Agent) may reasonably request to create, perfect and establish the priority of the Liens granted by this Agreement in that and any related Intellectual Property; and
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(c) whether with respect to Collateral as of the date of this Agreement or Collateral in which such Grantor acquires rights in the future, authorize, give, authenticate, execute, deliver, file or record any and all financing statements, notices, contracts, agreements or other records or instruments, obtain any and all Applicable Permits, and take all such other actions, as are necessary or as the Collateral Agent (at the written direction of the Administrative Agent) may reasonably request to create, perfect and establish the priority of the Liens granted by this Agreement in any and all of the Collateral, to preserve the validity, perfection or priority of the Liens granted by this Agreement in any and all of the Collateral or to enable the Collateral Agent to exercise its remedies, rights, powers and privileges under this Agreement, including upon the occurrence and during the continuation of an Event of Default, causing any or all Securities to be transferred of record into the name of the Collateral Agent or its nominee.
Section 2.06 Attorney-in-Fact.
(a) Without limiting the rights and powers granted by this Agreement to the Collateral Agent, upon the occurrence and during the continuance of any Event of Default (other than with respect to clause (i) below), the Collateral Agent and any officer or agent thereof is hereby appointed the attorney-in-fact of each Grantor, with full power of substitution and with full irrevocable power and authority in the place and stead of each Grantor and in the name of each Grantor or in its own name, for the purpose of carrying out the provisions of this Agreement, including Sections 2.02, 2.03, 2.04 and 2.05 and Article V, and taking any action and executing any instruments that the Collateral Agent (at the written direction of the Administrative Agent) may deem necessary, advisable or desirable to accomplish the purposes hereof, including (i) to preserve the validity, perfection and priority of the Liens granted by this Agreement; (ii) to direct any party liable for any payment under any Collateral to make payment of any moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct, (iii) to execute, in connection with any sale or disposition of the Collateral, any endorsements, assignments, bills of sale or other instruments of conveyance or transfer with respect to all or any part of the Collateral, (iv) to receive, endorse and collect all checks made payable to the order of each Grantor representing any dividend, payment or other distribution in respect of the Collateral or any part thereof and to give full discharge for the same and (v) at any time, or from time to time, at the Collateral Agent’s option, to do all acts and things that the Collateral Agent (at the written direction of the Administrative Agent) determines to be necessary to protect, preserve or realize upon the Collateral and the Collateral Agent’s and the other Secured Parties’ security interests therein and to effect the intent of this Agreement, all as fully and effectively as each Grantor might do. This appointment as attorney-in-fact is irrevocable and coupled with an interest.
(b) The expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Section 2.06, together with interest thereon at a rate per annum equal to the Default Rate under the Credit Agreement, from the date of payment by the Collateral Agent to the date reimbursed by the Grantors, shall be payable by the Grantors, on a joint and several basis, to the Collateral Agent on demand and shall constitute Secured Obligations and be secured by the Liens of the Security Documents.
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(c) Without limiting the rights and powers of the Collateral Agent under Section 2.06(a), each Grantor hereby appoints the Collateral Agent as its attorney-in-fact, effective the date of this Agreement and terminating upon the termination of this Agreement, at the Collateral Agent’s option, but without any obligation to do so, for the purpose of performing, executing, and filing all such contracts, agreements and other documents as are contemplated by Section 2.05(b). This appointment as attorney-in-fact is irrevocable and coupled with an interest.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released.
(e) The right granted by this Agreement to take the actions provided in this Section 2.06 shall not obligate the Collateral Agent or any other Secured Party to take such action. In acting under this Section 2.06, the Collateral Agent shall act pursuant to a written direction of the Administrative Agent.
Section 2.07 Intellectual Property.
(a) For the purpose of enabling the Collateral Agent to exercise the rights, remedies, powers and privileges under Section 5.01 at that time or times as the Collateral Agent is lawfully entitled to exercise those rights, remedies, powers and privileges, and for no other purpose, each Grantor hereby grants to the Collateral Agent, to the extent assignable, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to such Grantor) to use, assign, license or sublicense any of the Intellectual Property of such Grantor, together with reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout of those items.
(b) Notwithstanding anything contained herein to the contrary, but subject to the provisions of Section 8.9 of the Credit Agreement, so long as no Event of Default shall have occurred and be continuing, each Grantor will be permitted to exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or take other actions with respect to the Intellectual Property in the ordinary course of the business of such Grantor. In furtherance of the foregoing, unless an Event of Default shall have occurred and be continuing, the Collateral Agent shall from time to time, upon the request and at the expense of such Grantor, execute and deliver any instruments, certificates or other documents, in the form so requested, that such Grantor shall have certified are appropriate (in its judgment) to allow it to take any action permitted above (including relinquishment of the license provided pursuant to clause (a) immediately above as to any specific Intellectual Property). Further, upon the payment in full of all of the Secured Obligations or earlier expiration of this Agreement or release of the Collateral, the Collateral Agent shall grant back to such Grantor the license granted pursuant to clause (a) immediately above. The exercise of rights and remedies under Section 5.01 by the Collateral Agent shall not terminate the rights of the holders of any licenses or sublicenses theretofore granted by such Grantor in accordance with the first sentence of this clause (b).
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Section 2.08 Use of Collateral. So long as no Event of Default has occurred and is continuing, each Grantor shall be entitled to possess the Collateral, subject to the rights, remedies, powers and privileges of the Collateral Agent under Articles II and V.
Section 2.09 Rights and Obligations.
(a) No reference in this Agreement to proceeds or to the sale or other disposition of Collateral shall authorize any Grantor to sell or otherwise dispose of any Collateral except to the extent permitted by the terms of the other Credit Documents. The Collateral Agent shall not be required to take steps necessary to preserve any rights against prior parties to any part of the Collateral.
(b) Each Grantor shall remain liable to perform its duties and obligations under the contracts and agreements included in the Collateral in accordance with their respective terms to the same extent as if this Agreement had not been executed and delivered. The exercise by the Collateral Agent of any right, remedy, power or privilege in respect of this Agreement shall not release such Grantor from any of its duties and obligations under those contracts and agreements. Except as expressly set forth in the Credit Documents, the Collateral Agent shall not have any duty, obligation or liability under those contracts and agreements or with respect to any Applicable Permit included in the Collateral by reason of this Agreement or any other Credit Document, nor shall the Collateral Agent be obligated to perform any of the duties or obligations of such Grantor under any such contract or agreement or any such Applicable Permit or to take any action to collect or enforce any claim (for payment) under any such contract or agreement or Applicable Permit.
(c) No Lien granted by this Agreement in each Grantor’s right, title and interest in any contract, agreement or Applicable Permit shall be deemed to be a consent by the Collateral Agent to any such contract, agreement or Applicable Permit.
Section 2.10 Termination.
(a) Upon the Discharge Date but subject to Section 7.14, this Agreement and the security interest granted hereby shall automatically terminate, all rights to the Collateral shall automatically revert to the applicable Grantor, and the Collateral Agent shall, at the Grantors’ expense, following notice of such occurrence from the Administrative Agent, forthwith cause to be assigned, transferred and delivered, against receipt but without any recourse, warranty or representation whatsoever, any remaining Collateral and money received in respect of the Collateral, to or on the order of the applicable Grantor, including, without limitation, delivering to the applicable Grantor any Instruments, Certificated Securities or any other Collateral in the Collateral Agent’s possession, together with any instruments of assignment and transfer with regard to any certificates evidencing any Pledged Ownership Interests that were transferred into the name of the Collateral Agent or its nominee pursuant to Section 2.03(c). The Collateral Agent shall also execute and deliver to each Grantor, at the Grantors’ expense, upon such termination such UCC termination statements and other documentation as shall be reasonably requested by such Grantor to effect the termination and release of the Liens created under this Agreement. The security interest created hereby shall also be released with respect to any portion
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of the Collateral that is sold, transferred or otherwise disposed of in compliance with the terms and conditions of the Credit Documents.
(b) Notwithstanding anything to the contrary in this Agreement, but subject to Section 7.14, upon the occurrence of the Back-Leverage Date with respect to a Project:
(i) the Collateral granted in the Pledged Ownership Interests in the First-Tier Subsidiary and the Second-Tier Subsidiary that directly or indirectly owns such Project shall terminate and the Collateral Agent shall, at the Grantors’ expense, following notice of such occurrence from the Administrative Agent, forthwith cause to be assigned, transferred and delivered, against receipt but without any recourse, warranty or representation whatsoever, any remaining Collateral and money received in respect of such Pledged Ownership Interests, to or on the order of the Grantor of such Pledged Ownership Interests, including, without limitation, delivering to such Grantor any instruments of assignment and transfer with regard to any certificates evidencing any such Pledged Ownership Interests that were transferred into the name of the Collateral Agent or its nominee pursuant to Section 2.03(c), and execute and deliver to such Grantor, at the Grantors’ expense, such UCC termination statements and other documentation as shall be reasonably requested by the Grantors to effect the termination and release of the Liens with respect to such Pledged Ownership Interests created under this Agreement,
(ii) the security interest granted by such First-Tier, such Second-Tier Subsidiary, and the HoldCo that directly or indirectly owns such Project shall automatically terminate, all rights to the applicable Collateral shall automatically revert to such Person, and the Collateral Agent shall, at the Grantors’ expense, following notice of such occurrence from the Administrative Agent, forthwith cause to be assigned, transferred and delivered, against receipt but without any recourse, warranty or representation whatsoever, any remaining Collateral of such Person and money received in respect of such Collateral, to or on the order of such Person, respectively, including, without limitation, delivering any Instruments or Certificated Securities, in the Collateral Agent’s possession,
(iii) the Collateral Agent shall execute and deliver to such Person, at the Grantors’ expense, such UCC termination statements and other documentation as shall be reasonably requested by such Person to effect the termination and release of the applicable Liens created under this Agreement,
(iv) without limiting or modifying the obligations of any other Grantor, the Guaranty provided by such Person pursuant to Article VI hereof shall be terminated, and
(v) each such Person shall cease to be a Grantor hereunder.
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(c) Notwithstanding anything to the contrary in this Agreement, but subject to Section 7.14, upon the occurrence of the date on which the Back-Leverage Date for all Projects shall have occurred:
(i) the security interest granted by the Devco Borrower hereby shall automatically terminate, all rights to the applicable Collateral shall automatically revert to the Devco Borrower, and the Collateral Agent shall, at the Grantors’ expense, following notice of such occurrence from the Administrative Agent, forthwith cause to be assigned, transferred and delivered, against receipt but without any recourse, warranty or representation whatsoever, any remaining applicable Collateral and money received in respect of such Collateral, to or on the order of the Devco Borrower, including, without limitation, delivering to the Devco Borrower any Instruments, Certificated Securities or any other Collateral in the Collateral Agent’s possession,
(ii) the Collateral Agent shall execute and deliver to the Devco Borrower, at the Grantors’ expense such UCC termination statements and other documentation as shall be reasonably requested by the Devco Borrower to effect the termination and release of the applicable Liens created under this Agreement, and
(iii) the Devco Borrower shall cease to be a Grantor hereunder.
Section 2.11 Commercial Tort Claims. Each Grantor agrees that, if such Grantor shall acquire any interest in any Commercial Tort Claim in excess of $1,000,000 (whether from another Person or because such Commercial Tort Claim shall have come into existence), (i) such Grantor shall, promptly upon such acquisition, deliver to the Collateral Agent a notice of the existence and nature of such Commercial Tort Claim and deliver a supplement to Annex 5 in form and substance reasonably acceptable to the Collateral Agent (at the written direction of the Administrative Agent) containing a specific description of such Commercial Tort Claim, certified by such Grantor as true, correct and complete, (ii) the provision of Section 2.01 shall apply to such Commercial Tort Claim (and such Grantor authorizes the Collateral Agent to supplement such annex with a description of such Commercial Tort Claim if such Grantor fails to deliver the supplement described in clause (i)), and (iii) such Grantor shall execute and deliver to the Collateral Agent, in each case in form and substance reasonably satisfactory to the Collateral Agent, any certificate, agreement and other document, and take all other action, determined by the Collateral Agent (at the written direction of the Administrative Agent) to be reasonably necessary or appropriate for the Collateral Agent to obtain a first-priority, perfected security interest in all such Commercial Tort Claims. Any supplement to Annex 5 delivered pursuant to this Section 2.11 shall become part of such Annex 5 for all purposes hereunder.
Section 2.12 Governmental Authorities. Consent, authorization, approval or other action by, and notice to or filing with, applicable Governmental Authorities may be required for the exercise by the Collateral Agent or the Secured Parties of the remedies in respect of the Collateral pursuant to this Agreement in connection with the sale, transfer or other disposition of
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the Collateral under laws affecting the regulation of ownership or operation of utility assets (including the disposition or transfer of facilities subject to the jurisdiction of FERC).
Section 2.13 Special Provisions Relating to Pledged Ownership Interests.
(a) Subject to Section 5.01, the applicable Grantor shall have the right to exercise all voting, consensual and other powers of ownership pertaining to the applicable Pledged Ownership Interests for all purposes not inconsistent with the terms of any Credit Document or other document pursuant to which any other Secured Obligation is incurred, as applicable, provided that the applicable Grantor shall not vote the Pledged Ownership Interests in any manner that is inconsistent with the terms of any Credit Document or other document pursuant to which any other Secured Obligation is incurred, as applicable; and the Collateral Agent shall, at the applicable Grantor’s expense, execute and deliver to the applicable Grantor or cause to be executed and delivered to the applicable Grantor all such proxies, powers of attorney, dividend and other orders and other instruments, without recourse, as the applicable Grantor may reasonably request for the purpose of enabling the applicable Grantor to exercise the rights and powers that it is entitled to exercise pursuant to this Section 2.13.
(b) If an Event of Default has occurred and is continuing (subject to Section 5.01), the Collateral Agent shall have the right, to the fullest extent permitted by Applicable Law, to exercise all voting, consensual and other powers of ownership pertaining to the Pledged Ownership Interests as if the Collateral Agent were the sole and absolute owner thereof (and the applicable Grantor agrees to take all such action as may be appropriate to give effect to such right).
(c) So long as no Event of Default has occurred and is continuing, the applicable Grantor shall be entitled to receive and retain any and all dividends and distributions on the Ownership Collateral made in accordance with the Credit Documents.
(d) If any Event of Default has occurred and is continuing, and whether or not the Collateral Agent or any Secured Party exercises any available right to declare any Secured Obligation due and payable or seeks or pursues any other right, remedy, power or privilege available to it under Applicable Law, this Agreement or any other Credit Document, as applicable, all dividends and other distributions on the Ownership Collateral shall be paid directly to the Collateral Agent and retained by it as part of the Ownership Collateral, subject to the terms of this Agreement, and, if the Collateral Agent so requests, the applicable Grantor shall execute and deliver to the Collateral Agent appropriate additional dividend, distribution and other orders and instruments to that end; provided that if that Event of Default is cured, any such dividend or distribution paid to the Collateral Agent prior to that cure shall, upon request of the applicable Grantor (except to the extent applied to the Secured Obligations), be returned by the Collateral Agent to the applicable Grantor.
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ARTICLE III
REPRESENTATIONS
As of the date of this Agreement, each Tax Equity Effective Date and each TC Structure Effective Date:
Section 3.01 Organization; Power; Authorization; Validity.
(a) Without limiting the generality of this Section 3.01, each Grantor represents and warrants that (i) such Grantor is duly formed, validly existing and in good standing under the laws of the jurisdiction of its formation and, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, each jurisdiction where such qualification is required, and has all requisite limited liability company power and authority to carry on its business as now conducted, (ii) the execution, delivery and performance by such Grantor of its obligations under this Agreement, the Credit Agreement, the other Credit Documents and the Project Documents to which it is a party are within such Grantor’s limited liability company, partnership or corporate powers and have been duly authorized by all necessary limited liability company, partnership or corporate action, and, if required, by all necessary member, partner or shareholder action, and (iii) this Agreement has been duly executed and delivered by such Grantor and constitutes a legal, valid and binding obligation of such Grantor, enforceable against such Grantor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
(b) Annex 1 correctly sets forth such Grantor’s full and correct legal name, type of organization, jurisdiction of organization, chief executive office, place of business and mailing address as of the date of this Agreement.
(c) Except as set forth on Annex 1, such Grantor has not previously changed its location (as defined in Section 9-307 of the UCC), its name or previously become a “new debtor” (as defined in the UCC) with respect to a currently effective security agreement entered into by another Person.
Section 3.02 Title. Such Grantor is the sole beneficial owner of the Collateral in which it purports to grant a security interest pursuant to this Agreement, and no Lien exists or will exist upon such Collateral, except for the Permitted Liens. The security interest created pursuant hereto constitutes a valid and perfected first priority security interest in the Collateral, subject to no other Liens except Permitted Liens, and, as to the priority of such Liens, subject only to Permitted Liens that, pursuant to Applicable Law, are entitled to a higher priority than or equal priority to the Liens granted by this Agreement. The Liens granted by this Agreement have attached to all Collateral owned by the Grantors and constitute a perfected security interest in all of the Collateral (other than Intellectual Property registered or otherwise located outside of the United States of America), subject to no other Liens except Permitted Liens, and as to the priority of such Liens, Permitted Liens that, pursuant to Applicable Law, are entitled to a higher priority than or equal to the Liens granted by this Agreement.
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Section 3.03 Intellectual Property. Annexes 2, 3, and 4 respectively, set forth a complete and correct list of all Copyrights, Patents and Trademarks owned by such Grantor on the date hereof.
Section 3.04 Commercial Tort Claims. Annex 5 sets forth a complete and correct list of all Commercial Tort Claims in excess of $1,000,000 of such Grantor in existence on the date hereof.
Section 3.05 Deposit and Securities Accounts. Annex 6 sets forth a complete and correct list of all Deposit Accounts and Securities Accounts for such Grantor on the date hereof which are not Collateral Accounts.
Section 3.06 Pledged Ownership Interests.
(a) The Pledged Ownership Interests identified in Annex 7 are duly authorized, validly existing, fully paid and nonassessable, and none of the Pledged Ownership Interests are subject to any contractual restriction, upon the pledge or transfer of such Pledged Ownership Interests (except for any such restriction contained (u) herein, (v) in the other Credit Documents, (w) in any applicable Tax Equity Documents, (x) in any applicable TC Structure Documents, (y) in any applicable Tax Credit Transfer Document or (z) in the Power Purchase Agreements). Such Pledged Ownership Interests exist in a certificated form, except for the membership interests of AC1 ASOA.
(b) The Pledged Ownership Interests identified in Annex 7 constitute, (i) all of the issued and outstanding membership interests in each Devco Borrower Subsidiary then outstanding and owned by Devco Borrower (whether or not registered in the name of Devco Borrower), (ii) all the issued and outstanding membership interests in AC1 ASOA then outstanding and owned by the American Beech Project Company (whether or not registered in the name of the American Beech Project Company), (iii) all the issued and outstanding membership interests in Bluebird IRB SPV then outstanding and owned by the Bluebird Project Company (whether or not registered in the name of the Bluebird Project Company), (iv) all the issued and outstanding membership interests in the Prairie Project Company then outstanding and owned by Prairie Holdings (whether or not registered in the name of Prairie Holdings), (v) all of the issued and outstanding membership interests in each Opco Borrower 1 Subsidiary then outstanding and owned by Opco Borrower 1 (whether or not registered in the name of Opco Borrower 1), (vi) all of the issued and outstanding membership interests in each Opco Borrower 2 Subsidiary then outstanding and owned by Opco Borrower 2 (whether or not registered in the name of Opco Borrower 2) and (vii) all of the issued and outstanding membership interests in the Bluebird TE Partnership then outstanding and owned by Opco Borrower 1 (whether or not registered in the name of Opco Borrower 1) and Annex 7 correctly identifies the issuer of such Pledged Ownership Interests and the respective number (and registered owners) of the interests identified in Annex 7.
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(c)
(i) no Person other than Devco Borrower is the registered owner of any Devco Borrower Subsidiary Pledged Ownership Interests;
(ii) no Person other than the American Beech Project Company is the registered owner of the AC1 ASOA Pledged Ownership Interests;
(iii) no Person other than Bluebird Project Company is the registered owner of the Bluebird IRB SPV Pledged Ownership Interests;
(iv) no Person other than Prairie Holdings is the registered owner of the Prairie Pledged Ownership Interests;
(v) no Person other than Opco Borrower 1 is the registered owner of any Opco Borrower 1 Subsidiary Pledged Ownership Interests;
(vi) no Person other than Opco Borrower 2 is the registered owner of any Opco Borrower 2 Subsidiary Pledged Ownership Interests; and
(vii) no person other than the Opco Borrower 1 is the registered owner of the Bluebird TE Pledged Ownership Interests.; and
(viii) no person other than Class B Member (American Beech) is the registered owned of American Beech TE Pledged Ownership Interests.
Section 3.07 Consent to Transfer.
(a) Devco Borrower, as the managing member, general partner or director of each Devco Borrower Subsidiary, and the sole owner of the membership interests, partnership interest or shares set forth in Annex 7, hereby irrevocably consents (for all purposes under the applicable Organizational Documents of each Devco Borrower Subsidiary and notwithstanding anything to the contrary set forth in such Organizational Documents) to the transfer by the Collateral Agent or the applicable Secured Parties of the applicable Devco Borrower Subsidiary Pledged Ownership Interests to any Person upon the occurrence and during the continuation of an Event of Default and upon exercise by the Collateral Agent of its remedies under Sections 5.01 and 5.03. Consent, authorization, approval or other action by, and notice to or filing with, applicable Governmental Authorities may be required for the exercise by the Collateral Agent or the applicable Secured Parties of the remedies in respect of the Collateral pursuant to this Agreement in connection with the sale, transfer or other disposition of the Collateral under laws affecting the offering and sale of securities generally or the regulation of ownership or operation of utility assets (including the disposition or transfer of facilities subject to the jurisdiction of FERC).
(b) Opco Borrower 1, as the managing member, general partner or director of each Opco Borrower 1 Subsidiary, and the sole owner of the membership interests, partnership interest or shares set forth in Annex 7, hereby irrevocably consents (for all purposes under the
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applicable Organizational Document of each Opco Borrower 1 Subsidiary and notwithstanding anything to the contrary set forth in such Organizational Documents) to the transfer by the Collateral Agent or the applicable Secured Parties of the applicable Opco Borrower 1 Subsidiary Pledged Ownership Interests to any Person upon the occurrence and during the continuation of an Event of Default and upon exercise by the Collateral Agent of its remedies under Sections 5.01 and 5.03. Consent, authorization, approval or other action by, and notice to or filing with, applicable Governmental Authorities may be required for the exercise by the Collateral Agent or the applicable Secured Parties of the remedies in respect of the Collateral pursuant to this Agreement in connection with the sale, transfer or other disposition of the Collateral under laws affecting the offering and sale of securities generally or the regulation of ownership or operation of utility assets (including the disposition or transfer of facilities subject to the jurisdiction of FERC).
(c) Opco Borrower 2, as the managing member, general partner or director of each Opco Borrower 2 Subsidiary, and the sole owner of the membership interests, partnership interest or shares set forth in Annex 7, hereby irrevocably consents (for all purposes under the applicable Organizational Document of each Opco Borrower 2 Subsidiary and notwithstanding anything to the contrary set forth in such Organizational Documents) to the transfer by the Collateral Agent or the applicable Secured Parties of the applicable Opco Borrower 2 Subsidiary Pledged Ownership Interests to any Person upon the occurrence and during the continuation of an Event of Default and upon exercise by the Collateral Agent of its remedies under Sections 5.01 and 5.03. Consent, authorization, approval or other action by, and notice to or filing with, applicable Governmental Authorities may be required for the exercise by the Collateral Agent or the applicable Secured Parties of the remedies in respect of the Collateral pursuant to this Agreement in connection with the sale, transfer or other disposition of the Collateral under laws affecting the offering and sale of securities generally or the regulation of ownership or operation of utility assets (including the disposition or transfer of facilities subject to the jurisdiction of FERC).
(d) The American Beech Project Company, as the sole owner of the membership interests set forth in Annex 7, hereby irrevocably consents (for all purposes under the applicable American Beech LLC Agreement and notwithstanding anything to the contrary set forth in such American Beech LLC Agreement) to the transfer by the Collateral Agent or the applicable Secured Parties of the AC1 ASOA Pledged Ownership Interests to any Person upon the occurrence and during the continuation of an Event of Default and upon exercise by the Collateral Agent of its remedies under Sections 5.01 and 5.03. Consent, authorization, approval or other action by, and notice to or filing with, applicable Governmental Authorities may be required for the exercise by the Collateral Agent or the applicable Secured Parties of the remedies in respect of the Collateral pursuant to this Agreement in connection with the sale, transfer or other disposition of the Collateral under laws affecting the offering and sale of securities generally or the regulation of ownership or operation of utility assets (including the disposition or transfer of facilities subject to the jurisdiction of FERC).
(e) The Bluebird Project Company, as the managing member of the Bluebird IRB SPV, and the sole owner of the membership interests set forth in Annex 7, hereby
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irrevocably consents (for all purposes under the applicable Bluebird IRB SPV LLC Agreement and notwithstanding anything to the contrary set forth in such Bluebird LLC Agreement) to the transfer by the Collateral Agent or the applicable Secured Parties of the Bluebird IRB SPV Pledged Ownership Interests to any Person upon the occurrence and during the continuation of an Event of Default and upon exercise by the Collateral Agent of its remedies under Sections 5.01 and 5.03. Consent, authorization, approval or other action by, and notice to or filing with, applicable Governmental Authorities may be required for the exercise by the Collateral Agent or the applicable Secured Parties of the remedies in respect of the Collateral pursuant to this Agreement in connection with the sale, transfer or other disposition of the Collateral under laws affecting the offering and sale of securities generally or the regulation of ownership or operation of utility assets (including the disposition or transfer of facilities subject to the jurisdiction of FERC).
(f) Prairie Holdings, as the managing member of the Prairie Project Company, and the sole owner of the membership interests set forth in Annex 7, hereby irrevocably consents (for all purposes under the applicable Prairie LLC Agreement and notwithstanding anything to the contrary set forth in such Prairie LLC Agreement) to the transfer by the Collateral Agent or the applicable Secured Parties of the Prairie Pledged Ownership Interests to any Person upon the occurrence and during the continuation of an Event of Default and upon exercise by the Collateral Agent of its remedies under Sections 5.01 and 5.03. Consent, authorization, approval or other action by, and notice to or filing with, applicable Governmental Authorities may be required for the exercise by the Collateral Agent or the applicable Secured Parties of the remedies in respect of the Collateral pursuant to this Agreement in connection with the sale, transfer or other disposition of the Collateral under laws affecting the offering and sale of securities generally or the regulation of ownership or operation of utility assets (including the disposition or transfer of facilities subject to the jurisdiction of FERC).
(g) Opco Borrower 1, as the managing member of the Bluebird TE Partnership, and the sole owner of the membership interests set forth in Annex 7, hereby irrevocably consents (for all purposes under the applicable Bluebird TE Partnership LLC Agreement and notwithstanding anything to the contrary set forth in such Bluebird TE Partnership LLC Agreement) to the transfer by the Collateral Agent or the applicable Secured Parties of the applicable Bluebird TE Pledged Ownership Interests to any Person upon the occurrence and during the continuation of an Event of Default and upon exercise by the Collateral Agent of its remedies under Sections 5.01 and 5.03. Consent, authorization, approval or other action by, and notice to or filing with, applicable Governmental Authorities may be required for the exercise by the Collateral Agent or the applicable Secured Parties of the remedies in respect of the Collateral pursuant to this Agreement in connection with the sale, transfer or other disposition of the Collateral under laws affecting the offering and sale of securities generally or the regulation of ownership or operation of utility assets (including the disposition or transfer of facilities subject to the jurisdiction of FERC).
(h) Class B Member (American Beech), as the managing member of the American Beech TE Partnership, and the sole owner of the membership interests set forth in Annex 7, hereby irrevocably consents (for all purposes under the American Beech TE
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Partnership LLC Agreement and notwithstanding anything to the contrary set forth in American Beech TE Partnership LLC Agreement) to the transfer by the Collateral Agent or the applicable Secured Parties of the applicable American Beech TE Pledged Ownership Interests to any Person upon the occurrence and during the continuation of an Event of Default and upon exercise by the Collateral Agent of its remedies under Sections 5.01 and 5.03. Consent, authorization, approval or other action by, and notice to or filing with, applicable Governmental Authorities may be required for the exercise by the Collateral Agent or the applicable Secured Parties of the remedies in respect of the Collateral pursuant to this Agreement in connection with the sale, transfer or other disposition of the Collateral under laws affecting the offering and sale of securities generally or the regulation of ownership or operation of utility assets (including the disposition or transfer of facilities subject to the jurisdiction of FERC).
ARTICLE IV
COVENANTS
Section 4.01 Further Assurances. Each Grantor agrees that, from time to time upon the written request of the Collateral Agent (at the written direction of the Administrative Agent), such Grantor shall execute and deliver such further documents and do such other acts and things as the Collateral Agent may reasonably request in order to fully effect the purposes of this Agreement. Without limiting the generality of the foregoing, but subject to Permitted Dispositions, each Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 3.02 and subject to any Permitted Liens, shall defend such security interest against the claims and demands of all Persons whomsoever.
Section 4.02 Covenants. Each Grantor agrees that it will be the sole owner of the Pledged Ownership Interests identified as being owned by such Grantor on Annex 7 hereto, and except for the Operative Documents to which it is a party, such Grantor shall not execute a binding agreement to become a general or limited partner in any partnership, or a joint venturer in any joint venture or a member in any limited liability company.
Section 4.03 Consent to Transfer. Without the prior written consent of Collateral Agent (at the written direction of the Administrative Agent) or as otherwise permitted by the Credit Agreement, no Grantor will cause, suffer or permit, the sale, assignment, conveyance or other transfer of all or any portion of the Pledged Ownership Interests owned by such Grantor.
Section 4.04 Preservation of Collateral. With respect to any new Subsidiary created or acquired after the Financial Closing Date by any Borrower or any other Grantor and directly owned by such Borrower or such Grantor, as applicable, such Borrower or such Grantor, as applicable, shall promptly after such Subsidiary is created or acquired (but in no event later than the earlier of five (5) Business Days after such Subsidiary first acquiring any material assets and ten (10) Business Days after the date of such creation or acquisition), (i) notify the Administrative Agent of the creation or acquisition of such Subsidiary, (ii) cause such Subsidiary to execute and deliver to the Administrative Agent a Guarantor Supplement, substantially in the form of Annex 8 to this Agreement, pursuant to which it will become a Guarantor and a Grantor
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and be bound as a Guarantor and as a Grantor by the applicable terms and provisions thereof, (iii) take such other actions as are reasonably necessary to grant to the Collateral Agent a perfected first priority Lien in the Equity Interests of such Subsidiary and all Collateral owned by such Subsidiary (including the execution of an amendment to this Agreement) and (iv) upon request of any Lender, provide all documentation and other information required by bank regulatory authorities with respect to such Subsidiary, including a properly completed and signed applicable IRS Form W-8, under applicable “know-your-customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, which are applicable to such Lender.
ARTICLE V
REMEDIES
Section 5.01 Events of Default, Etc. If any Event of Default shall have occurred and be continuing, at the written direction of the Administrative Agent:
(a) The Collateral Agent may require each Grantor to, and such Grantor shall, assemble the Collateral owned by it at such place or places, reasonably convenient to both the Collateral Agent and such Grantor, designated in the Collateral Agent’s request;
(b) The Collateral Agent may make any reasonable compromise or settlement it determines with respect to any of the Collateral and may extend the time of payment, arrange for payment in installments, or otherwise modify the terms of all or any part of the Collateral;
(c) The Collateral Agent may, in its name or in the name of the applicable Grantor or otherwise, demand, sue for, collect or receive any money or property at any time payable or receivable on account of or in exchange for all or any part of the Collateral, but shall be under no obligation to do so;
(d) The Collateral Agent may, upon ten (10) Business Days’ prior written notice to each Grantor of the time and place, with respect to all or any part of the Collateral which shall then be or shall thereafter come into the possession, custody or control of the Collateral Agent or any of its agents, sell, lease or otherwise dispose of all or any part of such Collateral, at such place or places as the Collateral Agent determines, for cash, for credit or for future delivery (without thereby assuming any credit risk) and at public or private sale, without demand of performance or notice of intention to effect any such disposition or of time or place of any such sale (except such notice as is required above or by applicable statute and cannot be waived), and the Collateral Agent or any other Person may be the purchaser, lessee or recipient of any or all of the Collateral so disposed of at any public sale (or, to the extent permitted by law, at any private sale) and thereafter hold the same absolutely, free from any claim or right of whatsoever kind, including any right or equity of redemption (statutory or otherwise), of the applicable Grantor, any such demand, notice and right or equity being hereby expressly waived and released. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the sale may be so adjourned;
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(e) The Collateral Agent shall have, and may exercise, all of the rights, remedies, powers and privileges with respect to the Collateral of a secured party under the UCC (whether or not the UCC is in effect in the jurisdiction where such rights, remedies, powers and privileges are asserted) and such additional rights, remedies, powers and privileges to which a secured party is entitled under the laws in effect in any jurisdiction where any rights, remedies, powers and privileges in respect of this Agreement or the Collateral may be asserted, including the right, to the maximum extent permitted by law, to exercise all voting, consensual and other powers of ownership pertaining to the Collateral as if the Collateral Agent were the sole and absolute owner of the Collateral (and each Grantor agrees to take all such action as may be appropriate to give effect to such right);
(f) The Collateral Agent may, to the fullest extent provided by law, have a court having jurisdiction appoint a receiver, which receiver shall take charge and possession of and protect, preserve, replace and repair the Collateral or any part thereof, and manage and operate the same, and receive and collect all rents, income, receipts, royalties, revenues, issues and profits therefrom. Each Grantor irrevocably consents and shall be deemed to have hereby irrevocably consented to the appointment thereof, and upon such appointment, such Grantor shall immediately deliver possession of such Collateral to the receiver. Each Grantor also irrevocably consents to the entry of an order authorizing such receiver to invest upon interest any funds held or received by the receiver in connection with such receivership. The Collateral Agent shall be entitled to such appointment as a matter of right, if it shall so elect, without the giving of notice to any other party and without regard to the adequacy of the security of the Collateral; and
(g) The Collateral Agent may enforce one or more remedies hereunder, successively or concurrently, and such action shall not operate to estop or prevent the Collateral Agent from pursuing any other or further remedy which it may have hereunder or by law, and any repossession or retaking or sale of the Collateral pursuant to the terms hereof shall not operate to release any Grantor until full and final payment of any deficiency has been made in cash. Each Grantor, on a joint and several basis, shall reimburse the Collateral Agent upon demand for, or the Collateral Agent may apply any proceeds of Collateral to, the costs and expenses (including documented attorneys’ fees, transfer taxes and any other charges) incurred by the Collateral Agent in connection with any sale, disposition, repair, replacement, alteration, addition, improvement or retention of any Collateral hereunder.
Section 5.02 Deficiency. If the proceeds of or other realization upon, the Collateral by virtue of the exercise of remedies under Section 5.01 are insufficient to cover the costs and expenses of such exercise and the payment in full of the Secured Obligations, each Grantor, on a joint and several basis, shall remain liable for any deficiency.
Section 5.03 Private Sale.
(a) The Collateral Agent shall incur no liability as a result of the sale, lease or other disposition of all or any part of the Collateral at any private sale pursuant to Section 5.01 conducted in a commercially reasonable manner. Each Grantor hereby waives any claims against the Collateral Agent arising by reason of the fact that the price at which the Collateral may have been sold at such a private sale was less than the price which might have been obtained at a
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public sale or was less than the aggregate amount of the Secured Obligations, even if the Collateral Agent accepts the first offer received and does not offer the Collateral to more than one offeree.
(b) Each Grantor recognizes that, by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and applicable state securities laws, the Collateral Agent may be compelled, with respect to any sale of all or any part of the Collateral, to limit purchasers to those who will agree, among other things, to acquire the Collateral for their own account, for investment and not with a view to distribution or resale. Each Grantor acknowledges that any such private sales may be at prices and on terms less favorable to the Collateral Agent than those obtainable through a public sale without such restrictions, and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner and that the Collateral Agent shall have no obligation to engage in public sales and no obligation to delay the sale of any Collateral for the period of time necessary to permit the respective issuer of such Collateral to register it for public sale.
Section 5.04 Cash Proceeds of Collateral.
(a) If so requested by the Collateral Agent (at the written direction of the Administrative Agent) at any time after the occurrence and during the continuation of an Event of Default, each Grantor shall instruct all applicable account debtors in respect of Accounts, Chattel Paper and General Intangibles and all obligors on Instruments to make all payments in respect thereof to one or more other banks in the United States of America specified by the Collateral Agent (at the written direction of the Administrative Agent) under arrangements, in form and substance reasonably satisfactory to the Collateral Agent, pursuant to which such Grantor shall have irrevocably instructed such other bank (and such other bank shall have agreed) to remit all proceeds of such payments directly to the Collateral Agent for deposit in accordance with the terms of Section 7.5 of the Credit Agreement and the Depositary Agreement.
(b) In addition to the foregoing, each Grantor agrees that, at any time after the occurrence and during the continuation of an Event of Default, if the proceeds of any Collateral hereunder (including the payments made in respect of Accounts) shall be received by it, such Grantor shall as promptly as possible deposit such proceeds in accordance with the terms of Section 7.5 of the Credit Agreement and the Depositary Agreement. Until so deposited, all such proceeds shall be held in trust by such Grantor for and as the property of the Collateral Agent and shall not be commingled with any other funds or property of such Grantor.
Section 5.05 Application of Proceeds. The Proceeds of or other realization upon, all or any part of the Collateral by virtue of the exercise of remedies under Section 5.01, and any other cash at the time held by the Collateral Agent or under this Article V, shall be applied by the Collateral Agent:
First, to the payment of (a) first, any and all fees, costs, expenses, losses, indemnities and other amounts due and payable to the Agents and the Depositary under the Credit Documents, including all documented, reasonable out-of-pocket costs and expenses of such exercise of remedies (including documented
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reasonable fees and out-of-pocket expenses of the Agents, the Depositary and their respective agents and reasonable fees and expenses of their counsel) and (b) then, the costs and expenses of the Lenders and their counsel, in each case ratably in accordance with such amounts then due such Persons;
Next, to the payment in full of the remaining Secured Obligations equally ratably in accordance with their respective amounts then due and owing; and
Finally, subject to the rights of any other holder of any Lien in the relevant Collateral, to the payment to the applicable Grantor, or its successors or permitted assigns, or as a court of competent jurisdiction may direct, of any surplus then remaining.
ARTICLE VI
GUARANTY
Section 6.01 Guaranty. Each Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the Collateral Agent, on behalf of the Secured Parties, the due, prompt, and faithful performance of, and punctual payment in full when due (whether at scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise) of, all Obligations now or hereafter existing under or in respect of the Credit Documents (including any extensions, modifications, substitutions, amendments or renewals of any or all of the foregoing Obligations), whether direct or indirect, absolute or contingent, and whether for principal, interest, premiums, fees, indemnities, contract causes of action, costs, expenses or otherwise, but excluding any Excluded Swap Obligations (such obligations being the “Guaranteed Obligations”), and agrees to pay any and all reasonable and documented expenses (including reasonable and documented fees and expenses of counsel) incurred by the Collateral Agent or any other Secured Party in enforcing any rights under this Section 6.01.
Section 6.02 Guaranty and Grant of Security Interest Absolute.
(a) Each Guarantor guarantees that the Guaranteed Obligations will be paid in accordance with the terms of the Credit Documents, regardless of any Applicable Law now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Secured Party with respect thereto. To the maximum extent permitted by Applicable Law, the obligations of each Guarantor under or in respect of this Agreement are independent of the Obligations under or in respect of the Credit Documents, and a separate action or actions may be brought and prosecuted against the Guarantors to enforce this Agreement, irrespective of whether any action is brought against the Borrower or any other Loan Party or whether the Borrower or such Loan Party is joined in any such action or actions. The obligations of each Guarantor under this Agreement and the rights of the Collateral Agent and the Liens and security interests hereunder shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby
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irrevocably waives any defenses it may now have or hereafter acquire in any way relating to, any or all of the following:
(i) any illegality or lack of validity or enforceability of the Guaranteed Obligations, any Credit Document or any agreement or instrument relating thereto;
(ii) any failure or omission to assert or enforce or agreement or election not to assert or enforce, or the stay or enjoining, by order of court, by operation of law or otherwise, of the exercise or enforcement of, any claim or demand or any right, power or remedy (whether arising under the Credit Documents, at law, in equity or otherwise) with respect to the Guaranteed Obligations or any agreement relating thereto, or with respect to any other guaranty of or security for the payment of the Guaranteed Obligations;
(iii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any rescission, waiver, amendment or modification of, or any consent to departure from, any of the terms or provisions (including provisions relating to events of default) hereof, any of the other Credit Documents or any agreement or instrument executed pursuant thereto, or of any other guaranty or security for the Guaranteed Obligations, in each case whether or not in accordance with the terms hereof or such Credit Documents, or any agreement relating to such other guaranty or security, including any increase in the Guaranteed Obligations resulting from the extension of additional credit to the Borrower;
(iv) any taking, exchange, release or non-perfection of any Collateral, or any taking, release or amendment or waiver of, or consent to departure from, any guaranty, for all or any of the Guaranteed Obligations;
(v) any manner of application of Collateral, or Proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any Collateral for all or any of the Guaranteed Obligations or any other assets of any Loan Party;
(vi) the application of payments received from any source (other than payments received pursuant to the other Credit Documents or from the proceeds of any security for the Guaranteed Obligations, except to the extent such security also serves as collateral for indebtedness other than the Guaranteed Obligations) to the payment of indebtedness other than the Guaranteed Obligations, even though any Secured Party might have elected to apply such payment to any part or all of the Guaranteed Obligations;
(vii) any change, restructuring or termination of the corporate structure or existence of any Loan Party and any Secured Parties’ consent thereto and to any corresponding restructuring of the Guaranteed Obligations;
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(viii) the failure of any other Person to execute or deliver any other guaranty or agreement or the release or reduction of liability of any other guarantor or surety with respect to the Guaranteed Obligations;
(ix) any limitation on any party’s liability or obligations under any Credit Document or any invalidity or unenforceability, in whole or in part, of any such Credit Documents;
(x) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to any Loan Party, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding;
(xi) any defenses, set offs or counterclaims which any Loan Party may allege or assert against any Secured Party in respect of the Guaranteed Obligations, including failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury; or
(xii) any other circumstance (including any statute of limitations but excluding payment in full of the Guaranteed Obligations) that might otherwise constitute a legal or equitable defense available to, or discharge of, a surety or a guarantor.
(b) In furtherance of the foregoing and without limiting the generality thereof, each Guarantor agrees as follows:
(i) Such Guarantor’s guaranty under Section 6.01 (the “Guaranty”) is a primary obligation of such Guarantor and not merely a contract of surety;
(ii) Collateral Agent may enforce this Guaranty upon the occurrence of an Event of Default that is continuing;
(iii) The obligations of each Guarantor hereunder are independent of the obligations of any Loan Party and the obligations of any other guarantor of the obligations of any Loan Party, and a separate action or actions may be brought and prosecuted against the Guarantors whether or not any action is brought against any other Loan Party or any of such other guarantors and whether or not another Loan Party is joined in any such action or actions;
(iv) Payment by a Grantor of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge the Guarantors’ liability for any portion of the Guaranteed Obligations which has not been paid. Without limiting the generality of the foregoing, if Collateral Agent is awarded a judgment in any suit brought to enforce a Grantor’s covenant to pay a portion of the Guaranteed Obligations, such judgment shall not be deemed to release any
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Grantor from its covenant to pay the portion of the Guaranteed Obligations that is not the subject of such suit; and
(v) Any Secured Party, upon such terms as it deems appropriate, without notice or demand and without affecting the validity or enforceability hereof or giving rise to any reduction, limitation, impairment, discharge or termination of any Guarantor’s liability hereunder, from time to time may (A) renew, extend, accelerate, increase the rate of interest on, or otherwise change the time, place, manner or terms of payment of the Guaranteed Obligations; (B) settle, compromise, release or discharge, or accept or refuse any offer of performance with respect to, or substitutions for, the Guaranteed Obligations or any agreement relating thereto and/or subordinate the payment of the same to the payment of any other obligations; (C) request and accept other guaranties of the Guaranteed Obligations and take and hold security for the payment hereof or the Guaranteed Obligations; (D) release, surrender, exchange, substitute, compromise, settle, rescind, waive, alter, subordinate or modify, with or without consideration, any security for payment of the Guaranteed Obligations, any other guaranties of the Guaranteed Obligations, or any other obligation of any Person with respect to the Guaranteed Obligations; (E) enforce and apply any security now or hereafter held by or for the benefit of such Secured Party in respect hereof or the Guaranteed Obligations and direct the order or manner of sale thereof, or exercise any other right or remedy that such Secured Party may have against any such security, in each case as such Secured Party in its discretion may determine consistent herewith and any applicable security agreement, including foreclosure on any such security pursuant to one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable, and even though such action operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of the Guarantors against any other Loan Party or any security for the Guaranteed Obligations; and (F) exercise any other rights available to it under the Credit Documents.
(c) Notwithstanding the foregoing provisions of this Section 6.02 or Section 6.03, the Guarantors shall be entitled to assert all rights, defenses and counterclaims (other than relating to bankruptcy or insolvency in respect of the Borrower and any rights, defenses or counterclaims based upon lack of authority, capacity, legal right or power of the Borrower to perform its obligations under the Credit Documents or based upon any Credit Document being unenforceable) to which the Borrower is entitled under the Credit Documents in connection with the Borrower’s performance of their obligations thereunder.
Section 6.03 Waivers and Acknowledgments.
(a) The Guarantors’ guaranty under Section 6.01 is a guarantee of payment and not of collection. Each Guarantor hereby unconditionally and irrevocably waives, to the maximum extent permitted by Applicable Law, promptness, diligence, notice of acceptance, presentment, demand for performance, notice of nonperformance, default, acceleration, protest
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or dishonor and any other notice with respect to any of the Guaranteed Obligations and this Agreement and any requirement that any Secured Party protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right or take any action against the Borrower or any other Person or any Collateral.
(b) Each Guarantor hereby acknowledges that this Agreement is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future, and shall remain in full force and effect until such time as the Guaranteed Obligations have been paid in full.
(c) Each Guarantor hereby unconditionally and irrevocably waives, for the benefit of the Secured Parties, to the maximum extent permitted by Applicable Law, (i) any right to require any Secured Party, as a condition of payment or performance by the Guarantor, to (A) proceed against the Borrower, any other guarantor of the Guaranteed Obligations or any other Person, (B) proceed against or exhaust any security held from the Borrower, any such other guarantor or any other Person, (C) proceed against or have resort to any balance of any deposit account or credit on the books of any Secured Party in favor of the Borrower or any other Person, or (D) pursue any other remedy in the power of any Secured Party whatsoever; (ii) any defense arising by reason of the incapacity, lack of authority or any disability or other defense of the Borrower including any defense based on or arising out of the lack of validity or unenforceability of the Guaranteed Obligations or any agreement or instrument relating thereto or by reason of the cessation of the liability of the Borrower from any cause other than payment in full of the Guaranteed Obligations; (iii) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (iv) any defense based upon any Secured Party’s errors or omissions in the administration of the Guaranteed Obligations, except behavior which amounts to fraud or willful misconduct; (v) (A) any principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms hereof and any legal or equitable discharge of such Guarantor’s obligations hereunder, (B) the benefit of any statute of limitations affecting such Guarantor’s liability hereunder or the enforcement hereof, and (C) promptness, diligence and any requirement that any Secured Party protect, secure, perfect or insure any security interest or Lien or any property subject thereto; (vi) notices, demands, presentments, protests, notices of protest, notices of dishonor and notices of any action or inaction, including acceptance hereof, notices of default hereunder or any agreement or instrument related thereto, notices of any renewal, extension or modification of the Guaranteed Obligations or any agreement related thereto, notices of any extension of credit to the Borrower and notices of any of the matters referred to in Section 6.02 and any right to consent to any thereof; (vii) any defenses or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms hereof; (viii) any defense arising by reason of any claim or defense based upon an election of remedies by any Secured Party that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Guarantor or other rights of such Guarantor to proceed against the Borrower, any other guarantor or any other Person or any Collateral and (ix) any defense based on any right of set-off or counterclaim against or in respect of the obligations of any Grantor hereunder.
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(d) Each such Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Credit Documents and that the waivers set forth in Section 6.02 and this Section 6.03 are knowingly made in contemplation of such benefits.
Section 6.04 Subrogation. Each Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against any Loan Party that arise from the existence, payment, performance or enforcement of such Guarantor’s obligations under or in respect of this Agreement, including any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Secured Party against any Loan Party or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including the right to take or receive from any Loan Party directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, prior to the Discharge Date. Notwithstanding the foregoing sentence, if any amount shall be paid to a Guarantor in violation of the immediately preceding sentence at any time prior to the Discharge Date, such amount shall be received and held in trust for the benefit of the Secured Parties, shall be segregated from other property and funds of such Guarantor and shall promptly (and, in any event, within two (2) Business Days) be paid or delivered to the Collateral Agent in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Agreement, whether matured or unmatured, in accordance with the terms of the Credit Documents, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Agreement thereafter arising. On the Discharge Date, the Collateral Agent will, at any Guarantor’s request and at the Borrower’s expense, execute and deliver to such Person appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment made by such Guarantor pursuant to this Agreement.
Section 6.05 General Limitation on Guarantee Obligations. In any action or proceeding involving any state or provincial corporate law, or any foreign, state, provincial or federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under Section 6.01 would otherwise be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 6.01, then, notwithstanding any other provision hereof to the contrary, the amount of such liability shall, without any further action by such Guarantor, any Secured Party or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01 Communication. Except as otherwise specified herein, all notices hereunder shall be in writing (including, without limitation, notice by electronic communication) and shall
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be given to the relevant party at its address set forth below, or such other address as such party may hereafter specify by notice to the other party, by courier, by United States certified or registered mail, or by other electronic communication capable of creating a written record of such notice and its receipt. Notices under this Agreement to the Grantors or the Collateral Agent shall be addressed to their respective addresses set forth below:
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| (A) | if to Devco Borrower, at: | |
| | | |
| | MN8 DevCo 3 LLC | |
| | 1155 Avenue of the Americas 27th Floor, New York, NY 10036 | |
| | Attention: General Counsel | |
| | Email: notices@mn8energy.com | |
| | | |
| | with copy to: | |
| | | |
| | MN8 Energy LLC | |
| | 1155 Avenue of the Americas 27th Floor, New York, NY 10036 Attention: General Counsel Email: notices@mn8energy.com | |
| | | |
| (B) | if to Opco Borrower 1, at: | |
| | | |
| | MN8 FMG Class B LLC 1155 Avenue of the Americas 27th Floor, New York, NY 10036 Attention: General Counsel Email: notices@mn8energy.com | |
| | | |
| | with copy to: | |
| | | |
| | MN8 Energy LLC | |
| | 1155 Avenue of the Americas 27th Floor, New York, NY 10036 Attention: General Counsel Email: notices@mn8energy.com | |
| | | |
| (C) | if to Opco Borrower 2, at: | |
| | | |
| | MN8 Bleeker 2 LLC 1155 Avenue of the Americas 27th Floor, New York, NY 10036 Attention: General Counsel Email: notices@mn8energy.com | |
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| | | |
| | with copy to: | |
| | | |
| | MN8 Energy LLC | |
| | 1155 Avenue of the Americas 27th Floor, New York, NY 10036 Attention: General Counsel Email: notices@mn8energy.com | |
| | | |
| (D) | if to the Project Companies, at: | |
| | | |
| | American Beech Solar LLC, Bluebird Solar LLC or Prairie Solar 1, LLC | |
| | 1155 Avenue of the Americas 27th Floor, New York, NY 10036 Attention: General Counsel Email: notices@mn8energy.com | |
| | | |
| | | |
| | with copy to: | |
| | | |
| | MN8 Energy LLC | |
| | 1155 Avenue of the Americas 27th Floor, New York, NY 10036 Attention: General Counsel Email: notices@mn8energy.com | |
| | | |
| | | |
| (E) | if to the Collateral Agent, at: | |
| | | |
| | Natixis, New York Branch, as Collateral Agent | |
| | 1251 Avenue of The Americas, 5th Floor
New York, NY 10020 | |
| | Attention: Daniel Fahey | |
| | Email: adminagency@natixis.com; daniel.fahey.com | |
Each such notice, request or other communication shall be effective (i) if given by mail, five (5) days after such communication is deposited in the mail, certified or registered with return receipt requested, addressed as aforesaid, or (ii) if given by any other means, when delivered at the addresses specified in this Section 7.01.
Section 7.02 Amendments. No amendment of any provision of this Agreement shall be effective unless the same shall be in writing and signed by the Collateral Agent (at the written direction of the Administrative Agent) and each Grantor, and such consent shall be effective only
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in the specific instance and for the specific purpose for which given. The Collateral Agent shall not be obligated to enter into any amendment that affects its rights, duties or obligations under this Agreement.
Section 7.03 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, however, that each Grantor may not assign or transfer any of its rights or interest in or under this Agreement or delegate any of its obligations under this Agreement without the prior written consent of the Collateral Agent (at the written direction of the Administrative Agent); provided, further, that the Collateral Agent shall transfer or assign its rights under this Agreement in connection with a resignation or removal of such Person from its respective capacity in accordance with the terms of the Credit Agreement.
Section 7.04 Survival. All agreements, statements, representations and warranties made by each Grantor herein or in any certificate or other instrument delivered by such Grantor or on its behalf under this Agreement shall be considered to have been relied upon by the Collateral Agent and shall survive the execution and delivery of this Agreement and the other Credit Documents until termination thereof regardless of any investigation made by or on behalf of the Collateral Agent.
Section 7.05 No Waiver; Remedies Cumulative. No failure or delay on the part of the Collateral Agent or any Secured Party to exercise and no delay in exercising, and no course of dealing with respect to any right, remedy, power or privilege hereunder shall operate as a waiver of such right, remedy, power or privilege nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies which the Collateral Agent would otherwise have.
Section 7.06 Counterparts. This Agreement may be executed in any number of counterparts, and by the different parties hereto on separate counterpart signature pages, and all such counterparts taken together shall be deemed to constitute one and the same instrument. A facsimile or portable document format (“pdf”) signature page shall constitute an original for purposes hereof. 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 (including without limitation the Credit Documents, certificates, notices, consents, borrowing request and other documents) 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.
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Section 7.07 Captions. The headings of the several articles and sections and sub sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.
Section 7.08 Severability. Any provision of this Agreement which is unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of law, and all the provisions of this Agreement are intended to be subject to all applicable provisions of law which may be controlling and to be limited to the extent necessary so that they will not render this Agreement invalid or unenforceable.
Section 7.09 Governing Law; Waiver of Jury Trial; Jurisdiction and Process.
(a)THIS AGREEMENT, AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
(b)EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(c)EACH PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK, FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH GRANTOR AGREES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THAT A FINAL JUDGMENT IN ANY SUIT, ACTION OR PROCEEDING OF THE NATURE REFERRED TO IN THIS SECTION 7.09 BROUGHT IN ANY SUCH COURT SHALL BE CONCLUSIVE AND BINDING UPON IT SUBJECT TO RIGHTS OF APPEAL, AS THE CASE MAY BE, AND MAY BE ENFORCED IN THE COURTS OF THE UNITED STATES OF AMERICA OR THE STATE OF NEW YORK (OR ANY OTHER COURTS TO THE JURISDICTION OF WHICH IT OR ANY OF ITS ASSETS IS OR MAY BE SUBJECT) BY A SUIT UPON SUCH JUDGEMENT.
(d)NO CLAIM MAY BE MADE BY ANY BORROWER, ANY OTHER GRANTOR OR ANY OF THEIR RESPECTIVE AFFILIATES, DIRECTORS, EMPLOYEES, ATTORNEYS OR AGENTS AGAINST THE COLLATERAL AGENT OR ANY OF ITS
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SUCCESSORS IN INTEREST OR ASSIGNS OR THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATING TO, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER SECURITY DOCUMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE OTHER SECURITY DOCUMENTS, AND EACH GRANTOR HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
Section 7.10 Entire Agreement. This Agreement, together with any other agreement executed in connection with this Agreement, is intended by the parties as a final expression of their agreement as to the matters covered by this Agreement and is intended as a complete and exclusive statement of the terms and conditions of such agreement.
Section 7.11 Independent Obligations. Each Grantor’s obligations under this Agreement are independent of those of any other Person. The Collateral Agent may bring a separate action against a Grantor without first proceeding against any other Person or any other security held by the Collateral Agent and without pursuing any other remedy.
Section 7.12 Expenses. Each Grantor, on a joint and several basis, agrees to pay or to reimburse the Collateral Agent for all reasonable documented, out-of-pocket costs and expenses (including reasonable and documented out-of-pocket attorney’s fees and expenses) that may be incurred by the Collateral Agent in any effort to enforce any of the provisions of Article V, or any of the obligations of such Grantor in respect of the Collateral or in connection with the preservation of the Liens on, or the rights of the Collateral Agent to the Collateral pursuant to this Agreement or the other Security Documents or any actual or attempted sale, lease, disposition, exchange, collection, compromise, settlement or other realization in respect of, or care of, the Collateral, including all such costs and expenses (and reasonable attorney’s fees and expenses) incurred in any bankruptcy, reorganization, workout or other similar proceeding. The Collateral Agent shall provide reasonable support for any costs, expenses, and/or charges at such Grantor’s reasonable request.
Section 7.13 Collateral Agent. The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under the UCC or otherwise, shall be to deal with it in substantially the same manner as the Collateral Agent deals with similar property for other customers in similar transactions. The Collateral Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction. Except for reasonable care and preservation of any Collateral in its possession and the accounting for moneys actually received by it hereunder as described above, the Collateral
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Agent shall have no duty as to the collection or protection of the Collateral or any income thereon, nor as to the preservation of rights against prior parties, nor as to the preservation of any rights pertaining thereto beyond the safe custody thereof. The Collateral Agent is entering into this Agreement solely in its capacity as Collateral Agent under the Credit Agreement and shall be entitled to all of the rights, benefits, protections, indemnities and immunities afforded to it pursuant to the Credit Documents (including without limitation Section 11 of the Credit Agreement), all of which are incorporated herein by reference, mutatis mutandis. It is understood that any reference to the Collateral Agent taking any action, making any determinations, requests, directions, consents or elections, deeming any action or document reasonable, appropriate, necessary, appropriate or satisfactory, exercising discretion, or exercising any rights or duties under this Agreement shall be pursuant to written direction from the Administrative Agent.
Section 7.14 Reinstatement. This Agreement and the obligations of the Grantors hereunder shall automatically be reinstated if and to the extent that for any reason any payment made pursuant to any Credit Document is rescinded or must otherwise be restored or returned, whether as a result of any proceedings in bankruptcy or reorganization or otherwise with respect to such Grantor or any other Person or as a result of any settlement or compromise with any Person in respect of such payment, and the Grantors shall be jointly and severally obligated to pay the Collateral Agent promptly on demand for all reasonable and reasonably documented costs and expenses (including reasonable and reasonably documented fees of counsel) incurred by the Collateral Agent in connection with such rescission or restoration.
Section 7.15 Amendment and Restatement. The Existing Security Agreement is hereby amended and restated in its entirety by this Agreement, and the Existing Security Agreement shall hereafter be replaced and superseded in all respects by this Agreement.
[SIGNATURES TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective authorized officers as of the date first written above.
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| GRANTORS: |
| | | |
| | | |
| MN8 DEVCO 3 LLC, |
| a Delaware limited liability company |
| | | |
| | | |
| By: | |
| Name: |
| Title: |
| | | |
| | | |
| MN8 BLEEKER 2 LLC, |
| a Delaware limited liability company |
| | | |
| | | |
| By: | |
| Name: |
| Title: |
| | | |
| | | |
| AMERICAN BEECH SOLAR LLC, |
| a North Carolina limited liability company |
| | | |
| | | |
| By: | |
| Name: |
| Title: |
| | | |
| | | |
| AMERICAN BEECH SOLAR HOLDINGS LLC, |
| a Delaware limited liability company |
| | | |
| | | |
| By: | |
| Name: |
| Title: |
| | | |
| | | |
[Signature Page to Amended and Restated Guaranty, Pledge and Security Agreement (MN8 Bridge Construction Financing)]
| | | | | | | | | | | |
| BLUEBIRD SOLAR LLC, |
| a Kentucky limited liability company |
| | | |
| | | |
| By: | |
| Name: |
| Title: |
| | | |
| | | |
| BLUEBIRD SOLAR INVESTMENTS LLC, |
| a Kentucky limited liability company |
| | | |
| | | |
| By: | |
| Name: |
| Title: |
| | | |
| | | |
| PRAIRIE SOLAR 1, LLC, |
| a Delaware limited liability company |
| | | |
| | | |
| By: | |
| Name: |
| Title: |
| | | |
| | | |
| PRAIRIE SOLAR HOLDINGS LLC, |
| a Delaware limited liability company |
| | | |
| | | |
| By: | |
| Name: |
| Title: |
| | | |
| MN8 FMG CLASS B LLC, |
| a Delaware limited liability company |
| | | |
| | | |
| By: | |
| Name: |
| Title: |
| | | |
| | | |
[Signature Page to Amended and Restated Guaranty, Pledge and Security Agreement (MN8 Bridge Construction Financing)]
| | | | | | | | | | | |
| MN8 FMG LLC, |
| a Delaware limited liability company |
| | | |
| | | |
| By: | |
| Name: |
| Title: |
[Signature Page to Amended and Restated Guaranty, Pledge and Security Agreement (MN8 Bridge Construction Financing)]
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| COLLATERAL AGENT: |
| | | |
| NATIXIS, NEW YORK BRANCH, |
| as Collateral Agent for the Secured Parties |
| | | |
| | | |
| By: | |
| Name: |
| Title |
| | | |
| | | |
| By: | |
| Name: |
| Title |
[Signature Page to Amended and Restated Guaranty, Pledge and Security Agreement (MN8 Bridge Construction Financing)]
Annex 1
[Omitted.]
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| | AMENDED AND RESTATED GUARANTY, PLEDGE & SECURITY AGREEMENT (MN8 BRIDGE CONSTRUCTION FINANCING) |
Annex 2
Copyrights
[Omitted.]
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| | AMENDED AND RESTATED GUARANTY, PLEDGE & SECURITY AGREEMENT (MN8 BRIDGE CONSTRUCTION FINANCING) |
Annex 3
Patents
[Omitted.]
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| | AMENDED AND RESTATED GUARANTY, PLEDGE & SECURITY AGREEMENT (MN8 BRIDGE CONSTRUCTION FINANCING) |
Annex 4
Trademarks
[Omitted.]
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| | AMENDED AND RESTATED GUARANTY, PLEDGE & SECURITY AGREEMENT (MN8 BRIDGE CONSTRUCTION FINANCING) |
Annex 5
Commercial Tort Claims
[Omitted.]
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| | AMENDED AND RESTATED GUARANTY, PLEDGE & SECURITY AGREEMENT (MN8 BRIDGE CONSTRUCTION FINANCING) |
Annex 6
Deposit and Securities Accounts
[Omitted.]
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| | AMENDED AND RESTATED GUARANTY, PLEDGE & SECURITY AGREEMENT (MN8 BRIDGE CONSTRUCTION FINANCING) |
Annex 7
Pledged Ownership Interests
[Omitted.]
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| | AMENDED AND RESTATED GUARANTY, PLEDGE & SECURITY AGREEMENT (MN8 BRIDGE CONSTRUCTION FINANCING) |
Annex 8
Form of Guarantor Supplement
[Omitted.]
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| | AMENDED AND RESTATED GUARANTY, PLEDGE & SECURITY AGREEMENT (MN8 BRIDGE CONSTRUCTION FINANCING) |