SOLARCITY CORP (Form: 10-Q, Received: 07/30/2015 06:11:50)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35758

SolarCity Corporation

(Exact name of registrant as specified in its charter)

Delaware

02-0781046

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

3055 Clearview Way

San Mateo, California

94402

(Address of principal executive offices)

(Zip Code)

(650) 638-1028

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨

Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of shares outstanding of the registrant’s common stock as of June 30, 2015 was 97,197,464.

TABLE OF CONTENTS

		Page

PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	46

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	48
Item 6.	Exhibits	70

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The discussion in this quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements are any statements that look to future events and consist of, among other things, our business strategies; anticipated future financial results; expected trends in certain financial and operating metrics; our belief that the aggregate megawatt, or MW, production capacity of our systems is an indicator of the growth rate of our solar energy systems business; the calculation of estimated nominal contracted payments remaining, and certain other metrics based on forward-looking projections; projections on growth in the markets that we operate and our growth rates; pricing trends, including our ability to achieve economies of scale in both installation and capital costs; our ability to successfully integrate Silevo, LLC’s business, operations and personnel and achieve manufacturing economies of scale and associated cost reductions; our expectations regarding the Riverbend Agreement and the development and construction of the Riverbend facility, including expected capital and operating expenses and the performance of our manufacturing operations; our belief that adequate surplus capacity of non-tariff solar panels is available to suit our future needs and the costs of solar energy system components; projections relating to our use of and reliance on U.S. Treasury grants and federal, state and local incentives and tax attributes; our regulatory status as a non-utility; our ability to continue to meet the regulatory requirements of a public company; international and domestic expansion and hiring plans; product development efforts and customer preferences; the fair market value of our solar energy systems, including amounts potentially payable to our fund investors as a result of decreased fair market value determinations by the U.S. Treasury Department; the life and durability of our solar systems and equipment, and anticipated contract renewals; the success of our sales and marketing efforts; our plans to sell Zep Solar products; our internal control environment; the payment of future dividends; and our belief as to the sufficiency of our existing cash and cash equivalents, funds available under our secured credit facilities and funds available under existing financing funds to meet our working capital and operating resource requirements for the next 12 months.

The forward-looking statements are contained principally in, but not limited to, the sections titled “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In addition, forward-looking statements also consist of statements involving trend analyses and statements including such words as “may,” “believe,” “will,” “could,” “anticipate,” “would,” “might,” “potentially,” “estimate,” “continue,” “plan,” “expect,” “intend,” and similar expressions or the negative of these terms or other comparable terminology that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. These forward-looking statements speak only as of the date of this quarterly report on Form 10-Q and are subject to business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements as a result of a number of factors, including those set forth below in “Risk Factors,” and in our other reports filed with the U.S. Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this report may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. We undertake no obligation to revise or publically release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

P ART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SolarCity Corporation

Condensed Consolidated Balance Sheets

(In Thousands, Except Share Par Values)

	June 30,			December 31,
	2015			2014
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	421,420		$	504,383
Short-term investments		67,665			138,311
Restricted cash		8,557			20,875
Accounts receivable (net of allowances for doubtful accounts of $2,263 and $1,941 as of June 30, 2015 and December 31, 2014, respectively)		34,233			22,708
Rebates receivable - net		20,383			30,021
Inventories		279,789			217,223
Deferred income tax asset		14,887			13,149
Prepaid expenses and other current assets		76,381			55,729
Total current assets		923,315			1,002,399
Solar energy systems, leased and to be leased - net		3,421,170			2,796,796
Property, plant and equipment - net		353,738			101,914
Goodwill and intangible assets - net		523,383			539,557
MyPower customer notes receivable, net of current portion		236,701			34,544
MyPower deferred costs		106,601			13,147
Other assets		139,784			97,854
Total assets(1)	$	5,704,692		$	4,586,211
Liabilities and equity
Current liabilities:
Accounts payable	$	278,583		$	237,809
Distributions payable to noncontrolling interests and redeemable noncontrolling interests		16,944			8,552
Current portion of deferred U.S. Treasury grant income		15,330			15,330
Accrued and other current liabilities		212,688			152,408
Customer deposits		5,281			10,560
Current portion of deferred revenue		96,553			86,238
Current portion of long-term debt		35,606			11,781
Current portion of solar bonds		7,502			820
Current portion of solar bonds issued to related parties		165,340			330
Current portion of solar asset-backed notes		12,592			13,574
Current portion of financing obligation		30,567			29,689
Total current liabilities		876,986			567,091
Deferred revenue, net of current portion		760,275			557,408
Long-term debt, net of current portion		588,263			287,621
Solar bonds, net of current portion		28,509			2,593
Solar bonds issued to related parties, net of current portion		200			200
Convertible senior notes		796,000			796,000
Solar asset-backed notes, net of current portion		298,032			304,393
Long-term deferred tax liability		14,938			13,194
Financing obligation, net of current portion		69,107			73,379
Deferred U.S. Treasury grant income, net of current portion		389,803			397,486
Other liabilities and deferred credits		398,648			244,474
Total liabilities(1)		4,220,761			3,243,839
Commitments and contingencies (Note 13)
Redeemable noncontrolling interests in subsidiaries		285,081			186,788
Stockholders' equity:
Common stock, $0.0001 par value - authorized, 1,000,000 shares as of June 30, 2015 and December 31, 2014; issued and outstanding, 97,197 and 96,521 shares as of June 30, 2015 and December 31, 2014, respectively		10			10
Additional paid-in capital		1,061,254			1,003,992
Accumulated deficit		(302,245	)		(258,360	)
Total stockholders' equity		759,019			745,642
Noncontrolling interests in subsidiaries		439,831			409,942
Total equity		1,198,850			1,155,584
Total liabilities and equity	$	5,704,692		$	4,586,211

(1)	SolarCity Corporation’s, or the Company’s, consolidated assets as of June 30, 2015 and December 31, 2014 include $2,218,479 and $1,672,370, respectively, being assets of variable interest entities, or VIEs, that can only be used to settle

obligations of the VIEs. These assets include solar energy systems, leased and to be leased-net, of $2,106,995 and $ 1,581,459 as of June 30 , 2015 and Decem ber 31, 2014 , respectively; property , plant and equipment-net, of $23,610 and $ 24,286 as of June 30 , 2015 and December 31, 2014 , respectively; cash and cash equivalents of $47,431 and $ 27,820 as of June 30 , 2015 and December 31, 2014 , respectively; inventory, of $1,181 and $ 614 as of June 30 , 2015 and December 31, 2014 , respectively; restricted cash, current, of $557 and $ 106 as of June 30 , 2015 and December 31, 2014 , respectively; accounts receivable, net, of $16,342 and $ 6,769 as of June 30 , 2015 and December 31, 2014 , respectively; prepaid expenses and other current assets of $1,757 and $ 1,839 as of June 30 , 2015 and December 31, 2014 , respectively; rebates receivable of $13,884 and $ 25,397 as of June 30 , 2015 and December 31, 2014 , respectively; restricted cash, noncurrent, of $254 and $ 300 as of June 30 , 2015 and December 31, 2014 , respectively; and other assets of $6,468 and $ 3,780 as of June 30 , 2015 and December 31, 2014 , respectively. The Company’s consolidated liabilities as of June 30 , 2015 and December 31, 2014 include $26,097 and $ 27,808 , respectively, being liabilities of VIEs whose creditors have no recourse to the Company. These liabilities include distributions p ayable to noncontrolling interests in subsidiaries and redeemable noncontrolling interests in subsidiaries of $16,944 and $ 8,552 as of June 30 , 2015 and December 31, 2014 , respectively; accounts payable of $2,708 and $ 2,748 as of June 30 , 2015 and December 31, 2014 , respectively; customer deposits of $3,785 and $ 6,405 as of June 30 , 2015 and December 31, 2014 , respectively; accrued liabilities and other payables of $2,660 and $ 969 as of June 30 , 2015 and December 31, 2014 , respectively; and current portion of long-term debt of $ 0 and $ 9,134 as of June 30 , 2015 and December 31, 2014 , respectively.

See further description in Note 6, VIE Arrangements .

See accompanying notes.

SolarCity Corporation

Condensed Consolidated Statements of Operations

(In Thousands, Except Share and Per Share Amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Revenue:
Operating leases and solar energy systems incentives	$	78,283		$	43,181		$	133,054		$	72,253
Solar energy systems and components sales		24,520			18,153			37,228			52,627
Total revenue		102,803			61,334			170,282			124,880
Cost of revenue:
Operating leases and solar energy systems incentives		37,392			20,826			69,652			36,805
Solar energy systems and components sales		22,087			17,635			35,547			50,417
Total cost of revenue		59,479			38,461			105,199			87,222
Gross profit		43,324			22,873			65,083			37,658
Operating expenses:
Sales and marketing		113,160			55,771			199,831			102,621
General and administrative		50,211			38,387			98,865			71,398
Research and development		12,401			3,000			24,521			4,923
Total operating expenses		175,772			97,158			323,217			178,942
Loss from operations		(132,448	)		(74,285	)		(258,134	)		(141,284	)
Interest expense - net		20,497			12,892			39,018			20,871
Other expense - net		2,768			1,307			4,872			1,332
Loss before income taxes		(155,713	)		(88,484	)		(302,024	)		(163,487	)
Income tax (provision) benefit		(20	)		24			(646	)		(191	)
Net loss		(155,733	)		(88,460	)		(302,670	)		(163,678	)
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests		(133,373	)		(40,808	)		(258,785	)		(91,963	)
Net loss attributable to stockholders	$	(22,360	)	$	(47,652	)	$	(43,885	)	$	(71,715	)
Net loss attributable to common stockholders
Basic	$	(22,360	)	$	(47,652	)	$	(43,885	)	$	(71,715	)
Diluted	$	(22,360	)	$	(47,652	)	$	(43,885	)	$	(71,715	)
Net loss per share attributable to common stockholders
Basic	$	(0.23	)	$	(0.52	)	$	(0.45	)	$	(0.78	)
Diluted	$	(0.23	)	$	(0.52	)	$	(0.45	)	$	(0.78	)
Weighted-average shares used to compute net loss per share attributable to common stockholders
Basic		97,013,499			92,251,767			96,845,827			91,833,936
Diluted		97,013,499			92,251,767			96,845,827			91,833,936

See accompanying notes.

SolarCity Corporation

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

	Six Months Ended June 30,
	2015			2014
Operating activities:
Net loss	$	(302,670	)	$	(163,678	)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on disposal of property, plant and equipment and construction in progress		129			1,227
Depreciation and amortization		74,420			39,982
Non cash interest and other expense		7,533			5,807
Stock-based compensation, net of amounts capitalized		36,132			28,891
Deferred income taxes		6			7
Non-cash reduction in financing obligation		(23,449	)		(23,041	)
Changes in operating assets and liabilities:
Restricted cash		5,499			(4,878	)
Accounts receivable		(11,525	)		743
Rebates receivable		9,638			(4,688	)
Inventories		(62,329	)		(32,498	)
Prepaid expenses and other current assets		(15,766	)		(16,732	)
MyPower deferred costs		(94,203	)		—
Other assets		(18,887	)		(5,201	)
Accounts payable		39,787			20,289
Accrued and other liabilities		41,017			(7,512	)
Customer deposits		(5,279	)		(1,661	)
Deferred revenue		8,031			103,149
Net cash used in operating activities		(311,916	)		(59,794	)
Investing activities:
Payments for the cost of solar energy systems, leased and to be leased		(665,079	)		(450,296	)
Purchase of property, plant and equipment		(102,065	)		(7,610	)
Investment in promissory notes receivable and other advances		—			(11,000	)
Purchases of short-term investments		(44,592	)		—
Proceeds from sales and maturities of short-term investments		114,642			—
Payments to acquire redeemable noncontrolling interest in a subsidiary		—			(450	)
Net cash used in investing activities		(697,094	)		(469,356	)

	Six Months Ended June 30,
	2015			2014
Financing activities:
Investment fund financings, bank and other borrowings:
Borrowings under long-term debt		456,108			198,935
Repayments of long-term debt		(134,613	)		(52,289	)
Proceeds from issuance of solar bonds		32,494			—
Proceeds from issuance of solar bonds issued to related parties		165,010			—
Proceeds from issuance of solar asset-backed notes		—			67,435
Repayments of borrowings under solar asset-backed notes		(7,355	)		(2,187	)
Payment of deferred purchase consideration		(2,498	)		(957	)
Proceeds from financing obligation		20,481			19,001
Repayments of financing obligation		(5,023	)		(6,557	)
Repayment of capital lease obligations		(1,357	)		(382	)
Proceeds from investment by noncontrolling interests and redeemable noncontrolling interests in subsidiaries		428,934			216,096
Distributions paid to noncontrolling interests and redeemable noncontrolling interests in subsidiaries		(33,575	)		(90,533	)
Proceeds from U.S. Treasury grants		—			360
Net cash provided by financing activities before equity and convertible notes issuances		918,606			348,922
Equity issuances:
Proceeds from exercise of stock options		7,441			8,409
Net cash provided by equity issuances		7,441			8,409
Net cash provided by financing activities		926,047			357,331
Net decrease in cash and cash equivalents		(82,963	)		(171,819	)
Cash and cash equivalents, beginning of period		504,383			577,080
Cash and cash equivalents, end of period	$	421,420		$	405,261
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	22,193		$	9,589
Cash paid (received) during the period for taxes	$	137		$	1,881

See accompanying notes.

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements

1. Organization

SolarCity Corporation, or the Company, was incorporated as a Delaware corporation on June 21, 2006. The Company is engaged in the design, manufacture, installation and sale or lease of solar energy systems to residential and commercial customers, or sale of electricity generated by solar energy systems to customers. The Company’s headquarters are located in San Mateo, California.

2. Summary of Significant Accounting Policies and Procedures

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles, or GAAP, and reflect the accounts and operations of the Company and those of its subsidiaries in which the Company has a controlling financial interest. In accordance with the provisions of Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, 810, Consolidation , the Company consolidates any variable interest entity, or VIE, of which it is the primary beneficiary. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. ASC 810 requires a variable interest holder to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company does not consolidate a VIE in which it has a majority ownership interest when the Company is not considered the primary beneficiary. The Company has determined that it is the primary beneficiary of a number of VIEs (see Note 6, VIE Arrangements ). The Company evaluates its relationships with all the VIEs on an ongoing basis to ensure that it continues to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.

The Company and its subsidiaries’ fiscal quarters and years are the same as calendar quarters and years except for one subsidiary, Silevo, LLC, or Silevo, which continues to have fiscal quarters based on 13-week periods and fiscal years based on 52-week periods. Silevo’s second fiscal quarter of 2015 began on March 29, 2015 and ended on June 27, 2015, and this timing difference and the related activity did not materially impact the condensed consolidated financial statements.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Use of Estimates

The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Management regularly makes significant estimates and assumptions regarding the selling price of undelivered elements for revenue recognition purposes, the collectability of accounts and rebates receivable, the valuation of inventories, the labor costs for long-term contracts used as a basis for determining the percentage of completion for such contracts, the fair values and residual values of solar energy systems subject to leases, the accounting for business combinations, the fair values and useful lives of acquired tangible and intangible assets, the fair value of debt assumed under business combinations, the fair value of contingent consideration payable under business combinations, the fair value of short-term investments, the useful lives of solar energy systems, property, plant and equipment, the determination of accrued warranty, the determination of accrued liability for solar energy systems performance guarantees, the determination of lease pass-through financing obligations, the discount rates used to determine the fair values of investment tax credits, the valuation of stock-based compensation, the determination of valuation allowances associated with deferred tax assets, asset impairment, the valuation of build-to-suit lease assets and other items. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ materially from those estimates.

Short-Term Investments

The Company’s short-term investments are comprised of corporate debt securities and asset-backed securities. The Company classifies short-term investments as available-for-sale and carries them at fair value, with any unrealized gains or losses recognized as other comprehensive income or loss in the condensed consolidated balance sheets. The specific identification method is used to determine the cost of any securities disposed of, with any realized gains or losses recognized as other income or expense in the condensed consolidated statements of operations. Short-term investments are anticipated to be used for current operations and are, therefore, classified as current assets even though their maturities may extend beyond one year. The Company periodically reviews

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

short-term investments for impairment. In the event a decline in value is determined to be other-than-temporary, an impairment loss is recognized. When determining if a decline in value is other-than-temporary, the Company takes into consideration the current market conditions and the duration and severity of and the reason for the decline, as well as the likelihood that it would need to sell the security prior to a recovery of par value.

As of June 30, 2015, short-term investments were comprised of $60.8 million of corporate debt securities and $6.9 million of asset-backed securities. The costs of these securities approximated their fair values, and there were no material gross realized or unrealized gains, gross realized or unrealized losses or impairment losses recognized for the three and six months ended June 30, 2015. As of June 30, 2015, all short-term investments were scheduled to mature within the next twelve months.

Fair Value of Financial Instruments

ASC 820 , Fair Value Measurements , clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

ASC 820 requires that the valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes inputs that may be used to measure fair value as follows:

·	Level 1—Observable inputs that reflect quoted prices for identical assets or liabilities in active markets.

Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

·	Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

As of June 30, 2015, the Company’s assets and liabilities carried at fair value on a recurring basis included cash equivalents, short-term investments and contingent consideration, as follows (in thousands):

	Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	32,651	$	—	$	—
Short-term investments:
Corporate debt securities	$	—	$	60,759	$	—
Asset-backed securities	$	—	$	6,906	$	—
Liabilities:
Contingent consideration	$	—	$	—	$	120,133

The Company classified its money market funds within Level 1 because their fair values are based on their quoted market prices. The Company classified its corporate debt securities and asset-backed securities within Level 2 because their fair values are determined using alternative pricing sources or models that utilized market observable inputs to determine their fair values. The Company classified its contingent consideration within Level 3 because their fair values are determined using unobservable probability estimates and unobservable estimated discount rates applicable to the acquisition to determine the fair value. During the six months ended June 30, 2015, there were no transfers between the levels of the fair value hierarchy.

The contingent consideration is dependent on the achievement of specified production milestones for the acquired business. The fair value of the contingent consideration is directly proportional to the estimated probabilities of achievement of these milestones. As of June 30, 2015, the estimated probabilities ranged from 90% to 95%, the estimated discount rates ranged from 5.0% to 7.0%, $42.5 million was included under accrued and other current liabilities on the condensed consolidated balance sheets and $77.6 million was included under other liabilities and deferred credits on the condensed consolidated balance sheets.

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

The following table summarizes the activity of the Level 3 contingent consideration balance in the six months ended June 30 , 2015 (in thousands):

Balance - beginning of the period	$	117,197
Change in fair value recorded in other expense - net		2,936
Balance - end of the period	$	120,133

The Company’s financial instruments that are not re-measured at fair value include accounts receivable, customer notes receivable, rebates receivable, accounts payable, customer deposits, distributions payable to noncontrolling interests and redeemable noncontrolling interests, the participation interest, solar asset-backed notes, convertible senior notes, Solar Bonds and long-term debt. The carrying values of these financial instruments other than customer notes receivable, the participation interest, solar asset-backed notes, convertible senior notes, Solar Bonds and long-term debt approximated their fair values due to the fact that they were short-term in nature at June 30, 2015 and December 31, 2014 (Level 1).

The Company estimates the fair value of convertible senior notes based on their last actively traded prices (Level 1). The Company estimates the fair value of customer notes receivable, the participation interest, solar asset-backed notes, Solar Bonds and long-term debt based on rates currently offered for instruments with similar maturities and terms (Level 3).

The following table presents the estimated fair values and the carrying values of the participation interest, solar asset-backed notes and convertible senior notes (in thousands):

	June 30, 2015				December 31, 2014
	Carrying Value		Fair Value		Carrying Value		Fair Value
Participation interest	$	15,760	$	14,387	$	15,556	$	14,102
Solar asset-backed notes	$	310,624	$	321,127	$	317,967	$	328,313
Convertible senior notes	$	796,000	$	781,875	$	796,000	$	752,176

The Company has estimated the fair values of customer notes receivable, Solar Bonds and long-term debt to approximate their carrying values based on rates currently offered for instruments with similar maturities and terms.

Customer Notes Receivable

In determining the allowance and credit quality for customer loans under MyPower, the Company identifies significant customers with known disputes or collection issues and also considers its historical level of credit losses and current economic trends that might impact the level of future credit losses. Customer notes receivable that are individually impaired are charged-off as a write-off of allowance for losses. As of June 30, 2015, there were no significant customers with known disputes or collection issues, and the amount of potentially uncollectible amounts was also insignificant. Accordingly, the Company did not establish an allowance for losses against customer notes receivable. In addition, there were no material non-accrual or past due customer notes receivable as of June 30, 2015.

Deferred Revenue and Deferred Costs under MyPower Contracts

For solar energy systems sold under a MyPower contract, the Company has determined that the arrangement consideration may not currently be fixed or determinable. In making this determination, the Company considered (i) the MyPower arrangement is unique and the Company does not have company-specific or market history for similar financing arrangements with similar asset classes over an extended term; (ii) customer preferences and satisfaction during the life of these long-term contracts, including as a result of technological advances in solar energy systems over time, may change, and the Company may be incented to offer future inducements or concessions to ensure customers remain satisfied during the life of these long-term contracts; and (iii) possible future decreases in the retail prices of electricity from utilities or from other renewable energy sources that may make the purchase of the solar energy systems less economically attractive and may cause the Company to amend the terms of its contracts to ensure continued performance and remain competitive. Accordingly, the Company initially defers the revenue associated with the sale of a solar energy system under a MyPower contract when it delivers the system that has passed inspection by the utility or the authority having jurisdiction. In instances where there are multiple deliverables in a single MyPower contract, the Company allocates the arrangement consideration to the various elements in the contract based on the relative selling price method. Then, the Company recognizes revenue for the system over the term of the contract as the customer pays the loan’s principal and interest. The deferred revenue is included in the condensed consolidated balance sheets under the current portion of deferred revenue for the portion expected to be recognized as revenue in the

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

next 12 months, and the non-current portion is included under deferred revenue, net of current portion. The Company records a note receivable when the customer secures the loan from a subsidiary of the Company to finance the purchase.

MyPower deferred revenue activity was as follows (in thousands):

	As of and for the
	Six Months Ended
	June 30,
	2015
Balance - beginning of the period	$	33,651
MyPower systems delivered under executed contracts		196,825
MyPower revenue recognized within solar energy systems and components sales		(8,597	)
Balance - end of the period	$	221,879

Of the balance outstanding as of June 30, 2015, $3.7 million is included in the condensed consolidated balance sheet under current portion of deferred revenue. The balances in the table above do not include $18.0 million allocated to remote monitoring service revenue and $3.5 million allocated to accrued sales taxes.

The costs associated with solar energy systems sold under MyPower contracts, including the costs of acquisition of solar energy systems component, personnel costs associated with system installations and costs to originate the contracts such as sales commissions, referral fees and some incremental contract administration costs, are initially capitalized as deferred costs. Subsequently these costs are recognized as a component of cost of revenue from solar energy systems and components sales for the costs associated with system components and installation, or as a component of operating expenses for costs associated with contract origination, generally in proportion to the reduction of the MyPower loan’s outstanding principal over 30 years. The deferred cost is included in the condensed consolidated balance sheets under prepaid expenses and other current assets for the portion expected to be recognized in the condensed consolidated income statement in the next twelve months, and the non-current portion is included under other assets. MyPower deferred costs activity was as follows (in thousands):

	As of and for the
	Six Months Ended
	June 30,
	2015
Balance - beginning of the period	$	13,571
MyPower systems delivered under executed contracts(1)		98,526
Recognized in cost of revenue within solar energy systems and components sales		(3,711	)
Recognized in operating expenses		(107	)
Balance - end of the period	$	108,279

(1)	Included in MyPower systems delivered under executed contracts was $13.3 million of MyPower contract origination costs incurred in the six months ended June 30, 2015.

Of the balance outstanding as of June 30, 2015, $1.7 million is included in the condensed consolidated balance sheet under prepaid and current assets.

Warranties

The Company warrants its products for various periods against defects in material or installation workmanship. The Company generally provides a warranty on the generating and non-generating parts of the solar energy systems it sells, including sales under MyPower contracts, of typically between 10 to 30 years. The manufacturer’s warranty on the solar energy systems’ components, which is typically passed-through to customers, ranges from 1 to 25 years.

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

The changes in the accrued warranty balance, recorded as a component of accrued and other current liabilities on the condensed consolidated balance sheets, consisted of the following (in thousands):

	As of and for the
	Six Months Ended
	June 30,
	2015
Balance - beginning of the period	$	8,607
Reduction in liability (payments)		(122	)
Increase in liability (new customer warranties)		12,284
Balance - end of the period	$	20,769

Solar Energy Systems Performance Guarantees

The Company guarantees certain specified minimum solar energy production output for certain systems leased or sold to customers generally for a term up to 30 years. The Company monitors the solar energy systems to ensure that these outputs are being achieved. The Company evaluates if any amounts are due to its customers and makes any payments periodically as specified in the customer contracts. As of June 30, 2015 and December 31, 2014, the Company had recorded liabilities of $2.1 million and $1.6 million, respectively, under accrued and other current liabilities in the condensed consolidated balance sheets, relating to these guarantees based on the Company’s assessment of its current exposure.

Comprehensive Income (Loss)

The Company accounts for comprehensive income (loss) in accordance with ASC 220 , Comprehensive Income . Under ASC 220, the Company is required to report comprehensive income (loss), which includes net income (loss) as well as other comprehensive income (loss). There were no significant other comprehensive income (losses) and no significant differences between comprehensive loss as defined by ASC 220 and net loss as reported in the condensed consolidated statements of operations, for the periods presented.

Segment Information

Operating segments are defined as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The executive team is the Company’s chief operating decision maker, which is comprised of the chief executive officer, the chief technology officer, the chief revenue officer, chief operating officer and the chief financial officer. Based on the financial information presented to and reviewed by the executive team in deciding how to allocate the resources and in assessing the performance of the Company, the Company has determined that it has a single operating and reporting segment: solar energy products and services. The Company’s principal operations, revenue and decision-making functions are located in the United States.

Basic and Diluted Net Income (Loss) Per Share

The Company’s basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period.

The diluted net income (loss) per share attributable to common stockholders is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the treasury stock method or the if-converted method, as applicable. In periods when the Company incurred a net loss attributable to common stockholders, stock options, restricted stock units and convertible senior notes are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive.

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

Recently Issued Accounting Standards

In May 2014, the FASB issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers , to replace the existing revenue recognition criteria for contracts with customers and to establish the disclosure requirements for revenue from contracts with customers. The ASU was originally effective for interim and annual periods beginning after December 15, 2016. However, in July 2015, the FASB voted to defer the effective date by one year, with early adoption still permitted. Adoption of the ASU is either retrospective to each prior period presented or retrospective with a cumulative adjustment to retained earnings or accumulated deficit as of the adoption date. The Company is currently assessing the impact of the ASU and the revised adoption date on its condensed consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern , to provide guidance within GAAP requiring management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and requiring related disclosures. The ASU is effective for annual periods ending after December 15, 2016. The Company believes that the ASU will have no impact on its condensed consolidated financial statements.

In February 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis , to amend the criteria for consolidation of certain legal entities. The ASU is effective for interim and annual periods beginning after December 15, 2015. Adoption of the ASU is either retrospective to each prior period presented or retrospective with a cumulative adjustment to retained earnings or accumulated deficit as of the adoption date. The Company is currently assessing the impact of the ASU on its condensed consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs , to require debt issuance costs to be presented as an offset against debt outstanding as opposed to an asset. The ASU is effective for interim and annual periods beginning after December 15, 2015. Adoption of the ASU is retrospective to each prior period presented. Upon adoption of the ASU, the Company will offset its debt issuance costs, which were $29.7 million as of June 30, 2015, against debt outstanding.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory , to specify that inventory should be subsequently measured at the lower of cost or net realizable value, which is the ordinary selling price less any completion, transportation and disposal costs. However, the ASU does not apply to inventory measured using the last-in-first-out or retail methods. The ASU is effective for interim and annual periods beginning after December 15, 2016. Adoption of the ASU is prospective. The Company does not anticipate that the adoption of the ASU will have a material impact on its condensed consolidated financial statements.

3. Goodwill and Intangible Assets

There were no material changes recorded in the six months ended June 30, 2015 related to the amounts reported in the Company’s Form 10-K for the year ended December 31, 2014, except for the periodic amortization of the intangible assets.

Intangible Assets

The following is a summary of intangible assets as of June 30, 2015 (in thousands):


	Weighted-
	average
	useful life				Accumulated
	(in years)		Gross		amortization			Net
Developed technology - Silevo		10	$	115,000	$	(8,846	)	$	106,154
Developed technology - Zep Solar		7		60,100		(13,363	)		46,737
Trademarks and trade names		7		24,700		(5,492	)		19,208
Marketing database		5		17,427		(6,341	)		11,086
PowerSaver agreement		10		17,077		(3,107	)		13,970
Non-compete agreement		5		6,959		(2,532	)		4,427
Other		6		10,028		(4,147	)		5,881
Total		8.33	$	251,291	$	(43,828	)	$	207,463

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

The following is a summary of intangible assets as of December 31, 2014 (in thousands):

								Transfers to
	Weighted-							solar energy
	average							systems,			Write-offs
	useful life				Accumulated			leased and to be			and
	(in years)		Gross		amortization			leased			cancellations			Net
Developed technology - Silevo		10	$	115,000	$	(3,096	)	$	—		$	—			111,904
Developed technology - Zep Solar		7		60,100		(9,070	)		—			—			51,030
Trademarks and trade names		7		24,700		(3,728	)		—			—			20,972
Marketing database		5		17,427		(4,599	)		—			—			12,828
PowerSaver agreement		10		17,077		(2,253	)		—			—			14,824
Solar energy systems backlog		30		12,434		—			(10,755	)		(1,679	)		—
Non-compete agreement		5		6,959		(1,836	)		—			—			5,123
Other		6		10,028		(3,072	)		—			—			6,956
Total		9.35	$	263,725	$	(27,654	)	$	(10,755	)	$	(1,679	)	$	223,637

Amortization expense for the identifiable purchased intangible assets for the six months ended June 30, 2015 and 2014 was allocated as follows (in thousands):

	Six Months Ended June 30,
		2015	2014
Included in operating leases and solar energy incentives cost of revenue	$	8,546	$	2,912
Included in solar energy systems and components sales cost of revenue		1,780		2,076
Total included in cost of revenue		10,326		4,988
Included in sales and marketing		5,848		5,848
Total amortization expense	$	16,174	$	10,836

No intangible assets were impaired during the six months ended June 30, 2015.

The total future amortization expense for intangible assets is expected to be (in thousands):

	Cost of Revenue		Operating Expense		Total
Six months ending December 31, 2015	$	10,327	$	5,848	$	16,175
2016		20,643		11,203		31,846
2017		20,486		10,153		30,639
2018		20,486		8,582		29,068
2019		20,486		5,236		25,722
Thereafter		64,398		9,615		74,013
Total	$	156,826	$	50,637	$	207,463

Goodwill

The carrying value of goodwill as of June 30, 2015 and December 31, 2014 was $315.9 million.

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

4. Selected Balance Sheet Components

Selected components of the condensed consolidated balance sheets were as follows (in thousands):


	June 30, 2015			December 31, 2014
Inventories:
Raw materials	$	273,159		$	209,251
Work in progress		6,630			7,972
Total	$	279,789		$	217,223

Solar Energy Systems, Leased and To Be Leased - Net:
Solar energy systems leased to customers	$	2,947,005		$	2,388,548
Initial direct costs related to solar energy systems leased to customers		276,221			207,537
		3,223,226			2,596,085
Less accumulated depreciation and amortization		(210,778	)		(159,160	)
		3,012,448			2,436,925
Solar energy systems under construction		173,449			131,048
Solar energy systems to be leased to customers		235,273			228,823
Solar energy systems, leased and to be leased - net(1)(2)	$	3,421,170		$	2,796,796

Accrued and Other Current Liabilities:
Accrued compensation	$	72,110		$	50,414
Current portion of contingent consideration		42,530			41,978
Accrued expenses		61,787			34,298
Accrued sales and use taxes		6,127			10,438
Accrued warranty		20,769			8,607
Current portion of capital lease obligation		6,122			3,430
Current portion of deferred gain on sale-leaseback transactions		3,243			3,243
Total	$	212,688		$	152,408

Other Liabilities and Deferred Credits:
Deferred gain on sale-leaseback transactions, net of current portion	$	53,168		$	54,790
Build-to-suit lease liability		158,700			26,450
Deferred rent expense		13,955			4,838
Capital lease obligation, net of current portion		31,322			27,791
Liability for receipts from investors		7,224			3,213
Contingent consideration, net of current portion		77,603			75,219
Participation interest		15,760			15,556
Other noncurrent liabilities		40,916			36,617
Total	$	398,648		$	244,474

(1)	Included in solar energy systems leased to customers as of June 30, 2015 and December 31, 2014 was $66.4 million related to capital leased assets with an accumulated depreciation of $9.3 million and $7.9 million, respectively.

( 2 )

Included in solar energy systems leased to customers as of June 30, 2015 and December 31, 2014 was $4.6 million and $3.5 million, respectively, related to energy storage systems with an accumulated depreciation of $0.3 million and $0.1 million, respectively.

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

5. Indebtedness

The following is a summary of the Company’s debt as of June 30, 2015 (dollars in thousands):

	Unpaid						Unused
	Principal		Carrying Value, Net of Fees				Borrowing
	Balance		Current		Long-Term		Capacity		Interest Rate	Maturity Dates
Recourse debt:
Revolving credit facility	$	215,000	$	—	$	211,437	$	25,320	3.4%-5.5%	December 2016
Vehicle loans		8,313		2,512		5,801		—	2.9%-7.0%	April 2015 - June 2019
2.75% convertible senior notes due in 2018		230,000		—		230,000		—	2.8%	November 2018
1.625% convertible senior notes due in 2019		566,000		—		566,000		—	1.6%	November 2019
Solar Bonds		36,187		7,502		28,509		—	1.6%-5.8%	October 2015 - June 2030
Solar Bonds issued to related parties		165,540		165,340		200		—	2.0%-4.0%	October 2015 - October 2021
Total recourse debt		1,221,040		175,354		1,041,947		25,320
Non-recourse debt:
Term loan due in May 2016		34,622		33,094		—		—	3.2%	May 2016
Term loan due in December 2016		184,451		—		181,758		65,549	3.4%	December 2016
MyPower revolving credit facility		13,576		—		10,939		186,424	2.8%-5.3%	January 2017
Solar asset-backed revolving credit facility		187,015		—		178,328		312,985	2.9%	December 2017
Solar Asset-backed Notes, Series 2013-1		48,091		3,374		44,717		—	4.8%	November 2038
Solar Asset-backed Notes, Series 2014-1		66,276		2,863		63,413		—	4.6%	April 2044
Solar Asset-backed Notes, Series 2014-2		196,966		6,355		189,902		—	4.0%-Class A 5.4%-Class B	July 2044
Total non-recourse debt		730,997		45,686		669,057		564,958
Total debt	$	1,952,037	$	221,040	$	1,711,004	$	590,278

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

The following is a summary of the Company’s debt as of December 31, 2014 (dollars in thousands):

	Unpaid						Unused
	Principal		Carrying Value, Net of Fees				Borrowing
	Balance		Current		Long-Term		Capacity		Interest Rate	Maturity Date
Recourse debt:
Revolving credit facility	$	130,000	$	—	$	126,939	$	54,935	3.4%	December 2016
Vehicle loans		9,724		2,647		7,077		—	1.9%-7.5%	March 2015 - June 2019
2.75% convertible senior notes due in 2018		230,000		—		230,000		—	2.8%	November 2018
1.625% convertible senior notes due in 2019		566,000		—		566,000		—	1.6%	November 2019
Solar Bonds		3,413		820		2,593		—	2.0%-4.0%	October 2015 - October 2021
Solar Bonds issued to related parties		530		330		200		—	2.0%-4.0%	October 2015 - October 2021
Total recourse debt		939,667		3,797		932,809		54,935
Non-recourse debt:
Term loan assumed from Silevo acquisition		9,134		9,134		—		—	7.8%	June 2015
Term loan due in May 2016		34,195		—		33,497		90,805	3.2%	May 2016
Term loan due in December 2016		122,655		—		120,108		127,345	3.4%-3.5%	December 2016
Solar Asset-backed Notes, Series 2013-1		49,519		3,291		46,228		—	4.8%	November 2038
Solar Asset-backed Notes, Series 2014-1		67,676		2,779		64,897		—	4.6%	April 2044
Solar Asset-backed Notes, Series 2014-2		201,494		7,504		193,268		—	4.0%-Class A 5.4%-Class B	July 2044
Total non-recourse debt		484,673		22,708		457,998		218,150
Total debt	$	1,424,340	$	26,505	$	1,390,807	$	273,085

Recourse debt refers to debt that is recourse to the Company’s general assets. Non-recourse debt refers to debt that is recourse to only specified assets or subsidiaries of the Company. The Company’s debt is described further below.

Recourse Debt Facilities:

Revolving Credit Facility

In September 2012, the Company entered into a revolving credit agreement with a syndicate of banks to obtain funding for working capital, letters of credit and funding for general corporate needs. The committed amount under the revolving credit facility was increased from $75.0 million to $200.0 million in 2013. On June 29, 2015, the committed amount under the revolving credit facility was further increased to $260.0 million. Borrowed funds bear interest, at the Company’s option, at an annual rate of (a) 3.25% plus LIBOR or (b) 2.25% plus the highest of (i) the federal funds rate plus 0.50%, (ii) Bank of America’s published “prime rate” or (iii) LIBOR plus 1.00%. The fee for undrawn commitments is 0.375% per annum. The revolving credit facility is secured by certain of the Company’s machinery and equipment, accounts receivable, inventory and other assets. In each of June, July, September, October and December 2014 and June 2015, the revolving credit facility was amended to increase certain debt covenant thresholds, including those related to permitted investment amounts and capital expenditures by the Company, to make certain changes in connection with the Company’s acquisition of Silevo and to make certain changes in connection with the issuance and payment of certain loans and debt, among other things. The Company was in compliance with all financial covenants as of June 30, 2015.

Vehicle Loans

The Company has entered into various vehicle loan agreements with various financial institutions. The vehicle loans are secured by the vehicles financed. The Company was in compliance with all financial covenants as of June 30, 2015.

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

2.75% Convertible Senior Notes Due in 2018

In October 2013, the Company issued $230.0 million in aggregate principal of 2.75% convertible senior notes due on November 1, 2018 through a public offering. The net proceeds from the offering, after deducting transaction costs, were $222.5 million. The Company debt issuance costs were recorded in other assets and are being amortized to interest expense over the contractual term of the convertible senior notes.

Each $1,000 of principal of the convertible senior notes is initially convertible into 16.2165 shares of the Company’s common stock, which is equivalent to an initial conversion price of $61.67 per share, subject to adjustment upon the occurrence of specified events set forth in the applicable indenture. Holders of the convertible senior notes may convert their convertible senior notes at their option at any time up to and including the second scheduled trading day prior to maturity. If certain events that would constitute a make-whole fundamental change under the applicable indenture occur prior to the maturity date, the Company would increase the conversion rate for a holder who elects to convert its convertible senior notes in connection with such an event in certain circumstances. The convertible senior note holders may require the Company to repurchase their convertible senior notes for cash only under certain defined fundamental changes. The Company was in compliance with all financial covenants as of June 30, 2015.

1.625% Convertible Senior Notes Due in 2019

In September 2014, the Company issued $500.0 million in aggregate principal of 1.625% convertible senior notes due on November 1, 2019 through a private placement. The net amount from the issuance, after deducting transaction costs, was $488.3 million. On October 10, 2014, the Company issued an additional $66.0 million in aggregate principal of the 1.625% convertible senior notes, pursuant to the exercise of an option by the initial purchasers. The net amount from the additional issuance, after deducting transaction costs, was $64.5 million. The debt issuance costs were recorded in other assets and are being amortized to interest expense over the contractual term of the convertible senior notes.

Each $1,000 of principal of the convertible senior notes is initially convertible into 11.972 shares of the Company’s common stock, which is equivalent to an initial conversion price of $83.53 per share, subject to adjustment upon the occurrence of specified events set forth in the applicable indenture. Holders of the convertible senior notes may convert their convertible senior notes at their option at any time up to and including the second scheduled trading day prior to maturity. If certain events that would constitute a make-whole fundamental change under the applicable indenture occur prior to the maturity date, the Company would increase the conversion rate for a holder who elects to convert its convertible senior notes in connection with such an event in certain circumstances. The convertible senior note holders may require the Company to repurchase their convertible senior notes for cash only under certain defined fundamental changes. The Company was in compliance with all financial covenants as of June 30, 2015.

In connection with the issuance of the convertible senior notes in September 2014, the Company paid $57.6 million to enter into capped call option agreements to reduce the potential dilution to holders of the Company’s common stock after a conversion of the convertible senior notes. In connection with the additional issuance of the convertible senior notes on October 10, 2014, the Company paid $7.6 million to enter into additional capped call option agreements. Specifically, upon the exercise of the capped call options, the Company would receive shares of its common stock equal to 6,776,152 shares multiplied by (a) (i) the lower of $126.08 or the then market price of its common stock less (ii) $83.53 and divided by (b) the then market price of its common stock. The results of this formula are that the Company would receive more shares as the market price of its common stock exceeds $83.53 and approaches $126.08, but the Company would receive fewer shares as the market price of its common stock exceeds $126.08. Consequently, if the convertible senior notes are converted, then the number of shares to be issued by the Company would be effectively partially offset by the shares received by the Company under the capped call options as they are exercised.

The Company can also elect to receive the equivalent value of cash in lieu of shares. The capped call options expire on various dates ranging from September 4, 2019 to October 29, 2019, and the formula above would be adjusted in the event of a merger; a tender offer; nationalization, insolvency or delisting of the Company’s common stock; changes in law; failure to deliver; insolvency filing; stock splits, combinations, dividends, repurchases or similar events; or an announcement of certain of the preceding actions. Although intended to reduce the net number of shares issued after a conversion of the convertible senior notes, the capped call options were separately negotiated transactions, are not a part of the terms of the convertible senior notes, do not affect the rights of the convertible senior note holders and will take effect regardless of whether the convertible senior notes are actually converted. The capped call options met the criteria for equity classification because they are indexed to the Company’s common stock and the Company always controls whether settlement will be in shares or cash. As a result, the amounts paid for the capped call options were recorded as reductions to additional paid-in capital. The capped call options are excluded from the calculation of diluted net income (loss) per share attributable to common stockholders as their effect is antidilutive.

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

Solar Bonds

In October 2014, the Company commenced issuing Solar Bonds, which are senior unsecured obligations that are structurally subordinate to the indebtedness and other liabilities of the Company’s subsidiaries. Solar Bonds have been issued under multiple series that have various fixed terms and interest rates. The Company intends to continue to issue Solar Bonds from time to time depending on market conditions. In March 2015, Space Exploration Technologies Corporation, or SpaceX, purchased $90.0 million in aggregate principal amount of 2.00% Solar Bonds due in March 2016. In June 2015, SpaceX purchased an additional $75.0 million in aggregate principal amount of 2.00% Solar Bonds due in June 2016. SpaceX is considered a related party (see Note 12, Related Party Transactions ). The Company was in compliance with all debt covenants as of June 30, 2015.

Non-Recourse Debt Facilities:

Term Loan Assumed From Silevo Acquisition

Through the Silevo acquisition, the Company assumed a pre-existing term loan with an outstanding principal balance of $9.1 million. The term loan bore interest at a fixed rate of 7.8% per annum and was denominated in the Chinese Yuan. The term loan was a liability of a subsidiary of Silevo only and was non-recourse to the Company or its other subsidiaries. In June 2015, the Company fully paid-off the term loan.

Term Loan Due in September 2015

In March 2015, a subsidiary of the Company entered into an agreement with a bank for a term loan of $79.0 million. The term loan bore interest, at the Company’s option, at an annual rate of (a) 3.50% plus LIBOR or (b) 3.50% plus the highest of (i) the Federal Funds Rate plus 0.50%, (ii) Bank of America’s published “prime rate” or (iii) LIBOR plus 1.00%. The term loan was secured by certain assets and cash flows of certain subsidiaries of the Company and was non-recourse to the Company’s other assets or cash flows. On May 4, 2015, the Company fully paid-off the term loan using a portion of the proceeds from the solar asset-backed revolving credit facility (see below).

Term Loan Due in May 2016

On May 23, 2014, a subsidiary of the Company entered into an agreement with a syndicate of banks for a term loan of $125.0 million. The term loan bears interest at an annual rate of 3.00% to 4.00%, depending on the cumulative period the term loan has been outstanding, plus LIBOR or, at the Company’s option, plus the highest of (i) the Federal Funds Rate plus 0.50%, (ii) Bank of America’s published “prime rate” or (iii) LIBOR plus 1.00%. The term loan is secured by certain assets and cash flows of the subsidiary and is non-recourse to the Company’s other assets or cash flows. The Company was in compliance with all financial covenants as of June 30, 2015.

Term Loan Due in December 2016

On February 4, 2014, a subsidiary of the Company entered into an agreement with a syndicate of banks for a term loan of $100.0 million. On February 20, 2014, the agreement was amended to increase the maximum term loan availability to $220.0 million. On March 20, 2014, the agreement was further amended to increase the maximum term loan availability to $250.0 million. The term loan bears interest at an annual rate of LIBOR plus 3.25% or, at the Company’s option, 3.25% plus the highest of (i) the Federal Funds Rate plus 0.50%, (ii) Bank of America’s published “prime rate” or (iii) LIBOR plus 1.00%. The term loan is secured by the assets and cash flows of the subsidiary and is non-recourse to the Company’s other assets. The Company was in compliance with all financial covenants as of June 30, 2015.

MyPower Revolving Credit Facility

On January 9, 2015, a subsidiary of the Company entered into a $200.0 million revolving credit agreement with a syndicate of banks to obtain funding for the MyPower customer loan program. The MyPower revolving credit facility provides up to $160.0 million of Class A notes and up to $40.0 million of Class B notes. The Class A notes bear interest at an annual rate of 2.50% plus (a) the commercial paper rate or (b) 1.50% plus adjusted LIBOR. The Class B notes bear interest at an annual rate of 5.00% plus LIBOR. The fee for undrawn commitments is 0.50% per annum. The MyPower revolving credit facility is secured by the payments owed to the Company or its subsidiaries under MyPower customer loans and is non-recourse to the Company’s other assets. The Company was in compliance with all financial covenants as of June 30, 2015.

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

The Company has entered into forward interest rate swaps, in order to fix the variable interest rate, for each draw under the MyPower revolving credit facility. The Company accounts for the interest rate swaps as non-hedging derivatives, whose value was immaterial as of June 30, 2015 .

Solar Asset-backed Revolving Credit Facility

On May 4, 2015, a subsidiary of the Company entered into an agreement with a syndicate of banks for a revolving credit facility with a total committed amount of $500.0 million. On the same date, the subsidiary drew $113.1 million under the revolving credit facility and used a portion of the proceeds to fully pay-off the term loan due in September 2015 (see above). The revolving credit facility bears interest at an annual rate of 2.75% plus, at the Company’s option, LIBOR or the commercial paper rate. The revolving credit facility is secured by certain assets and cash flows of certain subsidiaries of the Company and is non-recourse to the Company’s other assets. The Company was in compliance with all financial covenants as of June 30, 2015.

The Company has entered into forward interest rate swaps, in order to fix the variable interest rate, for each draw under the revolving credit facility. The Company accounts for the interest rate swaps as non-hedging derivatives, whose value was immaterial as of June 30, 2015.

Solar Asset-backed Notes, Series 2013-1

In November 2013, the Company pooled and transferred qualifying solar energy systems and the associated customer contracts into a special purpose entity, or SPE, and issued $54.4 million in aggregate principal of Solar Asset-backed Notes, Series 2013-1, backed by these solar assets to certain investors. The SPE is wholly owned by the Company and is consolidated in the Company’s financial statements. Accordingly, the Company did not recognize a gain or loss on the transfer of these solar assets. As of June 30, 2015, these solar assets had a carrying value of $141.2 million and are included under solar energy systems, leased and to be leased — net, in the condensed consolidated balance sheets. The Solar Asset-backed Notes were issued at a discount of 0.05%. The cash flows generated by these solar assets are used to service the monthly principal and interest payments on the Solar Asset-backed Notes and satisfy the SPE’s expenses, and any remaining cash is distributed to a wholly owned subsidiary of the Company. The Company recognizes revenue earned from the associated customer contracts in accordance with the Company’s revenue recognition policy. The assets and cash flows generated by the qualifying solar energy systems are not available to the other creditors of the Company, and the creditors of the SPE, including the Solar Asset-backed Note holders, have no recourse to the Company’s other assets. The Company contracted with the SPE to provide operations and maintenance and administrative services for the qualifying solar energy systems. The Company was in compliance with all financial covenants as of June 30, 2015.

Solar Asset-backed Notes, 2014-1

In April 2014, the Company pooled and transferred qualifying solar energy systems and the associated customer contracts into a SPE and issued $70.2 million in aggregate principal of Solar Asset-backed Notes, Series 2014-1, backed by these solar assets to certain investors. The SPE is wholly owned by the Company and is consolidated in the Company’s financial statements. Accordingly, the Company did not recognize a gain or loss on the transfer of these solar assets. As of June 30, 2015, these solar assets had a carrying value of $132.0 million and are included under solar energy systems, leased and to be leased — net, in the condensed consolidated balance sheets. The Solar Asset-backed Notes were issued at a discount of 0.01%. The cash flows generated by these solar assets are used to service the monthly principal and interest payments on the Solar Asset-backed Notes and satisfy the SPE’s expenses, and any remaining cash is distributed to a wholly owned subsidiary of the Company. The Company recognizes revenue earned from the associated customer contracts in accordance with the Company’s revenue recognition policy. The assets and cash flows generated by the qualifying solar energy systems are not available to the other creditors of the Company, and the creditors of the SPE, including the Solar Asset-backed Note holders, have no recourse to the Company’s other assets. The Company contracted with the SPE to provide operations and maintenance and administrative services for the qualifying solar energy systems. The Company was in compliance with all financial covenants as of June 30, 2015.

Solar Asset-backed Notes, Series 2014-2

In July 2014, the Company pooled and transferred qualifying solar energy systems and the associated customer contracts into a SPE and issued $160.0 million in aggregate principal of Solar Asset-backed Notes, Series 2014-2, Class A, and $41.5 million in aggregate principal of Solar Asset-backed Notes, Series 2014-2, Class B, to certain investors. The SPE is wholly owned by the Company and is consolidated in the Company’s financial statements. Accordingly, the Company did not recognize a gain or loss on the transfer of these solar assets. As of June 30, 2015, these solar assets had a carrying value of $280.6 million and are included under solar energy systems, leased and to be leased — net, in the condensed consolidated balance sheets. The Solar Asset-backed Notes were issued at a discount of 0.01%. These solar assets and the associated customer contracts are leased to an investor under a lease

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

pass-through arrangement that the Company has accounted for as a borrowing. The rent paid by the investor under the lease pass-through arrangement is used (and, following the expiration of the lease pass-through arrang ement, the cash generated by these solar assets will be used) to service the monthly principal and interest payments on the Solar Asset-backed Notes and satisfy the SPE’s expenses, and any remaining cash is distributed to a wholly owned subsidiary of the C ompany. The Company recognizes revenue earned from the associated customer contracts in accordance with the Company’s revenue recognition policy. The assets and cash flows generated by these solar assets are not available to the other creditors of the Comp any, and the creditors of the SPE, including the Solar Asset-backed Note holders, have no recourse to the Company’s other assets. The Company contracted with the SPE to provide operations and maintenance and administrative services for the qualifying solar energy systems. The Company was in compliance with all financial covenants as of June 30 , 201 5 .

6. VIE Arrangements

The Company has entered into various arrangements with investors to facilitate funding and monetization of solar energy systems. These arrangements include those described in this Note 6, VIE Arrangements , as well as those described in Note 7, Financing Obligations .

VIE Fund Arrangements

Wholly owned subsidiaries of the Company and fund investors formed and contributed cash or assets to various solar financing funds and entered into related agreements. Additionally, the Company acquired the assets of a fund through a business combination in September 2013 and assumed the related contractual arrangements. The following table shows the number of current VIE funds by classification of investor, the carrying value of solar energy systems in the funds, the total investor contributions received and undrawn investor contributions as of June 30, 2015 under these funds (in thousands, except for number of funds):

Open			Total				Carrying
			Investor		Undrawn		Value of
Investor	Number		Contributions		Investor		Solar Energy
Classification	of Funds		Received		Contributions		Systems
Financial institutions		20	$	1,147,797	$	240,538	$	1,369,555
Corporations		6		445,654		198,751		475,816
Utilities		3		259,021		42,830		258,353
Various other investors		1		3,607		-		3,271
Total		30	$	1,856,079	$	482,119	$	2,106,995

The Company has determined that the funds are VIEs and it is the primary beneficiary of these VIEs by reference to the power and benefits criterion under ASC 810, Consolidation . The Company has considered the provisions within the contractual agreements, which grant it power to manage and make decisions that affect the operation of these VIEs, including determining the solar energy systems and associated customer contracts to be sold or contributed to these VIEs and the redeployment of solar energy systems. The Company considers that the rights granted to the fund investors under the contractual agreements are more protective in nature rather than participating.

As the primary beneficiary of these VIEs, the Company consolidates in its financial statements the financial position, results of operations and cash flows of these VIEs, and all intercompany balances and transactions between the Company and these VIEs are eliminated in the condensed consolidated financial statements.

Cash distributions of income and other receipts by a fund, net of agreed upon expenses, estimated expenses, tax benefits and detriments of income and loss and tax credits, are allocated to the fund investor and the Company’s subsidiary as specified in contractual agreements.

Generally, the Company’s subsidiary has the option to acquire the fund investor’s interest in the fund for an amount based on the market value of the fund or the formula specified in the contractual agreements.

As of June 30, 2015 the Company was contractually required to make payments to a fund investor in order to ensure the investor is projected to achieve a specified minimum return annually. The amounts of any potential future payments under this guarantee are dependent on the amounts and timing of future distributions to the investor from the fund, the tax benefits that accrue to the investor from the fund’s activities and the amount and timing of the Company’s purchase of the investor’s interest in the fund or the amount and timing of the distributions to the investor upon liquidation of the fund. Due to uncertainties associated with estimating the amount

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

and timing of distributions to the investor and the possibility and timing of the li quidation of the fund, the Company is unable to determine the potential maximum future payments that it would have to make under this guarantee.

Upon the sale or liquidation of a fund, distributions would occur in the order and priority specified in the contractual agreements.

Pursuant to management services, maintenance and warranty arrangements, the Company has been contracted to provide services to the funds, such as operations and maintenance support, accounting, lease servicing and performance reporting. In some instances, the Company has guaranteed payments to the investors as specified in the contractual agreements. A fund’s creditors have no recourse to the general credit of the Company or to that of other funds. None of the assets of the funds had been pledged as collateral for their obligations.

The Company presents the solar energy systems in the VIEs under solar energy systems, leased and to be leased – net in the condensed consolidated balance sheets. The aggregate carrying values of the VIEs’ assets and liabilities, after elimination of intercompany transactions and balances, in the condensed consolidated balance sheets were as follows (in thousands):

	June 30, 2015		December 31, 2014
Assets
Current assets:
Cash and cash equivalents	$	46,243	$	26,419
Restricted cash		47		106
Accounts receivable - net		16,342		6,769
Rebates receivable		13,884		25,397
Prepaid expenses and other current assets		496		615
Total current assets		77,012		59,306
Restricted cash		254		300
Solar energy systems, leased and to be leased - net		2,106,995		1,581,459
Other assets		6,468		3,780
Total assets	$	2,190,729	$	1,644,845
Liabilities
Current liabilities:
Distributions payable to noncontrolling interests and redeemable noncontrolling interests	$	16,944	$	8,552
Current portion of deferred U.S. Treasury grant income		6,501		6,502
Accrued and other current liabilities		1,270		336
Customer deposits		3,785		6,405
Current portion of deferred revenue		19,894		16,746
Total current liabilities		48,394		38,541
Deferred revenue, net of current portion		281,055		256,200
Deferred U.S. Treasury grant income, net of current portion		167,285		170,548
Other liabilities and deferred credits		17,880		10,825
Total liabilities	$	514,614	$	476,114

Silevo’s Joint Venture in China

The Company, through its subsidiary, Silevo, operates a joint venture, Silevo China Company Limited, or the JV, with three other Chinese legal entities, or the JV Partners, to develop, manufacture and market high performance solar cells. Silevo owns approximately 65.7% of the outstanding capital of the JV, and the rest is owned by the JV Partners. Silevo has a Manufacturing Services and Technology Licensing Agreement with the JV to acquire solar cells on a “cost-plus” basis. The JV is required to obtain Silevo’s consent to sell products to any third-party. The agreement had an initial term of one year and automatically renews for successive one-year periods.

The Company has determined that the JV is a VIE and that Silevo is the primary beneficiary of the JV since the variable interests held by Silevo empower it to direct the activities that most significantly impact the joint venture’s economic performance. In reaching this determination, the Company considered the significant control exercised by Silevo over the JV’s Board of Directors, management and the daily operations of the JV.

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

Silevo has the right to acquire the JV Partners’ interests in the JV at any time within five years from the date of their initial capital contri bution. The JV Partners have the right to sell all or part of their interests in the JV to Silevo if the JV does not meet certain conditions set out in the JV contract, which include meeting set production targets within a specified time frame. The JV did not meet some of those targets, and as such, the option is currently exercisable. The amount that the Company would pay the JV Partners upon the exercise of either option is equal to the JV Partners’ accumulated capital contributions plus interest at specified rates. As of June 30, 2015, this amount was $14.4 million. The JV is not allowed to make a profit distribution to investors prior to the full exit of JV Partners from their investments in the JV. During the quarter ended June 30, 2015, the JV Par tners informed the Company of their intention to exercise the put option.

Since Silevo has been determined to be the primary beneficiary of the JV, the JV’s assets, liabilities and results of operations are included in the Company’s condensed consolidated financial statements. The JV Partners’ interests in the JV are reflected in redeemable noncontrolling interests on the condensed consolidated balance sheets. The JV Partners’ interests in the JV is recorded at fair value, which takes into account the JV Partners’ share of the JV’s enterprise value and the value of the JV Partners’ option to sell their interests in the JV to Silevo.

The aggregate carrying values of the JV’s assets and liabilities in the condensed consolidated balance sheets were as follows (in thousands):

	June 30, 2015		December 31, 2014
Assets
Current assets:
Cash and cash equivalents	$	1,188	$	1,401
Restricted cash		510		—
Inventories		1,181		614
Prepaid expenses and other current assets		1,261		1,224
Total current assets		4,140		3,239
Property, plant and equipment - net		23,610		24,286
Total assets	$	27,750	$	27,525
Liabilities
Current liabilities:
Accounts payable	$	2,708	$	2,748
Accrued and other current liabilities		1,390		633
Current portion of long-term debt		—		9,134
Total current liabilities		4,098		12,515
Total liabilities	$	4,098	$	12,515

7. Financing Obligations

Lease Pass-Through Financing Obligation

In the six months ended June 30, 2015, the Company entered into a new lease pass-through fund arrangement. Under this arrangement, the Company and an investor formed a partnership whereby the Company contributes solar energy systems and the investor contributes cash to the partnership. Contemporaneously, the partnership entered into a master lease arrangement to lease the solar energy systems and the associated customer lease or power purchase agreements to the investor. The Company has concluded that the partnership is a VIE that is consolidated by the Company as the primary beneficiary. The assets and liabilities of this partnership are included under Note 6, VIE Arrangements . The partnership also makes a tax election to pass-through the investment tax credits, or ITCs, that accrue to the solar energy systems to the investor, who as the legal lessee of the property is allowed to claim the ITCs under Section 50(d)(5) of the Internal Revenue Code and the related regulations. The solar energy systems are included under solar energy systems, leased and to be leased – net, in the condensed consolidated balance sheets, and as of June 30, 2015, the net carrying value of the solar energy systems was $44.2 million.

Under the arrangement, the investor makes a large upfront payment to the partnership and subsequent periodic payments. The Company allocates a portion of the aggregate payments received from the investor to the estimated fair value of the assigned ITCs, and the balance to the future customer lease payments that are also assigned to the investors. The estimated fair value of the ITCs are determined by discounting the estimated cash flows impact of the ITCs using an appropriate discount rate that reflects a market interest rate. The partnership has an obligation to ensure the solar energy system is in service and operational for a term of five years to avoid any recapture of the ITCs. Accordingly under the Company’s accounting policy for ITCs, the Company recognizes revenue

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

as the recapture provisions lapse assuming all other revenue recognition criteria under ASC 605-10-S99, Revenue Recognition-Overall-SEC Materials have been met. The amounts allocated to I TCs are initially recorded as deferred revenue on the condensed consolidated balance sheet, and subsequently, one-fifth of the amounts allocated to ITCs is recognized as revenue from operating leases and solar energy systems incentives in the condensed con solidated statement s of operations on each anniversary of the solar energy system’s placed in service date over the next five years.

The Company accounts for the residual of the payments received from the investors, net of amounts allocated to ITCs, as a borrowing by recording the proceeds received as a lease pass-through financing obligation, which would be repaid through customer payments and incentive rebates that would be received by the investors. Under this approach, the Company continues to account for the arrangement with the customers in its condensed consolidated financial statements, whether the cash generated from the customer arrangements is received by the lessor or paid directly to the investors. A portion of the amounts received by the investors from customer payments and incentive rebates associated with the leases assigned to the investors is applied to reduce the lease pass-through financing obligation, and the balance is allocated to interest expense. The incentive rebates and host customer payments are recognized into revenue consistent with the Company’s revenue recognition accounting policy. Interest is calculated on the lease pass-through financing obligation using the effective interest rate method. The effective interest rate is the interest rate that equates the present value of the cash amounts to be received by an investor over the master lease term with the present value of the cash amounts paid by the investor to the Company, adjusted for any payments made by the Company. The lease pass-through financing obligation is nonrecourse once the associated assets have been placed in service and all the customer arrangements have been assigned to the investors.

The investor is responsible for services such as warranty support, accounting, lease servicing and performance reporting, which have been outsourced to the Company under an operations and maintenance agreement.

8. Redeemable Noncontrolling Interests in Subsidiaries

Noncontrolling interests in subsidiaries that are redeemable at the option of the holder are classified as redeemable noncontrolling interests in subsidiaries between liabilities and stockholders’ equity in the condensed consolidated balance sheets. The redeemable noncontrolling interests in subsidiaries balance is determined using the hypothetical liquidation at book value method for the VIE funds or allocation of share of income or losses in other subsidiaries, subsequent to initial recognition, however, the noncontrolling interests balance cannot be less than the estimated redemption value. The activity of the redeemable noncontrolling interests in subsidiaries balance was as follows (in thousands):

Balance at December 31, 2014	$	186,788
Contributions from redeemable noncontrolling interests		219,274
Net loss		(102,716	)
Distributions to redeemable noncontrolling interests		(18,265	)
Balance at June 30, 2015	$	285,081

9. Equity

The changes in total stockholders’ equity and noncontrolling interests in subsidiaries were as follows (in thousands):

	Total			Noncontrolling
	Stockholders'			Interests in			Total
	Equity			Subsidiaries			Equity
Balance, December 31, 2014	$	745,642		$	409,942		$	1,155,584
Contributions from noncontrolling interests		—			209,660			209,660
Stock-based compensation expense		49,821			—			49,821
Issuance of common stock upon exercise of stock options for cash		7,441			—			7,441
Net loss		(43,885	)		(156,069	)		(199,954	)
Distributions to noncontrolling interests		—			(23,702	)		(23,702	)
Balance, June 30, 2015	$	759,019		$	439,831		$	1,198,850

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

10. Equity Award Plans

Stock Options

Under the Company’s 2012 Equity Incentive Plan, the Company may grant incentive stock options and nonstatutory stock options for common stock to employees, directors and consultants. Stock options may be granted at an exercise price per share not less than 100% of the fair market value per share on the grant date. If an incentive stock option is granted to a 10% or greater stockholder, then the exercise price per share shall not be less than 110% of the fair market value per share on the grant date. Stock options granted are exercisable over a maximum term of 10 years from the date of grant and generally vest over a period of four years.

In September 2012, the Company adopted a director compensation plan for future non-employee directors. Under the director compensation plan, each individual who joins the board of directors as a non-employee director following the adoption of the plan receives an initial stock option grant to purchase 30,000 shares of common stock at the time of initial election or appointment and additional triennial stock option grants to purchase 15,000 shares of common stock, as well as an annual cash retainer of $15,000, all of which are subject to continued service on the board of directors. Such non-employee directors who serve on committees of the board of directors receive various specified additional equity awards and cash retainers.

Effective as of June 2015, the Company revised the director compensation plan, pursuant to which non-employee directors receive an initial stock option grant to purchase 33,333 shares of common stock at the time of initial election or appointment and additional triennial stock option grants to purchase 30,000 shares of common stock, as well as an annual cash retainer of $20,000, all of which are subject to continued service on the board of directors. Such non-employee directors who serve on committees of the board of directors receive various specified additional equity awards and cash retainers.

A summary of stock option activity is as follows (in thousands, except per share amounts and terms):

						Weighted-
				Weighted-		Average
				Average		Remaining		Aggregate
	Stock			Exercise		Contractual		Intrinsic
	Options			Price		Term (Years)		Value
Outstanding - December 31, 2014		13,950		$	32.89		7.64	$	342,293
Granted (weighted-average fair value of $39.13)		888			58.64
Exercised		(585	)		12.71				24,953
Canceled		(664	)		55.82
Outstanding - June 30, 2015		13,589		$	34.32		7.37	$	316,979
Options vested and exercisable - June 30, 2015		7,369		$	17.65		6.21	$	277,579
Options vested and expected to vest - June 30, 2015		12,969		$	33.15		7.29	$	315,619

As of June 30, 2015, approximately 31% of the non-vested stock options outstanding had a performance feature that is required to be satisfied before the option is vested and exercisable. The grant date fair market value of options that vested in the three months ended June 30, 2015 and 2014 was $15.3 million and $9.8 million, respectively, and the grant date fair market value of options that vested in the six months ended June 30, 2015 and 2014 was $39.1 million and $19.2 million, respectively.

As of June 30, 2015 and December 31, 2014, there was $187.1 million and $242.9 million, respectively, of total unrecognized stock-based compensation expense, net of estimated forfeitures, related to non-vested stock options, which are expected to be recognized over the weighted-average period of 2.81 years and 2.76 years, respectively.

Under ASC 718, the Company estimates the fair value of stock options granted on each grant date using the Black-Scholes option valuation model and applies the straight-line method of expense attribution. The fair values were estimated on each grant date with the following weighted-average assumptions:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Dividend yield		0	%		0	%		0	%		0	%
Annual risk-free rate of return		1.49	%		1.97	%		1.51	%		1.97	%
Expected volatility		74.32	%		84.00	%		75.03	%		84.60	%
Expected term (years)		6.33			6.06			6.27			6.07

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

The expected volatility was calculated based on the average historical volatilities of the Company and publicly traded peer companies determined by the Company. The risk-free interest rate used was based on the U.S. Treasury yield curve in effect a t the time of grant for the expected term of the stock options to be valued. The expected dividend yield was zero, as the Company does not anticipate paying a dividend within the relevant time frame. The expected term has been estimated using the simplifie d method allowed under ASC 718.

Restricted Stock Units

The Company began granting restricted stock units, or RSUs, to employees, directors and consultants in 2012 under the Company’s 2012 Equity Incentive Plan. A summary of RSU activity is as follows (in thousands, except per share amounts):

				Weighted-
	Restricted			Average
	Stock			Fair
	Units			Value
Outstanding - December 31, 2014		1,029			61.16
Granted		1,664			58.72
Vested		(91	)		63.01
Cancelled		(153	)		58.50
Outstanding - June 30, 2015		2,449		$	59.60
Expected to vest - June 30, 2015		1,991		$	59.55

The grant date fair value of RSUs vested was $4.1 million and $0.1 million for the three months ended June 30, 2015 and 2014, respectively, and $5.7 million and $0.2 million for the six months ended June 30, 2015 and 2014, respectively. Under ASC 718, the Company determines the fair value of RSUs granted on each grant date based on the fair value of the Company’s common stock on the grant date and applies the straight-line method of expense attribution. As of June 30, 2015 and December 31, 2014, there was $104.7 million and $55.2 million, respectively, of total unrecognized stock-based compensation expense, net of estimated forfeitures, from RSUs, which are expected to be recognized over the weighted-average period of 3.46 years and 3.30 years, respectively.

Stock-Based Compensation Expense

As part of the requirements of ASC 718, the Company is required to estimate potential forfeitures of equity awards and adjust stock-based compensation expense accordingly. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized in the period of change and will also impact the amount of stock-based compensation expenses to be recognized in future periods.

The amount of stock-based compensation expense recognized was $25.5 million and $21.3 million for the three months ended June 30, 2015 and 2014, respectively, and $50.0 million and $39.4 million for the six months ended June 30, 2015 and 2014, respectively.

The amount of stock-based compensation expense that has been capitalized is as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Capitalized under:
Inventories	$	169	$	19	$	169	$	19
Other assets	$	972	$	—	$	1,615	$	—
Property, plant and equipment - net	$	6,016	$	1,342	$	10,653	$	2,821
Solar energy systems, leased and to be leased - net	$	779	$	4,026	$	1,385	$	7,668

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

Stock-based compensation expense is included in cost of revenue and operating expenses as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Total cost of revenue	$	437	$	511	$	1,007	$	1,444
Sales and marketing	$	6,453	$	3,920	$	10,218	$	6,961
General and administrative	$	7,877	$	10,719	$	18,019	$	19,195
Research and development	$	2,755	$	785	$	6,888	$	1,291

11. Income Taxes

The Company accounts for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based upon the difference between the condensed consolidated financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed.

The Company has a full valuation allowance for its net deferred tax assets since the Company has concluded that it is more likely than not that the Company will not realize the benefit of the deferred tax assets. The Company continues to evaluate both positive and negative evidence with respect to its net deferred tax assets.

The income tax expense for the three months ended June 30, 2015 and 2014 was determined based on the Company’s estimated consolidated effective income tax rates of 0.22% and negative 0.17%, respectively. The income tax expense for the six months ended June 30, 2015 and 2014 was determined based on the Company’s estimated consolidated effective income tax rates of 0.21% and 0.12%, respectively. The differences between the estimated consolidated effective income tax rates and the U.S. federal statutory rates were primarily attributable to valuation allowances and the current amortization of prepaid income taxes due to inter-company sales held within the consolidated group.

As part of its asset monetization strategy, the Company has agreements to sell solar energy systems to financing funds. The gain on the sale of the assets has been eliminated in the condensed consolidated financial statements. These transactions are treated as inter-company sales, and as such, tax is not recognized on the sale until the Company no longer benefits from the underlying assets. Since the assets remain within the consolidated group, the tax expense incurred related to the sale is being deferred and amortized over the estimated useful life of the assets, which has been estimated to be 30 years. The deferral of the tax expense results in recording of a prepaid tax expense that is included in the condensed consolidated balance sheets as other assets. The amortization of the prepaid tax expense in each period makes up the major component of income tax expense.

Uncertain Tax Positions

The Company applies a two-step approach with respect to uncertain tax positions. This approach involves recognizing any uncertain tax positions that are more-likely-than-not of being ultimately realized and then measuring those positions to determine the amounts to be recognized.

The Company is subject to taxation and files income tax returns in the U.S., various state, local and foreign jurisdictions. Due to the Company’s net losses, substantially all of its federal, state, local and foreign income tax returns since inception are still subject to audit.

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

12. Related Party Transactions

The Company’s operations included the following related party transactions (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Revenue:
Solar energy systems sales to related parties	$	79	$	2,479	$	79	$	2,479
Expenditures:
Purchases of inventories or equipment from related parties	$	900	$	1,010	$	1,697	$	1,970
Fees paid or payable to related parties (included in sales and marketing expense)	$	—	$	28	$	—	$	92
Interest paid or payable to related parties (included in interest expense — net)	$	462	$	—	$	470	$	—

Related party balances were comprised of the following (in thousands):

	June 30, 2015		December 31, 2014
Due from related parties (included in accounts receivable)	$	112	$	30
Due to related parties (included in accounts payable)	$	900	$	300
Due to related parties (included in solar bonds)	$	165,540	$	530
Due to related parties (included in accrued and other current liabilities)	$	468	$	3

The related party transactions were primarily purchases of batteries from Tesla Motors, Inc., or Tesla, and issuances of Solar Bonds to SpaceX and the Company’s Chief Technology Officer. Tesla is considered a related party because the Chairman of the Company’s board of directors is the Chief Executive Officer and Chairman of Tesla, other members of the Company’s board of directors also serve as members of the board of directors of Tesla, the Company’s Chief Financial Officer also serves as a member of the board of directors of Tesla and some members of the Company’s board of directors and executive management are also investors in Tesla. SpaceX is considered a related party because the Chairman of the Company’s board of directors is the Chief Executive Officer, Chief Designer, Chairman and a significant stockholder of SpaceX, other members of the Company’s board of directors also serve as members of the board of directors of SpaceX and some members of the Company’s board of directors and executive management are also investors in SpaceX.

13. Commitments and Contingencies

Noncancelable Leases

The Company leases offices, manufacturing and warehouse facilities, equipment, vehicles and solar energy systems under noncancelable leases.

Build-to-Suit Lease Arrangement

In September 2014, a subsidiary of the Company entered into a build-to-suit lease arrangement with the Research Foundation for the State University of New York, or the Foundation, for the construction of an approximately 1,000,000 square foot manufacturing facility with the capacity to produce at least 1 gigawatt of solar panels annually on an approximately 88.24 acre site located in Buffalo, New York. Under the terms of the agreement, the Foundation will construct the manufacturing facility and install certain utilities and other improvements, with participation by the Company as to the design and construction of the manufacturing facility, and acquire certain manufacturing equipment designated by the Company to be used in the manufacturing facility. The Foundation will cover construction costs related to the manufacturing facility in an amount up to $350.0 million and the acquisition and commissioning of the manufacturing equipment in an amount up to $400.0 million, in each case, subject to the maximum funding allocation from the State of New York, and the Company will be responsible for any construction and equipment costs in excess of such amounts. The Foundation will own the manufacturing facility and manufacturing equipment. Following completion of the

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

manufacturing facility, the Company will lease the manufacturing facility and the manufacturing equipment from the Foundation for an initial period of 10 years, with an option to renew, for $ 2 per year plus utilities.

Under the terms of the build-to-suit lease arrangement, the Company is required to achieve specific operational milestones during the initial term of the lease, which include employing a certain number of employees at the facility and within the State of New York within specified time periods following the completion of the facility. The Company is also required to spend or incur approximately $5 billion in combined capital, operational expenses and other costs in the State of New York over the 10 years following full production. On an annual basis during the initial lease term, as measured on each anniversary of the commissioning of the facility, if the Company fails to meet its specified investment and job creation obligations, then it would be obligated to pay a $41.2 million “program payment” to the Foundation for each year that it fails to meet these requirements. Furthermore, if the agreement is terminated due to a material breach by the Company, then additional amounts might be payable by the Company.

Due to the Company’s involvement with the construction of the facility, its exposure to any potential cost overruns and its other commitments under the agreement, the Company is deemed to be the owner of the facility and the manufacturing equipment for accounting purposes during the construction phase. Accordingly, as of June 30, 2015 and December 31, 2014, the Company had recorded a non-cash build-to-suit lease asset under construction of $158.7 million and $26.5 million, respectively, which is a component of property, plant and equipment – net, and a corresponding build-to-suit lease liability, which is a component of other liabilities and deferred credits, on the condensed consolidated balance sheets.

Indemnification and Guaranteed Returns

The Company is contractually committed to compensate certain fund investors for any losses that they may suffer in certain limited circumstances resulting from reductions in U.S. Treasury grants or ITCs. Generally, such obligations would arise as a result of reductions to the value of the underlying solar energy systems as assessed by the U.S. Treasury Department for purposes of claiming U.S. Treasury grants or as assessed by the IRS for purposes of claiming ITCs or U.S. Treasury grants. For each balance sheet date, the Company assesses and recognizes, when applicable, the potential exposure from this obligation based on all the information available at that time, including any guidelines issued by the U.S. Treasury Department on solar energy system valuations for purposes of claiming U.S. Treasury grants and any audits undertaken by the IRS. The Company believes that any payments to the fund investors in excess of the amount already recognized by the Company for this obligation are not probable based on the facts known at the reporting date.

The maximum potential future payments that the Company could have to make under this obligation would depend on the difference between the fair values of the solar energy systems sold or transferred to the funds as determined by the Company and the values that the U.S. Treasury Department would determine as fair value for the systems for purposes of claiming U.S. Treasury grants or the values the IRS would determine as the fair value for the systems for purposes of claiming ITCs or U.S. Treasury grants. The Company claims U.S. Treasury grants based on guidelines provided by the U.S. Treasury department and the statutory regulations from the IRS. The Company uses fair values determined with the assistance of independent third-party appraisals commissioned by the Company as the basis for determining the ITCs that are passed-through to and claimed by the fund investors. Since the Company cannot determine future revisions to U.S. Treasury Department guidelines governing system values or how the IRS will evaluate system values used in claiming ITCs or U.S. Treasury grants, the Company is unable to reliably estimate the maximum potential future payments that it could have to make under this obligation as of each balance sheet date.

The Company is eligible to receive certain state and local incentives that are associated with renewable energy generation. The amount of incentives that can be claimed is based on the projected or actual solar energy system size and/or the amount of solar energy produced. The Company also currently participates in one state’s incentive program that is based on either the fair market value or the tax basis of solar energy systems placed in service. State and local incentives received are allocated between the Company and fund investors in accordance with the contractual provisions of each fund. The Company is not contractually obligated to indemnify any fund investor for any losses they may incur due to a shortfall in the amount of state or local incentives actually received.

As disclosed in Note 6, VIE Arrangements , the Company is contractually required to make payments to one fund investor to ensure that the fund investor achieves a specified minimum internal rate of return. The fund investor has already received a significant portion of the projected economic benefits from U.S. Treasury grant distributions and tax depreciation benefits. The contractual provisions of the fund state that the fund has an indefinite term unless the members agree to dissolve the fund. Based on the Company’s current financial projections regarding the amount and timing of future distributions to the fund investor, the Company does not expect to make any payments as a result of this guarantee and has not accrued any liabilities for this guarantee. The amount of potential future payments under this guarantee is dependent on the amount and timing of future distributions to the fund investor and future tax benefits that accrue to the fund investor. Due to the uncertainties surrounding estimating the amounts of these factors,

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

the Company is unable to estimate the maximum potential payments under this guarantee. As of June 30 , 201 5 , the fund investor has achieved the specified m inimum internal rate of return as determined in accordance with the contractual provisions of the fund.

The lease pass-through funds have a one-time lease payment reset mechanism that occurs after the installation of all solar energy systems in a fund. As a result of this mechanism, the Company may be required to refund master lease prepayments previously received from investors. Any refunds of master lease prepayments would reduce the lease pass-through financing obligation.

Letters of Credit

As of June 30, 2015, the Company had $19.7 million of unused letters of credit outstanding, which carry a fee of 3.375% per annum.

Other Contingencies

In July 2012, the Company, along with other companies in the solar energy industry, received a subpoena from the U.S. Treasury Department’s Office of the Inspector General to deliver certain documents in the Company’s possession that were dated, created, revised or referred to after January 1, 2007 and that relate to the Company’s applications for U.S. Treasury grants or communications with certain other solar energy development companies or with certain firms that appraise solar energy property for U.S Treasury grant application purposes. The Inspector General and the Civil Division of the U.S. Department of Justice are investigating the administration and implementation of the U.S Treasury grant program, including possible misrepresentations concerning the fair market value of the solar energy systems submitted by the Company in U.S. Treasury grant applications. If the Inspector General concludes that misrepresentations were made, the U.S. Department of Justice could decide to bring a civil action to recover amounts it believes were improperly paid to the Company. If the U.S. Department of Justice is successful in asserting this action, the Company could then be required to pay material damages and penalties for any funds received based on such misrepresentations, which, in turn, could require the Company to make indemnity payments to certain fund investors. The Company is unable to estimate the possible loss, if any, associated with this ongoing investigation as information is still being produced by the Company for further review by the Inspector General and the Civil Division.

On March 28, 2014, a purported stockholder class action lawsuit was filed in the United States District Court for the Northern District of California against the Company and two of its officers. The complaint alleges claims for violations of the federal securities laws, and seeks unspecified compensatory damages and other relief on behalf of a purported class of purchasers of our securities from March 6, 2013 to March 18, 2014. On April 16, 2015, the District Court dismissed the complaint. The plaintiffs have filed an amended complaint in an attempt to remedy the defects in the original complaint; the Company has until August 7, 2015 to respond to the amended complaint. The Company believes that the claims are without merit and intends to defend itself vigorously. The Company is unable to estimate the possible loss, if any, associated with this lawsuit.

On June 5 and 11, 2014, stockholder derivative actions were filed in the Superior Court of California for the County of San Mateo, purportedly on behalf of the Company and against the board of directors, alleging that the board of directors breached its duties to the Company by failing to prevent the conduct alleged in the pending purported stockholder class action lawsuit. The Company and the individual board member defendants have filed a motion to dismiss the complaint, which is currently set for hearing on September 8, 2015. The Company is reviewing the claims asserted by the stockholders and is unable to estimate the possible loss, if any, associated with this lawsuit.

SolarCity Corporation

Notes to Condensed Consolidated Financial Statements (Continued)

14. Basic and Diluted Net Loss p er Share

The following table sets forth the computation of basic and diluted net loss per share for the periods presented (in thousands, except share and per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Net loss attributable to stockholders	$	(22,360	)	$	(47,652	)	$	(43,885	)	$	(71,715	)
Net loss attributable to common stockholders, basic	$	(22,360	)	$	(47,652	)	$	(43,885	)	$	(71,715	)
Net loss attributable to common stockholders, diluted	$	(22,360	)	$	(47,652	)	$	(43,885	)	$	(71,715	)
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic		97,013,499			92,251,767			96,845,827			91,833,936
Weighted-average shares used to compute net loss per share attributable to common stockholders, diluted		97,013,499			92,251,767			96,845,827			91,833,936
Net loss per share attributable to common stockholders, basic	$	(0.23	)	$	(0.52	)	$	(0.45	)	$	(0.78	)
Net loss per share attributable to common stockholders, diluted	$	(0.23	)	$	(0.52	)	$	(0.45	)	$	(0.78	)

The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Common stock options		13,542,879		14,602,732		13,676,512		14,498,465
Restricted stock units		2,061,808		134,849		1,733,437		114,475
Convertible senior notes		10,505,947		3,729,795		10,505,947		3,729,795

15. Subsequent Events

Upsize of Solar Asset-backed Revolving Credit Facility

On July 13, 2015, the total committed amount under the solar asset-backed revolving credit facility was increased to $650.0 million.

Upsize of Revolving Credit Facility

On July 24, 2015, the total committed amount under the revolving credit facility was increased to $333.5 million.

I TEM 2 . MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the accompanying notes to those statements included elsewhere in this quarterly report on Form 10-Q and with our annual report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on February 24, 2015. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” and elsewhere in this quarterly report on Form 10-Q.

Overview

We integrate the sales, engineering, manufacturing, installation, monitoring, maintenance and financing of our distributed solar energy systems. This allows us to offer long-term energy solutions to residential, commercial, government and other customers. We make it possible for our customers to buy renewable energy or solar energy systems from us for less than they currently pay for electricity from utilities with little to no up-front cost or down payment, as applicable. Our long-term contractual arrangements typically generate recurring customer payments, provide our customers with insight into their future electricity costs and minimize their exposure to rising retail electricity rates. We also offer energy-related products and services to our customers, such as energy storage solutions. To date, revenue attributable to our energy-related products and services has not been material.

We offer our customers the choice to either purchase and own solar energy systems or to purchase the energy that our solar energy systems produce through various contractual arrangements. These contractual arrangements include long-term leases and power purchase agreements. In both structures, we install our solar energy systems at our customer’s premises and charge the customer a monthly fee for the power that our system produces. In the lease structure, this monthly payment is fixed with a production guarantee. In the power purchase agreement structure, we charge customers a fee per kWh based on the amount of electricity the solar energy system actually produces. The leases and power purchase agreements are typically for 20 years with a renewal option, and generally when there is no upfront prepayment, the specified monthly fees are subject to annual escalations.

In the fourth quarter of 2014, we began offering MyPower. Under MyPower, one of our wholly-owned subsidiaries provides qualified residential customers with a 30-year loan to finance the purchase of a solar energy system. The interest rate on the loan is fixed at inception and ranges from 4.50% to 5.49% per annum, depending on the geographic market. The interest rates are reduced by 0.50% per annum for customers who elect to have their payments automatically withdrawn. The monthly loan repayments are variable based on the amount of electricity generated by the systems. The customers are eligible to receive a federal income tax credit equal to 30% of the value of the solar energy system, which the customers can, and in certain cases are contractually obligated to, use to pay down the loan principal, and lower future monthly loan payments. This in turn translates to a lower effective cost per kWh of electricity to these customers.

Initially, we only offered our solar energy systems on an outright purchase basis. During 2008, we began offering leases and power purchase agreements, and in 2014, we began offering MyPower. Our ability to offer leases, power purchase agreements and the financing of systems under MyPower depends in part on our ability to monetize the resulting customer receivables and any related investment tax credits, or ITCs, accelerated tax depreciation and other incentives.

We compete mainly with the retail electricity rate charged by the utilities in the markets we serve, and our strategy is to price the energy and/or services we provide and payments under MyPower below that rate. As a result, the price our customers pay varies depending on the state where the customer is located and the local utility. The price we charge also depends on customer price sensitivity, the need to offer a compelling financial benefit and the price other solar energy companies charge in the region. Our commercial rates in a given region are also typically lower than our residential rates in that region because utilities’ commercial retail rates are generally lower than their residential retail rates.

We generally recognize revenue from solar energy systems sold to our customers on an outright purchase basis when we install the solar energy system and it passes inspection by the utility or the authority having jurisdiction. We recognize revenue from MyPower financed sales over the term of the loan contract as the customer pays the loan’s outstanding principal and interest. We account for our leases and power purchase agreements as operating leases. We recognize the revenue that these arrangements generate on a straight-line basis over the term for leases, and as we generate and deliver energy for power purchase agreements. We recognize revenue from our energy-related products and services when we complete the services or when we earn a referral fee. Substantially all of our revenue is attributable to customers located in the United States.

We monetize certain government incentives in the form of ITCs under lease pass-through structures by assigning the ITCs to investors in exchange for upfront cash payments. We rec ord the amounts we receive from the investors for the ITCs as a liability, which is subsequently recognized as revenue as the five-year ITC recapture period expires.

The amount of operating lease revenue that we recognize in a given period is dependent in part on the amount of electricity generated by solar energy systems under power purchase agreements and by systems with energy output performance based incentives, which is in turn dependent on the amount of sunlight received by these solar energy systems. Additionally, a portion of the revenue that we recognize in any given period for sales financed under MyPower is derived from the cash receipts from periodic customer billings. The periodic customer billings are based on the amount of electricity generated by these systems, which in turn is dependent in part on the amount of sunlight received by these systems. As a result, operating lease revenue and revenue from sales financed under MyPower are impacted by seasonally shorter daylight hours and inclement weather in winter months. As the relative percentage of our revenue attributable to power purchase agreements, performance-based incentives or financed sales under MyPower increases, this seasonality may become more significant to our quarterly financial results.

Various state and local agencies offer incentive rebates for the installation and operation of solar energy systems. For solar energy systems we sell, we typically have the customer assign the incentive rebate to us. For outright sales, we record the incentive rebate as a component of proceeds from the solar energy system sale. For incentive rebates associated with solar energy systems under leases or power purchase agreements, we initially record the incentive rebate that is paid upfront as deferred revenue and recognize the deferred revenue as revenue over the term of the lease or power purchase agreement. For incentives that are paid based on the performance of the solar energy systems, we recognize revenue as the solar energy systems produce electricity.

Component materials, direct labor and third-party appliances comprise the substantial majority of the costs of our solar energy systems and energy-related products and services. Under U.S. generally accepted accounting principles, or GAAP, the cost of revenue from our leases and power purchase agreements are primarily comprised of the depreciation of the cost of the solar energy systems, which are depreciated over their estimated useful lives of 30 years, reduced by amortization of U.S. Treasury grants income. The cost of revenue from our leases and power purchase agreements also include the amortization of initial direct costs, which generally include the incremental costs of contract administration, referral fees and sales commissions, which are amortized over the minimum contractual term of the lease or power purchase agreement, which is typically 20 years. The costs associated with sales financed under MyPower are initially deferred as other assets on the balance sheet and subsequently recognized as a component of cost of revenue from solar energy systems and component sales, generally in proportion to the reduction of the principal balance of the customer’s loan. We have proactively initiated discussions with the SEC regarding the appropriate accounting treatment for MyPower warranty costs. Such warranty costs have not been material to date. If, as a result of such discussions, we adopt an accounting policy of recognizing an expense for MyPower warranty costs upon the delivery of solar energy systems, MyPower gross margin would be adversely affected.

We have structured different types of financing funds to implement our asset monetization strategy. One such structure is a joint venture structure where we and our fund investors both contribute funds or assets into the joint venture. In accordance with GAAP, we recognize the impact of a hypothetical liquidation of these joint ventures on our condensed consolidated statements of operations. Therefore, after we determine our consolidated net income (loss) for a given period, we allocate a portion of our consolidated net income (loss) to the fund investors in our joint ventures (referred to as the “noncontrolling interests and redeemable noncontrolling interests” in our condensed consolidated financial statements) and allocate the remainder of the consolidated net income (loss) to our stockholders. These income or loss allocations, reflected on our condensed consolidated statements of operations, can have a significant impact on our reported results of operations. For example, for the three months ended June 30, 2015 and 2014, our consolidated net loss was $155.7 million and $88.5 million, respectively, and for the six months ended June 30, 2015 and 2014, our consolidated net loss was $302.7 million and $163.7 million, respectively. However, after applying the required allocations to arrive at the consolidated net loss attributable to our stockholders, the result was a loss of $22.4 million and $47.7 million for the three months ended June 30, 2015 and 2014, respectively, and a loss of $43.9 million and $71.7 million for the six months ended June 30, 2015 and 2014, respectively. For a more detailed discussion of this accounting treatment, see “Results of Operations—Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests.”

Financing Funds

Our lease and power purchase agreements in conjunction with the associated solar energy systems create ITCs, accelerated tax depreciation deductions and other incentives. Our financial strategy is to monetize these attributes or ‘assets’ to generate cash. Through this monetization process, we are able to share the economic benefits generated by the solar energy system with our customers by lowering the price they pay for energy. Historically, we have monetized the assets created by substantially all of our leases and power purchase agreements via funds we have formed with fund investors. Depending on the structure of the fund, we may contribute or sell solar energy systems to the fund and assign certain of the tax attributes and other incentives associated with the solar energy systems to the investors and in return we receive upfront cash payments from investors.

We also enter into arrangements that allow us to borrow against the future rec urring customer payments under the solar system leases and power purchase agreements. Through the financing funds, we are able to retain the residual value in leases and the solar energy systems themselves. We use the cash received from the investors to co ver our operating and capital costs including the variable and fixed costs associated with installing the related solar energy systems. Because these recurring customer payments are from individuals or commercial businesses with high credit scores, and bec ause electricity is a necessity, our fund investors perceive these as high-quality assets with a relatively low loss rate. We invest any excess cash in the growth of our business.

Joint Ventures. Under joint venture structures, we and our fund investors contribute assets or cash into a joint venture. Then, the joint venture acquires solar energy systems from us and leases the solar energy systems to customers. Prior to the fund investor receiving its contractual rate of return or for a time period specified in the contractual arrangements, the fund investors receive substantially all of the value attributable to the long-term recurring customer payments, ITCs, accelerated tax depreciation and, in some cases, other incentives. After the fund investor receives its contractual rate of return or after the specified time period, we receive substantially all of the value attributable to the long-term recurring customer payments and the other incentives.

We have determined that we are the primary beneficiary in these joint venture structures. Accordingly, we consolidate the assets and liabilities and operating results of these joint ventures, including the solar energy systems and operating lease revenue, in our condensed consolidated financial statements. We recognize the fund investors’ share of the net assets of the joint ventures as noncontrolling interests in subsidiaries or redeemable noncontrolling interests in subsidiaries in our condensed consolidated balance sheets. We recognize the amounts that are contractually payable to these investors in each period as distributions to noncontrolling interests or redeemable noncontrolling interests in subsidiaries in our consolidated statements of equity. Our condensed consolidated statements of cash flows reflect cash received from these fund investors as proceeds from investments by noncontrolling interests and redeemable noncontrolling interests in subsidiaries. Our condensed consolidated statements of cash flows also reflect cash paid to these fund investors as distributions paid to noncontrolling interests and redeemable noncontrolling interests in subsidiaries. We reflect any unpaid distributions to these fund investors as distributions payable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries in our condensed consolidated balance sheets.

Lease Pass-Through. Under lease pass-through structures, we lease solar energy systems to fund investors under a master lease agreement, and these investors in turn sublease the solar energy systems to customers. We receive all of the value attributable to the accelerated tax depreciation and some or all of the value attributable to the other incentives. We assign to the fund investors the value attributable to the ITCs, the right to receive U.S. Treasury Department grants, where applicable, and, for the duration of the master lease term, the long-term recurring customer payments. The investors typically make significant upfront cash payments that we classify and allocate between the right to the ITCs, where applicable, and the future customer lease payments and other benefits assigned to the investor, which are recorded as a lease pass-through financing obligation. After the master lease term expires, we receive the customer payments, if any. We record the solar energy systems on our condensed consolidated balance sheets as a component of solar energy systems, leased and to be leased—net. We record the amounts allocated to the ITCs as deferred revenue on our condensed consolidated balance sheets as the associated solar energy systems are placed in service. We then recognize the deferred revenue in our condensed consolidated statements of operations as revenue from operating leases and solar energy systems incentives, by reducing the deferred revenue balance at each reporting date as the five-year recapture period expires. We record the balance of the amounts received from fund investors as financing obligation on our condensed consolidated balance sheets and subsequently reduce these obligations by the amounts received by the fund investors from U.S. Treasury Department grants, where applicable, customer payments and the associated incentive rebates. We in turn recognize the incentive rebates and customer payments as revenue over the customer lease term and amortize U.S. Treasury Department grants as a reduction to depreciation of the associated solar energy systems over the estimated life of these systems.

Sale-Leaseback. Under sale-leaseback structures, we generate cash through the sale of solar energy systems to fund investors, and we then lease these systems back from the investors and sublease them to our customers. For the duration of the lease term, we may, for some of the structures, receive the value attributable to the incentives and the long-term recurring customer payments, and we make leaseback payments to the fund investors. The fund investors receive the customer payments after the lease term. They also receive the value attributable to the ITCs, accelerated depreciation and other incentives. At the end of the lease term, we have the option to purchase the solar energy systems from the fund investors. Typically, our customers make monthly lease payments that we recognize as revenue over the term of the subleases on a straight-line basis. Depending on the design, size and construction of the individual systems and the leaseback terms, we may recognize a portion of the revenue from the sale of the systems or we may treat the cash received from the sale as financing received from the fund investors and reflect the cash received as a financing obligation on our condensed consolidated balance sheets.

Securitization. Under securitization arrangements, we pool and transfer qualifying solar energy systems and associated customer contracts into a special purpose entity, or SPE, and issue notes backed by these solar assets to investors. The SPE is wholly owned by us and is consolidated in our condensed consolidated financial statements. Accordingly, we do not recognize a gain or loss on transfer of these assets. The notes bear interest at a rate determined on the issuance of the notes. The cash flows generated by the assets in the SPEs are used to service the principal and interest payments of the notes and meet the SPE’s expenses, and any remaining cash is

distributed to us. We recognize the revenue earned from the associated customer contracts in our condensed consolidated financial statements. The assets and cash flows generated by the securitized solar energy systems are not available to our other cr editors and the creditors of the SPE, including the notes holders, have no recourse to our other assets.

Key Operating Metrics

We regularly review a number of metrics, including the following key operating metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.

Customers

We track the number of residential, commercial, government and other customers where we have installed or contracted to install a solar energy system, or performed or contracted to perform an energy-related consultation or other energy efficiency services. We believe that the relationship we establish with building owners, together with the energy-related information we obtain about the buildings, position us to provide the owners with additional solutions to further lower their energy costs. We track the cumulative number of customers as of the end of a given period as an indicator of our historical growth and as an indicator of our rate of expected growth from period to period. The following table sets forth our cumulative number of customers as of the dates presented:

		June 30, 2015				December 31, 2014
Cumulative customers			262,495				189,657

Energy Contracts

We define an energy contract as a residential, commercial or government lease, power purchase agreement or MyPower contract pursuant to which consumers use or will use energy generated by a solar energy system that we have installed or have been contracted to install. For landlord-tenant structures in which we contract with the landlord or development company, we include each residence as an individual contract. For commercial customers with multiple locations, each location is deemed a contract if we maintain a separate contract for that location. We track the cumulative number of energy contracts as of the end of a given period as an indicator of our historical growth and as an indicator of our rate of growth from period to period. The following table sets forth our cumulative number of energy contracts as of the dates presented:

		June 30, 2015				December 31, 2014
Cumulative energy contracts			252,591				177,455

Megawatts Deployed and Megawatts Installed

We track megawatts deployed, or the megawatt production capacity of our solar energy systems that have had all required building department inspections completed. This metric includes solar energy systems deployed under energy contracts, as well as solar energy system direct sales. Because the size of our solar energy systems varies greatly, we believe that tracking the megawatt production capacity of deployed systems is an indicator of our growth rate and cost efficiency of our solar energy system business. We track the megawatts deployed in a given period as an indicator of asset growth and efficiency of the scale of our operations in the period. We track cumulative megawatts deployed as of the end of a given period as an indicator of our historical growth and our future opportunity to provide customers with additional solutions to further lower their energy costs. The following table sets forth the megawatt production capacity of solar energy systems that we have deployed during the periods presented and the cumulative megawatts deployed as of the end of each period presented:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Megawatts deployed		177		107		320		189
Cumulative megawatts deployed		1,389		756		1,389		756

In addition, we track megawatts installed, or the megawatt production capacity of (a) residential solar energy systems for which (i) all solar panels, inverters, mounting and racking hardware and system wiring have been installed, (ii) the system inverter is connected and a successful direct current string test has been completed confirming the production capacity of the system and (iii) interconnection wiring has been completed and the system is capable of being grid connected, and (b) non-residential solar energy systems for which (i) all solar panels, inverters, mounting and racking hardware and system wiring have been installed, (ii) the system inverter is connected and a successful direct current string test has been completed confirming the production capacity of the system and (iii) the system is capable of being grid connected, in each case, as of the latest of which criteria is completed during the applicable period. This metric includes solar energy systems installed under energy contracts, as well as solar energy system direct

sales. The following table sets forth the megawatt production capacity of solar energy systems that we have installed during the periods presented and the cumulative megawatts installed as of the end of each pe riod presented:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Megawatts installed		189		107		342		189
Cumulative megawatts installed		1,418		761		1,418		761

Nominal Contracted Payments

Our energy contracts create long-term recurring customer payments. We use a portion of the value created by these contracts, which we refer to as “nominal contracted payments,” together with the value attributable to ITCs, accelerated depreciation, solar renewable energy credits, performance-based incentives, state tax benefits and rebates to cover the fixed and variable costs associated with installing solar energy systems.

We track the estimated nominal contracted payments of our energy contracts entered into as of specified dates. Nominal contracted payments represent our estimate of the sum of the cash payments that our customer is obligated to pay under our energy contracts. When calculating nominal contracted payments, we include only those energy contracts for solar energy systems already deployed and in backlog over the remaining term of such contracts. Backlog represents the aggregate megawatt capacity of solar energy systems not yet deployed as of the date specified pursuant to energy contracts and contracts for solar energy system direct sales executed as of such date. For a lease, we include the monthly fee and the upfront fee as set forth in the lease. As an example, the nominal contracted payments for a 20-year lease with monthly payments of $200 and an upfront payment of $5,000 is $53,000. For a power purchase agreement, we multiply the contract price per kWh by the estimated annual energy output of the associated solar energy system to determine the nominal contracted payments. For MyPower contracts, we include the total payments during the full 30-year term of the loan. The nominal contracted payments of a particular lease, power purchase agreement or MyPower contract decline as the payments are received by us or a fund investor, as applicable. Aggregate nominal contracted payments include leases and power purchase agreements that we have contributed to financing funds, aggregation facilities or solar-asset backed notes. Currently, fund investors have contractual rights to a portion of these nominal contracted payments.

Estimated nominal contracted payments remaining is a forward-looking number, and we use judgment in developing the assumptions used to calculate it. Those assumptions may not prove to be accurate over time. Cancellation of signed contracts, underperformance of the solar energy systems, payment defaults by our customers or other factors described under the heading “Risk Factors” could cause our actual results to differ materially from our calculation of nominal contracted payments.

The following table sets forth, with respect to our energy contracts, the estimated aggregate nominal contracted payments remaining as of the dates presented (in thousands):

June 30, 2015

December 31, 2014

Estimated aggregate nominal contracted payments

remaining

7,672,310

4,951,429

In addition to nominal contracted payments, our leases and power purchase agreements provide us with a significant post-contract renewal opportunity. Because our solar energy systems have an estimated life of 30 years, they will continue to have a useful life after the term of their leases or power purchase agreements. At the end of an original contract term, we intend to offer our customer a renewal contract. The solar energy systems have already been installed on the customer’s building, which will facilitate the customer’s acceptance of our renewal offer and will result in limited additional costs to us. No amounts attributed to the expected renewal period are included in the estimated aggregate nominal contracted payments remaining as detailed in the above table.

Critical Accounting Policies and Estimates

There were no material changes to our critical accounting policies or estimates during the six months ended June 30, 2015 from those disclosed in our annual report on Form 10-K for the year ended December 31, 2014.

Results of Operations

The following table sets forth selected condensed consolidated statements of operations data for each of the periods indicated (in thousands, except share and per share data).

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Revenue:
Operating leases and solar energy systems incentives	$	78,283		$	43,181		$	133,054		$	72,253
Solar energy systems and components sales		24,520			18,153			37,228			52,627
Total revenue		102,803			61,334			170,282			124,880
Cost of revenue:
Operating leases and solar energy systems incentives		37,392			20,826			69,652			36,805
Solar energy systems and components sales		22,087			17,635			35,547			50,417
Total cost of revenue		59,479			38,461			105,199			87,222
Gross profit		43,324			22,873			65,083			37,658
Operating expenses:
Sales and marketing		113,160			55,771			199,831			102,621
General and administrative		50,211			38,387			98,865			71,398
Research and development		12,401			3,000			24,521			4,923
Total operating expenses		175,772			97,158			323,217			178,942
Loss from operations		(132,448	)		(74,285	)		(258,134	)		(141,284	)
Interest expense - net		20,497			12,892			39,018			20,871
Other expense - net		2,768			1,307			4,872			1,332
Loss before income taxes		(155,713	)		(88,484	)		(302,024	)		(163,487	)
Income tax (provision) benefit		(20	)		24			(646	)		(191	)
Net loss		(155,733	)		(88,460	)		(302,670	)		(163,678	)
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests		(133,373	)		(40,808	)		(258,785	)		(91,963	)
Net loss attributable to stockholders	$	(22,360	)	$	(47,652	)	$	(43,885	)	$	(71,715	)
Net loss attributable to common stockholders
Basic	$	(22,360	)	$	(47,652	)	$	(43,885	)	$	(71,715	)
Diluted	$	(22,360	)	$	(47,652	)	$	(43,885	)	$	(71,715	)
Net loss per share attributable to common stockholders
Basic	$	(0.23	)	$	(0.52	)	$	(0.45	)	$	(0.78	)
Diluted	$	(0.23	)	$	(0.52	)	$	(0.45	)	$	(0.78	)
Weighted-average shares used to compute net loss per share attributable to common stockholders
Basic		97,013,499			92,251,767			96,845,827			91,833,936
Diluted		97,013,499			92,251,767			96,845,827			91,833,936

Three Months Ended June 30, 2015 and 2014

Revenue

	Three Months Ended June 30,				Change
(Dollars in thousands)	2015		2014		$		%
Operating leases and solar energy systems incentives	$	78,283	$	43,181	$	35,102		81	%
Solar energy systems and components sales		24,520		18,153		6,367		35	%
Total revenue	$	102,803	$	61,334	$	41,469		68	%

Total revenue increased by $41.5 million, or 68%, for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014.

Operating leases and solar energy systems incentives revenue increased by $35.1 million, or 81%, for the three months ended June 30, 2015, as compared to the three months ended June 30 , 2014. This increase was attributable to the increase in solar energy systems placed in service under leases and power purchase agreements between Jul y 1, 2014 and June 30, 2015. The in-period average of the aggregate megawatt production capacity of solar energy systems placed in service under leases and power purchase agreements during the three months ended June 30, 2015 increased by 83% as compared t o the in-period average during the three months ended June 30, 2014. This significant growth was attributable to our continued success in the installation and operation of solar energy systems under lease and power purchase agreements in new and existing m arkets. In addition, revenue from the monetization of ITCs increased by $7.6 million for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014, as we recognized revenue from the monetization of ITCs related to solar ener gy systems that were placed in service in the three months ended June 30, 2014. We recognize revenue from the monetization of ITCs ratably on each anniversary date of each solar energy system’s placed in service date as recapture provisions expire.

Revenue from sales of solar energy systems and components increased by $6.4 million, or 35%, for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014. This increase was primarily due to an $8.2 million increase in revenue from sales under MyPower contracts, which were mainly comprised of unscheduled principal and rate reduction payments. Rate reduction payments are expected in the second quarter of each year when customers utilize the proceeds from their ITCs to make the payments. In addition, there were a $3.1 million increase in revenue from sales to residential customers and a $0.7 million increase in revenue from sales to government entities. These increases were partially offset by a $3.3 million decrease in revenue from sales to commercial customers and a $2.5 million decrease in revenue from long-term solar energy system sales contracts recognized on the percentage-of-completion basis.

Cost of Revenue, Gross Profit and Gross Profit Margin

	Three Months Ended June 30,						Change
(Dollars in thousands)	2015			2014			$		%
Cost of operating leases and solar energy systems incentives	$	37,392		$	20,826		$	16,566		80	%
Gross profit of operating leases and solar energy systems incentives		40,891			22,355			18,536		83	%
Gross profit margin of operating leases and solar energy systems incentives		52	%		52	%
Cost of solar energy systems and component sales	$	22,087		$	17,635		$	4,452		25	%
Gross (loss) profit of solar energy systems and component sales		2,433			518			1,915		370	%
Gross (loss) profit margin of solar energy systems and component sales		10	%		3	%
Total cost of revenue	$	59,479		$	38,461		$	21,018		55	%
Total gross profit		43,324			22,873			20,451		89	%
Total gross profit margin		42	%		37	%

Cost of operating leases and solar energy systems incentives revenue increased by $16.6 million, or 80%, for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014. This increase was primarily due to greater depreciation expense arising from the higher aggregate cost of solar energy systems placed in service and generating revenue under solar energy system leases and power purchase agreements.

Cost of solar energy systems and component sales increased by $4.5 million, or 25%, for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014. This increase was primarily due to higher sales of solar energy systems and components. In addition, the gross margin improved from a gross profit of 3% to a gross profit of 10% mainly due to the increase in the percentage of residential sales and sales under MyPower contracts in the three months ended June 30, 2015, as compared to the three months ended June 30, 2014, that generally had higher gross margins than commercial and government sales.

Operating Expenses

	Three Months Ended June 30,				Change
(Dollars in thousands)	2015		2014		$		%
Sales and marketing	$	113,160	$	55,771	$	57,389		103	%
General and administrative		50,211		38,387		11,824		31	%
Research and development		12,401		3,000		9,401		313	%
Total operating expenses	$	175,772	$	97,158	$	78,614		81	%

Sales and marketing expense increased by $57.4 million, or 103%, for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014. This increase was primarily due to more expansive sales and marketing efforts, which have resulted in increases in customer backlog as defined in our key operating metrics, the number of customers, system installations and system deployments. This initiative increased the average number of personnel in sales and marketing departments by 92% for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014. As a result of this growth in headcount, employee compensation costs increased by $34.0 million (of which $2.5 million was non-cash and related to stock-based compensation), and facilities and operations costs increased by $6.1 million. In addition, promotional marketing costs increased by $17.1 million as part of this broadening of the scope of our marketing activities, including enhanced digital marketing activities to increase brand awareness and customer reach. We expect that our increased investment in sales and marketing efforts in current and new markets will continue to drive customer acquisitions and the future growth of our business.

General and administrative expense increased by $11.8 million, or 31%, for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014. This increase was primarily due to the increase in the average number of personnel in general and administrative departments, which grew by 91% for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014. As a result of this growth in headcount, employee compensation costs increased by $6.4 million, and facilities and operations costs increased by $1.1 million. Employee compensation costs did not change proportionally to the change in headcount as new hiring was primarily for lower level positions. In addition, professional services fees increased by $3.5 million for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014, primarily due to increased legal costs and accounting services fees.

Research and development expense increased by $9.4 million, or 313%, for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014. This increase was primarily due to the greater level of research and development activities undertaken by Silevo, which we acquired in September 2014, and the corresponding increase in the average number of personnel in research and development departments, which grew by 263% for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014.

Other Income and Expenses

	Three Months Ended June 30,				Change
(Dollars in thousands)	2015		2014		$		%
Interest expense, net	$	20,497	$	12,892	$	7,605		59	%
Other expense, net		2,768		1,307		1,461		112	%
Total interest and other expenses, net	$	23,265	$	14,199	$	9,066		64	%

Interest expense, net, increased by $7.6 million, or 59%, for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014. This increase was primarily due to the $9.5 million increase in interest expense, net, attributable to the higher average carrying balances on our various borrowing facilities for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014. Partially offsetting this was a $1.9 million decrease in interest expense, net, related to our financing obligations.

Other expense, net, increased by $1.5 million, or 112%, for the three months ended June 30, 2015, as compared to the three months ended June 30, 2014. The increase in other expense, net, was mainly due to a $1.8 million charge related to the accretion of the contingent consideration payable related to the acquisition of Silevo, which closed in September 2014.

Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests

Three Months Ended June 30,

Change

(Dollars in thousands)

2015

2014

Net loss attributable to noncontrolling

interests and redeemable noncontrolling

(133,373

)

(40,808

)

(92,565

)

(227

The net loss attributable to noncontrolling interests and redeemable noncontrolling interests represents the share of net loss that was allocated to the investors in the joint venture financing funds. This amount was determined as the change in the investors’ interests in the joint venture financing funds between the beginning and end of each reported period calculated primarily using the HLBV method, less any capital contributions net of any capital distributions. The calculation depends on the specific contractual liquidation provisions of each joint venture financing fund and is generally affected by, among other factors, the tax attributes allocated to the investors including tax bonus depreciation and investment tax credits or U.S. Treasury grants in lieu of the investment tax credits, the existence of guarantees of minimum returns to the investors by us, and the allocation of tax income or losses including provisions that govern the level of deficits that can be funded by the investors in a liquidation scenario. The calculation is also affected by the cost of the assets sold to the joint venture financing funds, which forms the book basis of the net assets allocated to the investors assuming a liquidation scenario. Generally, significant loss allocations to the investors have arisen in situations where there was a significant difference between the fair value and the cost of the assets sold to the joint venture financing funds in a particular period accompanied by the absence of guarantees of minimum returns to the investors by us, since the capital contributions by the investors were based on the fair value of the assets while the calculation is based on the cost of the assets. The existence of guarantees of minimum returns to the investors by us and limits on the level of deficits that the investors are contractually obligated to fund in a liquidation scenario reduce the amount of losses that could be allocated to the investors. In addition, the redeemable noncontrolling interests balance is at least equal to the redemption amount.

The net loss attributable to noncontrolling interests and redeemable noncontrolling interests for the three months ended June 30, 2015 was $133.4 million while the net loss attributable to noncontrolling interests and redeemable noncontrolling interests for the three months ended June 30, 2014 was $40.8 million. The net loss allocation to noncontrolling interests and redeemable noncontrolling interests for the three months ended June 30, 2015 was primarily due to the $130.6 million loss allocation from new financing funds into which we are selling or contributing assets. The net loss allocation to noncontrolling interests and redeemable noncontrolling interests for the three months ended June 30, 2014 was primarily due to $49.6 million loss allocation from financing funds into which we were selling or contributing assets. Additionally, during the three months ended June 30, 2014, $8.7 million of income was allocated to noncontrolling interests and redeemable noncontrolling interests in an entity that had a lease pass-through joint venture arrangement with us that was terminated in the period. In conjunction with the termination of the lease pass-through arrangement the contractual agreements of this fund were amended to grant the investor redemption rights of its investment in the fund and accordingly we adjusted the carrying value of the redeemable noncontrolling interest balance to its redemption amount resulting to $8.5 million additional income allocation to the investor.

Six Months Ended June 30, 2015 and 2014

Revenue

	Six Months Ended June 30,				Change
(Dollars in thousands)	2015		2014		$			%
Operating leases and solar energy systems incentives	$	133,054	$	72,253	$	60,801			84	%
Solar energy systems and components sales		37,228		52,627		(15,399	)		(29	)%
Total revenue	$	170,282	$	124,880	$	45,402			36	%

Total revenue increased by $45.4 million, or 36%, for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014.

Operating leases and solar energy systems incentives revenue increased by $60.8 million, or 84%, for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014. This increase was attributable to the increase in solar energy systems placed in service under leases and power purchase agreements between July 1, 2014 and June 30, 2015. The in-period average of the aggregate megawatt production capacity of solar energy systems placed in service under leases and power purchase agreements during the six months ended June 30, 2015 increased by 79% as compared to the in-period average during the six months ended June 30, 2014. This significant growth was attributable to our continued success in the installation and operation of solar energy systems under lease and power purchase agreements in new and existing markets. In addition, revenue from the monetization of ITCs increased by $15.1 million for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014, as we recognized revenue from the monetization of ITCs related to solar energy systems that were placed in service in the six months ended June 30, 2014. We recognize revenue from the monetization of ITCs ratably on each anniversary date of each solar energy system’s placed in service date as recapture provisions expire.

Revenue from sales of solar energy systems and components decreased by $15.4 million, or 29%, for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014. This decrease was primarily due to a $17.6 million decrease in revenue from long-term solar energy system sales contracts recognized on the percentage-of-completion basis and a $7.1 million decrease in revenue from sales to commercial customers. These decreases were partially offset by a $9.3 million increase in revenue from sales

under MyPower contracts, which were mainly comprised of unscheduled principal and rate reduction payments. Rate reduction payments are expected in the second quarter of each year when customers utilize the proceeds from their ITCs to make the payments. A ddition ally , the re were a $5.3 million increase in revenue from sales to residential customers, a $1.7 million increase in revenue from sales to government entities and a $1.5 million increase in revenue from sales generated by Silevo , which we acquired in September 2014. In addition, in the six months ended June 30, 2014, we recognized $9.0 million of revenue from sales of Zep Solar products as we fulfilled open customer orders following our acquisition of Zep Solar in December 2013 .

Cost of Revenue, Gross Profit and Gross Profit Margin

	Six Months Ended June 30,						Change
(Dollars in thousands)	2015			2014			$			%
Cost of operating leases and solar energy systems incentives	$	69,652		$	36,805		$	32,847			89	%
Gross profit of operating leases and solar energy systems incentives		63,402			35,448			27,954			79	%
Gross profit margin of operating leases and solar energy systems incentives		48	%		49	%
Cost of solar energy systems and component sales	$	35,547		$	50,417		$	(14,870	)		(29	)%
Gross (loss) profit of solar energy systems and component sales		1,681			2,210			(529	)		(24	)%
Gross (loss) profit margin of solar energy systems and component sales		5	%		4	%
Total cost of revenue	$	105,199		$	87,222		$	17,977			21	%
Total gross profit		65,083			37,658			27,425			73	%
Total gross profit margin		38	%		30	%

Cost of operating leases and solar energy systems incentives revenue increased by $32.8 million, or 89%, for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014. This increase was primarily due to greater depreciation expense arising from the higher aggregate cost of solar energy systems placed in service under leases and power purchase agreements.

Cost of solar energy systems and component sales decreased by $14.9 million, or 29%, for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014. This decrease was primarily due to lower sales of solar energy systems and components.

Operating Expenses

	Six Months Ended June 30,				Change
(Dollars in thousands)	2015		2014		$		%
Sales and marketing	$	199,831	$	102,621	$	97,210		95	%
General and administrative		98,865		71,398		27,467		38	%
Research and development		24,521		4,923		19,598		398	%
Total operating expenses	$	323,217	$	178,942	$	144,275		81	%

Sales and marketing expense increased by $97.2 million, or 95%, for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014. This increase was primarily due to more expansive sales and marketing efforts, which have resulted in increases in customer backlog as defined in our key operating metrics, the number of customers, system installations and system deployments. This initiative increased the average number of personnel in sales and marketing departments by 104% for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014. As a result of this growth in headcount, employee compensation costs increased by $63.5 million (of which $3.3 million was non-cash and related to stock-based compensation), and facilities and operations costs increased by $12.0 million. In addition, promotional marketing costs increased by $22.4 million as part of this broadening of the scope of our marketing activities, including enhanced digital marketing activities to increase brand awareness and customer reach. We expect that our increased investment in sales and marketing efforts will continue to drive customer acquisitions and the future growth of our business.

General and administrative expense increased by $27.5 million, or 38%, for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014. This increase was primarily due to the increase in the average number of personnel in general and administrative departments, which grew by 94% for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014. As a result of this growth in headcount, employee compensation costs increased by $14.5 million, and facilities and

operations costs increased by $ 5.4 million. Employee compensation costs did not change proportionally to the change in headcount as new hiring was primarily for lower level positions. In addition, professional services fees increased by $ 6.1 million for the six months ended June 30, 201 5, as compared to the six months ended June 30, 2014, primarily due to increased legal costs and accounting services fees.

Research and development expense increased by $19.6 million, or 398%, for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014. This increase was primarily due to the greater level of research and development activities undertaken by Silevo, which we acquired in September 2014, and the corresponding increase in the average number of personnel in research and development departments, which grew by 227% for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014.

Other Income and Expenses

	Six Months Ended June 30,				Change
(Dollars in thousands)	2015		2014		$		%
Interest expense, net	$	39,018	$	20,871	$	18,147		87	%
Other expense, net		4,872		1,332		3,540		266	%
Total interest and other expenses, net	$	43,890	$	22,203	$	21,687		98	%

Interest expense, net, increased by $18.1 million, or 87%, for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014. This increase was primarily due to the $19.3 million increase in interest expense, net, related to our cash borrowings as a result of higher average carrying balances on our borrowings for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014. Partially offsetting this was a $1.2 million decrease in interest expense, net, related to our financing obligations.

Other expense, net, increased by $3.5 million, or 266%, for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014. The increase in other expense, net, was mainly due to $3.5 million charge related to the accretion of the contingent consideration payable related to the Silevo acquisition, which closed in September 2014.

Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests

Six Months Ended June 30,

Change

(Dollars in thousands)

2015

2014

Net loss attributable to noncontrolling

interests and redeemable noncontrolling

(258,785

)

(91,963

)

(166,822

)

(181

The net loss attributable to noncontrolling interests and redeemable noncontrolling interests for the six months ended June 30, 2015 was $258.8 million while the net loss attributable to noncontrolling interests and redeemable noncontrolling interests for the six months ended June 30, 2014 was $92.0 million. The net loss allocation to noncontrolling interests and redeemable noncontrolling interests for the six months ended June 30, 2015 was primarily due to the $252.4 million loss allocation from new financing funds into which we are selling or contributing assets. The net loss allocation to noncontrolling interests and redeemable noncontrolling interests for the six months ended June 30, 2014 was primarily due to $108.5 million loss allocation from financing funds into which we were

selling or contributing assets, partially offset by a $5.5 million income allocation related to financing funds that were fully funded and that we were not s elling or contributing additional assets. Additionally, during the six months ended June 30, 2014, $11.0 million of income was allocated to noncontrolling interests and redeemable noncontrolling interests in an entity that has a lease pass-through joint ve nture arrangement with us including $8.5 million income allocated due to adjusting the carrying amount of the redeemable noncontrolling interest balance to its redemption amount following amendments to the contractual agreements of this fund that granted t he investor redemption rights of its investment in the fund in conjunction with termination of the lease pass-through arrangement.

Liquidity and Capital Resources

The following table summarizes our condensed consolidated cash flows:

	Six Months Ended June 30,
	2015			2014
	(in thousands)
Consolidated cash flow data:
Net cash used in operating activities	$	(311,916	)	$	(59,794	)
Net cash used in investing activities		(697,094	)		(469,356	)
Net cash provided by financing activities		926,047			357,331
Net decrease in cash and cash equivalents	$	(82,963	)	$	(171,819	)

We finance our operations, including the costs of acquisition and installation of solar energy systems, mainly through a variety of financing fund arrangements that we have formed with tax equity fund investors, credit facilities from banks, solar asset-backed notes, convertible notes, Solar Bonds and cash generated from our operations. As described below under “—Financing Activities— Debt and Financing Fund Commitments,” as of June 30, 2015, we had $894.7 million of available commitments from our fund investors that could be drawn based on the available capacity under our credit facilities through our asset monetization strategy and $590.3 million of unused borrowing capacity available under our debt agreements that could be drawn based on the available capacity under our credit facilities.

While we had a net loss for the six months ended June 30, 2015, we believe that the aggregate of our existing cash and cash equivalents and short-term investments of $489.1 million, in addition to the funds available under our debt agreements and the funds available in our existing financing funds that can be drawn-down through our asset monetization strategy, will be sufficient to meet our cash requirements for at least the next 12 months. However, if, in the future, we are unable to comply with all of the covenants contained in our debt agreements or we are unable to obtain waivers of any non-compliance, then we might be considered in default under our debt agreements. In that circumstance, the payments due under our debt agreements could be accelerated, which would negatively impact our liquidity and capital resources. Under the terms of our revolving credit facility, we are subject to the following financial covenants:

Interest Coverage Ratio : We are obligated to maintain an interest coverage ratio of 1.5-to-1 as of the end of each fiscal quarter. The interest coverage ratio is measured by dividing (a) an amount equal to the excess of (i) our trailing 12-month consolidated gross profit over (ii) 20% of our trailing 12-month consolidated general and administrative expenses by (b) our unconsolidated trailing 12-month cash interest charges.

Unencumbered Liquidity : We are obligated to maintain unencumbered liquidity at an amount equal to at least 20% of the sum of (a) the committed amount under the revolving credit facility plus (b) the aggregate principal outstanding of Solar Bonds that mature prior to the revolving credit facility’s maturity date, as of the end of each month. However, unencumbered liquidity can never be less than $50.0 million, as of the end of each month. Unencumbered liquidity is defined as our average daily cash and cash equivalents, excluding certain of our subsidiaries.

Operating Activities

In the six months ended June 30, 2015, we utilized $311.9 million in net cash from operations due to our continued rapid growth. This cash outflow primarily resulted from a net loss of $302.7 million, reduced by non-cash items such as depreciation and amortization of $74.4 million, stock-based compensation of $36.1 million and non-cash interest and other expense of $7.5 million mainly related to financing obligations and deferred contingent consideration and increased by a reduction in financing obligations of $23.4 million. The cash outflow also increased in part due to an increase in inventories of $62.3 million, an increase of $94.2 million for MyPower deferred costs, an increase in prepaid expenses and other current assets of $15.8 million, an increase in other assets of $18.9 million and an increase in accounts receivable of $11.5 million. This cash outflow was offset by a decrease in restricted cash of $5.5 million, an increase in deferred revenue under our joint venture and lease pass-through structures of $8.0 million relating to upfront lease payments received from customers, solar energy system incentive rebate payments received from various state and local governments and deferred investment tax credits revenue, an increase in accounts payable of $39.8 million and an increase in accrued and other liabilities of $41.0 million.

In the six months ended June 30, 2014, we utilized $59.8 million in net cash from operations. This cash outflow primarily resulted from a net loss of $163.7 million, reduced by non-cash items such as depreciation and amortization of $ 40.0 million, stock-based compensation of $28.9 million and interest on lease pass-through financing obligations of $5.8 million and increased by a reduction in lease pass-through financing obligation of $23.0 million. This cash outflow also increased in p art due to an increase in restricted cash of $4.9 million, an increase in rebates receivable of $4.7 million, an increase in inventories of $32.5 million, an increase in prepaid expenses and other current assets of $16.7 million and a decrease in accrued a nd other liabilities of $7.5 million. This cash outflow was offset by an increase in deferred revenue of $103.1 million relating to upfront lease payments received from customers and solar energy system incentive rebate payments received from various state and local governments and deferred investment tax credits revenue and an increase in accounts payable of $20.3 million.

Investing Activities

Our investing activities consist primarily of purchases of solar energy systems and capital purchases for our module research and development and panel production.

In the six months ended June 30, 2015, we used $697.1 million in investing activities. Of this amount, we used $665.1 million on the design, acquisition and installation of solar energy systems under operating leases with our customers and the design and installation of solar energy systems under MyPower contracts, and $102.1 million in the acquisition of solar panel manufacturing equipment, vehicles, office equipment, leasehold improvements and furniture. We also invested $44.6 million in short-term investments in highly rated corporate debt securities and asset-backed securities. These expenditures were offset by $114.6 million from sales and maturities of short-term investments. As we increase our solar panel manufacturing operations, we estimate investing an additional $60 million related to acquisition of solar panel manufacturing equipment in the remainder of the 2015 fiscal year.

In the six months ended June 30, 2014, we used $469.4 million in investing activities. Of this amount, we used $450.3 million on the design, acquisition and installation of solar energy systems under operating leases with our customers and $7.6 million in the acquisition of vehicles, office equipment, leasehold improvements and furniture and $0.5 million for the acquisition of the redeemable noncontrolling interest related to a single joint venture financing fund. We also invested $11.0 million in promissory notes receivable and other advances to a third party, which was subsequently applied towards the purchase consideration of a business acquisition.

Financing Activities

In the six months ended June 30, 2015, we generated $926.0 million from financing activities. We received $456.1 million, net of lender fees, from long-term debt and repaid $134.6 million of long-term debt. We received $197.5 million from the issuance of solar bonds. We repaid $7.4 million of solar asset-backed notes. We received $20.5 million from fund investors in our financing funds and paid $5.0 million to fund investors in our financing funds. We also generated $428.9 million from proceeds from investments by various fund investors in our joint ventures and paid distributions to fund investors of $33.6 million.

In the six months ended June 30, 2014, we generated $357.3 million from financing activities. We received $198.9 million, net of lender fees, from long-term debt and repaid $52.3 million of long-term debt. We received $67.4 million, net of issuance costs, from the issuance of solar asset-backed notes and repaid $2.2 million of solar asset-backed notes. We also repaid $0.4 million of our capital lease obligation. We received $0.4 million from U.S. Treasury Department grants associated with solar energy systems that we had leased to customers. We received $19.0 million from fund investors in our lease pass-through financing funds and paid $6.4 million to fund investors in our lease pass-through financing funds. We also generated $216.1 million from proceeds from investments by various fund investors in our joint ventures and paid distributions to fund investors of $90.5 million. Additionally, we received $8.4 million from the issuance of common stock upon the exercise of stock options for cash.

Debt and Financing Fund Commitments

Debt

For a discussion of the terms and conditions of our indebtedness and changes thereof in the period, refer to Note 5, Indebtedness , to our condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q.

Financing Fund C ommitments

We have financing fund commitments from several fund investors that we can draw upon in the future upon the achievement of specific funding criteria. As of June 30, 2015, we had entered into 44 financing funds that had a total of $894.7 million of undrawn committed capital. From our significant customer backlog, we allocate to our financing funds leases, power purchase agreements and the related economic benefits associated with the solar energy systems, in accordance with the criteria of each fund. Upon such allocation and upon our satisfaction of the conditions precedent to drawing upon such commitments, we are able to draw down on the financing fund commitments. Once received, these proceeds provide working capital to deliver solar energy systems to our customers and form part of our general working capital.

Off-Balance Sheet Arrangements

We include in our condensed consolidated financial statements all assets and liabilities and results of operations of financing fund arrangements that we have entered into. We have not entered into any other transactions that have generated relationships with unconsolidated entities or financial partnerships or special purpose entities. Accordingly, we do not have any off-balance sheet arrangements.

Recent Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies and Procedures , to our condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks as part of our ongoing business operations. Our primary exposures include changes in interest rates because certain borrowings bear interest at floating rates based on LIBOR plus a specified margin. Historically, we have managed our interest rate risk by balancing our amount of fixed-rate and floating-rate debt. For fixed-rate debt, interest rate changes do not affect our earnings or cash flows. Conversely, for floating-rate debt, interest rate changes generally impact our earnings and cash flows, assuming other factors are held constant. Pursuant to our risk management policies, in certain cases, we had also made use of derivative instruments to manage some of our exposures to fluctuations in interest rates. We do not enter into any derivative instrument transactions for trading or speculative purposes. In addition, we have entered into capped call option agreements to reduce the potential dilution to holders of our common stock upon conversion of our convertible senior notes.

Changes in economic conditions could result in higher interest rates, thereby increasing our interest expense and other operating expenses and reducing our funds available for capital investments, operations or other purposes. In addition, we must use a substantial portion of our cash inflows to service our borrowings, which may affect our ability to make future acquisitions or capital expenditures. A hypothetical 10% change in our interest rates would have increased our interest expense for the six months ended June 30, 2015 and 2014 by $0.7 million and $0.5 million, respectively.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on our evaluation, our chief executive officer and chief financial officer concluded that, as of June 30, 2015, our disclosure controls and procedures were designed at a reasonable assurance level and were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

P ART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In June 2014, the Company along with Sunrun, Inc., or Sunrun, filed a lawsuit in the Superior Court of Arizona against the Arizona Department of Revenue, or DOR, challenging DOR’s interpretation of Arizona state law to impose property taxes on solar energy systems that are leased by customers. The Company and Sunrun filed a motion for summary judgment with the Superior Court, and the DOR responded by filing its own motion. On June 1, 2015, the Superior Court issued an order rejecting the interpretation of the Arizona state law under which the DOR had sought to tax leased solar energy systems. In that same order, the Superior Court held that a separate Arizona statute, which provides that such systems are deemed to have no value for purposes of calculating property tax, violated certain provisions of the Arizona state constitution. SolarCity and Sunrun have asked the Superior Court to award them costs and attorney’s fees as the prevailing parties in the litigation. The Superior Court has not yet formally entered judgment or acted on the motion for costs and fees. The Company will continue to vigorously pursue its claims.

On March 2, 2015, the Company filed a lawsuit in the United States District Court for the District of Arizona against the Salt River Project Agricultural Improvement and Power District and the Salt River Valley Water Users’ Association, or SRP, alleging that SRP’s imposition of distribution charges and demand charges on new solar energy customers in its territory violates state and federal antitrust laws. On June 23, 2015, SRP moved to dismiss the complaint. The Company filed an opposition to the motion on July 24, 2015; no hearing date has been set for SRP’s motion. Discovery has commenced, and the Company intends to pursue its claims vigorously.

From time to time, claims have been asserted, and may in the future be asserted, including claims from regulatory authorities related to labor practices and other matters. Such assertions arise in the normal course of the Company’s operations. The resolution of any such assertions or claims cannot be predicted with certainty. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the Company’s results of operations, prospects, cash flows, financial position and brand.

ITEM 1A. RISK FACTORS

You should carefully consider the risks described below, together with the other information contained in this quarterly report on Form 10-Q, including our consolidated financial statements and related notes, before investing in our common stock. The risks described below are not the only risks facing our company. Any of the following risks and additional risks and uncertainties not

currently known to us or those we currently view to be immaterial may also materially and adversely affect our b usiness, financial condition, results or operations. In such case, you may lose all or part of your original investment.

Risks Related to our Operations

Existing electric utility industry regulations, and changes to regulations, may present technical, regulatory and economic barriers to the purchase and use of solar energy systems that may significantly reduce demand for our solar energy systems.

Federal, state and local government regulations and policies concerning the electric utility industry, utility rate structures, interconnection procedures, internal policies and regulations promulgated by electric utilities, heavily influence the market for electricity generation products and services. These regulations and policies often relate to electricity pricing and the interconnection of customer-owned electricity generation. In the United States, governments and utilities continuously modify these regulations and policies. These regulations and policies could deter potential customers from purchasing renewable energy, including solar energy systems. This could result in a significant reduction in demand for our solar energy systems. For example, utilities commonly charge fees to large, industrial customers for disconnecting from the electric grid or for having the capacity to use power from the electric grid for back-up purposes. These fees could increase our customers’ cost to use our systems and make our product offerings less desirable, thereby harming our business, prospects, financial condition and results of operations. In addition, depending on the region, electricity generated by solar energy systems competes most effectively with higher priced peak-hour electricity from the electric grid, rather than the lower average price of electricity. Modifications to the utilities’ peak-hour pricing policies or rate design, such as a flat rate, would require us to lower the price of our solar energy systems to compete with the price of electricity from the electric grid.

Future changes to government or internal utility regulations and policies that favor electric utilities could also reduce our competitiveness and cause a significant reduction in demand for our products and services. For example, certain jurisdictions have proposed assessing fees on customers purchasing energy from solar energy systems or imposing a new charge that would disproportionately impact solar energy system customers who utilize net metering. In particular, the Salt River Project in Arizona has imposed anticompetitive penalties on new solar customers in an attempt to exclude rooftop solar, and in response in March 2015 we filed a lawsuit in federal court in Arizona, asking the court to stop SRP’s anti-competitive behavior. In the event that any such fees or charges are imposed, our ability to attract new customers and compete with the price of electricity generated by local utilities in these jurisdictions may be limited, and such unaccounted for increases in the fees or charges applicable to existing customer agreements may increase the cost of energy to those customers and result in an increased rate of defaults under our customer agreements. Any of these results could reduce demand for our solar energy systems, harm our business, prospects, financial condition and results of operations.

We rely on net metering and related policies to offer competitive pricing to our customers in some of our key markets.

Forty-four states, Washington, D.C. and Puerto Rico have a regulatory policy known as net energy metering, or net metering. Each of the states where we currently serve customers has adopted a net metering policy except for Texas, where certain individual utilities have adopted net metering or a policy similar to net metering. Net metering typically allows our customers to interconnect their on-site solar energy systems to the utility grid and offset their utility electricity purchases by receiving a bill credit at the utility’s retail rate for energy generated by their solar energy system that is exported to the grid in excess of the electric load used by the customers. At the end of the billing period, the customer simply pays for the net energy used or receives a credit at the retail rate if more energy is produced than consumed. Utilities operating in states without a net metering policy may receive solar electricity that is exported to the grid when there is no simultaneous energy demand by the customer without providing retail compensation to the customer for this generation.

Our ability to sell solar energy systems and the electricity they generate may be adversely impacted by the failure to expand existing limits on the amount of net metering in states that have implemented it, the failure to adopt a net metering policy where it currently is not in place, the imposition of new charges that only or disproportionately impact customers that utilize net metering or reductions in the amount or value of credit that customers receive through net metering. Our ability to sell solar energy systems and the electricity they generate may also be adversely impacted by the unavailability of expedited or simplified interconnection for grid-tied solar energy systems or any limitation on the number of customer interconnections or amount of solar energy that utilities are required to allow in their service territory or some part of the grid. For example, utilities in some states, such as Hawaiian Electric Company, have proposed imposing additional monthly charges on customers who interconnect solar energy systems installed on their homes. If such charges are imposed, the cost savings associated with switching to solar energy may be significantly reduced and our ability to attract future customers and compete with traditional utility providers could be impacted.

Limits on net metering, interconnection of solar energy systems and other operational policies in key markets could limit the number of solar energy systems installed in those markets. For example, California utilities limit net metering credit to 5% of the utilities’ aggregate customer peak demand. California has adopted legislation to establish a process and timeline for developing a new net metering successor program for its largest utilities with no cap on participation. In addition to California, New York is considering

a net metering successor program through the Reforming the Energy Vision docket at the state Public Service Commission, Hawaii is considering a net metering successor program through a proceeding at the state Public Utilities Commission, and Nevada is reviewing its net metering program as it nears the state’s cap on net metering at 3% of peak load . If the caps on net meteri ng in California , New York , Hawaii, Nevada and other key markets are reached or if the amount or value of credit that customers receive for net metering is significantly reduced, future customers will be unable to recognize the current cost savings associa ted with net metering. We rely substantially on net metering when we establish competitive pricing for our prospective customers and the absence of net metering for new customers c ould greatly limit demand for our solar energy systems.

Regulatory limitations associated with technical considerations may significantly limit our ability to sell electricity from our solar energy systems in certain markets.

Regulatory limits associated with technical considerations may curb our growth in certain key markets. For example, the Federal Energy Regulatory Commission has promulgated small generator interconnection procedures that recommend limiting customer-sited intermittent generation resources, such as our solar energy systems, to a certain percentage of peak load on a given electrical feeder circuit. Similar limits have been adopted by various states and could constrain our ability to market to customers in certain geographic areas where the concentration of solar installations exceeds the limit. For example, Hawaiian electric utilities have adopted certain policies that limit distributed electricity generation in certain geographic areas. While these limits have constrained our growth in certain parts of Hawaii, policy developments in Hawaii generally have allowed distributed electricity generation penetration despite the electric utility-imposed limitations. Furthermore, in certain areas, we benefit from policies that allow for expedited or simplified procedures related to connecting solar energy systems to the power grid. If such procedures are changed or cease to be available, our ability to sell the electricity generated by solar energy systems we install may be adversely impacted. As adoption of solar distributed generation increases, along with the operation of large-scale solar generation in key markets such as California, the amount of solar energy being fed into the power grid will surpass the amount planned for relative to the amount of aggregate demand. Some utilities claim that within several years, solar generation resources may reach a level capable of causing an over-generation situation that could require some solar generation resources to be curtailed to maintain operation of the grid. The adverse effects of such curtailment without compensation could adversely impact our business, results of operations and future growth.

Our business currently depends on the availability of rebates, tax credits and other financial incentives. The expiration, elimination or reduction of these rebates, credits and incentives would adversely impact our business.

U.S. federal, state and local government bodies provide incentives to end users, distributors, system integrators and manufacturers of solar energy systems to promote solar electricity in the form of rebates, tax credits and other financial incentives such as system performance payments, payments for renewable energy credits associated with renewable energy generation and the exclusion of solar energy systems from property tax assessments. We rely on these governmental rebates, tax credits and other financial incentives to lower our cost of capital and to encourage fund investors to invest in our funds. These incentives enable us to lower the price we charge customers for energy and for our solar energy systems. However, these incentives may expire on a particular date, end when the allocated funding is exhausted or be reduced or terminated as solar energy adoption rates increase. These reductions or terminations often occur without warning.

The federal government currently offers a 30% investment tax credit under Section 48(a)(3) and Section 25D of the Internal Revenue Code, or the Federal ITC, for the installation of certain solar power facilities until December 31, 2016. Additionally, under Section 48, energy storage systems that are installed at the time of the solar power facility and, as required by IRS guidelines, store the energy of the solar power facility, are also eligible for the Federal ITC. The credit under Section 48(a)(3) is due to adjust to 10% in 2017 for commercial installations and residential systems owned by corporate third parties, and to be completely eliminated for residential installations owned by the homeowner pursuant to Section 25D, which is the major end market we serve. Solar energy systems that began construction prior to the end of 2011 were eligible to receive a 30% federal cash grant paid by the U.S. Treasury Department under Section 1603 of the American Recovery and Reinvestment Act of 2009, or the U.S. Treasury grant, in lieu of the Federal ITC. Pursuant to the Budget Control Act of 2011, U.S. Treasury grants are subject to sequestration beginning in 2013. Specifically, U.S. Treasury grants made on or after October 1, 2013 through September 30, 2015 will be reduced by approximately 7.2%, regardless of when the U.S. Treasury received the application. As a result, for all applications pending or submitted prior to June 30, 2015, we expect to suffer grant shortfalls of approximately $1.3 million associated with our financing funds. Applicable authorities may adjust or decrease incentives from time to time or include provisions for minimum domestic content requirements or other requirements to qualify for these incentives.

Reductions in, eliminations of, or expirations of, governmental incentives could adversely impact our results of operations and ability to compete in our industry by increasing our cost of capital, causing us to increase the prices of our energy and solar energy systems and reducing the size of our addressable market. In addition, this would adversely impact our ability to attract investment partners and to form new financing funds and our ability to offer attractive financing to prospective customers. For the quarter ended June 30, 2015, approximately 98% of new customers chose to enter into financed lease, power purchase agreements or customer loans rather than buying a solar energy system for cash.

Our business depends in part on the regulatory treatment of third-party owned solar energy systems.

Our leases and power purchase agreements are third-party ownership arrangements. Sales of electricity by third parties face regulatory challenges in some states and jurisdictions. Other challenges pertain to whether third-party owned systems qualify for the same levels of rebates or other non-tax incentives available for customer-owned solar energy systems, whether third-party owned systems are eligible at all for these incentives and whether third-party owned systems are eligible for net metering and the associated significant cost savings. In some states and utility territories, third parties that own solar energy systems are limited in the way that they may deliver solar energy to their customers. In jurisdictions such as Arizona, Florida, Georgia, Iowa, Kentucky, North Carolina, Oklahoma and the Los Angeles Department of Water and Power service territory, laws have been interpreted to prohibit the sale of electricity pursuant to our standard power purchase agreement. This has led us and other solar energy system providers that utilize third-party ownership arrangements to offer leases rather than power purchase agreements in such jurisdictions. Imposition of such limitations in additional jurisdictions or reductions in, or eliminations of, incentives for third-party owned systems could reduce demand for our systems, adversely impact our access to capital and cause us to increase the price we charge our customers for energy.

The Office of the Inspector General of the U.S. Department of Treasury has issued subpoenas to a number of significant participants in the solar energy installation industry, including us. The subpoena we received requires us to deliver certain documents in our possession relating to our participation in the U.S. Treasury grant program. These documents are being delivered to the Office of the Inspector General of the U.S. Department of Treasury, which is investigating the administration and implementation of the U.S. Treasury grant program.

In July 2012, we and other companies that are significant participants in both the solar industry and the cash grant program under Section 1603 of the American Recovery and Reinvestment Act of 2009 received subpoenas from the U.S. Department of Treasury’s Office of the Inspector General to deliver certain documents in our respective possession. In particular, our subpoena requested, among other things, documents dated, created, revised or referred to since January 1, 2007 that relate to our applications for U.S. Treasury grants or communications with certain other solar companies or certain firms that appraise solar energy property for U.S. Treasury grant application purposes. The Inspector General is working with the Civil Division of the U.S. Department of Justice to investigate the administration and implementation of the U.S. Treasury grant program, including possible misrepresentations concerning the fair market value of the solar power systems submitted for grant under that program made in grant applications by solar companies, including us. We intend to cooperate fully with the Inspector General and the Department of Justice and continue to produce documents and testimony as requested by the Inspector General. We anticipate that the Inspector General will require at least another six months to conclude its review. If, at the conclusion of the investigation, the Inspector General concludes that misrepresentations were made, the Department of Justice could bring a civil action to recover amounts it believes were improperly paid to us. If the Department of Justice were successful in asserting such an action, we could then be required to pay damages and penalties for any funds received based on such misrepresentations (which, in turn, could require us to make indemnity payments to certain of our fund investors). Such consequences could have a material adverse effect on our business, liquidity, financial condition and prospects. Additionally, the period of time necessary to resolve the investigation is uncertain and this matter could require significant management and financial resources that could otherwise be devoted to the operation of our business.

If the Internal Revenue Service or the U.S. Treasury Department makes additional determinations that the fair market value of our solar energy systems is materially lower than what we have claimed, we may have to pay significant amounts to our financing funds or to our fund investors and such determinations could have a material adverse effect on our business, financial condition and prospects.

We and our fund investors claim the Federal ITC or the U.S. Treasury grant in amounts based on the fair market value of our solar energy systems. We have obtained independent appraisals to support the fair market values we report for claiming Federal ITCs and U.S. Treasury grants. The Internal Revenue Service and the U.S. Treasury Department review these fair market values. With respect to U.S. Treasury grants, the U.S. Treasury Department reviews the reported fair market value in determining the amount initially awarded. The Internal Revenue Service and the U.S. Treasury Department may subsequently audit the fair market value and determine that amounts previously awarded must be repaid to the U.S. Treasury Department or that excess awards constitute taxable income for U.S. federal income tax purposes. A small number of our financing funds are undergoing such audits. With respect to Federal ITCs, the Internal Revenue Service may review the fair market value on audit and determine that the tax credits previously claimed must be reduced. If the fair market value is determined to be less than we reported, we may owe our financing fund or fund investors an amount equal to this difference, plus any costs and expenses associated with a challenge to that valuation. We could also be subject to tax liabilities, including interest and penalties.

The U.S. Treasury Department has previously determined to award U.S. Treasury grants for some of our solar energy systems at a materially lower value than we had established in our appraisals. As a result, we have been required to pay our fund investors a true-up payment or contribute additional assets to the associated financing funds. It is possible that the U.S. Treasury Department will make similar determinations in the future. In response to such shortfalls, two of our financing funds filed a lawsuit in the United States Court of Federal Claims to recover the difference between the U.S. Treasury grants they sought and the amounts the U.S. Treasury

paid; to the extent that these lawsuits are successful, any recove ry would be used to repay us for amounts we previously reimbursed those funds. Our fund investors have contribut ed to our financing funds at the amounts the U.S. Treasury Department most recently awarded on similarly situated energy systems in order to red uce or eliminate the need for us to subsequently pay those fund investors true-up payments or contribute additional assets to the associated financing funds.

The Internal Revenue Service or the U.S. Treasury Department may object to the fair market value of solar energy systems that we have constructed, or will construct, including any systems for which grants have already been paid, as a result of:

●	any pending or future audit,

●	the outcome of the Department of Treasury Inspector General investigation, or

●	changes in guidelines or otherwise.

If the Internal Revenue Service or the U.S. Treasury Department were to object to amounts we have claimed as too high of a fair market value on such systems, it could have a material adverse effect on our business, financial condition and prospects. For example, a hypothetical 5% downward adjustment in the fair market value in the approximately $501.1 million of U.S. Department of Treasury grant applications that have been awarded from the beginning of the U.S. Treasury grant program through June 30, 2015 would obligate us to repay up to $25.1 million to our fund investors.

We have historically benefited from the declining cost of solar panels, and our business and financial results may be harmed as a result of increases in the cost of solar panels or tariffs on imported solar panels imposed by the U.S. government.

The declining cost of solar panels and the raw materials necessary to manufacture them has been a key driver in the pricing of our solar energy systems and customer adoption of this form of renewable energy. With the stabilization or increase of solar panel and raw materials prices, our growth could slow, and our financial results could suffer. Further, the cost of solar panels and raw materials could increase in the future due to tariff penalties or other factors.

The U.S. government has imposed tariffs on solar cells manufactured in China. Based on determinations by the U.S. government under the 2012 solar trade case, the anti-dumping and countervailing tariff rates range from approximately 33%-255%. Such anti-dumping and countervailing tariffs are subject to annual review and may be increased or decreased. Under the most recent preliminary annual review, the tariff rates under the 2012 trade case covering solar cells manufactured in China have been decreased. These tariffs have increased the price of solar panels containing Chinese-manufactured solar cells. In the past, we purchased a significant portion of the solar panels used in our solar energy systems from manufacturers based in China. Currently, many of the solar panels we purchase contain components from China or Taiwan. The purchase price of solar panels containing solar cells manufactured in China reflects these tariff penalties. While solar panels containing solar cells manufactured outside of China are not subject to these tariffs, the prices of these solar panels are, and may continue to be, more expensive than panels produced using Chinese solar cells, before giving effect to the tariff penalties.

In addition, the U.S. government imposed additional tariffs from a second trade case involving solar modules manufactured in China (with cells from other countries) and cells manufactured in Taiwan. In early January 2015, the U.S. government announced its affirmative final determinations in both the countervailing duty and anti-dumping cases against China and in the anti-dumping case against Taiwan. The new preliminary tariffs do not apply to modules with Chinese solar cells. Those modules are still covered by the existing tariffs from the first 2012 trade case.

If additional tariffs are imposed or other negotiated outcomes occur, our ability to purchase these products on competitive terms or to access specialized technologies from those countries could be limited. Any of those events could harm our financial results by requiring us to account for the cost of trade penalties or to purchase solar panels or other system components from alternative, higher-priced sources.

On September 23, 2014, we acquired Silevo, LLC, a solar panel technology and manufacturing company. Though we believe that panels manufactured by our company are exempt from these tariffs, as proposed, we expect to continue to rely on solar panels produced by our other existing suppliers for the near future. In addition, it is possible that system components purchased from other foreign suppliers could be the subject of these or future trade cases.

Our ability to provide solar energy systems to new customers on an economically viable basis depends on our ability to finance these systems with fund investors who require particular tax and other benefits.

Our solar energy systems have been eligible for Federal ITCs or U.S. Treasury grants, as well as depreciation benefits. We have relied on, and will continue to rely on, financing structures that monetize a substantial portion of those benefits and provide financing for our solar energy systems. With the lapse of the U.S. Treasury grant program, our reliance on these tax-advantaged financing

structure s has substantially increased . If, for any reason, we were unable to continue to monetize those benefits through these arrangements, we may be unable to provide and maintain solar energy systems for new customers on an economically viable basis.

The availability of this tax-advantaged financing depends upon many factors, including:

·	our ability to compete with other renewable energy companies for the limited number of potential fund investors, each of which has limited funds and limited appetite for the tax benefits associated with these financings;

·	the state of financial and credit markets;

·	changes in the legal or tax risks associated with these financings; and

·	non-renewal of these incentives or decreases in the associated benefits.

Under current law, the Federal ITC will be reduced from approximately 30% of the cost of the solar energy systems to approximately 10% for solar energy systems placed in service after December 31, 2016. In addition, U.S. Treasury grants are no longer available for new solar energy systems. Moreover, potential fund investors must remain satisfied that the structures we offer make the tax benefits associated with solar energy systems available to these investors, which depends both on the investors’ assessment of the tax law and the absence of any unfavorable interpretations of that law. Changes in existing law and interpretations by the Internal Revenue Service and the courts could reduce the willingness of fund investors to invest in funds associated with these solar energy system investments. We cannot assure you that this type of financing will be available to us. If, for any reason, we are unable to finance solar energy systems through tax-advantaged structures or if we are unable to realize or monetize depreciation benefits, we may no longer be able to provide solar energy systems to new customers on an economically viable basis. This would have a material adverse effect on our business, financial condition and results of operations.

We need to enter into additional substantial financing arrangements to facilitate our customers’ access to our solar energy systems, and if this financing is not available to us on acceptable terms, if and when needed, our ability to grow our business would be materially adversely impacted.

Our future success depends on our ability to raise capital from third-party fund investors to help finance the deployment of our residential and commercial solar energy systems. In particular, our strategy is to reduce the cost of capital through these arrangements to improve our margins, offset future reductions in government incentives and maintain the price competitiveness of our solar energy systems. If we are unable to establish new financing funds when needed, or on desirable terms, to enable our customers’ access to our solar energy systems with little or no upfront cost, we may be unable to finance installation of our customers’ systems, or our cost of capital could increase, either of which would have a material adverse effect on our business, financial condition and results of operations. To date, we have raised capital sufficient to finance installation of our customers’ solar energy systems from a number of financial institutions and other large companies. Our ability to draw on financing commitments is subject to the conditions of the agreements underlying our financing funds. If we do not satisfy such conditions due to events related to our business or a specific financing fund, developments in our industry (including related to the Department of Treasury Inspector General investigation) or otherwise, and as a result we are unable to draw on existing commitments, it could have a material adverse effect on our business, liquidity, financial condition and prospects. If any of the financial institutions or large companies that currently invest in our financing funds decide not to invest in future financing funds to finance our solar energy systems due to general market conditions, concerns about our business or prospects, the pendency of the Department of Treasury Inspector General investigation or any other reason, or materially change the terms under which they are willing to provide future financing, we will need to identify new financial institutions and companies to invest in our financing funds and negotiate new financing terms.

In the past, challenges raising new funds have caused us to delay deployment of a substantial number of solar energy systems for which we had already signed leases or power purchase agreements with customers. For example, in late 2008 and early 2009, as a result of the state of the capital markets, our ability to finance the installation of solar energy systems was limited and resulted in a significant backlog of signed sales orders for solar energy systems. Our future ability to obtain additional financing depends on the continued confidence of banks and other financing sources in our business model and the renewable energy industry as a whole. It could also be impacted by the liquidity needs of such financing sources. In addition, attracting future financing could be more difficult or costly to secure if the quality of our customer contracts, as perceived by our fund investors, were to decrease as a result of an increase in customer default rates, lower credit rating requirements for new customers or other factors. Solar energy has yet to achieve broad market acceptance and depends on continued support in the form of performance-based incentives, rebates, tax credits and other incentives from federal, state, local and foreign governments. If this support diminishes, our ability to obtain external financing, on acceptable terms or otherwise could be materially adversely affected. In addition, we face competition for these third-party investor funds. If we are unable to continue to offer a competitive investment profile, we may lose access to these funds or they may only be available on less favorable terms than are available to our competitors. Our current financing sources may be inadequate to support the anticipated growth in our business plans. Our inability to secure financing could lead to cancellations and could impair our ability to accept new projects and customers. In addition, our borrowing costs could increase, which would have a material adverse effect on our business, financial condition and results of operations.

A material drop in the retail price of utility-generated electricity or electricity from other sources would harm our business, financial condition and results of operations.

We believe that a customer’s decision to buy renewable energy from us is primarily driven by their desire to pay less for electricity. The customer’s decision may also be affected by the cost of other renewable energy sources. Decreases in the retail prices of electricity from the utilities or other renewable energy sources would harm our ability to offer competitive pricing and could harm our business. The price of electricity from utilities could decrease as a result of:

·	the construction of a significant number of new power generation plants, including nuclear, coal, natural gas or renewable energy technologies;

·	the construction of additional electric transmission and distribution lines;

·	a reduction in the price of natural gas, including as a result of new drilling techniques or a relaxation of associated regulatory standards;

·	the development of energy conservation technologies and public initiatives to reduce electricity consumption; and

·	the development of new renewable energy technologies that provide less expensive energy.

A reduction in utility electricity prices would make the purchase of our solar energy systems or the purchase of energy under our lease and power purchase agreements less economically attractive. In addition, a shift in the timing of peak rates for utility-generated electricity to a time of day when solar energy generation is less efficient could make our solar energy system offerings less competitive and reduce demand for our products and services. If the retail price of energy available from utilities were to decrease for any reason, we would be at a competitive disadvantage. As a result, we may be unable to attract new customers and our growth would be limited.

A material drop in the retail price of utility-generated electricity would particularly adversely impact our ability to attract commercial customers.

Commercial customers comprise a significant and growing portion of our business, and the commercial market for energy is particularly sensitive to price changes. Typically, commercial customers pay less for energy from utilities than residential customers. Because the price we are able to charge commercial customers is only slightly lower than their current retail rate, any decline in the retail rate of energy for commercial entities could have a significant impact on our ability to attract commercial customers. We may be unable to offer solar energy systems in commercial markets that produce electricity at rates that are competitive with the unsubsidized price of retail electricity. If this were to occur, our business would be harmed because we would be at a competitive disadvantage compared to other energy providers and may be unable to attract new commercial customers.

The terms of our agreement with the Research Foundation for the State University of New York pertaining to the construction of the Buffalo Riverbend Manufacturing Facility, among other things, require us to comply with a number of covenants during the term of the agreement. Any failure to comply with these covenants could obligate us to pay significant amounts to the Foundation and result in termination of the agreement.

In September 2014, Silevo entered into an amended and restated research and development alliance agreement, referred to as the Riverbend Agreement, with the Research Foundation for the State University of New York, referred to as the Foundation, for the construction of an approximately 1 million square foot manufacturing facility capable of producing 1-gigawatt of solar panels annually on an approximately 88.24 acre site located in Buffalo, New York, referred to as the Manufacturing Facility.

Under the terms of the Riverbend Agreement, the Foundation will construct the Manufacturing Facility and install certain utilities and other improvements, with participation by us as to the design and construction of the Manufacturing Facility, and acquire certain manufacturing equipment designated by us to be used in the Manufacturing Facility. The Foundation will cover construction costs related to the Manufacturing Facility and manufacturing equipment, in each case up to a maximum funding allocation from the State of New York, and we will be responsible for any construction and equipment costs in excess of such amounts. The Foundation will own the Manufacturing Facility and manufacturing equipment. Following completion of the Manufacturing Facility, we will lease the Manufacturing Facility from the Foundation for an initial period of 10 years for $1 per year plus utilities, and the Foundation will grant us the right to use the manufacturing equipment during the initial lease term at no charge. Currently, we estimate that we will incur capital expenses of up to $150 million in connection with the construction and commissioning of the Manufacturing Facility and the initial manufacturing equipment. We cannot assure you that these estimated capital expenses related to the construction and commissioning of the Manufacturing Facility and the initial manufacturing equipment will not exceed this estimated amount.

In addition to the other obligations under the Riverbend Agreement, we must (i) use our best commercially reasonable efforts to commission the manufacturing equipment within three months of Manufacturing Facility completion and reach full production output

within three months thereafter, (ii) employ 1,460 high-tech jobs for the manufacturing operation at the Manufacturing Facility for five years after Manufacturing Facility completion, (iii) employ at least 2,000 other personnel in the State of New Yo rk to support downstream solar panel sales and installation for five years after Manufacturing Facility completion, (iv) work with the Foundation to attract 1,440 additional support contractor and supplier jobs in the State of New York following full produ ction, (v) spend or incur approximately $5 billion in combined capital, operational expenses and other costs in the State of New York during the 10 year period following full production, (vi) make reasonable efforts to provide first consideration to New Yo rk-based suppliers, (vii) invest and spend in manufacturing operations at a level that ensures competitive product costs for at least five years from full production, and (viii) negotiate in good faith with the Foundation on an exclusive “first opportunity basis” for 120 days before entering into any agreement for additional solar panel manufacturing capacity that Silevo may wish to develop during the term of the agreement. If we are not able to hire the specified number of employees or identify and qualify local vendors and suppliers, we would face the risk of not only failing to meet the performance criteria under the Riverbend Agreement but also not being capable of running the operations related to the Manufacturing Facility. If we fail in any year over the course of the ten-year term to meet these specified investment and job creation obligations, as described above, we would be obligated to pay a “program payment” of $41.2 million to the Foundation in any such year. In addition, we are subject to other events of defaults, including breach of these program payments and certain insolvency events, that would lead to the acceleration of all of the then unpaid program payments by us to the Foundation. Our failure to meet our contractual obligations under the Riverbend Agreement may result in our obligation to pay significant amounts to the Foundation in scheduled program payments, other contractual damages and/or the termination of our lease of the Manufacturing Facility. Any inability on our part to raise the capital necessary to operate the Manufacturing Facility and meet the specified requirements of the Riverbend Agreement during the 10-year period following full production would also cause a material adverse effect upon our business operations and prospect s.

Our expectations as to the cost of building the Manufacturing Facility, acquiring manufacturing equipment and supporting our manufacturing operations may prove incorrect, which could subject us to significant expenses to achieve the desired benefits under the Riverbend Agreement.

In addition to the funding provided by the Foundation from the State of New York, we currently estimate that we will need to spend up to $150 million in connection with the construction and commissioning of the Manufacturing Facility and the initial manufacturing equipment. In the event of any cost overruns in construction, commissioning, acquiring manufacturing equipment or operating the Manufacturing Facility, we may incur additional capital and operating expenses that would have a material adverse effect upon our business operations and prospects.

Our projections as to the time necessary to build the Manufacturing Facility and acquire the manufacturing equipment may prove incorrect and subject us to significant delay and additional expense.

We currently anticipate that the Manufacturing Facility will be completed and ready to commence operations in the first quarter of 2016. To date, we have agreed on five occasions to extend the time period that the Foundation is to enter into reasonably acceptable construction contracts. There are a number of risks which may delay the completion of the Manufacturing Facility and commencement of operations, including:

·	failure or delay in obtaining necessary permits, licenses or other governmental support or approvals;

·	the time necessary for the construction of related utility and infrastructure improvements;

·	unforeseen engineering problems;

·	the inability to identify and hire qualified construction and other workers on a timely basis or at all;

·	construction delays and contractor performance shortfalls;

·	work stoppages or labor disruptions, including efforts by our employees to enter into collective bargaining agreements;

·	availability of raw materials and components from suppliers and any delivery delays in such materials or components;

·	delays resulting from environmental conditions, and any design changes or additions necessary to remediate prior environmental hazards at the site; and

·	adverse weather conditions, such as an extreme winter, and natural disasters.

Any delay in the completion of the Manufacturing Facility and commencement of our operations will result in us incurring additional expenses and could negatively affect our operating results, financial condition and prospects.

We may not be abl e to achieve anticipated production yields, efficiencies and quality, which would harm our production volume and increase our costs.

The Manufacturing Facility is expected to be the largest of its kind in the Western Hemisphere. Successfully achieving volume manufacturing of solar cells at our projected yield, efficiency and quality levels will be difficult, and we have little experience in manufacturing at these high volumes. As we continue to integrate the Silevo team, expand our manufacturing capacity and qualify additional suppliers to support our projected production volume, we may initially experience lower yields than anticipated. Any deviations in our manufacturing processes may result in significant decreases in production yield, efficiency and quality, and in some cases, may cause production to be suspended or yield no output. If we cannot achieve planned yields over time, our production costs could increase and we may be unable to produce a sufficient amount of our solar panels to meet our installation needs.

In addition, Silevo’s Triex technology is novel and involves proprietary and complex manufacturing techniques, which may result in undetected errors or defects in the solar cells produced. Any defects in our solar panels could cause us to incur significant warranty, non-warranty and re-engineering costs, divert the attention of our engineering personnel, result in indemnification liability to our fund investors and significantly affect our customer relations and business reputation.

If we are unable to achieve our cost projections or otherwise control the costs associated with operating our manufacturing business, our financial condition and operating results will suffer.

As a result of initial production levels that under-utilize the Manufacturing Facility as we ramp up production, we anticipate that our initial production costs (on a per watt basis) will be relatively high. As we work to achieve full utilization of the Manufacturing Facility, we anticipate that the volume of production will reduce our production costs (on a per watt basis). There is no guarantee that we will be able to achieve planned cost targets, some of which will be beyond our control. For example, the costs of our raw materials and components, such as polysilicon and polysilicon wafers, could increase due to shortages as global demand for these products increases. Any failure to achieve our per watt cost projections would cause our financial condition and operating results to suffer. In addition, the pricing of our solar energy systems may become less competitive if our competitors are able to reduce their manufacturing and installation costs faster than we are able to.

Competition in the solar industry is intense, and future success and innovation will require additional research and development expenses.

The Manufacturing Facility is designed to be a high-technology volume-manufacturing facility. In constructing the Manufacturing Facility, including local utility infrastructure upgrades and procurement of manufacturing equipment, the State of New York is making a significant investment in the Buffalo-area economy. However, the solar panel manufacturing market is characterized by continually changing technology that requires improved features, such as increased efficiency, higher power output and enhanced aesthetics. In the time it takes us to achieve volume production of Silevo’s Triex technology, it is possible that additional innovations in solar technology could result in our technology and the Manufacturing Facility becoming less competitive or obsolete, which could harm our costs and adversely affect our business operations. This risk requires us to continuously focus on research and development, and will require significant on-going research and development expenses. If we cannot continually improve the efficiency and power output of our solar panels and reduce the cost of production, we could become less competitive in the market and our financial condition and operating results could be adversely affected.

Rising interest rates could adversely impact our business.

Changes in interest rates could have an adverse impact on our business by increasing our cost of capital. For example:

·	rising interest rates would increase our cost of capital; and

·	rising interest rates may negatively impact our ability to secure financing on favorable terms to facilitate our customers’ purchase of our solar energy systems or energy generated by our solar energy systems.

The majority of our cash flows to date have been from solar energy systems under lease and power purchase agreements that have been monetized under various financing fund structures. One of the components of this monetization is the present value of the payment streams from our customers who enter into these leases and power purchase agreements. If the rate of return required by the fund investor rises as a result of a rise in interest rates, it will reduce the present value of the customer payment stream and consequently reduce the total value that we are able to derive from monetizing the payment stream. Interest rates are at historically low levels, partially as a result of intervention by the U.S. Federal Reserve. The U.S. Federal Reserve has taken actions to taper its intervention, and should these actions continue, it is likely that interest rates will rise, which could cause our cost of capital to increase and impede our ability to secure financing. As a result, our business and financial condition could be harmed.

In addition, we evaluate our business with a long-term view based on cash flows relating to our customer agreements, third-party financing funds and other arrangements. To date, we have taken limited actions to mitigate the risk of rising future interest rates. In 2014, we initiated a strategy of purchasing limited long-term derivative securities to hedge the effect of future interest rate increases. We may continue to engage in such transactions and the cost and outcomes of such transactions are currently not known.

We intend to expand our international activities, which will subject us to a number of risks.

Our long-term strategic plans include international expansion and we intend to sell our solar energy products and services in international markets. Risks inherent to international operations include the following:

·	multiple, conflicting and changing laws and regulations, including energy regulations, export and import restrictions, tax laws and regulations, environmental regulations, labor laws and other government requirements, approvals, permits and licenses;

·	difficulties and costs in recruiting and retaining individuals skilled in international business operations;

·	changes in general economic and political conditions in the countries where we operate, including changes in government incentives relating to power generation and solar electricity, and availability of capital at competitive rates;

·	political and economic instability, including wars, acts of terrorism, political unrest, boycotts, curtailments of trade and other business restrictions;

·	the inability to work successfully with third parties with local expertise to co-develop international projects;

·	international business practices that may conflict with U.S. customs or legal requirements;

·	financial risks, such as longer sales and payment cycles and greater difficulty collecting accounts receivable;

·	fluctuations in currency exchange rates relative to the U.S. dollar; and

·	the inability to obtain, maintain or enforce intellectual property rights, including inability to apply for or register material trademarks in foreign countries.

Doing business in foreign markets requires us to be able to respond to rapid changes in market, legal, and political conditions in these countries. The success of our business will depend in part on our ability to succeed in differing legal, regulatory, economic, social and political environments. We may not be able to develop and implement policies and strategies that will be effective in each location where we do business.

Our manufacturing operations and our continued international expansion efforts may subject us to additional regulatory risks that may harm our operating results. For example, business practices in certain foreign countries, particularly those with developing economies, may be prohibited by laws and regulations applicable to us, such as the U.S. Foreign Corrupt Practices Act, or the FCPA. The FCPA generally prohibits companies and their intermediaries from making improper payments to non-U.S. government officials for the purpose of obtaining or retaining business. Other countries in which we operate have adopted similar anti-bribery and anti-corruption laws. Our operations have historically been conducted predominantly within the United States while our international expansion has largely resulted from acquired businesses. Any violation of anti-bribery and anti-corruption laws could subject us to criminal or civil penalties or other sanctions, which could have a material adverse effect on our business, financial condition, cash flows and reputation.

If we are unable to maintain effective internal controls over financial reporting and disclosure controls and procedures, or if material weaknesses are discovered in future periods, the accuracy and timeliness of our financial and operating reporting may be adversely affected, and confidence in our operations and disclosures may be lost.

In connection with the audit of our consolidated financial statements for the year ended December 31, 2013, we identified four material weaknesses in our internal control over financial reporting relating to (i) the costing of our solar system installations, (ii) accounting for and classification of redeemable noncontrolling interests, (iii) segregation of incompatible duties at our lease administrator and our controls over the data received from our administrator, and (iv) certain areas of our financial statement close process. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. These material weaknesses resulted from separate control deficiencies, as well as our misinterpretation of certain accounting standards, and resulted in the restatement of our consolidated financial statements as of and for the years ended December 31, 2012, 2011, 2010 and 2009 and for certain interim periods in 2012 and 2013.

As a result of significant efforts by us and our Audit Committee, we have successfully remediated these material weaknesses and improved our internal control over financial reporting.

In connection with this quarterly report on Form 10-Q, our management has performed an evaluation of our internal control over financial reporting as of June 30 , 2015 pursuant to Section 404 of the Sarbanes-Oxley Act, and has concluded that our internal co ntrol over financial reporting and our disclosure controls and procedures were effective as of June 30 , 2015 .

If we are not able to maintain effective internal control over financial reporting and disclosure controls and procedures, or if additional material weaknesses are discovered in future periods, a risk that is significantly increased in light of the complexity of our business and investment funds, we may be unable to accurately and timely report our financial position, results of operations, cash flows or key operating metrics, which could result in additional late filings of our annual and quarterly reports under the Exchange Act, additional restatements of our consolidated financial statements or other corrective disclosures, a decline in our stock price, suspension or delisting of our common stock by The NASDAQ Stock Market, an inability to access the capital and commercial lending markets, defaults under our revolving credit facility and other agreements, or other material adverse effects on our business, reputation, results of operations, financial condition or liquidity.

In our lease pass-through financing funds, there is a one-time reset of the lease payments, and we may be obligated, in connection with the resetting of the lease payments at true up, to refund lease prepayments or to contribute additional assets to the extent the system sizes, costs and timing are not consistent with the initial lease payment model.

In our lease pass-through financing funds, the models used to calculate the lease prepayments will be updated for each fund at a fixed date occurring after placement in service of all solar energy systems in a given fund or on an agreed upon date (typically within the first year of the applicable lease term) to reflect certain specified conditions as they exist at such date, including the ultimate system size of the equipment that was leased, how much it cost and when it went into service. As a result of such a true up, the lease payments are resized and we may be obligated to refund the investor’s lease prepayments or to contribute additional assets to the fund. Any significant refunds or capital contributions that we may be required to make could adversely affect our financial condition.

We are not currently regulated as a utility under applicable law, but we may be subject to regulation as a utility in the future.

Federal law and most state laws do not currently regulate us as a utility. As a result, we are not subject to the various federal and state standards, restrictions and regulatory requirements applicable to U.S. utilities. In the United States, we obtain federal and state regulatory exemptions by establishing “Qualifying Facility” status with the Federal Energy Regulatory Commission for all of our qualifying solar energy projects. In Canada, we also are generally subject to the regulations of the relevant energy regulatory agencies applicable to all producers of electricity under the relevant feed-in tariff regulations (including the feed-in tariff rates), however we are not currently subject to regulation as a utility. Our business strategy includes the continued development of larger solar energy systems in the future for our commercial and government customers, which has the potential to impact our regulatory position. Any local, state, federal or foreign regulations could place significant restrictions on our ability to operate our business and execute our business plan by prohibiting or otherwise restricting our sale of electricity. If we were subject to the same state, federal or foreign regulatory authorities as utilities in the United States or if new regulatory bodies were established to oversee our business in the United States or in foreign markets, then our operating costs would materially increase.

We may not realize the anticipated benefits of past or future acquisitions, and integration of these acquisitions may disrupt our business and management and cause dilution to our stockholders.

On September 23, 2014, we acquired Silevo, LLC, a solar panel technology and manufacturing company. In 2013, we acquired Zep Solar, Common Assets, certain assets of Paramount Solar and completed other smaller acquisitions. In the future, we may acquire additional companies, project pipelines, products or technologies, including additional photovoltaics companies, or enter into joint ventures or other strategic initiatives. Our ability as an organization to integrate acquisitions is unproven. We may not realize the anticipated benefits of our acquisitions or any other future acquisition or the acquisition may be viewed negatively by customers, financial markets or investors.

Any acquisition has numerous risks, including the following:

·	difficulty in assimilating the operations and personnel of the acquired company;

·	difficulty in effectively integrating the acquired technologies or products with our current products and technologies;

·	difficulty in maintaining controls, procedures and policies during the transition and integration;

·	disruption of our ongoing business and distraction of our management and employees from other opportunities and challenges due to integration issues;

·	difficulty integrating the acquired company’s accounting, management information and other administrative systems;

·	inability to retain key technical and managerial personnel of the acquired business;

·	inability to retain key customers, vendors, and other business partners of the acquired business;

·	inability to achieve the financial and strategic goals for the acquired and combined businesses;

·	incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our operating results;

·	failure of due diligence processes to identify significant issues with product quality, legal and financial liabilities, among other things;

·	inability to assert that internal controls over financial reporting are effective; and

·	inability to obtain, or obtain in a timely manner, approvals from governmental authorities, which could delay or prevent such acquisitions.

In connection with our acquisitions of Silevo, Zep Solar and Paramount Solar, we issued approximately 8.8 million shares of our common stock. In connection with our acquisition of Silevo, we may issue additional common stock with an aggregate value of up to $150 million, subject to adjustments, upon the timely achievement of all earnout related milestones. In addition, we typically offer additional equity compensation to continuing employees of these businesses. If we are unable to successfully integrate these businesses and technologies or are unable to otherwise achieve the anticipated benefits of these acquisitions, the related issuances of our securities may be highly dilutive to our existing stockholders.

A failure to hire and retain a sufficient number of employees in key functions would constrain our growth and our ability to timely complete our customers’ projects.

To support our growth, we need to hire, train, deploy, manage and retain a substantial number of skilled employees. In particular, we need to continue to expand and optimize our sales infrastructure to grow our customer base and our business, and we plan to expand our direct sales force. Identifying, recruiting and training qualified personnel requires significant time, expense and attention. It can take several months before a new salesperson is fully trained and productive. If we are unable to hire, develop and retain talented sales personnel or if new direct sales personnel are unable to achieve desired productivity levels in a reasonable period of time, we may not be able to realize the expected benefits of this investment or grow our business.

To complete current and future customer projects and to continue to grow our customer base, we need to hire a large number of installers in the relevant markets. Competition for qualified personnel in our industry is increasing, particularly for skilled installers and other personnel involved in the installation of solar energy systems. We also compete with the homebuilding and construction industries for skilled labor. As these industries seek to hire additional workers, our cost of labor may increase. The unionization of our labor force could also increase our labor costs. Shortages of skilled labor could significantly delay a project or otherwise increase our costs. Because our profit on a particular installation is based in part on assumptions as to the cost of such project, cost overruns, delays or other execution issues may cause us to not achieve our expected margins or cover our costs for that project. In addition, because we are headquartered in the San Francisco Bay Area, we compete for a limited pool of technical and engineering resources that requires us to pay wages that are competitive with relatively high regional standards for employees in these fields.

If we cannot meet our hiring, retention and efficiency goals, we may be unable to complete our customers’ projects on time, in an acceptable manner or at all. Any significant failures in this regard would materially impair our growth, reputation, business and financial results. If we are required to pay higher compensation than we anticipate, these greater expenses may also adversely impact our financial results and the growth of our business.

We have guaranteed a minimum return to be received by an investor in one of our financing funds and could be adversely affected if we are required to make any payments under this guarantee.

We have guaranteed payments to the investor in one of our financing funds to compensate for payments that the investor would be required to make to a certain third party as a result of the investor not achieving a specified minimum internal rate of return in this fund, assessed annually. The amounts of potential future payments under this guarantee depend on the amounts and timing of future distributions to the investor from the funds and the tax benefits that accrue to the investor from the fund’s activities. Because of uncertainties associated with estimating the timing and amounts of distributions to the investor, we cannot determine the potential maximum future payments that we could have to make under this guarantee. We may agree to similar terms in the future if market conditions require it. Any significant payments that we may be required to make under our guarantees could adversely affect our financial condition.

It is difficult to evaluate our business and prospects due to our limited operating history.

Since our formation in 2006, we have focused our efforts primarily on the sales, financing, engineering, installation and monitoring of solar energy systems for residential, commercial and government customers. We launched our pilot commercial and

residential energy storage products and services in late 2013, and revenue attributable to this line of business has not been material compared to revenue attrib utable to our solar energy systems. We may be unsuccessful in significantly broadening our customer base through installation of solar energy systems within our current markets or in new markets we may enter. Additionally, we cannot assure you that we will be successful in generating substantial revenue from our current energy-related products and services or from any additional products and services we may introduce in the future. Our limited operating history, combined with the rapidly evolving and compet itive nature of our industry, may not provide an adequate basis for you to evaluate our operating and financing results and business prospects. In addition, we only have limited insight into emerging trends that may adversely impact our business, prospects and operating results. As a result, our limited operating history may impair our ability to accurately forecast our future performance.

We have incurred losses and may be unable to achieve or sustain profitability in the future.

We have incurred net losses in the past, and we had an accumulated deficit of $302.2 million as of June 30, 2015. We may incur net losses from operations as we increase our spending to finance the expansion of our operations, expand our installation , engineering, administrative, sales and marketing staffs, and implement internal systems and infrastructure to support our growth. We do not know whether our revenue will grow rapidly enough to absorb these costs, and our limited operating history makes it difficult to assess the extent of these expenses or their impact on our operating results. Our ability to achieve profitability depends on a number of factors, including:

·	growing our customer base;

·	finding investors willing to invest in our financing funds;

·	maintaining and further lowering our cost of capital;

·	reducing the cost of components for our solar energy systems; and

·	reducing our operating costs by optimizing our design and installation processes and supply chain logistics.

Even if we do achieve profitability, we may be unable to sustain or increase our profitability in the future.

We face competition from both traditional energy companies and renewable energy companies.

The solar energy and renewable energy industries are both highly competitive and continually evolving as participants strive to distinguish themselves within their markets and compete with large utilities. We believe that our primary competitors are the traditional utilities that supply energy to our potential customers. We compete with these utilities primarily based on price, predictability of price and the ease by which customers can switch to electricity generated by our solar energy systems. If we cannot offer compelling value to our customers based on these factors, then our business will not grow. Utilities generally have substantially greater financial, technical, operational and other resources than we do. As a result of their greater size, these competitors may be able to devote more resources to the research, development, promotion and sale of their products or respond more quickly to evolving industry standards and changes in market conditions than we can. Utilities could also offer other value-added products and services that could help them compete with us even if the cost of electricity they offer is higher than ours. In addition, a majority of utilities’ sources of electricity is non-solar, which may allow utilities to sell electricity more cheaply than electricity generated by our solar energy systems.

We also compete with solar companies in the downstream value chain of solar energy. For example, we face competition from purely finance driven organizations which then subcontract out the installation of solar energy systems, from installation businesses that seek financing from external parties, from large construction companies and utilities and increasingly from sophisticated electrical and roofing companies. Some of these competitors specialize in either the residential or commercial solar energy markets, and some may provide energy at lower costs than we do. Many of our competitors also have significant brand name recognition and have extensive knowledge of our target markets. Competitors have increasingly begun vertically integrating their operations to offer comprehensive products and services offerings similar to ours, and, recently, we have seen increased consolidation of competitors in our primary markets. For us to remain competitive, we must distinguish ourselves from our competitors by offering an integrated approach that successfully competes with each level of products and services offered by our competitors at various points in the value chain. As consolidation in our markets increases and more of our competitors develop an integrated approach similar to ours, our marketplace differentiation may suffer.

We also face competition in the energy-related products and services markets and we expect to face competition in additional markets as we introduce new products and services. As the solar industry grows and evolves, we will also face new competitors who are not currently in the market. Our failure to adapt to changing market conditions and to compete successfully with existing and new competitors could limit our growth and could have a material adverse effect on our business and prospects.

Projects for our significant commercial and government customers involve concentrated project risks that may cause significant changes in our financial results.

During any given financial reporting period, we typically have ongoing significant projects for commercial and governmental customers that represent a significant portion of our potential financial results for such period. For example, Walmart is a significant customer for which we have installed a substantial number of solar energy systems. These larger projects create concentrated operating and financial risks. The effect of recognizing revenue or other financial measures on the sale of a larger project, or the failure to recognize revenue or other financial measures as anticipated in a given reporting period because a project is not yet completed under applicable accounting rules by period end, may materially impact our quarterly or annual financial results. In addition, if construction, warranty or operational issues arise on a larger project, or if the timing of such projects unexpectedly shifts for other reasons, such issues could have a material impact on our financial results. If we are unable to successfully manage these significant projects in multiple markets, including our related internal processes and external construction management, or if we are unable to continue to attract such significant customers and projects in the future, our financial results could be harmed.

We depend on a limited number of suppliers of solar panels and other system components to adequately meet anticipated demand for our solar energy systems. Any shortage, delay or component price change from these suppliers could result in sales and installation delays, cancellations and loss of our ability to effectively compete.

We purchase solar panels, inverters and other system components from a limited number of suppliers, which makes us susceptible to quality issues, shortages and price changes. If we fail to develop, maintain and expand our relationships with existing or new suppliers, we may be unable to adequately meet anticipated demand for our solar energy systems or we may only be able to offer our systems at higher costs or after delays. If one or more of the suppliers that we rely upon to meet anticipated demand ceases or reduces production, we may be unable to satisfy this demand due to an inability to quickly identify alternate suppliers or to qualify alternative products on commercially reasonable terms. In particular, there are a limited number of inverter suppliers. Once we design a system for use with a particular inverter, if that type of inverter is not readily available at an anticipated price, we may incur additional delay and expense to redesign the system.

In addition, production of solar panels involves the use of numerous raw materials and components. Several of these have experienced periods of limited availability, particularly polysilicon, as well as indium, cadmium telluride, aluminum and copper. The manufacturing infrastructure for some of these raw materials and components has a long lead time, requires significant capital investment and relies on the continued availability of key commodity materials, potentially resulting in an inability to meet demand for these components. The prices for these raw materials and components fluctuate depending on global market conditions and demand and we may experience rapid increases in costs or sustained periods of limited supplies.

In addition to purchasing from New York-based suppliers, we anticipate that we will need to purchase supplies globally in order to meet the anticipated production output of the Manufacturing Facility. Despite our efforts to obtain raw materials and components from multiple sources whenever possible, many of our suppliers may be single-source suppliers of certain components. If we are not able to maintain long-term supply agreements or identify and qualify multiple sources for raw materials and components, our access to supplies at satisfactory prices, volumes and quality levels may be harmed. We may also experience delivery delays of raw materials and components from suppliers in various global locations. In addition, we may be unable to establish alternate supply relationships or obtain or engineer replacement components in the short term, or at all, at favorable prices or costs. Qualifying alternate suppliers or developing our own replacements for certain components may be time-consuming and costly and may force us to make modifications to our product designs.

Any decline in the exchange rate of the U.S. dollar compared to the functional currency of our component suppliers could increase our component prices. In addition, the state of the financial markets could limit our suppliers’ ability to raise capital if they are required to expand their production to meet our needs or satisfy their operating capital requirements. Changes in economic and business conditions, wars, governmental changes and other factors beyond our control or which we do not presently anticipate, could also affect our suppliers’ solvency and ability to deliver components to us on a timely basis. Any of these shortages, delays or price changes could limit our growth, cause cancellations or adversely affect our profitability and ability to effectively complete in the markets in which we operate.

Our expanded operations also subject us to risks associated with currency fluctuations.

Our need to purchase supplies globally in order to meet the anticipated production output of the Manufacturing Facility and our continued international expansion further subjects us to risks relating to currency fluctuations. Foreign currencies periodically experience rapid fluctuations in value against the U.S. dollar. A weakened U.S. dollar could increase the cost of procurement of raw materials from foreign jurisdictions and operating expenses in foreign locations, which could have a material adverse effect on our business and financial results.

Our operating results may fluctuate from quarter to quarter, which could make our future performance difficult to predict and could cause our operating results for a particular period to fall below expectations, resulting in a severe decline in the price of our common stock.

Our quarterly operating results are difficult to predict and may fluctuate significantly in the future. We have experienced seasonal and quarterly fluctuations in the past. However, given that we are an early-stage public company operating in a rapidly growing industry, those fluctuations may be masked by our recent growth rates and thus may not be readily apparent from our historical operating results. As such, our past quarterly operating results may not be good indicators of future performance.

In addition to the other risks described in this “Risk Factors” section, the following factors could cause our operating results to fluctuate:

·	expiration or initiation of any rebates or incentives;

·	significant fluctuations in customer demand for our products and services;

·	our ability to complete installations in a timely manner due to market conditions resulting in inconsistently available financing;

·	our ability to continue to expand our operations, and the amount and timing of expenditures related to this expansion;

·	actual or anticipated changes in our growth rate relative to our competitors;

·	announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments;

·	changes in our pricing policies or terms or changes in those of our competitors, including utilities; and

·	actual or anticipated developments in our competitors’ businesses or the competitive landscape.

For these or other reasons, the results of any prior quarterly or annual periods should not be relied upon as indications of our future performance. In addition, our actual revenue, key operating metrics and other operating results in future quarters may fall short of the expectations of investors and financial analysts, which could have a severe adverse effect on the trading price of our common stock.

We act as the licensed general contractor for our customers and are subject to risks associated with construction, cost overruns, delays, regulatory compliance and other contingencies, any of which could have a material adverse effect on our business and results of operations.

We are a licensed contractor or use licensed subcontractors in every community we service, and we are responsible for every customer installation. For our residential projects, we are the general contractor, construction manager and installer. For our commercial projects, we are the general contractor and construction manager, and we typically rely on licensed subcontractors to install these commercial systems. We may be liable to customers for any damage we cause to their home or facility and belongings or property during the installation of our systems. For example, we frequently penetrate our customers’ roofs during the installation process and may incur liability for the failure to adequately weatherproof such penetrations following the completion of construction. In addition, shortages of skilled subcontractor labor for our commercial projects could significantly delay a project or otherwise increase our costs. Because our profit on a particular installation is based in part on assumptions as to the cost of such project, cost overruns, delays or other execution issues may cause us to not achieve our expected margins or not cover our costs for that project.

In addition, the installation of solar energy systems and energy-storage systems requiring building modifications are subject to oversight and regulation in accordance with national, state and local laws and ordinances relating to building codes, safety, utility interconnection and metering, environmental protection and related matters. It is difficult and costly to track the requirements of every individual authority having jurisdiction over our installations and to design solar energy systems to comply with these varying standards. Any new government regulations or utility policies pertaining to our systems may result in significant additional expenses to us and our customers and, as a result, could cause a significant reduction in demand for our systems.

Compliance with occupational safety and health requirements and best practices can be costly, and noncompliance with such requirements may result in potentially significant monetary penalties, operational delays and adverse publicity.

The installation of solar energy systems requires our employees to work at heights with complicated and potentially dangerous electrical systems. The evaluation and installation of our energy-related products requires our employees to work in locations that may contain potentially dangerous levels of asbestos, lead or mold. We also maintain a fleet of over 3,000 vehicles that our employees use in the course of their work. There is substantial risk of serious injury or death if proper safety procedures are not followed. Our operations are subject to regulation under the U.S. Occupational Safety and Health Act, or OSHA, and equivalent state laws. Changes

to OSHA requirements, or stricter interpretation or enforcement of existing laws or regulations, could result in increased costs. If we fail to comply with applicable OSHA regulations, even if no work-related serious injury or death occurs, we may be subject to civil or criminal enforcement and be required to pay substantial penalties, incur significant capital expenditures or suspend or limit operations. In the past, we have had workpl ace accidents and received citations from OSHA regulators for alleged safety violations, resulting in fines and operational delays for certain projects. Any such accidents, citations, violations, injuries or failure to comply with industry best practices m ay subject us to adverse publicity, damage our reputation and competitive position and adversely affect our business.

Problems with product quality or performance may cause us to incur warranty expenses and performance guarantee expenses, may lower the residual value of our solar energy systems and may damage our market reputation and adversely affect our financial performance and valuation.

Our solar energy system warranties are lengthy. Customers who buy energy from us under leases or power purchase agreements are covered by warranties equal to the length of the term of these agreements—typically 20 years for leases and power purchase agreements and 30 years for MyPower loan agreements. Depending on the state where they live, customers who purchase our solar energy systems for cash are covered by a warranty up to 10 years in duration. We also make extended warranties available at an additional cost to customers who purchase our solar energy systems for cash. In addition, we provide a pass-through of the inverter and panel manufacturers’ warranties to our customers, which generally range from 5 to 25 years. One of these third-party manufacturers could cease operations and no longer honor these warranties, leaving us to fulfill these potential obligations to our customers. For example, Evergreen Solar, Inc., one of our former solar panel suppliers, filed for bankruptcy in August 2011. Further, we provide a performance guarantee with our leased solar energy systems that compensates a customer on an annual basis if their system does not meet the electricity production guarantees set forth in their lease.

Because of the limited operating history of our solar energy systems, we have been required to make assumptions and apply judgments regarding a number of factors, including our anticipated rate of warranty claims and the durability, performance and reliability of our solar energy systems. We have made these assumptions based on the historic performance of similar systems or on accelerated life cycle testing. Our assumptions could prove to be materially different from the actual performance of our systems, causing us to incur substantial expense to repair or replace defective solar energy systems in the future or to compensate customers for systems that do not meet their production guarantees. Product failures or operational deficiencies would also reduce our revenue from power purchase agreements because they are dependent on system production. Any widespread product failures or operating deficiencies may damage our market reputation and adversely impact our financial results.

In addition, we amortize costs of our solar energy systems over 30 years, which typically exceeds the period of the component warranties and the corresponding payment streams from our operating lease arrangements with our customers. In addition, we typically bear the cost of removing the solar energy systems at the end of the lease term. Furthermore, it is difficult to predict how future environmental regulations may affect the costs associated with the removal, disposal and recycling of our solar energy systems. Consequently, if the residual value of the systems is less than we expect at the end of the lease, after giving effect to any associated removal and redeployment costs, we may be required to accelerate all or some of the remaining unamortized expenses. This could materially impair our future operating results.

Compliance with environmental regulations can be expensive, and noncompliance with these regulations may result in adverse publicity and potentially significant monetary damages and fines.

We are required to comply with all foreign, federal, state and local laws and regulations regarding pollution control and protection of the environment. In addition, under some statutes and regulations, a government agency, or other parties, may seek recovery and response costs from operators of property where releases of hazardous substances have occurred or are ongoing, even if the operator was not responsible for such release and not otherwise at fault. While we and the State of New York have performed environmental diligence relating to the construction of the Manufacturing Facility, the site where the Manufacturing Facility is to be located is on the former site of Republic Steel and has been considered a “brownfield.”

The operation of Silevo’s manufacturing and research and development facilities, including in Hangzhou, China, Buffalo, New York and Fremont, California, involves the use of hazardous chemicals and materials which may subject us to liabilities for any releases or other failures to comply with applicable laws, regulations and policies. Any failure by us to maintain effective controls regarding the use of hazardous materials or to obtain and maintain all necessary permits could subject us to potentially significant fines and damages or interrupt our operations.

Product liability claims against us could result in adverse publicity and potentially significant monetary damages.

We would be exposed to product liability claims if one of our solar energy systems or other products injured someone. Because solar energy systems and many of our other current and anticipated products are electricity-producing devices, it is possible that consumers could be injured by our products for many reasons, including product malfunctions, defects or improper installation. We

rely on our general liability insurance to cover product liability claims and have not obtained separate product liability insurance. Any product liability claim we face could be expensiv e to defend and could divert management’s attention. Any product liability claims against us and any resulting adverse outcomes could result in potentially significant monetary damages that could require us to make significant payments, as well as subject us to adverse publicity, damage our reputation and competitive position or adversely affect sales of our systems and other products.

Damage to our brand and reputation would harm our business and results of operations.

We depend significantly on our reputation for high-quality products and services, best-in-class engineering, exceptional customer service and the brand name “SolarCity” to attract new customers and grow our business. Our brand and reputation could be significantly impaired if we fail to continue to deliver our solar energy systems and our other energy products and services within the planned timelines, if our products and services do not perform as anticipated or if we damage any of our customers’ properties or cancel projects. In addition, if we fail to deliver, or fail to continue to deliver, high-quality products and services to our customers through our long-term relationships, our customers will be less likely to purchase future products and services from us, which is a key strategy to achieve our desired growth. In addition to our other marketing efforts, we also depend greatly on referrals from existing customers for our growth. Therefore, our inability to meet or exceed our current customers’ expectations would harm our reputation and growth through referrals.

If we fail to manage our recent and future growth effectively, we may be unable to execute our business plan, maintain high levels of customer service or adequately address competitive challenges.

We have experienced significant growth in recent periods and we intend to continue to expand our business significantly within existing markets and in a number of new foreign and domestic locations in the future. This growth has placed, and any future growth may place, a significant strain on our management, operational and financial infrastructure. In particular, we will be required to expand, train and manage our growing employee base. Our management will also be required to maintain and expand our relationships with customers, suppliers and other third parties and attract new customers and suppliers, as well as to manage multiple geographic locations and regulatory requirements.

In addition, our current and planned operations, personnel, systems and procedures might be inadequate to support our future growth and may require us to make additional unanticipated investments in our infrastructure. Our success and ability to further scale our business will depend in part on our ability to manage these changes in a cost-effective and efficient manner. If we cannot manage our growth, we may be unable to take advantage of market opportunities, execute our business strategies or respond to competitive pressures. This could also result in declines in quality or customer satisfaction, increased costs, difficulties in introducing new products and services or other operational difficulties. Any failure to effectively manage growth could adversely impact our business and reputation.

We may not be successful in leveraging our customer base to grow our business through sales of other energy products and services.

To date, we have derived substantially all of our revenue and cash receipts from the sale of solar energy systems and the sale of energy under our long-term customer agreements. While we continue to develop and offer innovative energy-related products and services, customer demand for these offerings may be more limited than we anticipate. We may not be successful in completing development of these products as a result of research and development difficulties, technical issues, regulatory issues, availability of third-party products or other reasons. Even if we are able to offer these or other additional products and services, we may not successfully generate meaningful customer demand to make these offerings viable. Our growth will be limited if we fail to deliver these additional products and services, if the costs associated with bringing these additional products and services to market is greater than we anticipate, if customer demand for these offerings is smaller than we anticipate or if our strategies to implement new sales approaches and acquire new customers are not successful.

Our growth depends in part on the success of our strategic relationships with third parties.

A key component of our growth strategy is to develop or expand our strategic relationships with third parties. For example, in an effort to generate new customers, we are investing resources in establishing relationships with leaders in other industries, such as trusted retailers and commercial homebuilders. Identifying partners and negotiating relationships requires significant time and resources. Our ability to grow our business could be impaired if we are unsuccessful in establishing or maintaining our relationships with these third parties. Even if we are able to establish these relationships, we may not be able to execute our goal of leveraging these relationships to meaningfully expand our business and customer base. This would limit our growth potential and our opportunities to generate significant additional revenue or cash receipts.

The loss of one or more members of our senior management or key employees may adversely affect our ability to implement our strategy.

We depend on our experienced management team and the loss of one or more key executives could have a negative impact on our business. In particular, we are dependent on the services of our chief executive officer and co-founder, Lyndon R. Rive, and our chief technology officer and co-founder, Peter J. Rive. We also depend on our ability to retain and motivate key employees and attract qualified new employees. Our founders and our key employees are not bound by employment agreements for any specific term, and as a result, we may be unable to replace key members of our management team and key employees in the event we lose their services. Integrating new employees into our management team could prove disruptive to our operations, require substantial resources and management attention and ultimately prove unsuccessful. An inability to attract and retain sufficient managerial personnel who have critical industry experience and relationships could limit or delay our strategic efforts, which could have a material adverse effect on our business, financial condition and results of operations.

The production and installation of solar energy systems depends heavily on suitable meteorological conditions. If meteorological conditions are unexpectedly unfavorable, the electricity production from our solar energy systems may be substantially below our expectations and our ability to timely deploy new systems may be adversely impacted.

The energy produced and revenue and cash receipts generated by a solar energy system depend on suitable solar and weather conditions, both of which are beyond our control. Furthermore, components of our systems, such as panels and inverters, could be damaged by severe weather, such as hailstorms or tornadoes. In these circumstances, we generally would be obligated to bear the expense of repairing or replacing the damaged solar energy systems that we own. Sustained unfavorable weather also could unexpectedly delay our installation of solar energy systems, leading to increased expenses and decreased revenue and cash receipts in the relevant periods. Weather patterns could change, making it harder to predict the average annual amount of sunlight striking each location where we install. This could make our solar energy systems less economical overall or make individual systems less economical. Any of these events or conditions could harm our business, financial condition and results of operations.

Our business may be harmed if we fail to properly protect our intellectual property.

We believe that the success of our business depends in part on our proprietary technology, including our hardware, software, information, processes and know-how. We rely on many forms of intellectual property rights to secure our technology, including trade secrets and patents. We cannot be certain that we have adequately protected or will be able to adequately protect our technology, that our competitors will not be able to use our existing technology or develop similar technology independently, that any patents or other intellectual property rights held by us will be broad enough to protect our technology or that foreign intellectual property laws will adequately protect us. Moreover, our patents and other intellectual property rights may not provide us with a competitive advantage.

Despite our precautions, it may be possible for third parties to obtain and use our intellectual property without our consent. Reverse engineering, unauthorized use or other misappropriation of our proprietary technology could enable third parties to benefit from our technology without compensating us for doing so. In addition, our proprietary technology may not be adequately protected because:

·	our systems may be subject to intrusions, security breaches or targeted thefts of our trade secrets;

·	people may not be deterred from misappropriating our technology despite the existence of laws or contracts prohibiting it;

·	unauthorized use of our intellectual property may be difficult to detect and expensive and time-consuming to remedy, and any remedies obtained may be inadequate to restore protection of our intellectual property;

·	the laws of other countries in which we manufacture our solar products, such as Silevo’s joint venture manufacturing company with partners in China and other countries in the Asia/Pacific region, may offer little or no protection for our proprietary technology; and

·	reports we may be required to file in connection with any government-sponsored research contracts may disclose some of our sensitive confidential information because they are or will be generally available to the public.

Any such activities or any other inabilities to adequately protect our proprietary rights could harm our ability to compete, to generate revenue and to grow our business.

Claims of patent and other intellectual property infringement are complex and their outcomes are uncertain, and the costs associated with such claims may be high and could harm our business.

Our success in operating our business, including operation of the Manufacturing Facility, depends largely on our ability to use and develop our proprietary technologies and manufacturing know-how without infringing or misappropriating the intellectual

property rights of third parties, many of whom have robust patent portfolios, greater capital resources and decades of manufacturing experience. In addition, as we have gained greater visibility and market exposure as a public company, we face a higher risk of being the subject of intellectual property infringement claims. Any claim of infringement by a third party, even those without merit, could cause us to incu r substantial legal costs defending against the claim and could distract our management and technical personnel from our business. In particular, the validity and scope of claims relating to photovoltaic technology patents may be highly uncertain because t hey involve complex scientific, legal and factual considerations and analysis. Furthermore, we could be subject to a judgment or voluntarily enter into a settlement, either of which could require us to pay substantial damages. A judgment or settlement coul d also include an injunction, a court order or other agreement that could prevent us from operating the Manufacturing Facility and producing our products. In addition, we might elect or be required to seek a license for the use of third - party intellectual property, which may not be available on commercially reasonable terms or at all, or if available, the payments under such license may harm our operating results and financial condition. Alternatively, we may be required to develop non-infringing technology , redesign our products or alter our manufacturing techniques and processes, each of which could require significant research and development efforts and expenses and may ultimately not be successful. Any of these events could seriously harm our business, operating results and financial condition.

We are subject to legal proceedings and regulatory inquiries and we may be named in additional claims or legal proceedings or become involved in regulatory inquiries, all of which are costly, distracting to our core business and could result in an unfavorable outcome or a material adverse effect on our business, financial condition, results of operations or the trading price for our securities.

We are involved in claims, legal proceedings and receive inquiries from government and regulatory agencies (such as the pending Treasury and Department of Labor investigations) that arise from the normal business activities. In addition, from time to time, third parties may assert claims against us. We evaluate all claims, lawsuits and investigations with respect to their potential merits, our potential defenses and counter claims, settlement or litigation potential and the expected effect on us. In the event that we are involved in significant disputes or are the subject of a formal action by a regulatory agency, we could be exposed to costly and time-consuming legal proceedings that could result in any number of outcomes. Although outcomes of such actions vary, any claims, proceedings or regulatory actions initiated by or against us, whether successful or not, could result in expensive costs of defense, costly damage awards, injunctive relief, increased costs of business, fines or orders to change certain business practices, significant dedication of management time, diversion of significant operational resources or some other harm to our business. In any of these cases, our business, financial condition, results of operations or the trading price for our securities could be negatively impacted.

We make a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. In our opinion, resolution of all current matters is not expected to have a material adverse impact on our business, financial condition or results of operations. However, depending on the nature and timing of any such controversy, an unfavorable resolution of a matter could materially affect our future business, financial condition or results of operations, or all of the foregoing, in a particular quarter.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members and officers.

As a public company, we are subject to the reporting requirements of the Exchange Act, the listing requirements of The NASDAQ Stock Market and other applicable securities rules and regulations. Compliance with these rules and regulations subject us to legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results and maintain effective disclosure controls and procedures and internal control over financial reporting. To maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight are required. As a result, management’s attention may be diverted from other business concerns, which could harm our business and operating results. Although we have already hired additional employees to comply with these requirements, we may need to hire more employees in the future, which will increase our costs and expenses.

We typically bear the risk of loss and the cost of maintenance and repair on solar systems that are owned or leased by our fund investors.

We typically bear the risk of loss and are generally obligated to cover the cost of maintenance and repair on any solar systems that we sell or lease to our fund investors. At the time we sell or lease a solar system to a fund investor, we enter into a maintenance services agreement where we agree to operate and maintain the system for a fixed fee that is calculated to cover our future expected maintenance costs. If our solar systems require an above-average amount of repairs or if the cost of repairing systems were higher than our estimate, we would need to perform such repairs without additional compensation. If our solar systems, a majority of which are

located in California, are damaged in the event of a natural disaster beyond our control, losses could be excluded, such as earthquake damage, or exceed insurance policy limits, and we could incur unforeseen costs that could harm our business and financial condition. We may also incur significant costs for taking other actions in preparation for, or in reaction to, such events. We purchase Property and Business Interruption insurance with industry standard coverage and limits approved by an investor’s third-party insurance advisors to hedge against such risk, but such coverage may not cover our losses.

Any unauthorized disclosure or theft of personal customer information we gather, store and use could harm our reputation and subject us to claims or litigation.

We receive, store and use personal information of our customers, including names, addresses, e-mail addresses, credit information and other housing and energy use information. Unauthorized disclosure of such personal information could harm our business, whether through breach of our systems by an unauthorized party, employee theft or misuse, or otherwise. If we were subject to an inadvertent disclosure of such personal information or if a third party were to gain unauthorized access to customer personal information in our possession, our operations could be seriously disrupted and we could be subject to claims or litigation arising from damages suffered by our customers. In addition, we could incur significant costs in complying with the multitude of federal, state and local laws regarding the unauthorized disclosure of personal customer information. Finally, any perceived or actual unauthorized disclosure of such information could harm our reputation, substantially impair our ability to attract and retain customers and have an adverse impact on our business.

Servicing our debt requires a significant amount of cash and we may not have sufficient cash flow from our business to pay our substantial debt; other actions we are forced to take to satisfy our obligations under our indebtedness may not be successful.

Our total consolidated indebtedness was $1,932.0 million as of June 30, 2015. Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not continue to generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. In addition, our 2.75% Convertible Senior Notes due 2018 issued in November 2013 (the “2018 Notes”) and our 1.625% Convertible Senior Notes due 2019 issued in September and October 2014 (the “2019 Notes” and together with the 2018 Notes, the “Notes”), are convertible into shares of common stock, and we may engage in similar issuances of convertible securities in the future to fund our operating and expansion plans. Our ability to issue additional securities and to refinance our existing indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

We expect to incur substantially more debt or take other actions which would intensify the risks discussed above.

We and our subsidiaries expect to incur substantial additional debt in the future, subject to the restrictions contained in our debt instruments, some of which may be secured debt. We are not restricted under the terms of the indentures governing the Notes from incurring additional debt, securing existing or future debt, recapitalizing our debt or taking a number of other actions that are not limited by the terms of the indenture governing the Notes that could have the effect of diminishing our ability to make payments on the Notes when due. Our existing credit facilities restrict our ability to incur additional indebtedness, including secured indebtedness, but we may be able to obtain waivers of such restrictions or may not be subject to such restrictions under the terms of any subsequent indebtedness.

We may have trouble refinancing our credit facilities or obtaining new financing for our working capital, equipment financing and other needs in the future or complying with the terms of existing credit facilities. If credit facilities are not available to us on acceptable terms, if and when needed, or if we are unable to comply with their terms, our ability to continue to grow our business would be adversely impacted.

We have entered into several secured credit agreements, including a working capital facility under which we may currently borrow up to $360.0 million (with $333.5 million currently committed from several lenders and an additional $26.5 million subject to further conditions) that matures in December 2016. As of June 30, 2015, we had the ability to draw up to an additional $590.3 million under our credit facilities. The working capital facility requires us to comply with certain financial, reporting and other requirements. The timing of our commercial projects has on occasion adversely affected our ability to satisfy certain financial covenants under these or prior facilities. While our lenders have given us waivers of certain covenants we have not satisfied in the past, there is no assurance that the lenders will waive or forbear from exercising their remedies with respect to any future defaults that might occur. In addition, we have amended our revolving credit facility to engage in transactions such as the issuance of the 2019 Notes and issue Solar Bonds debt securities. While we believe that some of the financial and other covenants are generally more favorable to us following these changes, a breach of our covenants may still occur in the future.

Further, th ere is no assurance that we will be able to enter into new credit facilities on acceptable terms. If we are unable to satisfy financial covenants and other terms under existing or new facilities or obtain associated waivers or forbearance from our lenders or if we are unable to obtain refinancing or new financings for our working capital, equipment and other needs on acceptable terms if and when needed, our business would be adversely affected.

We may not have the ability to raise the funds necessary to repurchase the Notes, including upon a fundamental change, and one of our current credit facilities prohibits us from repurchasing the issued Notes upon a fundamental change.

Holders of the Notes will have the right to require us to repurchase their Notes upon the occurrence of a fundamental change at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any. However, at such time that we may be required to repurchase the Notes, we may not have sufficient available cash or be able to obtain sufficient financing to allow for repurchase. In addition, one of our existing credit facilities prohibits us from repurchasing the Notes upon a fundamental change. We may enter into agreements in the future that similarly restrict our ability to repurchase the Notes and other securities. Our failure to repurchase the Notes when required would constitute a default which could also result in defaults under other agreements governing our existing or future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Notes or make cash payments upon conversions thereof. Our ability to repurchase the Notes may also be limited by law or by regulatory authority.

Risks Related to the Ownership of Our Common Stock

Our stock price has been and may continue to be volatile, and the value of your investment could decline.

The trading price of our common stock has been volatile since our initial public offering. Since shares of our common stock were sold in our initial public offering in December 2012 at a price of $8.00 per share, the reported high and low sales prices of our common stock on The NASDAQ Stock Market has ranged from $9.20 to $88.35 per share, through July 29, 2015. The market price of our common stock may fluctuate widely in response to many risk factors listed in this section and others beyond our control, including:

·	changes in laws or regulations applicable to our industry, products or services, including the effects of tariffs and other anti-competitive actions;

·	additions or departures of key personnel;

·	actual or anticipated changes in expectations regarding our performance by investors or securities analysts;

·	price and volume fluctuations in the overall stock market;

·	volatility in the market price and trading volume of companies in our industry or companies that investors consider comparable;

·	share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

·	addition or loss of significant customers;

·	our ability to protect our intellectual property and other proprietary rights;

·	sales of our common stock by us or our stockholders, including as a result of recent offerings and acquisitions;

·	litigation involving us, our industry or both;

·	major catastrophic events; and

·	general economic and market conditions and trends.

Further, in recent years the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. In addition, the stock prices of many renewable energy companies have experienced wide fluctuations that have often been unrelated to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, government shutdowns, interest rate changes or international currency fluctuations, may cause the market price of our common stock to decline. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

We incur significant costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our operating results.

As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting and corporate governance requirements. These requirements include compliance with Section 404 and other provisions of the Sarbanes-Oxley Act, as well as rules implemented by the Securities and Exchange Commission, or SEC, and The NASDAQ Stock Market. If these requirements divert our management’s attention from other business concerns, they could have a material adverse effect on our business, prospects, financial condition and operating results. In addition, complying with these rules and regulations has substantially increased our legal and financial compliance expenses, has made some activities more time-consuming and costly and may in the future require us to reduce costs in other areas of our business or increase the prices of our products and services, which could negatively impact our business.

Our stock price could decline due to the large number of outstanding shares of our common stock eligible for future sale and issuance.

Sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could cause the market price of our common stock to decline. These sales could also make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate. Such sales may occur in connection with our acquisitions, such as our issuance of approximately 8.8 million shares in the aggregate for our acquisitions of Silevo, Zep Solar and certain assets of Paramount Solar. In connection with our acquisition of Silevo, we may issue additional common stock with an aggregate value of up to $150.0 million, subject to adjustments and as determined in connection with the merger agreement, upon the timely achievement of all earnout related milestones. In addition, holders of a substantial amount of our common stock are entitled to rights with respect to registration of these shares under the Securities Act pursuant to an investors’ rights agreement. If these holders of our common stock, by exercising their registration rights, sell a large number of shares, they could adversely affect the market price for our common stock. If we file a registration statement for the purposes of selling additional shares to raise capital and are required to include shares held by these holders pursuant to the exercise of their registration rights, our ability to raise capital may be impaired.

Insiders have substantial control over us, which could limit your ability to influence the outcome of key transactions, including a change of control.

As of June 30, 2015, our directors and executive officers and their affiliates, in the aggregate, owned approximately 37% of the outstanding shares of our common stock. As a result, these stockholders, if acting together, would be able to influence or control matters requiring approval by our stockholders, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions. They may have interests that differ from yours and may vote in a way with which you disagree and that may be adverse to your interests. This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of our company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might affect the market price of our common stock.

Provisions in our certificate of incorporation and bylaws and under Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our common stock.

Our certificate of incorporation and bylaws contain provisions that could depress the trading price of our common stock by discouraging, delaying or preventing a change of control of our company or changes in our management that the stockholders of our company may believe advantageous. These provisions include:

·	establishing a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;

·	authorizing “blank check” preferred stock that our board of directors could issue to increase the number of outstanding shares to discourage a takeover attempt;

·	limiting the ability of stockholders to call a special stockholder meeting;

·	limiting the ability of stockholders to act by written consent;

·	authorizing the board of directors to make, alter or repeal our bylaws; and

·	establishing advance notice requirements for nominations for elections to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they adversely change their recomm endations regarding our stock, our stock price and trading volume could decline.

The trading market for our common stock, to some extent, depends on the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. If any of the analysts who cover us adversely change their recommendation regarding our stock, or provide more favorable relative recommendations about our competitors, our stock price would likely decline. If any analyst who covers us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

We do not intend to pay dividends for the foreseeable future.

We have never declared or paid any dividends on our common stock. We intend to retain any earnings to finance the operation and expansion of our business and do not anticipate paying any cash dividends in the future. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases.

ITEM 6. EXHIBITS

The documents listed in the Exhibit Index of this quarterly report on Form 10-Q are incorporated by reference or are filed with this quarterly report on Form 10-Q, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K).

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: July 29, 2015

SOLARCITY CORPORATION

By:

/s/ LYNDON R. RIVE

Lyndon R. Rive

Chief Executive Officer

(Principal Executive Officer)

EXHIBIT INDEX

Exhibit Number		Exhibit Description
10.10k*		Sixth Amendment to the Amended and Restated Credit Agreement, dated as of June 24, 2015, by and among SolarCity Corporation, a Delaware corporation, the Lenders party thereto and Bank of America, N.A., as administrative agent.

10.16e		Fifth Amendment to Amended and Restated Agreement For Research & Development Alliance on Triex Module Technology, effective as of June 30, 2015, by and between The Research Foundation For The State University of New York, on behalf of the College of Nanoscale Science and Engineering of the State University of New York, and Silevo, LLC.

10.19*		Loan Agreement, dated as of May 4, 2015, by and among Megalodon Solar, LLC (an indirect wholly owned subsidiary of the Registrant), as borrower, the Registrant, as limited guarantor, Bank of America, N.A., as collateral agent and administrative agent, and the lenders party thereto.

10.19a*		Majority Group Agent Action No. 1, dated as of May 18, 2015, by and among Megalodon Solar, LLC (an indirect wholly owned subsidiary of the Registrant), as borrower, the Registrant, as limited guarantor, Bank of America, N.A., as collateral agent and administrative agent, and the lenders party thereto.

10.19b*		Required Group Agent Action No. 2, dated as of June 26, 2015, by and among Megalodon Solar, LLC (an indirect wholly owned subsidiary of the Registrant), as borrower, the Registrant, as limited guarantor, Bank of America, N.A., as collateral agent and administrative agent, and the lenders party thereto.

31.1		Certification of the Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.

32.1†		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

32.2†		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document.

101.SCH		XBRL Taxonomy Schema Linkbase Document.

101.CAL		XBRL Taxonomy Calculation Linkbase Document.

101.DEF		XBRL Taxonomy Definition Linkbase Document.

101.LAB		XBRL Taxonomy Labels Linkbase Document.

101.PRE		XBRL Taxonomy Presentation Linkbase Document.

*	Confidential treatment requested as to certain portions of this exhibit, which portions have been omitted and submitted separately to the Securities and Exchange Commission.

†

The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of SolarCity Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

Exhibit 10.10k

CONFIDENTIAL TREATMENT REQUESTED

Certain portions of this document have been omitted pursuant to a request for Confidential Treatment and, where applicable, have been marked with “[***]” to indicate where omissions have been made. The confidential material has been filed separately with the Securities and Exchange Commission.

SIXTH AMENDMENT TO

THE AMENDED AND RESTATED

CREDIT AGREEMENT

THIS SIXTH AMENDMENT TO THE AMENDED AND RESTATED CREDIT AGREEMENT (this “ Amendment ”), dated as of June 24, 2015 (the “ Amendment Effective Date ”), is by and among SOLARCITY CORPORATION , a Delaware corporation (the “ Borrower ”), the Lenders party hereto and BANK OF AMERICA, N.A. , as administrative agent (in such capacity, the “ Administrative Agent ”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement.

W I T N E S S E T H

WHEREAS , the Borrower, the Subsidiaries of the Borrower from time to time party thereto (the “ Guarantors ”), certain banks and financial institutions from time to time party thereto as lenders (the “ Lenders ”), the Administrative Agent, and Bank of America Merrill Lynch, as sole lead arranger and sole book manager, are parties to that certain Amended and Restated Credit Agreement dated as of November 1, 2013 (as amended, modified, extended, restated, replaced, or supplemented from time to time, the “ Credit Agreement ”);

WHEREAS , the Loan Parties have requested that the Required Lenders amend certain provisions of the Credit Agreement; and

WHEREAS , the Required Lenders are willing to make such amendments to the Credit Agreement, in accordance with and subject to the terms and conditions set forth herein.

NOW, THEREFORE , in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I.
AMENDMENTS TO CREDIT AGREEMENT

Section 1.01 Deleted Definitions . The definitions of “Short-Term Solar Bonds Credit Support” and “Unencumbered Excluded Subsidiary Assets” are hereby deleted from Section 1.01.

Section 1.02 Amendments to Section 1.01 . The following definitions in Section 1.01 are hereby amended and restated in their entirety to read as follows:

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

“ Borrowing Base Deficiency ” means, at any time of determination, the failure of the Borrowing Base to exceed the sum of (a) the Total Outstandings plus (b) the aggregate principal amount of issued and outstanding Short-Term Solar Bonds. Such determination shall be made based on the most recently delivered Borrowing Base Certificate and Total Outstandings as reflected in the Register.

“ Capital Expenditures ” means, with respect to any Person for any period, any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding (i) acquisitions of PV Systems made in the ordinary course of business, (ii) normal replacements and maintenance which are properly charged to current operations and (iii) expenditures in connection with and substantially contemporaneous with the consummation of Permitted Acquisitions or Acquisitions of Developer Projects).

“ Letter of Credit Sublimit ” means an amount equal to the lesser of (a) $60,000,000, and (b) the Facility. The Letter of Credit Sublimit is part of, and not in addition to, the Facility.

“ Revolving Loan ” has the meaning specified in Section 2.01(a) .

Section 1.03 Amendment to the Definition of “Cost of Acquisition” . Clause (d) of the definition of “Cost of Acquisition” as set forth in Section 1.01 of the Credit Agreement is hereby deleted in its entirety and replaced with the following:

(d) as of the date such Acquisition is consummated, a reasonable estimate of all additional purchase price amounts in the form of earn outs and other contingent obligations that are required to be recorded as a liability on the financial statements of the Borrower and its Subsidiaries as of such date in accordance with GAAP in connection with such Acquisition,

Section 1.04 Amendment to the Definition of “Eligible Project Back-Log” . Clauses (b) and (c) of the definition of “Eligible Project Back-Log” as set forth in Section 1.01 of the Credit Agreement is hereby deleted in their entirety and replaced with the following:

(b) residential Projects set forth in SolarWorks as being in the “permit phase” for more than [***] days after being included in Project Back-Log;

(c) commercial Projects set forth in SolarWorks as being in the “permit phase” for more than [***] days after being included in Project Back-Log;

Section 1.05 Amendment to the Definition of “Permitted Acquisition” . Clause (b) of the definition of “Permitted Acquisition” as set forth in Section 1.01 of the Credit Agreement is hereby deleted in its entirety and replaced with the following:

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

(b) the Loan Parties shall demonstrate to the reasonable satisfaction of the Administrative Agent that, after giving effect to the Acquisition on a Pro Forma Basis, the Loan Parties are in compliance with each of the financial covenants set forth in Section 7.11 as of the last day of the most recent measurement period for which financial statements have been delivered pursuant to Section 6.01 ;

Section 1.06 Amendment to Section 2.01(a)(i) . Sub-clause (i) of clause (a) of Section 2.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(i) the Total Outstandings shall not exceed the lesser of (x) the Facility and (y) the Borrowing Base minus the aggregate outstanding principal amount of Short-Term Solar Bonds,

Section 1.07 Amendment to Section 2.16(a), (b) and (e) . Clauses (a), (b) and (e) of Section 2.16 of the Credit Agreement are hereby amended and restated in their entirety to read as follows:

(a) Request for Increase . Provided there exists no Default, upon notice to the Administrative Agent (which shall promptly notify the Revolving Lenders), the Borrower may from time to time, request an increase in the Facility so long as the Facility (“ Incremental Facility ”), after taking into account all such requests, does not exceed $300,000,000; provided that (i) any such request for an Incremental Facility shall be in a minimum amount of $10,000,000 and in increments of $5,000,000 (or such lesser amount as is acceptable to the Administrative Agent) in excess thereof, and (ii) the Borrower may make a maximum of three (3) such requests. At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Revolving Lender is requested to respond.

(b) Lender Elections to Increase . Each Revolving Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Commitment and, if so, whether by an amount equal to, greater than, or less than its Applicable Revolving Percentage of such requested increase. Any Revolving Lender not responding within such time period shall be deemed to have declined to increase its Commitment.

(e) Conditions to Effectiveness of Increase . As a condition precedent to such increase, the Borrower shall deliver to the Administrative Agent a certificate of each Loan Party dated as of the Revolving Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (ii) in the case of the Borrower, certifying that, immediately before and after giving effect to the Incremental Facility, (A) the representations and warranties contained in Article V and the other Loan Documents are true

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

and correct, on and as of the Revolving Increase Effective Date, and except that for purposes of this Section 2.16, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01, and (B) no Default exists. The Borrower shall deliver or cause to be delivered any other customary documents, (including, without limitation, legal opinions) as reasonably requested by the Administrative Agent in connection with any Incremental Facility. The Borrower shall prepay any Revolving Loans outstanding on the Revolving Increase Effective Date (and pay any additional amounts required pursuant to Section 3.05) to the extent necessary to keep the outstanding Revolving Loans ratable with any revised Applicable Revolving Percentages arising from any nonratable increase in the Commitments under this Section.

Section 1.08 Amendment to Section 4.01(i) . Clause (i) of Section 4.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(i) Material Contracts . The Administrative Agent or its counsel shall have received true and complete copies, certified by an officer of the Borrower as true and complete, of all Material Contracts, together with all exhibits and schedules. [***].

Section 1.09 Deletion of Section 6.02(o) . Clause (o) of Section 6.02 of the Credit Agreement is hereby deleted in its entirety.

Section 1.10 Amendment to Section 6.14(d) . Clause (d) of Section 6.14 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(d) Account Control Agreements . Each of the Loan Parties shall not open, maintain or otherwise have any deposit or other accounts (including securities accounts) at any bank or other financial institution, or any other account where money or securities are or may be deposited or maintained with any Person, other than (i) deposit accounts that are maintained at all times with depositary institutions as to which the Administrative Agent shall have received a Qualifying Control Agreement, (ii) securities accounts that are maintained at all times with financial institutions as to which the Administrative Agent shall have received a Qualifying Control Agreement, (iii) deposit accounts established solely as payroll and other zero balance accounts and such accounts are held at Bank of America, (iv) deposit accounts established solely for receipt of proceeds from the sale of Solar Bonds or for the administration or payment of amounts due with respect to a Solar Bonds Issuance; provided, that, any loan proceeds of a Solar Bonds Issuance received by the Borrower shall be promptly directed to a deposit account or other account that complies with clauses (i) through (iii) above as set forth in the Payment Direction Letter, (iv) FBO accounts (“for the benefit of” accounts) established by the Borrower

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

exclusively for the benefit of prospective participants in a Solar Bonds Issuance, the sole purpose of which is to hold such prospective participants’ funds in connection with their participation in such Solar Bonds Issuance, (v) deposit accounts established solely for the benefit of a Tax Equity Investor to receive customer payments on behalf of such Tax Equity Investor in connection with Borrower’s operation and maintenance of PV Systems leased or owned by such Tax Equity Investor, and (vi) other deposit accounts, so long as at any time the balance in any such account does not exceed $10,000 and the aggregate balance in all such other deposit acc ounts does not exceed $100,000.

Section 1.11 Amendment to Section 7.02(q) . Section 7.02(q) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(q) Solar Bonds Financing so long as the aggregate outstanding principal amount of (x) Short-Term Solar Bonds Issuances at no time exceed $[***] and (y) all Solar Bonds issued pursuant to all Solar Bonds Issuances (including Short-Term Solar Bonds Issuances) at no time exceeds $[***]; provided that at no time shall bondholders that are not Related Parties of Borrower hold more than $[***] of the aggregate principal amount of issued and outstanding Short-Term Solar Bonds;

Section 1.12 Amendment to Section 7.02 . Clause (s) of Section 7.02 of the Credit Agreement is hereby deleted and replaced with clauses (s) and (t) to read as follows:

(s) Indebtedness incurred in connection with (i) Permitted Acquisitions or (ii) Acquisitions of Developer Projects; and

(t) other unsecured Indebtedness not contemplated by the above provisions in an aggregate principal amount not to exceed $10,000,000 at any time outstanding.

Section 1.13 Amendment to Section 7.04(c) . Clause (c) of Section 7.04 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(c) in connection with any Permitted Acquisition (other than as set forth in clause (f) below) or any Acquisitions of Developer Projects, any Subsidiary of the Borrower may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it; provided that (i) the Person surviving such merger shall be a wholly-owned Subsidiary of the Borrower and (ii) in the case of any such merger to which any Loan Party (other than the Borrower) is a party, such Loan Party is the surviving Person;

Section 1.14 Amendment to Section 7.04(h) . Clause (ii) of Section 7.04(h) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

(ii) Administrative Agent shall have received the Sunflower Acquisition Certificate prior to the Silevo Acquisition Date,

Section 1.15 Amendment to Section 7.05(f) . Clause (f) of Section 7.05 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(f) other Dispositions so long as (i) the consideration paid in connection therewith shall be cash or Cash Equivalents paid contemporaneously with consummation of the transaction and shall be in an amount not less than the fair market value of the property disposed of, (ii) if such transaction is a Sale and Leaseback Transaction, such transaction is not prohibited by the terms of Section 7.14, (iii) unless otherwise contemplated herein, such transaction does not involve the sale or other disposition of Equity Interests in any Subsidiary, (iv) such transaction does not involve a sale or other disposition of receivables other than receivables owned by or attributable to other property concurrently being disposed of in a transaction otherwise permitted under this Section, and (v) the aggregate net book value of all of the assets sold or otherwise disposed of by the Loan Parties and their Subsidiaries in all such transactions in any fiscal year of the Borrower shall not exceed $25,000,000;

Section 1.16 Amendment to Section 7.05(g) . Clause (g) of Section 7.05 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(g) Disposition of assets of an Excluded Subsidiary as a result of a foreclosure of a Permitted Lien in connection with a Backlever Financing or System Refinancing so long as such foreclosure does not result in a Borrowing Base Deficiency; and

Section 1.17 Amendment to Section 7.06(f) . Clause (f) of Section 7.06 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(f) the Borrower may pay earnouts in connection with a Permitted Acquisition or an Acquisition of Developer Project; provided , that, at any time a Default exists or would exist immediately before or after giving pro forma effect to such payment (including any Default that occurs due to a breach of Section 7.11(b) which Unencumbered Liquidity shall be measured on the date of such earnout payment), then Borrower may only pay earnouts in Equity Interests of Borrower; provided , further, that, a Default set forth in Section 8.01(k) shall not be existing after giving effect to the payment of any such earnout in Equity Interests;

Section 1.18 Amendment to Section 7.11(b) . Clause (b) of Section 7.11 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

(b) Unencumbered Liquidity . Permit the Unencumbered Liquidity of the Borrower to be less than the sum of (x) 20% of the Aggregate Commitments plus (y) 20% of the aggregate principal amount of issued and outstanding Short-Term Solar Bonds, measured monthly as of the last day of each month; provided, that Unencumbered Liq uidity shall not be less than $ [***] as of the last day of any month.

Section 1.19 Amendment to Section 7.12(b) . Clause (b) of Section 7.12 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

7.12 Capital Expenditures .

Make or become legally obligated to make any Capital Expenditure, except for Capital Expenditures (a) in the ordinary course of business made or (b) legally obligated to be made during the period commencing January 1, 2015 and continuing until the Maturity Date not exceeding, in the aggregate for the Borrower and its Subsidiaries, $350,000,000.

Section 1.20 Amendment to Exhibits . Exhibits C, F, O, Q, T and U to the Credit Agreement are hereby deleted and replaced with the corresponding Exhibits attached hereto.

ARTICLE II.
consent and waiver

Section 2.01 Chinese Subsidiary Stock Certificate . In connection with the consummation of the Silevo Acquisition and the Zep Acquisition, Borrower is required under Section 6.14(a) of the Credit Agreement to deliver the stock certificates of the Chinese Subsidiaries of Zep Solar LLC and Silevo, LLC (collectively, “ Chinese Stock Certificates ”) to Administrative Agent for the benefit of the Secured Parties. Due to requirements under the applicable Laws of the People’s Republic of China (“ China ”), the Chinese Stock Certificates must remain within China. As such, Borrower has requested that Administrative Agent and Required Lenders waive the requirement that the Chinese Stock Certificates be delivered to Administrative Agent for the benefit of the Secured Parties. Administrative Agent and Required Lenders hereby waive the requirement that the Chinese Stock Certificates be delivered to Administrative Agent for the benefit of the Secured Parties.

Section 2.02 Limitations on Consent and Waiver . The consent and waiver set forth above is limited strictly as written and may not be deemed to constitute a waiver of, nor consent to any noncompliance with, any term or provision of the Credit Agreement or any other Loan Document except as expressly set forth herein. Further, this waiver does not constitute a waiver of any other Default or Event of Default arising as a result of the violation of any other term or provision of the Credit Agreement or any other Loan Documents or a waiver of any rights or remedies arising as a result of any such other Default or Event of Default.

ARTICLE III.
CONDITIONS TO EFFECTIVENESS

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Section 3.01 Conditions to Effectiveness . This Amendment shall become effective as of the Amendment Effective Date upon satisfaction of the following conditions (in each case, in form and substance reasonably acceptable to the Administrative Agent):

(a) Administrative Agent shall have received a copy of this Amendment duly executed by the Borrower, the Required Lenders and Administrative Agent.

(b) No Default or Event of Default shall exist.

(d) The Administrative Agent shall have received from Borrower, for the account of each Lender that executes and delivers a signature page hereto to the Administrative Agent on or before 5:00 pm (Pacific time) on June 23, 2015 (each such Lender, a “ Consenting Lender ”, and collectively, the “ Consenting Lenders ”, an amendment fee in an amount equal to ten (10) basis points on the aggregate Commitments of such Consenting Lender.

ARTICLE IV.
MiSCELLANEOUS

Section 4.01 Amended Terms . On and after the Amendment Effective Date, all references to the Credit Agreement in each of the Loan Documents shall hereafter mean the Credit Agreement as amended by this Amendment. Except as specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms.

Section 4.02 Representations and Warranties of Loan Parties . Each of the Loan Parties represents and warrants as follows:

(a) It has taken all necessary action to authorize the execution, delivery and performance of this Amendment.

(b) This Amendment has been duly executed and delivered by such Person and constitutes such Person’s legal, valid and binding obligation, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

(c) No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by such Person of this Amendment, other than those which have been duly obtained.

(d) Immediately before and after giving effect to this Amendment, no event has occurred and is continuing which constitutes a Default or an Event of Default.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

(e) After giving effect to this Amendment, the Collateral Documents continue to create a valid security interest in, and Lien upon, the Collateral, in favor of the Administrative Agent, for the benefit of the Lenders, which security interests and Liens are perfected in accordance with the terms of the Collateral Documents and prior to all Liens other than Permitted Liens.

(f) The Obligations are not reduced or modified by this Amendment and are not subject to any offsets, defenses or counterclaims.

Section 4.03 Reaffirmation of Obligations . Each Loan Party hereby ratifies the Credit Agreement and acknowledges and reaffirms (a) that it is bound by all terms of the Credit Agreement applicable to it and (b) that it is responsible for the observance and full performance of its respective Obligations.

Section 4.04 Loan Document . This Amendment shall constitute a Loan Document under the terms of the Credit Agreement.

Section 4.05 Expenses . The Borrower agrees to pay all reasonable costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including without limitation the reasonable fees and expenses of the Administrative Agent’s legal counsel.

Section 4.06 Further Assurances . The Loan Parties agree to promptly take such action, upon the request of the Administrative Agent, as is necessary to carry out the intent of this Amendment.

Section 4.07 Entirety . This Amendment and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof.

Section 4.08 Electronic Execution . The words “delivery,” “execute,” “execution,” “signed,” “signature,” and words of like import in any Loan Document or any other document executed in connection herewith 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, physical delivery thereof 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; provided that notwithstanding anything contained herein to the contrary neither the Administrative Agent, the L/C Issuer nor any Lender is under any obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent, the L/C Issuer or such Lender pursuant to procedures approved by it and provided further without limiting the foregoing, upon the request of any party, any electronic signature shall be promptly followed by a manually executed counterpart.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Section 4.09 Counterparts; Integration; Effectiveness . This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment, the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent or the L/C Issuer, constitute the entire contract among the parties relating to the subject matter hereof and thereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof and thereof . Except as provided in Section 2 .01 , this A mendment shall become effective when executed by the Administrative Agent and when the Administrative Agent has received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or other electronic imaging means (e.g. “pdf” or “tiff”) shall be effective as delivery of a manually executed counterpart of this Amendment .

Section 4.10 Acknowledgment of Foreign Account Tax Compliance Act . For purposes of determining withholding Taxes imposed under the Foreign Account Tax Compliance Act (FATCA), from and after the effective date of the Amendment, the Borrower and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) the Credit Agreement as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

Section 4.11 No Actions, Claims, Etc . As of the date hereof, each of the Loan Parties hereby acknowledges and confirms that it has no knowledge of any actions, causes of action, claims, demands, damages and liabilities of whatever kind or nature, in law or in equity, against the Administrative Agent, the Lenders, or the Administrative Agent’s or the Lenders’ respective officers, employees, representatives, agents, counsel or directors arising from any action by such Persons, or failure of such Persons to act under the Credit Agreement on or prior to the date hereof.

Section 4.12 GOVERNING LAW . THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Section 4.13 Successors and Assigns . This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

Section 4.14 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial . The jurisdiction, service of process and waiver of jury trial provisions set forth in Sections 11.14 and 11.15 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.

[ Signature Pages to Follow ]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be duly executed on the date first above written.

BORROWER : SOLARCITY CORPORATION,

a Delaware corporation

By: /s/ Brad Buss

Name: Brad Buss

Title: Chief Financial Officer

SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (REVOLVING LOAN)

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ADMINISTRATIVE AGENT : BANK OF AMERICA, N.A.,

in its capacity as Administrative Agent

By: /s/ Dora A. Brown

Name: Dora A. Brown

Title: Vice President

SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (REVOLVING LOAN)

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

LENDERS : BANK OF AMERICA, N.A.,

in its capacity as a Lender, L/C Issuer and Swingline Lender

By: /s/ Thomas R. Sullivan

Name: Thomas R. Sullivan

Title: SVP

SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (REVOLVING LOAN)

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH , as a Lender

By: /s/ Mikhail Faybusovich

Name: Mikhail Faybusovich

Title: Authorized Signatory

By: /s/ Karim Rahimtoola

Name: Karim Rahimtoola

Title: Authorized Signatory

SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (REVOLVING LOAN)

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

SILICON VALLEY BANK ,

as a Lender

By: /s/ Mona Maitra

Name: Mona Maitra

Title: Vice President

SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (REVOLVING LOAN)

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

BRIDGE BANK, NATIONAL ASSOCIATION

as a Lender

By: /s/ Randall Lee

Name: Randall Lee

Title: Assistant Vice President

SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (REVOLVING LOAN)

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ONEWEST BANK, FSB

as a Lender

By: /s/ Michael MacDonald

Name: Michael MacDonald

Title: Executive Vice President

SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (REVOLVING LOAN)

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

AMERICAN SAVINGS BANK, F.S.B.,

a federal savings bank,

as a Lender

By: /s/ Kyle J. Shelley

Name: Kyle J. Shelley

Title: Vice President

SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (REVOLVING LOAN)

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GUARANTOR CONSENT

Each of the undersigned (each a “ Guarantor ”) consents to the foregoing Amendment to Credit Agreement and other Loan Documents (“ Amendment ”) and the transactions contemplated thereby and reaffirms its obligations under Article X (Continuing Guaranty) of the Credit Agreement (as the same may be amended, modified, supplemented or replaced from time to time, the “ Guaranty ”).

Each Guarantor reaffirms, to the extent a party thereto, that its obligations under the Guaranty are separate and distinct from the Borrower’s obligations and reaffirms its waivers, as set forth in the Guaranty, of each and every one of the possible defenses to such obligations.

Furthermore, each Guarantor acknowledges and agrees that any reference to the term “Credit Agreement” in the Guaranty shall mean the Credit Agreement dated of even date with the Guaranty together with all amendments, increases or modifications thereto.

Agreed and Acknowledged:

Dated as of: June 24, 2015

GUARANTORS:

POPPY ACQUISITION LLC

By:

Name: Lyndon Rive

Title: President and CEO

ZEP SOLAR LLC

By:

Name: Lyndon Rive

Title: President and CEO

SILEVO, LLC

By:

Name: Lyndon Rive

Title: President

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Exhibit 10.16e

FIFTH AMENDMENT TO AMENDED AND RESTATED AGREEMENT FOR RESEARCH & DEVELOPMENT ALLIANCE ON

TRIEX MODULE TECHNOLOGY

This FIFTH AMENDMENT TO AMENDED AND RESTATED AGREEMENT FOR RESEARCH & DEVELOPMENT ALLIANCE ON TRIEX MODULE TECHNOLOGY (this “Amendment”) is effective as of June 30, 2015 (the “Effective Date”) and is by and between THE RESEARCH FOUNDATION FOR THE STATE UNIVERSITY OF NEW YORK (“FOUNDATION”), a non-profit educational corporation existing under the laws of the State of New York, having an office located at 257 Fuller Road, Albany, New York 12203, on behalf of the Colleges of Nanoscale Science and Engineering of the State University of New York Polytechnic Institute), and SILEVO, LLC (“SILEVO”), a Delaware corporation with its principal office located at 45655 Northport Loop East, Fremont, California 94555. FOUNDATION and SILEVO are each referred to herein sometimes individually as a “Party” or, collectively, as “Parties.”

I. RECITALS

I.1. FOUNDATION and SILEVO entered into that certain Amended and Restated Agreement for Research & Development Alliance on Triex Module Technology effective as of September 2, 2014, as amended by a First Amendment thereto effective as of October 31, 2014, a Second Amendment thereto effective as of December 15, 2014, a Third Amendment thereto effective as of February 12, 2015 and a Fourth Amendment thereto effective as of March 30, 2015 (as amended, the “Agreement”).

I.2. The parties wish to amend the terms of Section 19.14 of the Agreement as set forth in this Amendment.

THEREFORE, in consideration of the mutual promises and covenants contained in this Amendment and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, and intending to be legally bound hereby, the Parties agree as follows:

II. DEFINED TERMS

In addition to the terms defined elsewhere in this Amendment, capitalized terms that are used but not defined herein shall have the meanings ascribed to such terms in the Agreement .

III. AMENDMENTS

Section 19.14 is amended by deleting the reference to “June 30, 2015” and replacing it with “August 31, 2015”.

IV. MISCELLANEOUS

No amendment or modification of this Amendment shall be valid or binding upon the Parties unless in a writing executed by both of the Parties. This Amendment, together with the Agreement, is the complete and exclusive statement of the agreement of the Parties in respect of the subject matter described in this Amendment and shall supersede all prior and contemporaneous agreements, communications,

representations, and understandings, either oral or written, between the Parties or any officers, agents or representatives thereof. This Amendment may be signed in one or more counterparts, each of which shall be deemed to be an original and all of which when taken together shall constitute the same Amendment . Any signed copy of this Amendment made by photocopy, facsimile or PDF Adobe format shall be considered an original. Except as amended and/or modified by this Amendment, the Agreement is hereby ratified and confirmed and the Agreement and all other terms thereof shall remain in full force and effect, unaltered and unchanged by this Amendment. In the event of any conflict between the provisions of this Amendment and the provisions of the Agreement , the provisions of this Amendment shall prevail. Whether or not specifically amended by this Amendment, all of the terms and provisions of the Agreement are hereby amended to the extent necessary to give effect to the purpose and intent of this Amendment.

IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed and delivered by their duly authorized representatives as of the Effective Date.

THE RESEARCH FOUNDATION FOR

THE STATE UNIVERSITY OF NEW YORK

By: /s/Christine Waller

Name: Christine Waller

Title: Operations Manager

SILEVO, LLC

By: /s/ Zheng Zu

Name: Zheng Zu

Title: CEO, Silevo LLC

Exhibit 10.19

CONFIDENTIAL TREATMENT REQUESTED

LOAN AGREEMENT

dated as of May 4, 2015

among

MEGALODON SOLAR, LLC,
a Delaware limited liability company
(Borrower);

SOLARCITY CORPORATION,
a Delaware corporation
(Limited Guarantor);

EACH OF THE COMMERCIAL PAPER CONDUITS
FROM TIME TO TIME PARTY HERETO,
(as the Conduit Lenders);

EACH OF THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTY HERETO,
(as the Committed Lenders);

EACH OF THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTY HERETO,
(as the Group Agents);

BANK OF AMERICA, N.A.
(as the Collateral Agent and Administrative Agent);

BANK OF AMERICA, N.A.
(as Lead Syndication Agent);

BANK OF AMERICA, N.A. and CREDIT SUISSE SECURITIES (USA) LLC
(as Joint Structuring Agents)

BANK OF AMERICA, N.A., CREDIT SUISSE SECURITIES (USA) LLC and DEUTSCHE BANK AG, NEW YORK BRANCH
(as Joint Book Runners and Joint Lead Arrangers);

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Table of Contents

Page

ARTICLE 1

DEFINITIONS 1

1.1	Definitions1

1.2	Rules of Interpretation33

ARTICLE 2

THE LOAN FACILITY35

2.1	Loan Facility35

2.2	Commitments41

2.3

Fees41

2.4	Other Payment Terms42

2.5	Pro Rata Treatment51

2.6	Change of Circumstances51

2.7	Funding Losses53

2.8	Alternate Office; Minimization of Costs; Replacement of Lenders54

2.9	Increase in Loan Facility55

2.10	Addition of Subject Funds; Release of Subject Funds57

2.11	Defaulting Lenders59

2.12	Extended Availability Period and Loans60

2.13	Interest Rate Protection61

ARTICLE 3

CONDITIONS PRECEDENT62

3.1	Conditions Precedent to the Closing Date62

3.2	Conditions Precedent to Each Borrowing65

3.3	Conditions Precedent to Addition of Current Systems to Available Borrowing Base67

3.4	Conditions Precedent to Inclusion of New Subject Fund67

ARTICLE 4

REPRESENTATIONS AND WARRANTIES69

4.1	Representations and Warranties69

ARTICLE 5

AFFIRMATIVE COVENANTS OF BORROWER74

5.1	Use of Proceeds74

5.2

Notices75

5.3	Portfolio Reports; Financial Statements76

5.4	Reports; Other Information78

5.5	Existence, Conduct of Business79

5.6	Books, Records, Access79

5.7	Preservation of Rights; Further Assurance80

5.8	Taxes and Other Government Charges81

5.9	Compliance With Laws; Instruments, Etc81

5.10	Indemnification81

5.11	Revenue & Operating Accounts83

5.12	Compliance with Sanctioned Persons Laws and Anti-Corruption Laws84

5.13	Separateness Provisions; Required Provisions in LLC Agreement84


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Table of Contents

(continued)

Page

5.14	Distributions by Certain Subsidiaries 85

5.15	Borrowing Base Certificate85

5.16	New Subject Funds86

5.17	Maintenance of Materials86

5.18	Investor Consents87

5.19	Correction Payments87

5.20	Asset-Backed Commercial Paper87

ARTICLE 6

NEGATIVE COVENANTS OF BORROWER88

6.1	[Reserved]88

6.2	Limitations on Liens88

6.3

Debt88

6.4	Sale or Lease of Assets88

6.5

Changes89

6.6	Distributions89

6.7	Investments89

6.8	Use of Proceeds90

6.9	Fundamental Changes90

6.10	Amendments; Other Agreements90

6.11	Name and Location; Fiscal Year91

6.12	Assignment91

6.13	Transfer of Equity Interest91

6.14

ERISA91

6.15	Accounts91

6.16	Transaction with Affiliates91

6.17	Limitation on Dividends and Other Payment Restrictions Affecting Certain Subsidiaries91

6.18	Hedging Agreement91

6.19	Operations and Maintenance92

6.20	Sanctions92

6.21	Anti-Corruption Laws92

ARTICLE 7

ACCOUNTS; APPLICATION OF FUNDS92

7.1	Accounts; Application of Funds in Accounts92

ARTICLE 8

EVENTS OF DEFAULT; REMEDIES92

8.1	Events of Default92

8.2	Remedies95

ARTICLE 9

THE AGENTS; THE GROUP AGENTS AMENDMENTS; ASSIGNMENTS96

9.1	Appointment and Authority96

9.2	Rights as a Lender96


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Kronor Loan Agreement

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Table of Contents

(continued)

Page

9.3	Exculpatory Provisions 96

9.4	Reliance by Administrative Agent97

9.5	Delegation of Duties98

9.6	Resignation of Administrative Agent98

9.7	Non-Reliance on Administrative Agent and Other Lenders99

9.8	No Other Duties, Etc99

9.9	Administrative Agent May File Proofs of Claim99

9.10	Collateral Matters101

9.11	Indemnification101

9.12	No Advisory or Fiduciary Responsibility102

9.13	The Group Agents102

9.14	Amendments104

9.15	Withholding Tax106

9.16	Participations106

9.17	Assignments107

9.18	Assignability to Federal Reserve Bank or Central Bank110

9.19	Exercise of Discretion111

ARTICLE 10

MISCELLANEOUS111

10.1	Addresses; Notices111

10.2	Right to Set-Off115

10.3	Delay and Waiver115

10.4	Costs, Expenses and Attorney’s Fees116

10.5	Entire Agreement116

10.6	Governing Law116

10.7	Severability117

10.8	Headings117

10.9	Accounting Terms117

10.10

No Partnership, Etc117

10.11

Waiver of Jury Trial117

10.12

Consent to Jurisdiction; Service of Process118

10.13

Interest Rate Limitation118

10.14

Successors and Assigns119

10.15

Patriot Act Compliance119

10.16

Binding Effect; Counterparts119

10.17

Confidentiality119

10.18

Survival of Agreements121

10.19

Electronic Execution of Assignments and Certain Other Documents121

10.20

Agreement Not to Petition; Excess Funds121

10.21

No Recourse122


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Kronor Loan Agreement

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Table of Contents

(continued)

Page

ARTICLE 11

limited GUARANTY; TAX LOSS POLICIES 123

11.1	The Guarantee123

11.2	Obligations Unconditional123

11.3	Reinstatement124

11.4	Subrogation; Subordination124

11.5	Remedies125

11.6	[Reserved]125

11.7	Continuing Guarantee125

11.8	General Limitation on Guarantee Obligations125

11.9	Release of Guarantor125

11.10

Representations and Warranties125

11.11

Tax Loss Policies126


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Kronor Loan Agreement

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

INDEX OF EXHIBITS


Exhibit A	Form of Note
Exhibit B-1	Form of Borrowing Notice
Exhibit B-2	Form of Conversion and Continuation Notice
Exhibit C	Form of Assignment and Acceptance
Exhibit D	Form of Incremental Loan Commitment Increase Notice
Exhibit E	Form of Increasing Incremental Lender Confirmation
Exhibit F-1	Form of New Committed Lender Accession Agreement
Exhibit F-2	Form of New Conduit Lender Accession Agreement
Exhibit G	Form of Borrowing Base Certificate
Exhibit H-1	Form of Aggregate Advance Model
Exhibit H-2	Form of System Consolidator
Exhibit I	Form of US Tax Compliance Certificate

INDEX OF SCHEDULES


Schedule 1.1(a)	Knowledge Individuals
Schedule 1.1(b)	Change in Control
Schedule 1.1(c)	Operating Account
Schedule 3.1(m)	Consents
Schedule 5.13	Separateness Provisions

INDEX OF ANNEXES


Annex 1	Account Information
Annex 2	Lenders/Lending Office
Annex 3	Schedule of Lender Commitments

INDEX OF APPENDICES


Appendix 1	Advance Rate
Appendix 2	Borrowing Base Certificate Calculations
Appendix 3	Eligibility Representations
Appendix 4	List of Subject Funds, Managing Members, Funded Subsidiaries, Full and Partial Cash Sweep Fund Designations and Investors
Appendix 5	Project Documents
Appendix 6	System Consolidator
Appendix 7	Tax Equity Representations and Other Representations
Appendix 8	Approved Manufacturers
Appendix 9	Fundamental Tax Equity Structure Characteristics
Appendix 10	Conventional Tax Equity Structure Characteristics

Kronor Loan Agreement

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

LOAN AGREEMENT

This LOAN AGREEMENT, dated as of May 4, 2015 (this “ Agreement ”), is made by and among Megalodon Solar, LLC, a Delaware limited liability company (the “ Borrower ”), each of the Conduit Lenders that is a signatory to this Agreement identified as a “ Conduit Lender ” on the signature pages to this Agreement and listed on Annex 2 or that shall become a “ Conduit Lender ” under this Agreement pursuant to the terms of this Agreement (individually, a “ Conduit Lender ” and, collectively, the “ Conduit Lenders ”), each of the Committed Lenders that is a signatory to this Agreement identified as a “ Committed Lender ” on the signature pages to this Agreement and listed on Annex 2 or that shall become a “ Committed Lender ” under this Agreement pursuant to the terms of this Agreement (individually, a “ Committed Lender ” and, collectively, the “ Committed Lenders ”), each of the Group Agents that is a signatory to this Agreement identified as a “ Group Agent ” on the signature pages to this Agreement and listed on Annex 2 or that shall become a “ Group Agent ” under this Agreement pursuant to the terms of this Agreement (individually, a “ Group Agent ” and, collectively, the “ Group Agents ”), BANK OF AMERICA, N.A., as the collateral agent for the Secured Parties (in such capacity, together with its successors in such capacity, the “ Collateral Agent ”), and as the administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “ Administrative Agent ”, and, together with the Collateral Agent, the “ Agents ”), BANK OF AMERICA, N.A. and CREDIT SUISSE SECURITIES (USA) LLC, as joint structuring agents, BANK OF AMERICA, N.A., CREDIT SUISSE SECURITIES (USA) LLC and DEUTSCHE BANK AG, NEW YORK BRANCH, as joint book runners and joint lead arrangers (the “ Joint Lead Arrangers ”) and, solely for purposes of the limited guaranty as set forth in Article 11 and the obligations set forth in Section 10.20 , SOLARCITY CORPORATION, a Delaware corporation (“ SolarCity ” or the “ Limited Guarantor ”).

WHEREAS, the Borrower has requested that the Lenders from each Group make loans to the Borrower to monetize certain of the future distributions to be received by the Borrower from its subsidiaries in connection with Subject Funds; and

WHEREAS, the Lenders from each Group are willing to make such loans upon the terms and subject to the conditions of this Agreement.

NOW THEREFORE, in consideration of the agreements herein and in the other Financing Documents and in reliance upon the representations and warranties set forth herein and therein, the parties agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions . Except as otherwise expressly provided, capitalized terms used in this Agreement and its exhibits and schedules shall have the meanings set forth below:

“ Acceptable Hedge Bank ” means any Committed Lender, Affiliate of a Committed Lender, Joint Lead Arranger, or Affiliate of a Joint Lead Arranger.

Kronor Loan Agreement

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

“ Accounts ” has the meaning given in the CADA.

“ Actual Net Cash Flow ” means the actual amount of all Distributions of On-Going Revenue paid to the Borrower Subsidiary Parties, which such amounts shall be paid directly from the Borrower Subsidiary Parties into the Revenue Account for the benefit of the Borrower.

“ Additional Commitment Lender ” shall have the meaning set forth in Section 2.9(c) .

“ Administrative Agent ” has the meaning given in the introductory paragraph of this Agreement.

“ Administrative Questionnaire ” means an administrative questionnaire in the form supplied by the Administrative Agent.

“ Advance Rate ” has the meaning given in Appendix 1 .

“ Affiliate ” of a specified Person means any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Person specified. As used herein, the term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of partnership interests or voting securities, by contract or otherwise.

“ Agent Fees ” has the meaning given in Section 2.3(b) .

“ Agents ” has the meaning given in the introductory paragraph of this Agreement. “Agreement” has the meaning given in the introductory paragraph of this Agreement.

“ Aggregate Advance Model ” has the meaning given in Appendix 2 .

“ Agreement Value ” means, for each Hedging Agreement, on any date of determination, the maximum aggregate amount (giving effect to any netting agreements) that Borrower could be required to pay if such Hedging Agreement were terminated on such date.

“ Anti-Terrorism Laws ” means any Federal laws of the United States of America relating to terrorism or money laundering, including Executive Order 13224; the Patriot Act and the regulations administered by OFAC.

“ Applicable Interest Rate ” means (a) with respect to Loans advanced by any Lender other than through the issuance of Commercial Paper notes or with respect to any Group that does not include a Conduit Lender, (i) for any LIBO Loan, during each Interest Period applicable thereto, the per annum rate equal to the sum of the LIBO Rate for such Interest Period or the Daily LIBO Rate, as applicable, plus the Applicable Margin or (ii) for any Base Rate Loan, during each Interest Period applicable thereto, the per annum rate equal to the sum of the Base Rate for such Interest Period plus the Applicable Margin or (b) with respect to Loans advanced by a Conduit Lender through the issuance of Commercial Paper notes, the CP Rate plus the Applicable Margin.

Kronor Loan Agreement

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

“ Applicable Margin ” means 2.75% per annum.

“ Applicable Threshold ” means, with respect to any date of determination (for purposes of this definition, the “ Test Date ”):

(i) if such date is not a Scheduled Payment Date, the Outstanding Principal on the Test Date is less than the product of (x) the Available Borrowing Base (calculated on the Test Date using interest rates in effect as of the Test Date, including as a result of the application of the Interest Rate Protection Agreements then in effect), multiplied by (y) 105%;

(ii) if such date is a Scheduled Payment Date, the Outstanding Principal on the Test Date is less than or equal to the product of (x) the Available Borrowing Base (calculated on the Test Date using interest rates in effect as of the Test Date, including as a result of the application of the Interest Rate Protection Agreements then in effect), multiplied by (y) 100%, after taking into account any Restricted Payments made on such date (including from Accounts);

For the avoidance of doubt, on any date on which the Outstanding Principal is less than or equal to the Available Borrowing Base, the Applicable Threshold shall be deemed to be satisfied.

“ Assignment and Acceptance ” means an assignment and acceptance entered into by a Lender and an Eligible Assignee, and accepted by the Administrative Agent, in the form of Exhibit C or such other form as shall be approved by the Administrative Agent.

“ Attributable Indebtedness ” means, on any date, (a) in respect of any Capital Lease Obligation of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.

“ Availability Period ” means a period commencing on the Closing Date and ending on December 31, 2016; provided , that the Availability Period may be extended upon the mutual agreement of the Administrative Agent, the Group Agents and the Borrower pursuant to Section 2.12 ; provided , further , that in no event shall the Availability Period exceed the Loan Maturity Date.

“ Available Borrowing Base ” has the meaning given in Appendix 2 .

“ Bank of America ” means Bank of America, N.A., a national banking association.

Kronor Loan Agreement

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custodian, conservator, rehabilitator, receiver, liquidator, sequestrator, trustee or other officer with similar powers for itself or any substantial part of its assets; (d) such Person shall make an assignment for the benefit of creditors; (e) such Person shall become unable or admit in writing its inability to pay its debts generally as they become due; (f) if an involuntary case shall be commenced seeking the liquidation or reorganization of such Person under the Bankruptcy Law or any similar proceeding shall be commenced against such Person under any other applicable federal, State or other applicable Law and (i) the petition commencing the involuntary case is not timely controverted; (ii) the petition commencing the involuntary case is not dismissed within 60 days of its filing; (iii) an interim trustee is appointed to take possession of all or a portion of the property, and/or to operate all or any part of the business of such Person and such appointment is not vacated within 60 days; or (iv) an order for relief shall have been issued or entered therein; or a decree or order of a court having jurisdiction in the premises for the appointment of a custodian, conservator, rehabilitator, receiver, liquidator, sequestrator, trustee or other officer having similar powers of such Person or of all or a part of its property, shall have been entered; (g) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 60 days after its issue or levy; or (h) any other similar relief shall be granted against such Person under any federal, State or other applicable Law.

“ Bankruptcy Law ” means the Bankruptcy Code of the United States and any other state or federal insolvency, liquidation, conservatorship, rearrangement, receivership, assignment for the benefit of creditors, reorganization, moratorium or similar Law for the relief of debtors.

“ Basel III ” means the agreements reached by the Basel Committee on Banking Supervision in “Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems” to the extent and in the manner implemented as an applicable law, rule, regulation, pronouncement, guideline or request (or any combination thereof) from any Governmental Authority (whether or not having the force of law), as such agreements and any related law, rule, regulation, pronouncement, guideline or request may be amended, supplemented, restated or otherwise modified from time to time.

“ Base Rate ” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the Prime Rate, and (c) the LIBO Rate plus 1.0%. If the Base Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.

“ Base Rate Loan ” means any Loan that bears interest at rates based upon the Base Rate.

“ Benefited Lender ” has the meaning given in Section 2.5(b) .

“ Borrower ” has the meaning given in the introductory paragraph of this Agreement.

“ Borrower Materials ” has the meaning given in Section 10.1(d) .

“ Borrower Subsidiary Party ” means each of [***], [***], [***], [***], [***]and each other Person that becomes a party to the CADA as a “Subsidiary Party” or the Security

Kronor Loan Agreement

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Agreement as a “Borrower Subsidiary”, in accordance with the terms thereof, including each Managing Member and each Lessor.

“ Borrower’s Knowledge ” means the actual knowledge of (a) any Responsible Officer of the Borrower or (b) any Person set forth on Schedule 1.1(a) (but only with respect to matters relating to the Subject Fund(s) corresponding to such Person) or any Person who assumes the responsibility of a Person set forth on Schedule 1.1(a) with respect to a corresponding Subject Fund, of (x) a fact, condition or circumstance or (y) a fact, condition or circumstance that would cause a reasonably prudent person to conduct further inquiry.

“ Borrowing ” means Loans of the same Type made on the same date.

“ Borrowing Base Certificate ” means the certificate in the form of Exhibit G .

“ Borrowing Base Certificate Calculations ” means those calculations to be set forth in the Borrowing Base Certificate as described in Appendix 2 .

“ Borrowing Base Certificate Date ” means each date upon which a Borrowing Base Certificate is submitted in accordance with the terms of Section 2.1(a)(iv) or Section 5.15 .

“ Borrowing Base Requirements ” means, as of the date of a Borrowing Base Certificate, the Available Borrowing Base exceeds the Outstanding Principal.

“ Borrowing Date ” means that date on which a Borrowing occurs.

“ Borrowing Notice ” has the meaning given in Section 2.1(a)(iii) .

“ Breakage Event ” has the meaning given in Section 2.7 .

“ Business Day ” means any day other than a Saturday, Sunday or other day on which banks are authorized to be closed in New York, New York or California; provided that when used in connection with a Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in Dollar deposits in the London interbank market.

“ CADA ” means the Collateral Agency and Depositary Agreement, dated as of the date hereof, among the Borrower; the Collateral Agent; the Depositary; each Borrower Subsidiary Party thereto; and, the Lenders, solely for the purposes of Section 2.1 and Article VII thereof.

“ Capital Adequacy Requirement ” has the meaning given in Section 2.6(b) .

“ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

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“ Cash Sweep Fund ” means, with respect to any Subject Fund, a Subject Fund designated as such on Appendix 4 whose Project Documents reduce, limit, suspend or otherwise restrict distributions to the Managing Member following the occurrence of certain events enumerated in such Project Documents, including (a) the failure to achieve a target internal rate of return by the projected flip date, (b) certain indemnity claims, and (c) non-payment of such indemnity claims by the applicable Subject Fund guarantor, as reasonably determined by the Administrative Agent in consultation with the Borrower and the Lenders.

A “ Change in Control ” shall be deemed to have occurred if:

(a) SolarCity (or any successor entity thereto) shall cease to directly or indirectly own, beneficially and of record, 100% of the issued and outstanding equity interests in Member;

(b) Member shall cease to directly own, beneficially and of record, 100% of the issued and outstanding equity interests in the Borrower;

(c) the Borrower shall cease to directly own, beneficially and of record, 100% of the issued and outstanding equity interests in each Borrower Subsidiary Party

(d) Borrower Subsidiary Party directly transfers any of the Equity Interests owned by it in the related Subject Fund as of the date the Subject Fund becomes a Subject Fund under this Agreement and as such Equity Interests are set forth on Schedule 1.1(b) hereto (as such schedule may be updated prior to the funding of any new Subject Fund after the Closing Date);

provided , that any disposition that would otherwise be a Change in Control that (x) complies with the terms of Section 2.10 or Section 6.4 or (y) is otherwise required under the applicable Project Documents shall, in each case, not be deemed to be a Change in Control.

“ Change of Law ” means, after the Closing Date, the (i) occurrence of any adoption of any Governmental Rule, any change in any Governmental Rule or the application or requirements thereof (whether such change occurs in accordance with the terms of such Governmental Rule as enacted, as a result of amendment, or otherwise), any change in the interpretation or administration of any Governmental Rule by any Governmental Authority, or (ii) compliance by any Lender or the Borrower with any request or directive (whether or not having the force of law) of any Governmental Authority, that, in each such case, makes it unlawful or impossible for any Lender to make or maintain any Loan; for the avoidance of doubt, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change of Law”, regardless of the date enacted, adopted or issued.

“ Charges ” has the meaning given in Section 10.13 .

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“ Closing Date ” means the date when each of the conditions precedent listed in Section 3.1 has been satisfied (or waived in writing by the Agents and the Lenders), which date is May 4, 2015.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Collateral ” means, with respect to a Collateral Document, all property which is subject or is intended or required to become subject to the security interests or Liens granted by such Collateral Document.

“ Collateral Agent ” has the meaning given in the introductory paragraph of this Agreement.

“ Collateral Documents ” means the CADA, the Member Pledge, the Security Agreement, each Tax Equity Required Consent, each security agreement executed upon the admission of an Other Non-Financed Fund and delivered pursuant to Section 3.4 , each control agreement and any other security documents, financing statements and other documentation filed or recorded in connection with the foregoing, in each case, that are executed or otherwise authorized by a Loan Party or Borrower Subsidiary Party for the benefit of the Secured Parties; provided that, in the case of Tax Equity Required Consents and any other documents executed by an Investor, such documents shall be “Collateral Documents” only if such documents contain substantive covenants or similar obligations by the Investor for the benefit of the Secured Parties with respect to the applicable Subject Fund. For the avoidance of doubt, a mere acknowledgment by an Investor of any Lien on the Loan Parties’ assets or any related rights shall not constitute a “Collateral Document” for purposes of this Agreement.

“ Commercial Paper ” means short-term notes issued by or on behalf of the Conduit Lender in the ordinary course of its financing business.

“ Commercial Systems ” means any System in respect of which the Host Customer is a commercial Host Customer, other than any MHPI SPE.

“ Commitment ” means, at any time with respect to each Committed Lender, the commitment of such Committed Lender to make Loans hereunder, expressed as a maximum aggregate principal amount of the Loans to be made by such Committed Lender hereunder as such amount may be (a) reduced from time to time pursuant to Section 2.2(c) , (b) reduced or modified from time to time pursuant to assignments by or to such Lender pursuant to Section 9.17 or (c) increased pursuant to Section 2.9 . The initial amount of each Committed Lender’s Commitment as of the date of this Agreement is set forth in Annex 3 hereto, or, thereafter, in the Assignment and Acceptance pursuant to which such Committed Lender shall have assumed its Commitment, as applicable.

“ Commitment Fee ” has the meaning given to such term in the Fee Letters.

“ Committed Lender ” means each Person designated as a Committed Lender on its signature page hereto or in the Assignment or Acceptance pursuant to which it became a party hereto.

Kronor Loan Agreement

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“ Communications ” has the meaning given in Section 10.1(c) .

“ Completion Certificate ” means that certificate delivered by SolarCity or the applicable Lessor pursuant to the terms of the applicable Project Document of the applicable Subject Fund.

“ Conduit Lender ” means each Person designated as a Conduit Lender on its signature page hereto, or in the Assignment or Acceptance pursuant to which it became a party hereto.

“ Connection Income Taxes ” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.

“ Controlled Group ” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

“ Conventional Tax Equity Structure ” means a Tax Equity Structure the transaction documents for which comply with and reflect all the characteristics and criteria set forth in Appendix 9 and Appendix 10 .

“ Conversion and Continuation Notice ” has the meaning given in Section 2.1(a)(vi) .

“ Correction Payment Action ” means, except to the extent addressed by Sections 6.2 , 6.3 , 6.4 , 6.5 or 6.6 , and without duplication, (i) any fraud (including, any fraudulent conveyance involving the intent to hinder, defraud or delay) or willful misconduct involving Borrower or any Borrower Subsidiary Party or any of their respective assets, (ii) any theft, misappropriation, intentional or material waste, or abandonment by Borrower or any Borrower Subsidiary Party of any assets of such Person or (iii) any intentional act by Borrower or any Borrower Subsidiary Party, in each case, that prevents, delays or hinders the Collateral, the Collateral Agent’s perfection of its security interests in the Collateral, the Collateral Agent’s exercise of any of its enforcement rights or other remedies under the Financing Documents, including contesting foreclosure or asserting counterclaims in any action to foreclose or any other action, or otherwise results in any damage or diminution in value of any of the Collateral.

“ Correction Payment Amount ” has the meaning set forth in Section 5.19(a) .

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Commercial Paper, shall reflect and give effect to the commissions and charges of placement agents and dealers in respect of such Commercial Paper ( provided , however , that if any component of such rate is a discount rate, in calculating the “CP Rate” the Conduit Lender shall for such component use the rate resulting from converting such discount rate to an interest bearing an equivalent rate per annum). For the avoidance of doubt, the “CP Rate” shall include rates that are a result of payments received after the time they are due.

“ CP Rate Loan ” means any Loan that bears interest at rates based upon the CP Rate.

“ Credit Facilities ” means each of the committed loan facilities, lines of credit, letters of credit and other forms of credit enhancement available to a Conduit Lender that are not Liquidity Facilities.

“ Current System ” refers to a System in a Current System Group subject to a Subject Fund for which a Borrowing Notice is being delivered to the Administrative Agent. For avoidance of doubt, a System that was previously included in the calculation of Available Borrowing Base shall not be considered a “Current System”.

“ Current System Group ” means the new System Group being added to the Borrowing Base Certificate in connection with the applicable draw.

“ Customer Agreement ” means a long term power purchase agreement or lease agreement entered into with a Host Customer relating to a System subject to a Subject Fund.

“ Customer Payments ” means all payments made by the Host Customers in accordance with its Customer Agreement.

“ Daily LIBO Rate ” means, for any Interest Period on each day during such Interest Period, the fluctuating rate of interest equal to LIBOR, as published on the applicable Reuters screen page (or such other commercially available source providing quotations of LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London local time, on each day (or, if such day is not a Business Day, on the immediately preceding Business Day) any such Loan is outstanding, for dollars deposited with a term equivalent to a one-month interest period. If such rate is not available at such time for any reason, then the Daily LIBO Rate shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in dollars for delivery in same day funds in the approximate amount of the initial Loan with a term equivalent to a one-month interest period would be offered by Bank of America’s London branch to major banks in the London interbank Eurodollar market at their request at approximately 11:00 a.m. (London local time), on each day (or, if such day is not a Business Day, on the immediately preceding Business Day) such Loan is outstanding.

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as the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (f) all Debt of others secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all Guarantees by such Person of Debt of others, (h) all Capital Lease Obligations of such Person, (i) all Synthetic Lease Obligations of such Person, (j) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests of such Person or any other Person or any warrants, rights or options to acquire such Equity Interests, valued, in the case of redeemable preferred interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (k) all obligations of such Person as an account party in respect of letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (l) net obligations of such Person under any Hedging Agreement and (m) all obligations of such Person in respect of bankers’ acceptances. For all purposes hereof, the Debt of any Person shall include the Debt of any partnership in which such Person is a general partner, unless such Debt is expressly made non-recourse to such Person. The amount of any net obligation under any Hedging Agreement on any date shall be deemed to be the Hedging Termination Value thereof as of such date. The amount of any Capital Lease Obligation or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

“ Default ” means any occurrence, circumstance or event, or any combination thereof, which, with the lapse of time, the giving of notice or both, would constitute an Event of Default under this Agreement.

“ Default Rate ” means, with respect to the Loans, the interest rate per annum equal to the Applicable Interest Rate plus 2.0% per annum.

“ Defaulted System ” has the meaning given in Appendix 2 .

“ Defaulting Lender ” means, subject to Section 2.11(c) any Committed Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless the Related Group Agent notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Committed Lender’s determination that one or more of the conditions precedent set forth in Sections 3.1 and 3.2 with respect to the relevant Borrowing (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) have not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two (2) Business Days of the date when due, (b) has notified the Borrower or the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Committed Lender’s obligation to fund a Loan hereunder and states that such position is based on such Committed Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent

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or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Committed Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a public proceeding under Bankruptcy Law, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect, or (ii) had publicly appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the FDIC or any other state, federal or national regulatory authority acting in such a capacity; provided that a Committed Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Committed Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Committed Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Committed Lender. Any determination by the Administrative Agent that a Committed Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Committed Lender shall be deemed to be a Defaulting Lender (subject to Section 2.11(b) ) as of the date established therefor by the Administrative Agent in a written notice of such determination which shall be delivered by the Administrative Agent to the Borrower and each other Group Agent (other than the Related Group Agent with respect to such Defaulting Lender) promptly following such determination.

“ Depositary ” means Bank of America, N.A.

“ Designated Jurisdiction ” means any country or territory to the extent that such country or territory itself is the subject of any U.S. sanctions administered by the U.S. government (including OFAC).

“ Discharge Date ” means the date when the outstanding Obligations have been paid in full in cash, all Commitments have been terminated and each of the Financing Documents entered into by each party thereto have been terminated or novated such that none of the parties thereto continue to have any obligations thereunder. For the purpose of this definition, indemnification or similar obligations that by their terms survive the payment of the Obligations and for which no claim is pending as of the date of payment shall not constitute “Obligations” under the Financing Documents.

“ Discount Rate ” has the meaning given in Appendix 2 .

“ Distributions of On-Going Revenue ” means all distributions paid or payable to any Borrower Subsidiary Party on account of its interest in a Subject Fund, other than Excluded Revenues.

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“ Dollars ” and “ $ ” means United States dollars or such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts in the United States of America.

“ Eligibility Representations ” has the meaning given in Appendix 3 .

“ Eligible Assignee ” means (i) in the case of any Conduit Lender, any other Conduit Lender, any Affiliate of a Conduit Lender or another asset-backed Commercial Paper conduit administered or managed by the Related Group Agent or an Affiliate of such Group Agent, (ii) in the case of any Group Agent, any Committed Lender or any other provider of a Liquidity Facility or Credit Facility, (iii) in the case of any Committed Lender, any other existing Committed Lender or any other provider of a Liquidity Facility or a Credit Facility, (iv) a Related Fund of a Lender and (v) any other Person (other than the Borrower, any of the Borrower’s Affiliates or a natural person).

“ Eligible Systems ” means Inspected Systems and PTO Systems that, as of the applicable Borrowing Date, meet all of the Eligibility Representations set forth in Appendix 3 .

“ Environmental Claim ” means any and all obligations, liabilities, losses, administrative, regulatory or judicial actions, suits, demands, decrees, claims, liens, judgments, warning notices, notices of noncompliance or violation, investigations, proceedings, removal or remedial actions or orders, or damages, penalties, fees, out-of-pocket costs, expenses, disbursements, attorneys’ or consultants’ fees, relating in any way to any Environmental Law or any Permit issued under any such Environmental Law (hereafter “ Hazard Claims ”), including (a) any and all Hazard Claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and (b) any and all Hazard Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from the Release of Hazardous Substances or arising from injury to health, safety or the environment.

“ Environmental Law ” means any and all federal, State, regional and local statutes, laws (including common law), regulations, ordinances, judgments, orders, codes or injunctions pertaining to the environment, human health or safety, or natural resources, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.) (“ CERCLA ”), and the Superfund Amendments and Reauthorization Act of 1986, the Emergency Planning and Community Right to Know Act (42 U.S.C. §§ 11001 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. §§ 6901 et seq.), and the Hazardous and Solid Waste Amendments Act of 1984, the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Federal Water Pollution Control Act (also known as the Clean Water Act) (33 U.S.C. §§ 1251 et seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Safe Drinking Water Act (42 U.S.C. §§ 300f et seq.), the Endangered Species Act (16 U.S.C. §§ 1531 et seq.), the Migratory Bird Treaty Act (16 U.S.C. §§ 703 et seq.), the Bald Eagle Protection Act (16 U.S.C. §§ 668 et seq.), the Oil Pollution Act of 1990 (33 U.S.C. §§ 2701 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §§ 1801 et seq.), and any similar or analogous state and local statutes or regulations promulgated thereunder, and decisional law of any Governmental Authority, as each of the foregoing may be amended or supplemented from

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time to time in the future, in each case to the extent applicable with respect to the property or operation to which application of the term “Environmental Laws” relates.

“ Equity Contributions ” has the meaning given in the CADA.

“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any Person, and any option, warrant, commitment, preemptive rights or agreements of any kind (including any members’ or voting agreements) entitling the holder thereof to purchase or otherwise acquire any such equity interest.

“ ERISA ” means the Employee Retirement Income Security Act of 1974.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ ERISA Event ” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan; (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (g) the determination that any Pension Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; or (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

“ Event of Default ” and “ Events of Default ” have the meanings given in Section 8.1 .

“ Excess Cash Flow ” has the meaning given to such term in the CADA.

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the applicable Partnership Managing Member or, solely to the extent the master lease has been terminated, to the applicable Lessor Managing Member in respect of (w) the proportionate share of costs incurred pursuant to any applicable operations and maintenance agreements with respect to Excluded Systems, (x) the proportionate share of overhead expenses corresponding to Excluded Systems, to the extent such fees, costs and expenses are the responsibility of the Subject Fund outside of the fixed fees set forth the maintenance services agreement or administrative services agreement, as applicable, (y) any extraordinary expenses corresponding to the collection of fees, removal or relocation or other expenses with respect to the such Excluded Systems, to the extent expenses are the responsibility of the Subject Fund outside of the fixed fees set forth the maintenance services agreement or administrative services agreement, as applicable, and (z) any other expenses related to Excluded Systems; provided , that to the extent that the net amount of revenues that, but for this proviso, would constitute Excluded Revenues with respect to Excluded Systems for any Subject Fund, excluding any net Excluded Revenues of the types set forth in clauses (i), (ii), (iv) and (v) above, exceeds five percent (5%) of Actual Net Cash Flows for such Subject Fund, such excess shall not constitute Excluded Revenues.

“ Excluded Systems ” means any PV System that from its initial presentation as a Current System the cash flows from which are excluded from the definition of Net Cash Flow and that is not at any relevant time a Funded System.

“ Excluded Taxes ” means any of the following Taxes imposed on or with respect to any recipient or required to be withheld or deducted from a payment to a recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment, as applicable, pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.8(c) ) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 2.4(d)(i)(B) or (iii) , amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such recipient’s failure to comply with Section 2.4(g) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

“ Expense Claims ” has the meaning given in Section 10.21 .

“ Extension Request ” has the meaning given in Section 2.12(a) .

“ FATCA ” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official

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interpretations thereof and any agreements entered into pursuant to Section 1471 (b)(1) of the Code.

“ FDIC ” means the Federal Deposit Insurance Corporation and its successors.

“ Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

“ Fee Letters ” means each of the fee letters entered into with Bank of America and Credit Suisse AG, Cayman Islands Branch, dated as of the date hereof, and any other fee letter entered into by the Borrower and one or more Agents, Groups or Lenders in connection with this Agreement (including in connection with an increase in Commitments in accordance with Section 2.9 ).

“ Fees ” refers to all fees, costs and expenses payable in accordance with the Financing Documents.

“ Financing Documents ” means this Agreement, the Notes, the Collateral Documents, the Interest Rate Protection Agreements, and the Fee Letters, and any other documents, agreements or instruments entered into in connection with any of the foregoing.

“ Foreign Lender ” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“ FRB ” means the Board of Governors of the Federal Reserve System of the United States.

“ Funded System ” refers to any System against which a Loan has been advanced in accordance with the terms of this Agreement.

“ Funded Subsidiary ” means those Subsidiaries of the Borrower associated with a Subject Fund and listed on Appendix 4 as updated from time to time.

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Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“ Governmental Authority ” means any national, State or local government (whether domestic or foreign), any political subdivision thereof or any other governmental, quasi-governmental, judicial, public or statutory instrumentality, authority, body, agency, bureau or entity, (including any zoning authority, the Federal Energy Regulatory Commission, the relevant State commissions, the FDIC, the Comptroller of the Currency or the FRB, any central bank or any comparable authority) or any arbitrator with authority to bind a party at law.

“ Governmental Rule ” means any statute, law, regulation, ordinance, rule, judgment, order, decree, permit, concession, grant, franchise, license, agreement, directive, guideline, policy requirement or other governmental restriction or any similar form of decision of or determination by, or any interpretation or administration of any of the foregoing having the force of law by, any Governmental Authority, whether now or hereafter in effect.

“ Group ” means a group consisting of a Group Agent, one or more Committed Lenders and, if applicable, one or more Conduit Lenders. A Group that includes a Conduit Lender shall also include each Person that is committed to fund under a Liquidity Facility or Credit Facility provided to such Conduit Lender.

“ Group Agent ” means each Person designated as a Group Agent on its signature page hereto, or in the Assignment or Assumption pursuant to which it became a party hereto, in its capacity as contractual representative for the Lenders in its Group, and any successor thereto.

“ Group Limit ” means, with respect to any Group at any time, the sum of the Commitments of the Committed Lenders in such Group at such time.

“ Guarantee ” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Debt or other obligation payable or performable by another Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Debt or other obligation of the payment or performance of such Debt or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Debt or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Debt or other obligation of any other Person, whether or not such Debt or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Debt to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect

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of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“ Guaranteed Obligations ” has the meaning given in Section 11.1 .

“ Hazardous Substances ” means any hazardous substances, pollutants, contaminants, wastes, or materials (including petroleum (including crude oil or any fraction thereof), petroleum wastes, radioactive material, hazardous wastes, toxic substances, or asbestos or any materials containing asbestos) designated, regulated, or defined under or with respect to which any requirement or liability may be imposed pursuant to any Environmental Law.

“ Hedge Fix Fees ” has the meaning given in Section 2.13(c) .

“ Hedge Trigger Event ” means the earliest to occur of: (i) LIBOR for a three (3) month Interest Period is greater than or equal to one percent (1.00%), (ii) the expiration or termination of the Availability Period or (iii) the date that is thirty (30) days prior to the scheduled expiration of the Availability Period.

“ Hedging Agreement ” means (a) any and all interest rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc. or any International Foreign Exchange Master Agreement.

“ Hedging Termination Value ” means, in respect of any one or more Hedging Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedging Agreements, (a) for any date on or after the date such Hedging Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a) , the amount(s) determined as the mark-to-market value(s) for such Hedging Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Agreements (which may include a Lender or any Affiliate of a Lender).

“ Host Customer ” means a customer under a Customer Agreement relating to any System subject to a Subject Fund.

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“ Increasing Incremental Lender Confirmation ” has the meaning given in Section 2.9(b) .

“ Incremental Loan Amount ” has the meaning given in Section 2.9(a) .

“ Incremental Loan Commitment ” has the meaning given in Section 2.9(a) .

“ Incremental Loan Commitment Increase ” has the meaning given in Section 2.9(a) .

“ Incremental Loan Commitment Increase Notice ” has the meaning given in Section 2.9(a) .

“ Incremental Loan Increase Date ” has the meaning given in Section 2.9(a) .

“ Indemnified Taxes ” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Financing Document and (b) to the extent not otherwise described in (a), Other Taxes.

“ Indemnitee ” has the meaning given in Section 5.10(a) .

“ Independent Engineer ” means (i) DNV GL or (ii) any other reputable, qualified engineering firm with substantial experience in the residential solar industry that is not an Affiliate of the Borrower or the Sponsor.

“ Independent Member ” means an individual who has not been at any time during the five years preceding such initial designation: (a) a direct or indirect owner of any equity interest in, or member (with the exception of serving as the Independent Member), officer, employee, director, manager or contractor, bankruptcy trustee, attorney or counsel of, the Borrower or any of its respective Affiliates; (b) a creditor, customer, supplier (other than a supplier of registered agent or registered office services), or other Person who derives any of its purchases or revenues from its business activities with the Borrower or any of its respective Affiliates (other than any fee paid for its services as Independent Member); (c) an Affiliate of the Borrower excluded from serving as Independent Member under clause (a) or (b) of this definition; (d) a member of the immediate family by blood or marriage of any Person excluded from being an Independent Member under clause (a) or (b) of this definition; or (e) a Person who received, or a member or employee of a firm or business that received, fees or other income from the Borrower or any of its Affiliates in the aggregate in excess of five percent (5%) of the gross income, for any applicable year, of such Person; provided, however, that notwithstanding the foregoing, for the purposes of clause (a), an equity interest shall be deemed to exclude de minimis or otherwise immaterial holdings of equity interests of an Affiliate of the Borrower which are traded on public stock exchanges. The initial Independent Member is Jennifer A. Schwartz.

“ Information ” has the meaning given in Section 10.17 .

“ Inspected Systems ” means any Residential System, Commercial System or MHPI System for which SolarWorks classifies the related System to be at or past the point of the

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“Inspection Passed” stage as defined by SolarCity’s PV System Lifecycle Policy, as in effect on the date hereof.

“ Interest Period ” means, with respect to any Borrowing, the period commencing on the date of such Borrowing and ending on the next Scheduled Calculation Date, and thereafter, the three (3) month period between Scheduled Calculation Dates, provided that the final Interest Period shall commence on the final Scheduled Calculation Date and end on the Loan Maturity Date.

“ Interest Rate Cap Agreements ” has the meaning given in Section 2.13(b) .

“ Interest Rate Cap Counterparty ” has the meaning given in Section 2.13(b) .

“ Interest Rate Hedge Agreement ” has the meaning given in Section 2.13(a) .

“ Interest Rate Hedge Counterparty ” has the meaning given in Section 2.13(a) .

“ Interest Rate Protection Agreement Counterparties ” means the Interest Rate Hedge Counterparties and the Interest Rate Cap Counterparties.

“ Interest Rate Protection Agreements ” means the Interest Rate Hedge Agreements and the Interest Rate Cap Agreements.

“ Interest Reserve Account ” has the meaning given in the CADA.

“ Interest Reserve Required Balance ” has the meaning given in the CADA.

“ Inverted Lease Structure ” means a tax equity structure that conforms to the characteristics as set forth in Part III of Appendix 9 or is otherwise identified as an Inverted Lease Structure on Appendix 4 , as each such Appendix may be updated from time to time in accordance with this Agreement, whereby a Lessor, which is a wholly-owned subsidiary of Borrower, leases a specific, segregated pool of PV Systems to a Lessee and is entitled to receive the payments to be made under such lease.

“ Investor ” means (i) tax equity investors or affiliates thereof who invest cash through a Tax Equity Structure and (ii) each investor in any Other Financed Structure other than any Affiliate of SolarCity. Each Investor is listed on Appendix 4 , as such Appendix may be updated from time to time in accordance with the terms hereof.

“ Joint Lead Arrangers ” has the meaning set forth in the introductory paragraph to this Agreement.

“ Laws ” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and

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permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“ Legal Requirements ” means, as to any Person, the articles of incorporation, bylaws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation including any Governmental Rule, any requirement or obligation under a Permit, and any determination of any Governmental Authority in each case applicable to or binding upon such Person or any of its properties or to which such Person or any of its property is subject.

“ Lender ” means, collectively, the Conduit Lenders and the Committed Lenders.

“ Lending Office ” means the office in the United States of America designated as such beneath the name of such Lender on Annex 2 or such other office of such Lender as such Lender may specify in writing from time to time to the Administrative Agent and the Borrower in accordance with this Agreement.

“ Lessee ” means an Investor (or a partnership in which the Investor or a subsidiary of the Investor is a member), that leases a specific, segregated pool of PV Systems from a Lessor or Lessor Managing Member.

“ Lessor ” means a bankruptcy-remote special purpose vehicle that (a) is wholly owned by Borrower and (b) owns a specific, segregated pool of PV Systems. Each Lessor is listed on Appendix 4 , as such Appendix may be updated from time to time in accordance with the terms hereof.

“ Lessor Managing Member ” means a bankruptcy-remote special purpose vehicle and wholly-owned subsidiary of the Borrower that is the managing member of, and owns a direct Equity Interest in, a Lessor Partnership. Each Lessor Managing Member is listed on Appendix 4 , as such Appendix may be updated from time to time in accordance with the terms hereof.

“ Lessor Partnership ” means a bankruptcy-remote special purpose vehicle, that (a) is member managed by a Lessor Managing Member, (b) the other members of which are one or more Investors (or a partnership in which one or more Investors or a subsidiary of one or more Investors is a member) and (c) owns a specific, segregated pool of PV Systems. Each Lessor Partnership is listed on Appendix 4 , as such Appendix may be updated from time to time in accordance with the terms hereof.

“ LIBO Loan ” means any Loan that bears interest at rates based upon the Daily LIBO Rate or the LIBO Rate.

“ LIBO Rate ” means:

(a) for any Interest Period, other than Interest Periods when the Daily LIBO Rate is being charged, with respect to a LIBO Loan, the rate per annum equal to the London Interbank Offered Rate (“ LIBOR ”) or a comparable successor rate, which rate is approved by the Administrative Agent, as published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by the

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Administrative Agent from time to time) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, for dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; and

(b) for any interest calculation with respect to a Base Rate Loan on any date (other than the initial Interest Period), the rate per annum equal to LIBOR, at or about 11:00 a.m., London local time determined two (2) Business Days prior to such date for U.S. Dollar deposits with a term of three months commencing that day;

provided that to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent.

“ Lien ” means any mortgage, pledge, hypothecation, collateral assignment, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

“ Limited Guarantor ” has the meaning specified in the preamble.

“ Limited Guaranty ” means the obligations of Limited Guarantor set forth in Article 11 .

“ Liquidity Facilities ” means each of the committed loan facilities, asset purchase agreements, lines of credit and other financial accommodations available to a Conduit Lender to support the liquidity of such Conduit Lender’s Commercial Paper notes.

“ LLC Agreements ” means the Limited Liability Company Agreement of the Borrower, dated as of the date hereof and the limited liability company agreements of each Managing Member or Lessor.

“ Loan ” and “ Loans ” means such advances as the Borrower may request under the Total Loan Commitment during the Availability Period pursuant to Section 2.1(a) .

“ Loan Maturity Date ” means December 31, 2017, subject to extension pursuant to Section 2.12 .

“ Loan Parties ” means the Member and the Borrower.

“ [***] Tax Equity Required Consent ” means the Tax Equity Required Consent in respect of [***] listed on Schedule 3.1(m) , in form and substance satisfactory to the Administrative Agent.

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“ Majority Group Agents ” means, (a) at any time at which the Proportionate Share of Bank of America, N.A. (or any Affiliate thereof then acting as Committed Lender) or Credit Suisse AG, Cayman Islands Branch (or any Affiliate thereof then acting as Committed Lender), calculated for purposes of this clause (a) without giving effect to any increase in the Commitment of any Committed Lender pursuant to Section 2.9 , is at least 25%, (i) if the Proportionate Share of Bank of America, N.A. (or any Affiliate thereof then acting as Committed Lender) as so calculated is at least 25%, the Group Agent representing Bank of America, N.A. (or any Affiliate thereof then acting as Committed Lender), provided if such Proportionate Share as so calculated is less than 25%, this clause (i) shall be disregarded and the Group Agent representing Bank of America, N.A. (or any Affiliate thereof then acting as Committed Lender) shall instead be included for purposes of clause (iii) below, (ii) if the Proportionate Share of Credit Suisse AG, Cayman Islands Branch (or any Affiliate thereof then acting as Committed Lender) as so calculated is at least 25%, the Group Agent representing Credit Suisse AG, Cayman Islands Branch (or any Affiliate thereof then acting as Committed Lender), provided if such Proportionate share as so calculated is less than 25%, this clause (ii) shall be disregarded and the Group Agent representing Credit Suisse AG, Cayman Islands Branch shall instead be included for purposes of clause (iii) below, and (iii) Group Agents whose Related Lenders hold Loans and unused Commitments representing more than 50% of the sum of the Loans and unused Commitments of all Committed Lenders other than (x) Bank of America, N.A. (or any Affiliate thereof then acting as Committed Lender) if its Proportionate Share calculated in accordance with clause (i) above is at least 25% and (y) Credit Suisse AG, Cayman Islands Branch (or any Affiliate thereof then acting as Committed Lender) if its Proportionate Share calculated in accordance with clause (ii) above is at least 25%, and (b) at all other times, Group Agents whose Related Lenders hold Loans and unused Commitments representing more than 50% of the sum of the Loans and unused Commitments then outstanding; provided that, for purposes of Section 2.10(a) , Section 3.4 , Section 5.16 and Section 6.10(a) , “Majority Group Agents” shall at all times be required to include the Group Agent representing each of Bank of America, N.A. (or any Affiliate thereof then acting as Committed Lender and Credit Suisse AG, Cayman Islands Branch (or any Affiliate thereof then acting as Committed Lender) at any time at which it is acting as Group Agent hereunder.

“ Managing Member ” means (a) with respect to each Partnership Flip Structure, a Partnership Managing Member, (b) with respect to each Partnership Lease Pass Through Structure, a Lessor Managing Member and (c) with respect to each Other Structure, a special purpose vehicle wholly-owned by Borrower related to such Other Structure and, in each case, as identified as the Managing Member at the time of the addition of such Other Financed Structure to the Available Borrowing Base. The Managing Members are listed on Appendix 4 as the same is adjusted from time to time in accordance with the terms of this Agreement.

“ Managing Member Payment Level ” means, as of a Scheduled Payment Date or Borrowing Base Certificate Date, for any trailing three (3) month period ending on such date (or if shorter, such period from the Closing Date to such Scheduled Payment Date or Borrowing Base Certificate Date, as applicable), the ratio of: (a) Distributions of Ongoing Revenue deposited into the Revenue Account during such period, to (b) the aggregate Net Cash Flow for all Subject Funds during such trailing three (3) month period, through and including such date (or if shorter, such period from Closing Date through and including such date).

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“ Margin Stock ” has the meaning given to such term in Regulation U.

“ Material Adverse Effect ” means (a) a material adverse effect on the business, operations, financial condition, assets, liabilities or properties of the Borrower and the Borrower Subsidiary Parties, taken as a whole; (b) a material adverse effect on the ability of the Loan Parties (taken as a whole) to fully and timely perform any of their payment obligations under any Financing Document to which the Borrower or any of the Loan Parties is a party; or (c) material adverse effect on the legality, validity or enforceability of any of the Financing Documents or on the rights and remedies available to the Lenders or the Collateral Agent under any Financing Document.

“ Maximum Rate ” has the meaning given in Section 10.13 .

“ Member ” means [***], a Delaware limited liability company.

“ Member Pledge ” means the Pledge and Security Agreement, dated as of even date herewith, between the Member and the Collateral Agent.

“ MHPI SPE ” means a Host Customer that is a special purpose entity established for the primary purpose of providing family housing under the Military Housing Privatization Initiative.

“ MHPI System ” means a System in respect of which the Host Customer is an MHPI SPE.

“ Misdirected Revenues ” has the meaning given in Section 5.11(c) .

“ Moody’s ” means Moody’s Investors Service, Inc. and any successor thereto.

“ Multiemployer Plan ” means a Plan which has two or more contributing sponsors (including the Borrower or any ERISA Affiliate) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

“ Net Cash Flow ” has the meaning given in Appendix 2 .

“ New Committed Lender ” has the meaning given in Section 2.9(c) .

“ New Committed Lender Accession Agreement ” means an accession agreement substantially in the form of Exhibit F-1 hereto, among a New Lender, the Borrower and the Administrative Agent and delivered pursuant to Section 2.9(c) .

“ New Conduit Lender Accession Agreement ” means an accession agreement substantially in the form of Exhibit F-2 hereto, among a New Lender, the Borrower and the Administrative Agent and delivered pursuant to Section 2.9(c) .

“ Non-Cash Sweep Fund ” means any Subject Fund that is not a Cash-Sweep Fund.

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“ Non-Investment Grade Commercial Host Customer ” shall mean a commercial Host Customer whose credit rating is not investment grade as rated by Moody’s or S&P, or 3 notches above investment grade as rated by Moody’s RiskCalc or S&P Capital IQ.

“ Note ” and “ Notes ” has the meanings given in Section 2.1(d) .

“ Obligations ” means and includes, with respect to any Person, all loans, advances, debts and liabilities howsoever arising (and whether arising or incurred before or after any Bankruptcy Event with respect to the Borrower or any other Person), owed by such Person to the Agents or the Secured Parties of every kind and description (whether or not evidenced by any note or instrument and whether or not for the payment of money), direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, pursuant to the terms of this Agreement or any of the other Financing Documents, including all principal, interest, indemnity or reimbursement obligations, fees, charges, expenses, attorneys’ fees and accountants fees chargeable to such Person in connection with its dealings with such Person and payable by such Person under this Agreement or any of the other Financing Documents.

“ OFAC ” means the United States Department of the Treasury’s Office of Foreign Assets Control.

“ OFAC List ” means any list of persons, entities, and governments issued by OFAC pursuant to Executive Order 13224 – Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, as in effect on the date hereof, or any similar list issued by OFAC.

“ OFAC Violation ” has the meaning assigned to such term in Section 5.12(b) .

“ Operating Account ” means the Borrower’s account identified on Schedule 1.1(c) .

“ Operative Documents ” means the Financing Documents, the LLC Agreements and the Project Documents.

“ Organizational Documents ” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

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security interest under, engaged in any other transaction pursuant to or enforced any Financing Document, or sold or assigned an interest in any Loan or Financing Document).

“ Other Financed Structure ” means a financing structure for investments in Systems other than a Tax Equity Structure or Other Non-Financed Structure (which may include financing structures that include investments in commercial systems).

“ Other Non-Financed Structure ” means a non-financed structure composed entirely of Systems that are wholly and directly owned by a special purpose vehicle wholly-owned by Borrower related to a non-financed structure.

“ Other Structure ” means any Other Financed Structure or Other Non-Financed Structure.

“ Other Structure Representations ” means , with respect to each Other Structure, the representations set forth in Part II of Appendix 7 .

“ Other Taxes ” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Financing Document, except that any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.8(c) .

“ Outstanding Principal ” means the aggregate amount of principal outstanding under all Loans, as of the date of determination.

“ Participant Register ” has the meaning given in Section 9.16(b) .

“ Partnership ” means a limited liability company owned by Investor and Partnership Managing Member and that owns a specific pool of PV Systems. Each Partnership is listed on Appendix 4 , as such Appendix may be updated from time to time in accordance with the terms hereof.

“ Partnership Flip Structure ” means a tax equity structure that conforms to the characteristics set forth in Part I of Appendix 9 , or is otherwise is otherwise identified as a Partnership Lease Pass Through Structure on Appendix 4 , as each such Appendix may be updated from time to time in accordance with this Agreement whereby the Investor and the Partnership Managing Member jointly own a Partnership.

“ Partnership Lease Pass Through Structure ” means a tax equity structure that conforms to the characteristics set forth in Part II of Appendix 9 , as the same may be updated from time to time in accordance with this Agreement, whereby a Lessor Partnership leases a specific, segregated pool of PV Systems to a Lessee and is entitled to receive the payments to be made under such lease.

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“ Partnership Managing Member ” means a bankruptcy-remote special purpose vehicle and wholly-owned subsidiary of the Borrower that is the managing member of, and owns a direct Equity Interest in, the Partnership in a Partnership Flip Structure. Each Partnership Managing Member is listed on Appendix 4 , as such Appendix may be updated from time to time in accordance with the terms hereof.

“ Patriot Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56 ( a/k/a the USA PATRIOT Act).

“ PBGC ” means the Pension Benefit Guaranty Corporation.

“ PBI ” has the meaning given in Appendix 3 .

“ Pension Plan ” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that (i) is maintained or is contributed to by the Borrower and any ERISA Affiliate and (ii) is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.

“ Performance Based Incentive Agreement ” has the meaning given in Appendix 3 .

“ Permit ” means any action, approval, consent, waiver, exemption, variance, franchise, order, permit, authorization, right or license of or from a Governmental Authority.

“ Permitted Liens ” means (a) Liens of materialmen, mechanics, workers, repairmen or employees arising in the ordinary course of business; (b) Liens imposed by any Governmental Authority for Taxes not yet due or being contested in good faith and by appropriate proceedings and in respect of which appropriate reserves acceptable to the Administrative Agent have been established in accordance with GAAP; (c) Liens arising out of judgments or awards so long as an appeal or proceeding for review is being prosecuted in good faith and for the payment of which appropriate reserves have been established in accordance with GAAP, bonds or other security have been provided or are fully covered by insurance, in each case, as acceptable to the Administrative Agent; (d) Liens created under the Financing Documents; (e) Liens permitted under the applicable Project Documents; (f) Liens of Host Customers under Customer Agreements; and (g) encumbrances consisting of zoning restrictions, licenses, restrictions on use of property or imperfections in title relating to a Funded System which could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, partnership, firm, association, Governmental Authority or any other entity whether acting in an individual, fiduciary or other capacity.

“ Placed-In-Service ” means for a Current System, the definition of “Placed In Service” or “Placed-In-Service”, as applicable, given in the applicable Project Documents of the applicable Subject Fund.

“ Platform ” has the meaning given in Section 10.1(d) .

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“ Potential New Fund ” has the meaning given in Section 2.10(a)(i) .

“ Prime Rate ” means the rate of interest per annum determined from time to time by the Administrative Agent as its prime rate in effect at its principal office in New York City and notified to the Borrower. The prime rate is a rate set by the Administrative Agent based upon various factors including the Administrative Agent’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such rate.

“ Program Administrator ” has the meaning set forth in Section 10.17 .

“ Prohibited Manufacturer ” means (a) with respect to any Tax Equity Structure or Other Financed Structure the Project Documents in respect of which set forth a list of approved manufacturers, any manufacturer set forth on such list of approved manufacturers other than (i) with respect to photovoltaic panels, [***], [***], [***], [***], [***], [***]or [***] and (ii) with respect to inverters, [***], [***], [***], [***] or [***], (b) for any Subject Fund without an express approved manufacturers list, any manufacturer of photovoltaic panels or inverters other than those set forth in Appendix 8 , as such Appendix 8 may be updated from time to time upon approval of the Administrative Agent and the Majority Group Agents.

“ Project Documents ” means those documents of a Subject Fund listed on Appendix 5, as may be updated from time to time.

“ Proportionate Share ” means, at any time with respect to each Group, the percentage obtained by dividing the outstanding principal amount of the Loans and Commitments of the Related Committed Lenders of such Group at such time by the aggregate outstanding principal amount of all Loans and Commitments of the Related Committed Lenders of all Groups at such time.

“ PTO ” has the meaning set forth in the definition of “PTO Systems”.

“ PTO Systems ” any Residential System, Commercial System or MHPI System for which SolarWorks classifies the related System to be at or past the point of the “Permitted to Operate (“ PTO ”) Stage” as defined by SolarCity’s PV System Lifecycle Policy, as in effect on the date hereof.

“ Public Party ” has the meaning given in Section 10.1(d) .

“ Purchase Option ” has the meaning set forth in the CADA.

“ PV System ” means a photovoltaic system, including photovoltaic panels, racks, wiring and other electrical devices, conduit, weatherproof housings, hardware, one or more inverters, remote performance monitoring equipment, connectors, meters, disconnects, over current devices and battery storage. For the avoidance of doubt, usage monitoring equipment, if any, shall not be considered part of the PV System.

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“ Quarterly Date ” means a date occurring on the last day of each calendar quarter, commencing with the quarter in which the initial Borrowing Date occurs.

“ Rating Agency ” means any rating agency that rates the Commercial Paper notes issued by or on behalf of a Conduit Lender.

“ Register ” has the meaning given in Section 9.17(c) .

“ Regulation T ” means Regulation T of the FRB as from time to time in effect, and all official rulings and interpretations thereunder or thereof.

“ Regulation U ” means Regulation U of the FRB as from time to time in effect, and all official rulings and interpretations thereunder or thereof.

“ Regulation X ” means Regulation X of the FRB as from time to time in effect, and all official rulings and interpretations thereunder or thereof.

“ Related Committed Lender ” means, with respect to (a) any Conduit Lender, each Committed Lender included in such Conduit Lender’s Group or (b) any Group, each Committed Lender included in such Group.

“ Related Fund ” means, any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of activities that is administered or managed by (a) a Lender, (b) an Affiliate of Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“ Related Group Agent ” means, with respect to any (a) Conduit Lender or such Conduit Lender’s Related Committed Lenders or other providers of a Liquidity Facility or Credit Facility to such Conduit Lender, the Group Agent included in such Conduit Lender’s Group, as set forth on such Group Agent’s signature page hereto, or in the Lender Assignment or Assumption Agreement pursuant to which such Group Agent became a party hereto or (b) a Group without a Conduit Lender, the Group Agent included in such Committed Lender’s Group.

“ Related Lender ” means, with respect to any Group Agent, each Lender included in its Group.

“ Related Parties ” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, trustees, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

“ Release ” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing of any Hazardous Substances.

“ Released Fund ” has the meaning given in Section 2.10(b) .

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“ Relevant Member Action ” means, with respect to any matter relating to a Subject Fund with respect to which the Organizational Documents of such Subject Fund (or any other contract, agreement, or instrument) grant voting, approval or consent rights to the related Managing Member, or otherwise provide the Managing Member with the ability, or otherwise permit any Managing Member, to cause such Subject Fund to take, or restrict such Subject Fund from taking, any action, the exercise by the Borrower, in its capacity as sole member of the related Managing Member, of such voting, approval, consent or other rights; provided that for purposes of Article VI, if any voting, approval, or consent is required to be taken pursuant to the Organizational Documents of such Subject Fund, the applicable Managing Member’s fiduciary duties (to the extent applicable given any elections set forth in such Organizational Documents) or as otherwise required by applicable Laws, the “Relevant Member Action” shall be deemed to have been taken; provided further, that for purposes of Article VII , if any voting, approval, or consent is required to be taken pursuant to the Organizational Documents of such Subject Fund, the applicable Managing Member’s fiduciary duties (to the extent applicable given any elections set forth in such Organizational Documents) or as otherwise required by applicable Laws, the “Relevant Member Action” shall not be deemed to have been taken.

“ Removal Effective Date ” has the meaning given in Section 9.6(b) .

“ Rent Prepayment ” means any prepayment of rent to the Lessor in an Inverted Lease Structure or to the Lessor Partnership in a Partnership Lease Pass Through Structure.

“ Repeat Tax Equity Structure ” means a Partnership Flip Structure, Inverted Lease Structure, Partnership Lease Pass Through Structure or Other Financed Structure (a) that is substantially similar to a Partnership Flip Structure, Inverted Lease Structure, Partnership Lease Pass Through Structure or Other Financed Structure, as the case may be, that (i) was a Subject Fund as of the Closing Date (other than the [***] Subject Fund) or (ii) was previously approved by the Administrative Agent and the Majority Group Agents pursuant to Section 2.10 as a Subject Fund and (b) whose tax equity investor is the same Investor (or an Affiliate thereof) as the previously approved Partnership Flip Structure, Inverted Lease Structure, Partnership Lease Pass Through Structure or Other Financed Structure.

“ Repeat Tax Equity Structure Representations ” means, with respect to each Repeat Tax Equity Structure, representations set forth in clause (a) in Part III of Appendix 7 .

“ Reportable Event ” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

“ Representatives ” has the meaning given in Section 10.17 .

“ Required Group Agents ” means, in respect of any action, the percentage of Group Agents required to take or approve such action, as set forth in Section 9.14(a) .

“ Required LLC Provisions ” has the meaning given in Section 5.13(b).

“ Residential Systems ” means any System located on residential property other than MHPI Systems.

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“ Resignation Effective Date ” has the meaning given in Section 9.6(a) .

“ Responsible Officer ” means, as to any Person, its president, chief executive officer, chief operating officer, chief financial officer, general counsel, controller or treasurer, or any managing general partner or managing member of such Person that is a natural person (or any of the preceding with regard to any managing general partner or managing member of such Person that is not a natural person) and responsible for the administration of the obligations of such Person in respect of this Agreement, or with respect to any Loan Party, Borrower Subsidiary Party or Limited Guarantor, any other officer or employee of such Person designated in or pursuant to an agreement between such Person and the Administrative Agent.

“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Borrower Subsidiary Party, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests in the Borrower or any Borrower Subsidiary Party, other than Excluded Revenues.

“ Revenue Account ” has the meaning given in the CADA.

“ Revenues ” means, for any period, the Actual Net Cash Flows received by the Borrower from Funded Subsidiaries.

“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto.

“ Sanctions ” means any sanction administered or enforced by the United States Government (including OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury (“HMT”) or other relevant sanctions authority.

“ Scheduled Calculation Date ” means, with respect to each Scheduled Payment Date, each date that is ten (10) Business Days prior to such Scheduled Payment Date.

“ Scheduled Payment Date ” means, with respect to any Loan, (a) January 25, April 25, July 25 and October 25, or (b) if such January 25, April 25, July 25 or October 25 is not a Business Day, the first Business Day immediately following such January 25, April 25, July 25 and October 25, as applicable.

“ Secured Parties ” means the Agents, the Group Agents, the Lenders, the Depositary and the Interest Rate Protection Agreement Counterparties.

“ Security Agreement ” means the Pledge and Security Agreement, dated as of even date herewith, between the Borrower and the Collateral Agent.

“ Shadow Rated Commercial Host ” shall mean a commercial Host Customer whose credit rating is 3 notches above investment grade as rated by Moody’s RiskCalc or S&P Capital IQ.

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“ SolarCity ” means SolarCity Corporation, a Delaware corporation.

“ SolarWorks ” means SolarWorks®, SolarCity’s proprietary project management software.

“ SREC ” means the definition “SRECs”, “RECs” or “Renewable Energy Credits”, as applicable, given in the applicable Project Documents of the applicable Subject Fund, but in any event, includes credits, credit certificates, green tags or similar environmental or green energy attributes (such as those for greenhouse gas reduction or the generation of green power or renewable energy) created by a Governmental Authority of any State or local jurisdiction and/or independent certification board or group generally recognized in the electric power generation industry, and generated by or associated with any System or electricity produced therefrom. For the avoidance of doubt, the “ZREC” offered in Connecticut will not be considered an SREC under the Financing Documents.

“ State ” means (a) any state of the United States of America, (b) the District of Columbia, or (c) Puerto Rico.

“ Subject Fund ” means with respect to each Tax Equity Structure or Other Structure financed pursuant to this Agreement, (a) for each Partnership Flip Structure, the Partnership, (b) for each Inverted Lease Structure, the Lessor, (c) for each Partnership Lease Pass Through Structure, the Lessor Partnership, and (d) for each Other Structure, the legal entity that directly owns the PV Systems subject to the Other Structure, as agreed by the Administrative Agent and Borrower at the time such Tax Equity Structure or Other Structure is financed pursuant to this Agreement. Each Subject Fund is listed on Appendix 4 , as such Appendix may be updated from time to time in accordance with the terms hereof; provided , however, that [***] shall no longer be considered a “Subject Fund” if the Borrower has sold, transferred or otherwise disposed of the Equity Interests of [***] in accordance with Section 6.4(d) .

“ Subject Fund Borrowing Base ” has the meaning given in Appendix 2 .

“ Subject Fund Payment Level ” means, in respect of any Subject Fund, as of a Scheduled Payment Date or Borrowing Base Certificate Date, for any trailing three (3) month period ending on such date (or if shorter, such period from the Closing Date to such Scheduled Payment Date or Borrowing Base Certificate Date, as applicable), the ratio of: (a) Distributions of Ongoing Revenue in respect of such Subject Fund during such period, to (b) Net Cash Flow for such Subject Fund during such trailing three (3) month period, through and including such date (or if shorter, such period from Closing Date through and including such date).

“ Subject Fund Sweep Event ” means the Subject Fund Payment Level of any Subject Fund is less than 85% .

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contingency), (b) the interest in the capital or profits of such partnership, joint venture or limited liability company or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.

“ Swap Rate ” means, on any relevant date under Section 2.13(a) or Section 2.13(e) , the then current market rate associated with the expected amortization schedule of the outstanding principal balance of the Loans, as determined by the proprietary model maintained by the Interest Rate Hedge Counterparties in respect of the Interest Rate Hedge Agreements being entered into on such date and mutually agreed upon by such party and the Borrower.

“ Sweep Event ” means the occurrence and continuation of the following:

(a) the Managing Member Payment Level is less than 90%;

(b) (i)a Bankruptcy Event of SolarCity, (ii) SolarCity does not have either of the following: (A) a corporate issuer rating by S&P of BBB- or Moody’s is Baa3, or (B) tangible net worth (defined as total assets less intangible assets less total liabilities, in each case as those terms are defined for GAAP purposes and as reflected on SolarCity’s most recent financial statements) of at least four hundred million dollars ($400,000,000) and SolarCity has total unrestricted cash, cash equivalents and investments with maturity of less than 12 months (as determined under GAAP) of at least one hundred fifty million dollars ($150,000,000) or (iii) as of the last day of any calendar quarter, SolarCity’s “Interest Coverage Ratio” (as defined in that certain Amended and Restated Credit Agreement, dated as of November 1, 2013, under which SolarCity is the borrower), is less than 1.50:1.00; or

“ Synthetic Lease ” means, as to any Person, any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) (a) that is accounted for as an operating lease under GAAP and (b) in respect of which the lessee retains or obtains ownership of the property so leased for U.S. federal income tax purposes, other than any such lease under which such Person is the lessor.

“ Synthetic Lease Obligations ” means, as to any Person, an amount equal to the capitalized amount of the remaining lease payments under any Synthetic Lease that would appear on a balance sheet of such person in accordance with GAAP if such obligations were accounted for as Capital Lease Obligations.

“ System ” means (i) a PV System, (ii) the applicable Customer Agreement related to such System and (iii) all other related rights applicable thereto.

“ System Group ” means a group of Systems for which a Borrowing Notice has been submitted.

“ System Consolidator ” means the model that includes the applicable system information with respect to Systems in each of the Subject Funds in the form of Exhibit H-2 (which Exhibit

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H-2 may be updated from time to time with the addition of new Subject Funds or Systems pursuant to Section 2.10 or 3.3(a) ).

“ Tax Equity Model ” has the meaning given in Appendix 2 .

“ Tax Equity Representations ” means, with respect to each Tax Equity Structure, representations set forth in Part I of Appendix 7 .

“ Tax Equity Required Consent ” means, with respect to a Subject Fund, a consent executed by the Investor in such Subject Fund and each other party thereto, in form and substance acceptable to the Administrative Agent.

“ Tax Equity Structure ” means a Partnership Flip Structure, an Inverted Lease Structure, a Partnership Lease Pass Through Structure, a Repeat Tax Equity Structure or such other tax equity structure acceptable to the Administrative Agent and Lenders in their sole discretion.

“ Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“ Tax Loss ” means, with respect to any Subject Fund, the amount any investment tax credit under Section 48(a)(3)(A)(i) of the Code or any successor provision, or any other tax benefit, that such Subject Fund or its Lessee or Investor, shall lose the benefit of, shall not have the right to claim, shall suffer the disallowance of, shall be required to recapture or shall not claim.

“ Tax Loss Indemnity ” means, with respect to any Subject Fund, any obligation of SolarCity to indemnify the applicable Subject Fund, Investor or Lessor for any Tax Loss in accordance with the applicable Project Documents of such Subject Fund.

“ Tax Loss Insurer ” means an independent third-party insurer rated at least “A” by A.M. Best Company, “A” by S&P or “A2” by Moody’s or such other Person acceptable to the Administrative Agent.

“ Tax Loss Policy ” means, with respect to each Subject Fund, a policy of insurance or other credit enhancement product for the benefit of the Collateral Agent, under which the Tax Loss Insurer will, subject to the terms and conditions of the Tax Loss Policy, pay, or such other credit enhancement product will be used to pay, to the Collateral Agent the amount of any Tax Loss Indemnity required to be paid by SolarCity and not paid by SolarCity when due under the applicable Project Documents, up to an aggregate amount and subject to a retention limit, deductible or other similar amount, approved by the Administrative Agent in its reasonable discretion.

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Event of Loss or (b) is otherwise deemed to be a “Terminated System”, “Deficient System”, “Cancelled System” or “Overdue System” (or an equivalent term or designation of similar meaning) pursuant to the applicable Project Document.

“ Total Loan Commitment ” means the aggregate principal amount of the Group Limits hereunder as such amount may be (a) reduced from time to time pursuant to Section 2.2(c) , or (b) increased pursuant to Section 2.9 . The Total Loan Commitment as of the date of this Agreement is Five Hundred Million Dollars ($500,000,000).

“ True-Up Report ” means that report delivered by SolarCity or the applicable Lessor pursuant to the terms of the applicable Project Document of the applicable Subject Fund.

“ Type ” when used in respect of any Loan or Borrowing, shall refer to the Rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, the term “Rate” shall mean the CP Rate, LIBO Rate and the Base Rate.

“ UCC ” means the Uniform Commercial Code of the jurisdiction the law of which governs the document in which such term is used or which governs the creation or perfection of the Liens granted thereunder.

“ Undrawn Fees ” has the meaning given in Section 2.3(a) .

“ U.S. Tax Compliance Certificate ” has the meaning given in Section 2.4(g)(ii)(B)(3) .

“ U.S. Person ” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

“ Watched Fund ” has the meaning given in Appendix 2 .

1.2 Rules of Interpretation . Except as otherwise expressly provided, the rules of interpretation set forth below shall apply to this Agreement and the other Financing Documents:

(a) The singular includes the plural and the plural includes the singular. The definitions of terms apply equally to the singular and plural forms of the terms defined.

(b) A reference to a Governmental Rule includes any amendment or modification to such Governmental Rule, and all regulations, rulings and other Governmental Rules promulgated under such Governmental Rule.

(d) The words “include,” “includes” and “including” are not limiting.

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be deemed incorporated by reference in such document. In the event of any conflict between the provisions of this Agreement (exclusive of the Exhibits, Schedules, Annexes and Appendices thereto) and any Exhibit, Schedule, Annex or Appendix thereto, the provisions of this Agreement shall control.

(f) References to any document, instrument or agreement (a) shall include all exhibits, schedules and other attachments thereto, (b) shall include all documents, instruments or agreements issued or executed in replacement thereof, and (c) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified and supplemented from time to time and in effect at any given time, provided such amendment, modification or supplement was made in compliance with this Agreement.

(g) The words “hereof,” “herein” and “hereunder” and words of similar import when used in any document shall refer to such document as a whole and not to any particular provision of such document.

(h) References to “days” shall mean calendar days, unless the term “Business Days” shall be used. References to a time of day shall mean such time in New York, New York, unless otherwise specified.

(i) The Financing Documents are the result of negotiations between, and have been reviewed by the Borrower, the Agents, the Group Agents, each Lender and their respective counsel. Accordingly, the Financing Documents shall be deemed to be the product of all parties thereto, and no ambiguity shall be construed in favor of or against the Borrower, the Agents, the Group Agents or any Lender.

(j) Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “will” and “shall” shall be construed to have the same meaning and effect.

(k) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding.”

(l) Accounting terms have the meanings assigned to them by GAAP, as applied by the accounting entity to which they refer.

(m) Unless otherwise specified in this Agreement, whenever a payment or performance of an action is required to be made pursuant to this Agreement on a day that is not a Business Day, such payment or performance shall be made on the next succeeding Business Day.

(n) If, at any time after the Closing Date, Moody’s or S&P shall change its respective system of classifications, then any Moody’s or S&P “rating” referred to herein shall be considered to be at or above a specified level if it is at or above the new rating which most closely corresponds to the specified level under the old rating system.

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(o) Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding up if there is no nearest number).

ARTICLE 2

THE LOAN FACILITY

2.1 Loan Facility .

(a) Loan Facility .

(i) Availability .

(A)

Subject to the terms and conditions set forth herein, each Committed Lender agrees, severally and not jointly, to make one or more Loans to the Borrower, from time to time during the Availability Period, in an aggregate principal amount that will not result in such Committed Lender’s Loans exceeding its Commitment or such Group’s Loans exceeding its Group Limit; provided that a Committed Lender shall be deemed to have satisfied its obligation to make a Loan hereunder (solely with respect to such Loan) to the extent any Conduit Lender in such Committed Lender’s Group funds such Loan in place of such Committed Lender in accordance with this Agreement, it being understood that the Conduit Lender may fund a Loan in its sole discretion.

It is expected that each Conduit Lender always will (but there shall be no obligation of any Conduit Lender to) fund the Loans through the issuance of Commercial Paper notes. Each Group Agent agrees that it will notify the Borrower if it elects to fund any portion of any Loan from the Lenders in its Group other than through the issuance of Commercial Paper notes and, in such event, of the time periods and the funding cost applicable to such fundings. Each of the parties hereto hereby acknowledges and agrees that the Group that includes Bank of America, as Group Agent and Committed Lender shall not include a Conduit Lender (unless and until a Conduit Lender shall later join such Group pursuant to the terms hereof), and each request by the Borrower for Loans by the Conduit Lender shall be

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deemed to be a request that the Committed Lender in such Group make its ratable share of such Loan.

(B)

Notwithstanding the foregoing, (x) there shall be no more than four (4) Borrowings per calendar month (provided that, for purposes of this clause (x), simultaneous Borrowings of different Types shall be considered a single Borrowing), and (y) the total principal amount of Borrowings shall not exceed the Total Loan Commitment.

(C)	Within the limits of each Committed Lender’s Commitment and each Group’s Group Limit, and subject to the other terms and conditions hereof, the Borrower may borrow Loans, prepay under Section 2.1(f) , and reborrow under this Section 2.1(a) .

(ii) Loan Sizing; Minimum Draw Amount . Notwithstanding anything to the contrary in Section 2.1(a)(i) , the aggregate amount of each Borrowing (A) shall not cause the Outstanding Principal (including the amounts of the requested Borrowing) to exceed the Available Borrowing Base set forth in the Borrowing Base Certificate related to such Borrowing and (B) shall exceed $2,500,000 or such lesser amount as is remaining under the Total Loan Commitment.

(iii) Borrowing Notice . The Borrower shall request Loans by (A) telephone or (B) delivering to the Administrative Agent an irrevocable written notice in the form of Exhibit B-1 or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower (a “ Borrowing Notice ”) by no later than 2:00 p.m., New York time, at least three (3) Business Days before the requested date of each Borrowing. If the Borrower elects to provide notice by telephone, such telephonic notice shall be confirmed promptly by delivery to the Administrative Agent of a Borrowing Notice.

(iv) Borrowing Base Certificate; Aggregate Advance Model . In connection with any Borrowing Notice, the Borrower shall also deliver to the Administrative Agent (no later than the time specified in clause (iii) above with respect to such Borrowing Notice) the applicable (A) Borrowing Base Certificate, which shall include the Eligibility Representations with respect to the Current System or otherwise identify a Current System as a System the cash flow in respect of which is excluded from the definition of Net Cash Flow and (B) Aggregate Advance Model with respect to the requested Borrowing, each of which the Administrative Agent shall distribute to each Lender.

(v) Calculations and Computations . Unless the Administrative Agent has received a written notice from a Group Agent no later than 2:00 p.m., New

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York time, at least one (1) Business Day before the requested Borrowing Date contesting the Borrower’s calculations in the Borrowing Base Certificate submitted by the Borrower, the Administrative Agent shall confirm the Available Borrowing Base and provide notice thereof to the Borrower and each Group Agent. If the Administrative Agent receives a written notice from a Group Agent contesting the Borrower’s calculations in such Borrowing Base Certificate, it shall inform the Borrower and provide an amended Borrowing Base Certificate (provided to the Administrative Agent by the objecting Group Agent no later than one (1) Business Day prior to the initial requested Borrowing Date). Thereafter, Borrower may (A) agree to such amended Borrowing Base Certificate and deliver an amended Borrowing Notice to the Administrative Agent, or (B) by written notice to the Administrative Agent, rescind the Borrowing Notice. The delivery of an amendment to a Borrowing Notice or a rescission of a Borrowing Notice pursuant to this clause (v) shall not be subject to Section 2.7 , provided that the Borrower delivers such amendment or rescission no later than 12:00 p.m. New York time one (1) Business Day before the requested Borrowing Date.

(vi) Initial Conversion . Solely to the extent that the Borrower cannot borrow LIBO Loans, and instead borrows Base Rate Loans, pursuant to the initial Borrowing Notice delivered in accordance with Sections 2.1(a)(iii) and 3.2(c) , the Borrower may request a conversion of the Base Rate Borrowings made under such Borrowing Notice to LIBO Borrowings (at the Daily LIBO Rate) on the first date on which the Administrative Agent indicates that such LIBO Loans become available. The Borrower shall request such conversion of Loans from one Type to the other by delivering to the Administrative Agent an irrevocable written notice in the form of Exhibit B-2 , appropriately completed concurrently with such Borrowing Notice and signed by a Responsible Officer of the Borrower (a “ Conversion and Continuation Notice ”). Such conversion to LIBO Loans at the Daily LIBO Rate shall be in a principal amount equal to the entire amount of the Base Rate Loans made on the initial Borrowing Date.

(b) Interest Provisions Relating to Loans .

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Calculation Date and ending on the Loan Maturity Date, interest on the unpaid principal amount of each LIBO Loan shall be charged for each day during such period at the Daily LIBOR Rate plus the Applicable Margin.

(ii) Interest Payment Dates . Interest on the unpaid principal amount of each Loan shall be payable in arrears on (A) each Scheduled Payment Date with respect to such Loan and (B) upon prepayment of any Loans as and to the extent provided in Section 2.1(f) and at maturity (whether by acceleration or otherwise); provided that interest payable pursuant to Section 2.4(c) shall be payable on demand.

(iii) Interest Computations . All computations of interest on any Borrowing hereunder shall include the first day but exclude the last day of the Interest Period in effect for such Borrowing and shall be based upon a year of 360 days. The Applicable Interest Rate for each Interest Period or day within an Interest Period, as the case may be, shall be determined by the Administrative Agent or, with respect to each CP Rate Loan, the applicable Group Agent, and such determination shall be conclusive absent manifest error.

(iv) Interest Account and Interest Computations . The Administrative Agent shall record in an account or accounts maintained by the Administrative Agent on its books (A) the Applicable Interest Rate for the Loans; (B) the date and amount of each interest payment on each Loan; and (C) such other information as the Administrative Agent may determine is necessary for the computation of interest payable by the Borrower hereunder consistent with the basis hereof.

(v) Continuation . Each LIBO Loan shall be automatically continued at the end of each Interest Period that ends prior to the Loan Maturity Date for an additional Interest Period at the then Applicable Interest Rate, unless the Borrower (A) gives a notice by telephone or (B) delivers a Conversion and Continuation Notice, electing otherwise. The Borrower shall deliver any Conversion and Continuation Notice to the Administrative Agent by no later than 2:00 p.m., New York time, at least three (3) Business Days before the requested date of each continuation. If the Borrower elects to provide notice by telephone, such telephonic notice shall be confirmed promptly by delivery to the Administrative Agent of a Conversion and Continuation Notice. A LIBO Loan may be continued only on the last day of an Interest Period for such LIBO Loan.

(vi) Alternate Rate of Interest . If prior to the commencement of any Interest Period for a Borrowing:

(A)	the Administrative Agent shall have determined that Dollar deposits in the principal amounts of the Loans (other than CP Rate Loans) comprising such Borrowing are not generally available in the London interbank market or that

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reasonable means do not exist for ascertaining the LIBO Rate or Daily LIBO Rate, as applicable; or

(B)

the Administrative Agent is advised by Lenders holding Loans and unused Commitments representing 30% or more of the sum of unused Commitments and the Loans then outstanding that the rates at which such Dollar deposits are being offered will not adequately and fairly reflect the cost to the Lenders of making or maintaining such LIBO Loans during such Interest Period,

then the Administrative Agent shall, as soon as practicable thereafter, give written notice of such determination to the Borrower and the Lenders. In the event of any such determination, until the Administrative Agent shall have advised the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, any request by the Borrower for a Borrowing shall be deemed to be a request for a Base Rate Borrowing or CP Rate Borrowing, as applicable. Each determination by the Administrative Agent under this Section 2.1(b)(vi) shall be conclusive absent manifest error.

(c) Principal Payments of Loans . Subject to Section 8.2(c) , any remaining unpaid principal, interest, fees and costs payable hereunder or under any other Financing Documents shall be due and payable on the Loan Maturity Date.

(d) Promissory Notes . If requested by any Lender, the Borrower shall execute and deliver to such Lender a promissory note in the form of Exhibit A (individually, a “ Note ” and, collectively, the “ Notes ”), payable to the order of such Lender and in the principal amount of such Lender’s Proportionate Share of the Loans.

(e) Loan Funding .

(i) Notice . The Borrowing Notice, together with the applicable Borrowing Base Certificate, Conversion and Continuation Notice (as applicable) and Aggregate Advance Model shall be delivered to the Administrative Agent in accordance with Section 2.1 . The Administrative Agent shall promptly notify each Group Agent of the date of each requested Borrowing or conversion, as applicable, and such Group’s Proportionate Share of the requested Borrowing or conversion, as applicable.

(ii) Pro Rata Loans . All Loans shall be made on a pro rata basis by the Groups in accordance with their respective Proportionate Shares, with the Borrowings of Loans to be comprised of a Loan by each Group equal to such Group’s Proportionate Share of the aggregate amount of all Borrowings requested by Borrower with respect to such Borrowing Date.

(iii) Administrative Agent Account . No later than 2:00 p.m., New York time on the date of the requested Borrowing, if the applicable conditions

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precedent listed in Sections 3.1 and 3.2 have been satisfied or waived, each Lender shall make available the Loans requested in the Borrowing Notice or Conversion and Continuation Notice, as applicable, in Dollars and in immediately available funds to the Administrative Agent at its account in the United States identified in Annex 1 .

(f) Prepayments .

(i) Voluntary Prepayment of Loans . The Borrower may, at its option, prepay, all outstanding Loans in whole or in part. Any partial prepayment hereunder shall be in a minimum aggregate amount of One Million Dollars ($1,000,000) and in an integral multiple of One Million Dollars ($1,000,000), provided, however, that any prepayment pursuant to this Section 2.1(f)(i) shall not result in any release of Collateral without further action of the Collateral Agent.

(ii) Mandatory Prepayments . In accordance with Section 2.1(f)(iii) , (A) during a Sweep Event, the Borrower shall apply Actual Net Cash Flow remaining after making the transfers required pursuant to Sections 3.5(d)(1) through 3.5(d)(4) of the CADA to the prepayment of the Loans in accordance with Section 3.5(d)(5) of the CADA until such time the Sweep Event is remedied, provided that in the event that a Sweep Event is caused by the occurrence of a Bankruptcy Event of SolarCity as set forth in clause (c) of the definition of such term, such Sweep Event cannot be remedied and such Sweep Event shall continue until the Discharge Date; (B) during a Subject Fund Sweep Event, the Borrower shall apply Actual Net Cash Flow remaining after making the transfers required pursuant to Sections 3.5(d)(1) through 3.5(d)(4) of the CADA to the prepayment of Loans that were advanced in respect of the Subject Fund Borrowing Base for the applicable Subject Fund in accordance with Section 3.5(d)(5) of the CADA until the earlier of (x) such time the Subject Fund Sweep Event is remedied or (y) such time such Subject Fund becomes a Watched Fund; (C) upon receipt of any Equity Contributions for the purpose of curing a Default under Section 8.1(i) , the Borrower shall cause the proceeds of such Equity Contributions to be applied as a prepayment of outstanding principal of the Loans in an amount not less than the amount required to satisfy the Applicable Threshold, (D) upon receipt of any Equity Contributions under Section 5.19 , the Borrower shall cause the proceeds of such Equity Contribution to be applied as a prepayment of outstanding principal of the Loans in an amount not less than the amount of applicable Correction Payment Amount; and (E) upon receipt of the proceeds of the refinancing of Net Cash Flows of one or more Subject Funds in accordance with Section 2.10(b) in an amount to prepay the Loans that were advanced and are outstanding in respect of such Subject Funds.

(iii) Terms of Prepayments .

(A)	All voluntary and mandatory prepayments of the Loans shall be accompanied by a corresponding reduction in the

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notional amount of one or more Interest Rate Hedge Agreements sufficient to cause the aggregate notional amount of the Interest Rate Hedge Agreements and Interest Rate Cap Agreements to be not less than the Outstanding Principal (after giving effect to such prepayment) and not more than 105% of the Outstanding Principal.

(B)	All voluntary and mandatory prepayments of Loans under this Section 2.1(f) shall be subject to Section 2.7 but shall otherwise be without premium or penalty and shall be accompanied by accrued and unpaid interest on the principal amount to be prepaid to but excluding the date of payment.

(C)

The Borrower shall give the Administrative Agent at least three (3) Business Days’ notice of any voluntary prepayment under Section 2.1(f)(i) . Each notice of voluntary prepayment shall (x) specify the voluntary prepayment date, and (y) be accompanied by a certificate signed by a Responsible Officer of the Borrower setting forth in reasonable detail the calculation of the amount of such voluntary prepayment.

2.2 Commitments .

(a) Commitments . Subject to the terms and conditions set forth herein, each Committed Lender agrees, severally and not jointly, to make one or more Loans to the Borrower, from time to time during the Availability Period, in an aggregate principal amount that will not result in such Committed Lender’s Loans exceeding its Commitment or the Related Group’s Loans exceeding its Group Limit; provided that a Committed Lender shall be deemed to have satisfied its obligation to make a Loan hereunder (solely with respect to such Loan) to the extent any Conduit Lender in such Committed Lender’s Group funds such Loan in place of such Committed Lender in accordance with this Agreement.

(b) Scheduled Commitment Termination Date . Unless previously terminated, the Commitments shall automatically terminate on the last day of the Availability Period.

(c) Voluntary Termination or Reduction of Commitments . The Borrower may, at any time, terminate, or from time to time reduce, the Commitments provided that each partial reduction of the Commitments shall be in an amount that is One Million Dollars ($1,000,000) or a larger multiple of Five Hundred Thousand Dollars ($500,000); provided that no such reduction shall reduce the Commitments such that the amount of Outstanding Principal exceeds the Total Loan Commitment.

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specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section 2.2 shall be irrevocable.

(e) Effect of Termination or Reduction . Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments. Notwithstanding any termination or reduction of the Commitments pursuant to this Section 2.2(e) , the Commitment Fee shall not be reduced in any event unless otherwise set forth in the Fee Letters.

2.3 Fees .

(a) Undrawn Fee . On each Scheduled Payment Date and on the last day of the Availability Period, the Borrower shall pay to the Administrative Agent, for the account of each Lender, a commitment fee (the “ Undrawn Fees ”) equal to 0.50% per annum on the average daily unutilized portion of the Commitment of such Lender during the preceding three (3) month period calculated on an actual 365-day year during the period from the immediately preceding Scheduled Payment Date (or from the Closing Date in the case of the first Scheduled Payment Date) until the earlier of (i) the last day of the Availability Period and (ii) the date on which such Commitment is terminated or expires; provided , that following the date that is six (6) months after the first day of the Availability Period, but prior to the date that is nine (9) months after the first date of the Availability Period, if on any date on which any Undrawn Fee becomes due (x) the Outstanding Principal is less than 25% of the Total Loan Commitment, then the Undrawn Fee payable on such date shall be 1.00% per annum for the preceding six (6) month period less any Undrawn Fees previously paid, or (y) the Outstanding Principal is more than 25% but less than 50% of the Total Loan Commitment, then the Undrawn Fee payable on such date shall be 0.75% for the preceding six (6) month period less any Undrawn Fees previously paid; provided , further , that following the date that is nine (9) months after the first day of the Availability Period, if on any date on which any Undrawn Fee becomes due (1) the Outstanding Principal is less than 25% of the Total Loan Commitment, then the Undrawn Fee payable on such date shall be 1.00% per annum for the applicable period, or (2) the Outstanding Principal is more than 25% but less than 50% of the Total Loan Commitment, then the Undrawn Fee payable on such date shall be 0.75% for the applicable period. Notwithstanding the foregoing, on each Scheduled Payment Date occurring during any three (3) month period following the date on which a Subject Fund is released pursuant to Section 2.10(b) in connection with the refinancing of the Net Cash Flow arising from such Subject Fund, the calculation of the Outstanding Principal, solely for purposes of this Section 2.3(a) , shall be deemed to include the amount of all Loans that were advanced in respect of such Subject Fund and were outstanding as of the date on which it ceased to be a Subject Fund under this Agreement;

(b) Agent Fees . On the Closing Date and thereafter, the Borrower shall pay to the Administrative Agent and the Depositary (for their respective accounts) such fees in the amount and at the times set forth in the Fee Letters (the “ Agent Fees ”).

(c) Commitment Documents . All fees set forth in the Fee Letters shall be paid as and when due and as set forth in the Fee Letters.

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2.4 Other Payment Terms .

(a) Place and Manner . All payments to be made by the Borrower shall be made free and clear of and without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m., New York time, on the date specified herein. The Administrative Agent will promptly distribute to each Group Agent for its Group, its Proportionate Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Group Agent. All payments received by the Administrative Agent after 2:00 p.m., New York time, shall be deemed received on the next succeeding Business Day (it being understood that the Administrative Agent, in its sole discretion, may deem payments received after such time on any day to be received on the date due) and any applicable interest or fee shall continue to accrue.

(b) Date . Unless otherwise specified in this Agreement, whenever any payment due hereunder shall fall due on a day other than a Business Day, such payment shall instead be due on the next succeeding Business Day, and such extension of time shall be included in the computation of interest or fees, as the case may be.

(c) Default Interest . If the Borrower shall default in the payment of any principal of or interest on any Loan or any other amount due hereunder or under any other Financing Document, by acceleration or otherwise (subject to any applicable grace periods hereunder or thereunder), then from the date of such payment default until the date such overdue amount shall have been paid in full, to the extent permitted by law, the outstanding unpaid portion of such overdue amount shall bear interest at the Default Rate. Such Default Rate shall apply automatically without the need for any notice from the Administrative Agent, any Group Agent or any Lender; provided that the foregoing shall not be intended to modify any other notice obligation hereunder including the notice provisions applicable to Events of Default.

(d) Net of Taxes, Etc .

(i)

(A)

Taxes . Any and all payments by or on account of any obligation of any Loan Party under any Financing Document shall be made without deduction or withholding for any Taxes, except as required by applicable Laws. If any applicable Laws (as determined in the good faith discretion of the Administrative Agent) require the deduction or withholding of any Tax from any such payment by the Administrative Agent or a Loan Party, then the Administrative Agent or such Loan Party shall be entitled to make such deduction or withholding, upon the

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basis of the information and documentation to be delivered pursuant to subsection (g) below.

(B)

If any Loan Party or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States Federal backup withholding and withholding taxes, from any payment, then (A) the Administrative Agent shall withhold or make such deductions as are determined by the Administrative Agent to be required based upon the information and documentation it has received pursuant to subsection (g) below, (B) the Administrative Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 2.4(d) ) the applicable recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(C)

If any Loan Party or the Administrative Agent shall be required by any applicable Laws other than the Code to withhold or deduct any Taxes from any payment, then (A) such Loan Party or the Administrative Agent, as required by such Laws, shall withhold or make such deductions as are determined by it to be required based upon the information and documentation it has received pursuant to subsection (g) below, (B) such Loan Party or the Administrative Agent, to the extent required by such Laws, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with such Laws, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 2.4(d) ) the applicable recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

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(ii) Payment of Other Taxes by the Borrower . Without limiting the provisions of subsection (i) above, the Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable Laws, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(iii) Indemnity .

(A)

The Borrower shall indemnify each Agent and each Lender for the full amount of Indemnified Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.4(d) ) arising from the execution, delivery or performance of its obligations or from receiving a payment hereunder, or enforcing this Agreement or any Financing Document, paid by such Agent or Lender, or any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally asserted; provided that the Borrower shall not be obligated to indemnify any Agent or Lender for any penalties, additional interest or expense relating to Indemnified Taxes arising from such Agent’s or Lender’s fraud, gross negligence or willful misconduct. A certificate as to the amount of such payment or liability delivered to the Borrower by an Agent or Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. Payments by the Borrower pursuant to this indemnification shall be made within thirty (30) days from the date such Agent or Lender makes written demand therefor. The Borrower shall, and does hereby indemnify the Administrative Agent, and shall make in respect thereof within thirty (30) days after demand therefor, for any amount which a Lender for any reason fails to pay to the Administrative Agent as required pursuant to Section 2.4(d)(iii)(B) below.

(B)

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applicable, against any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.16(b) relating to the maintenance of a Participant Register and (z) the Administrative Agent or the Borrower, as applicable, against any Excluded Taxes attributable to such Lender that are payable or paid by the Administrative Agent or the Borrower in connection with any Financing Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender, as the case may be, under this Agreement or any other Financing Document against any amount due to the Administrative Agent under this clause (B) .

(iv) Evidence of Payments . Upon request by the Borrower or the Administrative Agent, as the case may be, after any payment of Taxes by any Loan Party or by the Administrative Agent to a Government Authority as provided in this Section 2.4(d) , the Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Borrower, as the case may be, the original or certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Borrower or the Administrative Agent, as the case may be.

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repay such refund to such Governmental Authority; provided that the Borrower shall not be obligated to reimburse an Agent or any Lender for any penalties, additional interest or other charges arising from such Agent’s or Lender’s fraud, gross negligence or willful misconduct. Notwithstanding anything to the contrary in this paragraph (v) , in no event will Lender or Agent be required to pay any amount to the Borrower pursuant to this paragraph (v) the payment of which would place such Lender or Agent in a less favorable net after-tax position than such Lender or Agent would have been in if the tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such tax had never been paid. This paragraph shall not be construed to require any Agent or Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

(vi) Survival of Obligations . The obligations of the Borrower under this Section 2.4(d) shall survive the resignation or replacement of any Agent, any assignment of rights by, or the replacement of, a Lender, and the occurrence of the Discharge Date.

(e) Application of Payments .

(i) Except as otherwise provided herein (including in Section 7.1 ), payments made under this Agreement and the other Financing Documents shall be applied in the order of priority set forth in Sections 3.5(d), 4.3(b) or 4.3(e) of the CADA, as applicable.

(ii) The Administrative Agent shall promptly distribute to each Secured Party its Proportionate Share of each payment of principal, payments, fees and any other amounts received by the Administrative Agent for the account of the Secured Parties under the Financing Documents. The payments made for the account of each Lender shall be made, and distributed to it, for the account of such Lender’s Lending Office.

(f) Failure to Pay Administrative Agent .

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demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Committed Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Committed Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Committed Lender pays its share of the applicable Loans to the Administrative Agent, then the amount so paid shall constitute such Committed Lender’s Proportionate Share included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Committed Lender that shall have failed to make such payment to the Administrative Agent.

(ii) Unless the Administrative Agent shall have received notice from the Borrower at least two (2) Business Days prior to the date on which any payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent the Borrower shall not have so made such payment in full to the Administrative Agent, such Lender shall repay to the Administrative Agent forthwith upon demand such amount distributed to such Lender, together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent, at a rate equal to the Applicable Interest Rate for each day during such period. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing by such Lender under this Section 2.4(f) shall be conclusive in the absence of manifest error.

(g) Withholding Certificates .

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such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.4(g)(ii)(A) , 2.4(g)(ii)(B) and 2.4(g)(ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,

(A)

any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B)

(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Financing Document, executed originals of IRS Form W-8BEN-E (or IRS Form W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Financing Document, IRS Form W-8BEN-E (or IRS Form W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

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(2) executed originals of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit I to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “ U.S. Tax Compliance Certificate ”) and (y) executed originals of IRS Form W-8BEN; or

(4) to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E (or IRS Form W-8BEN, as applicable), a U.S. Tax Compliance Certificate substantially in the form of Exhibit I , IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit I on behalf of each such direct and indirect partner;

(C)

any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

(D)

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deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(iii) Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 2.4(g) expires or becomes obsolete or inaccurate in any respect, it shall promptly (but in any event on or before the next Scheduled Payment Date; provided that such Scheduled Payment Date is at least ten (10) Business Days after such certificate expires or becomes obsolete) update such form or certification or notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

2.5 Pro Rata Treatment .

(a) Borrowing, Etc . Except as otherwise provided herein, each payment of principal of any Loan, each payment of interest on the Loans, each payment of Commitment Fees, each payment of Undrawn Fees and each reduction of the Commitments shall be made or shared among the Groups pro rata according to their respective applicable Group Limits (or, if the related Commitments shall have expired or terminated, other than with respect to payment of Undrawn Fees, in accordance with the respective principal amounts of their outstanding Loans). Each Group Agent agrees that in computing each Group’s portion of any Loan to be made hereunder, the Administrative Agent may, in its discretion, round each Group’s percentage of such Loan to the next higher or lower whole Dollar amount.

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(according to the proportion of (i) the amount of such other Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the Benefited Lender in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.5(b) may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of setoff) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation; provided , that the provisions of this Section 2.5(b) shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender) or any payment obtained by a Lender as consideration for the assignment of sale of a participation in any of its Loans to any assignee or participant, other than to a Loan Party or any of their Affiliates (as to which provisions of this Section 2.5(b) apply).

2.6 Change of Circumstances .

(a) Increased Costs . If, after the date of this Agreement, any Change of Law:

(i) shall impose, modify or hold applicable any reserve, special deposit or similar requirement (except any reserve requirement reflected in the calculation of the LIBO Rate) against assets held by, deposits or other liabilities in or for the account of, advances or loans by any Lender;

(ii) shall impose on any Lender any other condition not otherwise contemplated hereunder affecting this Agreement or Loans made by such Lender; or

(iii) shall subject the Lender to any taxes other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes,

and the effect of any of the foregoing is to increase the cost to such Lender of making or maintaining any Loan or, with respect to any Committed Lender, any Commitment, or to reduce any amount received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower shall promptly, but in no event later than ten (10) Business Days’ after receipt of written demand therefor by such Lender (accompanied by a certificate from such Lender setting forth the amount of the incurred costs as determined by such Lender in good faith and which shall be conclusive absent manifest error), pay to such Lender such additional amounts sufficient to reimburse such Lender for such increased costs or to compensate such Lender for such reduced amounts, to the extent actually incurred by or suffered by such Lender.

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account such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), the Borrower shall promptly, but in no event later than ten (10) Business Days’ after receipt of written demand therefor by such Lender (accompanied by a certificate from such Lender setting forth the amount of the incurred costs as determined by such Lender in good faith and which shall be conclusive absent manifest error), pay such amounts as such Lender shall determine are necessary to compensate such Lender for the increased costs to such Lender of such increased capital or liquidity.

(c) Notice . Each Group Agent on behalf of a Lender will notify the Borrower of any event occurring after the date of this Agreement that will entitle such Lender to compensation pursuant to this Section 2.6 , as promptly as is practicable. Failure or delay on the part of any Lender to demand compensation pursuant to this Section 2.6 shall not constitute a waiver of such Lender’s right to demand such compensation; provided , that the Borrower shall not be required to compensate a Lender pursuant to this Section 2.6 for any increased costs or reductions incurred more than one hundred and eighty (180) days prior to the date that such Lender notifies the Borrower of the Change of Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change of Law giving rise to such increased costs or reductions is retroactive, then the one hundred eighty (180) day period referred to above shall be extended to include the period of retroactive effect thereof. The protection of this Section 2.6 shall be available to each Lender regardless of any possible contention of the invalidity or inapplicability of the Change of Law that shall have occurred or been imposed.

(d) Change in Legality . Notwithstanding any other provision of this Agreement, if any Change of Law shall make it unlawful for any Lender to make or maintain a LIBO Loan or to give effect to its obligations as contemplated hereby with respect to any LIBO Loan, then, by written notice to the Borrower and to the Administrative Agent:

(i) such Lender may declare that LIBO Loans will not thereafter (for the duration of such unlawfulness) be made by such Lender hereunder (or be continued), whereupon any request for a Borrowing (or any continuation of a Borrowing for an additional Interest Period) shall, as to such Lender only, be deemed a request for a Base Rate Loan (or a continuation of a LIBO Loan as a Base Rate Loan), unless such declaration shall be subsequently withdrawn; and

(ii) such Lender may require that all outstanding LIBO Loans made by it be converted to Base Rate Loans, in which event all such LIBO Loans shall be automatically converted to Base Rate Loans as of the effective date of such notice as provided below.

In the event any Lender shall exercise its rights under clauses (i) or (ii) above, all payments and prepayments of principal that would otherwise have been applied to repay the LIBO Loans that would have been made by such Lender or the converted LIBO Loans of such Lender shall instead be applied to repay the Base Rate Loans made by such Lender in lieu of, or resulting from the conversion of, such LIBO Loans. For purposes of this clause (d) , a notice to the Borrower by any Lender shall be effective as to each LIBO Loan made by such Lender, if

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lawful, on the last day of the Interest Period then applicable to such LIBO Loan (which shall be a Scheduled Payment Date); in all other cases such notice shall be effective on the date of receipt by the Borrower.

2.7 Funding Losses . The Borrower shall indemnify each Lender against any loss or expense that such Lender may sustain or incur as a consequence of (a) any event, other than a default by such Lender in the performance of its obligations hereunder, that results in (i) such Lender receiving or being deemed to receive any amount for the prepayment of principal of any Loan (other than a Base Rate Loan) prior to the end of the Interest Period in effect therefor or (ii) any Loan (other than a Base Rate Loan) to be made by such Lender not being made after notice, (b) any default in the making, or failure to make on the date and in the amount notified of any payment or prepayment required to or permitted to be made by or on behalf of the Borrower hereunder on any Loan (other than a Base Rate Loan) (any of the events referred to in this clauses (a) and (b) being called a “ Breakage Event ”). In the case of any Breakage Event, such loss shall include an amount equal to the excess, as reasonably determined by such Lender, of (A) its costs of obtaining funds for the Loan that is the subject of such Breakage Event for the period from the date of such Breakage Event to the last day of the Interest Period in effect (or that would have been in effect) for such Loan over (B) the amount of interest likely to be realized by such Lender in redeploying the funds released or not utilized by reason of such Breakage Event for such period. A certificate of any Lender setting forth any amount or amounts which such Lender is entitled to receive pursuant to this Section 2.7 shall be delivered to the Borrower and shall be conclusive absent manifest error.

2.8 Alternate Office; Minimization of Costs; Replacement of Lenders .

(a) Any Lender may designate a Lending Office other than that set forth on Annex 2 and may assign all of its interests under the Financing Documents, and its Notes (if any), to such Lending Office, provided that such designation and assignment do not at the time of such designation and assignment increase the reasonably foreseeable liability of the Borrower under Section 2.4(d) , Section 2.6(a) or Section 2.6(b) .

(b) If the Borrower is required to pay additional amounts under Section 2.4(d) or any Lender requests compensation under Section 2.6(a) or Section 2.6(b) , then such Lender shall, to the extent not inconsistent with the internal policies of such Lender and any applicable legal or regulatory restrictions, use reasonable efforts to (i) file any certificate or document reasonably requested in writing by the Borrower or (ii) to assign its rights and delegate and transfer its obligations hereunder to another of its offices, branches or affiliates, if such filing or assignment would avoid or minimize any additional costs, taxes, expense or obligation which would otherwise be imposed on the Borrower pursuant to Section 2.4(d) , Section 2.6(a) or Section 2.6(b) ; provided , however , that no Lender shall be required to take any such action that, as determined by such Lender in its sole discretion, would adversely affect the making, issuing, funding or maintaining of such Loans or the interests of such Lender; provided , further , however , that such efforts shall not cause the imposition on any Lender of any additional costs or expenses, unless the Borrower agrees to pay such additional costs and expenses.

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(c) If (i) the Borrower incurs any liability to a Lender under Section 2.4(d) , Section 2.6(a) or Section 2.6(b) , (ii) any Lender is a Defaulting Lender or (iii) the Borrower is permitted to replace a Lender pursuant to Section 2.9(c) or Section 2.12(c) , then the Borrower, at its sole expense (including with respect to the processing and recordation fee referred to in Section 10.4 ) may, upon notice to such Lender and the Administrative Agent, require the Lender subject to this Section 2.8(c) to assign and delegate, without recourse, all its interests, rights and obligations under this Agreement and under the Loans and Commitments of the Lender being replaced hereunder to an Eligible Assignee that shall assume all those rights and obligations; provided , however , that (x) such assignment shall not conflict with any law, rule or regulation or order of any court or other Governmental Authority having valid jurisdiction, (y) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld or delayed, and (z) the Borrower or such assignee shall have paid to the replaced Lender in immediately available funds an amount equal to the sum of the principal of and interest accrued to the date of such payment on the outstanding Loans of such Lender plus all fees and other amounts accrued for the account of such Lender hereunder with respect thereto (including any amounts under Sections 2.6 and 2.7 ). A Lender subject to this Section 2.8(c) shall not be required to make any such assignment and delegation if (A) prior to any such assignment and delegation the circumstances entitling the Borrower to require such assignment and delegation have ceased to apply (including as a result of any action taken by such Lender pursuant to clause (b) above), (B) if such Lender shall waive its right to claim compensation or payment under Section 2.4(d) , Section 2.6(a) or Section 2.6(b) , if applicable, or (C) if any Default or Event of Default then exists. Each Lender hereby grants to the Administrative Agent an irrevocable power of attorney (which power is coupled with an interest) to execute and deliver, on behalf of such Lender, as assignor, any Assignment and Acceptance necessary to effectuate any assignment of such Lender’s interests hereunder in the circumstances contemplated by this Section 2.8(c) . Nothing in this Section 2.8 shall be deemed to prejudice any rights that the Borrower may have against any Lender that is a Defaulting Lender. The Administrative Agent and each Lender hereby agree to cooperate with the Borrower to effectuate the assignment of any Defaulting Lender’s interest hereunder.

2.9 Increase in Loan Facility .

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request by the Borrower for an Incremental Loan Commitment Increase the conditions set forth in Section 2.9(e)(i) , (ii) , (iii) and (iv) shall have been satisfied. An Incremental Loan Commitment Increase Notice shall set out the amount of the Incremental Loan Commitment requested and the date on which such Incremental Loan Commitments are requested to be effective (each an “ Incremental Loan Increase Date ”), which shall not be less than thirty (30) days nor more than forty-five (45) days after the date of such notice. Any Incremental Loan Commitment shall be a commitment to make loans with the same principal terms as the Loans; provided that Incremental Loan Commitments need not have the same interest rate, OID, upfront fees, Applicable Margin and maturity date as then existing Loans but the terms of all Incremental Loan Commitments with the same Incremental Loan Increase Date shall be identical.

(b) Lender Elections to Increase . Upon receipt of an Incremental Loan Commitment Increase Notice pursuant to Section 2.9(a) , the Committed Lenders shall have thirty (30) days to accept an offer to participate in a requested Incremental Loan Commitment Increase by delivering to the Administrative Agent confirmation of the increase in the amount of its Incremental Loan Commitment substantially in the form attached as Exhibit E (each, an “ Increasing Incremental Lender Confirmation ”); provided , that the failure by any Committed Lender to respond to an offer within the thirty (30) day period after receipt of such offer shall be deemed a denial of such offer. Any Committed Lender that has received such an offer may accept or decline such offer in such Committed Lender’s sole and absolute discretion.

(c) Notification by Administrative Agent; Additional Lenders . The Administrative Agent shall notify the Borrower and each Group Agent of the Committed Lenders’ responses to each request made hereunder. If any Committed Lender rejects an Incremental Loan Increase Notice or less than all of the Committed Lenders issue Increasing Incremental Lender Confirmations by the Incremental Loan Increase Date, then in order to achieve the full amount of a requested increase, and subject to the approval of the Administrative Agent and the Required Group Agents, any Committed Lender may elect unilaterally to deliver an Increasing Incremental Lender Confirmation, the Borrower may invite additional Eligible Assignees to become Committed Lenders by executing a New Committed Lender Accession Agreement, and each such Eligible Assignee may elect to include a Conduit Lender in its Group by causing such Person to execute a New Conduit Lender Accession Agreement (each such Eligible Assignee entering into a New Committed Lender Accession Agreement, a “ New Committed Lender ”) on the terms and subject to the conditions set forth in Section 2.9(a) (including the last sentence thereof). For the avoidance of doubt, the Borrower may not invite any additional Eligible Assignee to become a New Committed Lender until authorized by the Administrative Agent and the Required Group Agents in accordance with the immediately preceding sentence. The Borrower shall have the right to replace each Committed Lender the Group Agent in respect of which voted not to deliver an Increasing Incremental Lender Confirmation, and add as “Committed Lenders” under this Agreement in place thereof, one or more Eligible Assignees, as provided in Section 2.8(c) .

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of the Incremental Loan Commitment Increase to be effected on such Incremental Loan Increase Date and shall record in the Register with the relevant information with respect to each Committed Lender that executes an Incremental Lender Confirmation and each New Lender on such date.

(e) Conditions to Effectiveness of Increase . Any Incremental Loan Commitment Increase is subject to the occurrence of the Closing Date and the satisfaction of each of the following conditions on such Incremental Loan Increase Date:

(i) no Default or Event of Default shall have occurred and be continuing;

(ii) immediately before and after giving effect to the Incremental Loan Commitment Increase, the Borrower is in pro forma compliance with the Borrowing Base Requirements;

(iii) no Sweep Event or Subject Fund Sweep Event has occurred and remains ongoing;

(iv) since the delivery of the most recent financial statements of the Borrower delivered pursuant to Section 5.3 , no Material Adverse Effect has occurred or is continuing;

(v) the representations and warranties set forth in Section 4.1 and in each other Financing Document shall be true and correct in all material respects as of the Incremental Loan Increase Date (unless such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct in all material respects as of such earlier date);

(vi) the Administrative Agent shall have received a duly executed Incremental Loan Commitment Increase Notice and any fee letters entered into in connection with such Incremental Loan Commitment Increase;

(vii) the Administrative Agent shall have received for its own account, and for the account of each Incremental Loan Lender or New Lender (and any related new Conduit Lender) entitled thereto, all fees due and payable as of the Incremental Loan Increase Date pursuant to Section 2.3 , and all costs and expenses, including costs, fees and expenses of legal counsel, for which invoices have been presented; provided that costs, fees and expenses of legal counsel may be subject to caps as agreed to between the Borrower and the relevant party;

(viii) if requested by an Incremental Loan Lender providing an Incremental Loan Commitment Increase on such Incremental Loan Increase Date, such Incremental Loans shall be evidence by a Note; and

(ix) the Borrower shall deliver to the Administrative Agent a certificate of the Borrower dated as of the Incremental Loan Increase Date signed by a

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Responsible Officer of the Borrower (x) certifying and attaching the resolutions adopted by the Borrower approving or consenting to such increase, and (y) certifying that each of the conditions set forth in this Section 2.9(e) have been met as of the Incremental Loan Increase Date.

(f) Conflicting Provisions . This Section 2.9 shall supersede any provisions in Section 9.10 to the contrary.

2.10 Addition of Subject Funds; Release of Subject Funds .

(a) Addition of Subject Funds . (i) To the extent that no fewer than forty-five (45) days prior to the expiration of the Availability Period, the Available Borrowing Base is less than the Total Loan Commitment, the Lenders will permit the inclusion of additional Subject Funds with new or existing Investors (each, a “ Potential New Fund ”), subject to the terms and conditions precedent set forth in this Section 2.10 and in Section 3.4 . Following the later of (x) delivery of a complete set of transaction documents for the Potential New Fund and (y) the date upon which at least $2,500,000 of the applicable Investor’s funding commitment in respect of such Potential New Fund has been tranched or, with respect to any Potential New Fund in respect of which there is no Investor, such Potential New Fund owns $5,000,000 of Systems, (A) except as specified in clauses (B), (C), (D) and (E) below, the Administrative Agent acting at the direction of the Majority Group Agents shall have forty-five (45) days to conduct due diligence with respect to such Potential New Fund and determine, in their reasonable sole discretion, whether such Potential New Fund will, upon satisfaction of the conditions precedent set forth in Section 3.4 , become a Subject Fund, (B) with respect to any Repeat Tax Equity Structure, the Administrative Agent acting at the direction of the Majority Group Agents shall have fifteen (15) Business Days to confirm the characterization of such Potential New Fund as a Repeat Tax Equity Structure, in which case, such Potential New Fund will, upon satisfaction of the conditions precedent set forth in Section 3.4 , become a Subject Fund, (C) with respect to any Conventional Tax Equity Structure, the Administrative Agent acting at the direction of the Majority Group Agents shall have thirty (30) days to conduct due diligence with respect to such Potential New Fund and determine, in their reasonable sole discretion, whether such Potential New Fund will, upon satisfaction of the conditions precedent set forth in Section 3.4 , as a Subject Fund, (D) with respect to any Other Financed Structure, the Administrative Agent acting at the direction of the Majority Group Agents shall have as much time as necessary to conduct such due diligence and determine in their reasonable direction, whether such Other Financed Structure will, upon satisfaction of the conditions precedent set forth in Section 3.4 , become a Subject Fund and (E) with respect to any Other Non-Financed Structure, upon written notice to the Administrative Agent acting at the direction of the Majority Group Agents from the Borrower certifying that such Potential New Fund is an Other Non-Financed Structure, such Other Non-Financed Structure will, upon satisfaction of the conditions precedent set forth in Section 3.4 , become a Subject Fund; provided , that (x) in no event shall the Administrative Agent be requested to review and consider (1) more than one Potential New Fund in any 30-day period; provided that multiple Potential New Funds having the same Investor (or multiple affiliated Investors) that the Administrative Agent determines employ structures that do not have any material differences shall be deemed to constitute one Potential New Fund for purposes of this clause (1); and provided further that Repeat Tax Equity Structures shall not count against the

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limitation set forth in this clause (1); or (2) any Potential New Fund during the occurrence and continuance of an Event of Default, and (y) upon acceptance or confirmation of any such Potential New Fund as a Subject Fund, the Administrative Agent shall designate such Potential New Fund as a full or partial Cash Sweep Fund or a Non-Cash Sweep Fund in Appendix 4 and for all purposes under this Agreement in accordance with the criteria set forth in the definition of “Cash Sweep Fund”.

(ii) Following review of any such Potential New Fund in consultation with the Borrower, the Administrative Agent shall notify the Borrower in writing of any designation or confirmation under clause (i) above that such Potential New Fund is acceptable for inclusion in the Available Borrowing Base, and such Potential New Fund shall become a Subject Fund subject to the terms of the Financing Documents upon the satisfaction by Borrower of each of the conditions precedent set forth in Section 3.4 .

(iii) Simultaneously with the satisfaction of the conditions precedent set forth in Section 3.4 , (A) the Administrative Agent shall update (x) Schedule 1.1(b) to include the new Managing Member and the Equity Interests owned by such Managing Member, (y) Appendix 4 to include such new Subject Fund, its related Managing Member, the designation of the applicable Tax Equity Structure or Other Structure and whether it is a full or partial Cash-Sweep Fund or a Non-Cash-Sweep Fund and (z) Appendix 5 to include such new Subject Fund’s Project Documents and (B) in respect of any Other Non-Financed Structure, Administrative Agent and Borrower shall have agreed on the methodology for calculating the Inverter Required Deposit (as defined in the CADA) in respect of such Other Non-Financed Structure as contemplated in clause (ii) of the definition thereof.

(iv) For the avoidance of doubt, each Repeat Tax Equity Structure shall be designated as a full or partial Cash-Sweep Fund or a Non-Cash-Sweep Fund in accordance with the designation of the current Subject Fund to which it is substantially similar unless the Administrative Agent determines in its reasonable discretion in consultation with the Borrower and the Lenders that the provision(s) of such current Subject Fund that caused it to be designated a full or partial Cash-Sweep Fund or Non-Cash-Sweep Fund have been modified or eliminated so as to change the appropriate designation of such Repeat Tax Equity Structure.

(v) The Borrower will reimburse the Agents pursuant to Section 10.4 for their reasonable due diligence (if applicable) and legal expenses in connection with their review of any Potential New Fund (other than any Repeat Tax Equity Structure).

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Released Fund shall no longer be subject to the Financing Documents, (ii) the Borrower shall be entitled to the release of the Collateral with respect to the Released Fund, and (iii) the Released Fund shall cease to be a Subject Fund under this Agreement. Within five (5) Business Days of the release of such Collateral, Borrower shall cause the Managing Member related to the Released Fund to no longer be a Subsidiary of Borrower by selling, winding up or otherwise disposing of (including transferring Borrower’s Equity Interests in such Managing Member to a third party, which may be an Affiliate of SolarCity) such Managing Member.

2.11 Defaulting Lenders .

(a) Adjustments . Notwithstanding any provision of this Agreement to the contrary, if any Committed Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Committed Lender is a Defaulting Lender:

(i) fees shall cease to accrue on the unused portion of the Commitment of such Defaulting Lender pursuant to Section 2.3(a) ; and

(ii) the Loans and unused Commitments of such Defaulting Lender shall not be included in determining whether the Majority Group Agents have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 9.10 ).

(b) Defaulting Lender Waterfall . Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article 8 or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.2 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first , to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second , as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third , if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; fourth , to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth , so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and sixth , to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made at a time when the conditions set forth in Section 3.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all

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Loans are held by the Groups pro rata in accordance with the Group Limits hereunder. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this Section 2.11(b) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(c) Defaulting Lender Cure . If the Borrower and the Administrative Agent agree in writing that a Committed Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any cash collateral), that Committed Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held on a pro rata basis by the Groups in accordance with their Applicable Percentages, whereupon such Committed Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Committed Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Committed Lender will constitute a waiver or release of any claim of any party hereunder arising from that Committed Lender’s having been a Defaulting Lender.

2.12 Extended Availability Period and Loans .

(a) The Borrower may by written notice to Administrative Agent (who shall provide a copy of such notice to the Lenders) received not less than twenty-four (24) months prior to the then-current Loan Maturity Date, request that the Availability Period be extended for up to an additional twelve months from the then-current ending date and that the Loan Maturity Date be extended for up to an additional twelve months (an “ Extension Request ”).

(b) Other than such extension of the scheduled maturity date of any payment of principal, the terms and conditions applicable to the Loans as extended shall be identical in all respects to the terms and conditions set forth in this Agreement (and any related provision or definition under this Agreement or any other Financing Document) with respect to the subject matter thereof.

(c) If all Group Agents have notified the Administrative Agent within thirty (30) days of receipt of such Extension Request of their agreement to the Extension Request, such Extension Request shall be granted. No Group Agent shall have any obligation to agree to have any of the Loans related to its Group extended pursuant to any Extension Request. To the extent that not all Group Agents approve an Extension Request, the Borrower shall have the right to replace each Committed Lender whose Group Agent voted not to approve such Extension Request, and add as “Committed Lenders” under this Agreement in place thereof, one or more Eligible Assignees as provided in Section 2.8(c) .

(d) In connection with any Extension Request that is granted, the Loan Parties and the Collateral Agent shall enter into such amendments to the Collateral Documents as may be

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reasonably requested by the Collateral Agent (which shall not require any consent from any Lender) in order to ensure that the Loans as extended are provided with the benefit of the applicable Collateral Documents and shall deliver such other documents and certificates and opinions of counsel in connection therewith as may be reasonably requested by the Collateral Agent.

2.13 Interest Rate Protection .

(a) On each Borrowing Date other than the initial Borrowing Date and, with respect to the Borrowings made on the initial Borrowing Date, no later than ten (10) Business Days thereafter, the Borrower shall have entered into one or more forward-starting interest rate swap agreements (each, an “ Interest Rate Hedge Agreement ”) with one or more Acceptable Hedge Banks (each such Acceptable Hedge Bank, an “ Interest Rate Hedge Counterparty ”), in form and substance reasonably acceptable to each such Interest Rate Hedge Counterparty and the Administrative Agent, with respect to an aggregate notional principal amount across all Interest Rate Hedge Agreements and Interest Rate Cap Agreements at least equal to the Outstanding Principal and not more than 105% of the Outstanding Principal, in each case after giving effect to the Loans requested to be made on such Borrowing Date, (i) the swap rate under which is equal to the Swap Rate in effect on the date thereof and (ii) the amortization schedule in respect of which is determined using the methodology used to calculate the Swap Rate, provided that the notional amount of each Interest Rate Hedge Agreement shall relate solely to the outstanding principal amount of Loans to be made on the related Borrowing Date in respect of a single Tax Equity Structure or Other Structure.

(b) Within three (3) Business Days of the occurrence of a Hedge Trigger Event and on each Borrowing Date thereafter, the Borrower shall have entered into one or more interest rate cap agreements (each, an “ Interest Rate Cap Agreement ”) with one or more Acceptable Hedge Banks (each such Acceptable Hedge Bank, an “ Interest Rate Cap Counterparty ”), in form and substance reasonably acceptable to each such Interest Rate Cap Counterparty and the Administrative Agent, with respect to an aggregate notional principal amount across all Interest Rate Caps and Interest Rate Hedge Agreements at least equal to the Outstanding Principal and not more than 105% of the Outstanding Principal, in each case after giving effect to the Loans requested to be made on any such Borrowing Date, (i) the sole payment obligation of the Borrower under which is a premium payable upon the execution of such Interest Rate Cap Agreement, (ii) the strike rate under which is not more than 2.0% and (iii) which provides for payments to the Borrower on each Scheduled Payment Date during the Availability Period, provided that the notional amount of each Interest Rate Cap Agreement shall relate solely to the outstanding principal amount of Loans in respect of a single Tax Equity Structure or Other Structure.

(c) The Borrower shall be responsible for all reasonable costs, fees and expenses incurred by the Interest Rate Protection Agreement Counterparties, the Administrative Agent, the Collateral Agent, the Lenders, the Borrower or otherwise in connection with the Interest Rate Protection Agreements entered into by the Borrower hereunder, including any reasonable costs, fees or expenses (including increased interest payments) incurred in connection with any unwinding, breach or termination of any Interest Rate Hedge Agreements (“ Hedge Fix Fees ”).

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All payments by the Interest Rate Protection Agreement Counterparties under the Interest Rate Protection Agreements upon termination or otherwise shall be deposited into the Revenue Account.

(d) The obligations of the Borrower to the Interest Rate Hedge Counterparties under each Interest Rate Hedge Agreement and all Hedge Fix Fees, shall be secured by the Security Documents, and shall rank pari passu with the obligations of the Borrower in respect of the Loans.

ARTICLE 3

CONDITIONS PRECEDENT

3.1 Conditions Precedent to the Closing Date . The obligation of each Committed Lender to make Loans and the effectiveness of this Agreement are subject to the prior satisfaction of each of the following conditions, in each case to the satisfaction of the Administrative Agent, each Group Agent and each of the Lenders (unless waived pursuant to Section 9.14(a) ) on or prior to the Closing Date:

(a) Delivery to the Agents of each of the following Financing Documents, each duly executed and delivered by the parties thereto:

(i) this Agreement;

(ii) the CADA;

(iii) the Member Pledge;

(iv) the Security Agreement;

(v) the Fee Letters;

(vi) the Notes (if requested by a Lender); and

(vii) the LLC Agreements (amended and restated to comply with the provisions of this Agreement, as necessary).

(b) Each representation and warranty of the Borrower and each other Loan Party contained in Article 4 or any other Financing Document is true and correct in all material respects as of the Closing Date (unless such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct in all material respects as of such earlier date) other than those representations and warranties that are modified by materiality by their own terms, which shall be true and correct in all respects as of the Closing Date (unless such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct in all respects as of such earlier date). With respect to each Subject Fund designated as such as of the Closing Date, the Tax Equity Representations are true and correct in all material respects as of the Closing Date, other than those Tax Equity Representations that are modified by

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materiality by their own terms, which shall be true and correct in all respects as of the Closing Date (unless such Tax Equity Representation relates solely to an earlier date, in which case it shall have been true and correct in all material respects as of such earlier date).

(c) As of the Closing Date, no event shall have occurred and be continuing or would result from the consummation of the transactions contemplated by this Agreement or the other Financing Documents on the Closing Date that would constitute a Default or an Event of Default under this Agreement or would result from the Borrowing of the Loan or from the application of the proceeds therefrom.

(d) Delivery to the Administrative Agent and each Group Agent of the following:

(i) a secretary’s certificate, satisfactory in form and substance to the Administrative Agent, from each Loan Party and the Limited Guarantor, signed by each of its respective authorized Responsible Officers and dated as of the Closing Date, attaching and certifying as to the Organizational Documents of each such party (which, to the extent filed with a Governmental Authority, shall be certified as of a recent date by such Governmental Authority), and attaching and certifying as to the resolutions of the governing body of each such Person, the good standing, existence or its equivalent of each such party and of the incumbency of the Responsible Officers of each such Person;

(ii) a certificate from a Responsible Officer of each Loan Party certifying to (A) the representations and warranties made by such Loan Party (and in the case of the Borrower, for each Borrower Subsidiary Party) in each Financing Document to which it is a party being true and correct in all material respects as of the Closing Date (unless such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct in all material respects as of such earlier date), (B) the absence of a Default or an Event of Default, (C) the absence of any material breach by any Funded Subsidiary (unless identified as a Watched Fund) of any Project Documents to which it is a party, (D) the absence of a Bankruptcy Event with respect to each of SolarCity, each Loan Party and each Funded Subsidiary (unless identified as a Watched Fund), and (E) the satisfaction (or waiver by the Administrative Agent and each Lender) of all conditions precedent to the Closing Date in accordance with the terms and conditions hereof;

(iii) an opinion, dated as of the Closing Date, of Wilson Sonsini Goodrich & Rosati, counsel to the Loan Parties, the Borrower Subsidiary Parties and SolarCity, in form and substance reasonably acceptable to the Agents and each Group Agent; and

(iv) an opinion, dated as of the Closing Date, of Proskauer Rose LLP, special bankruptcy counsel to the Loan Parties, the Borrower Subsidiary Parties and SolarCity in form and substance reasonably acceptable to the Agents and each Group Agent.

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(e) All Liens contemplated by the Collateral Documents to be created and perfected in favor of the Collateral Agent as of the Closing Date shall have been perfected, recorded and filed in the appropriate jurisdictions.

(f) The Administrative Agent and the Collateral Agent shall have received (A) searches of UCC filings in the jurisdiction of incorporation or formation, as applicable, of each Loan Party and each jurisdiction where a filing would need to be made in order to perfect the security interest of the Collateral Agent (for the benefit of the Secured Parties) in the Collateral, (B) copies of the financing statements on file in such jurisdictions and evidence that no Liens exist on the Collateral other than Permitted Liens of the type set forth in clauses (b), (c) or (d) of the definition thereof and (C) copies of tax lien, judgment and bankruptcy searches in such jurisdictions.

(g) The UCC financing statements relating to the Collateral being secured as of the Closing Date shall have been duly filed in each office and in each jurisdiction where required in order to create and perfect the first Lien and security interest set forth in the Collateral Documents. Each Loan Party shall have properly delivered or caused to be delivered to the Collateral Agent all Collateral that requires perfection of the Lien and security interest described above by possession or control, including delivery of original certificates representing all issued and outstanding Equity Interests in the Borrower and in each Managing Member along with blank transfer powers and proxies.

(h) All amounts required to be paid to or deposited with the Administrative Agent, the Collateral Agent, the Depositary, any Group Agent or any Lender under this Agreement or any other Financing Document, or under any separate agreement with such parties, and all taxes, fees and other costs payable in connection with the execution, delivery and filing of the documents and instruments required to be filed pursuant to this Section 3.1 , shall have been paid in full (or in connection with such taxes, fees (other than fees payable to the Lenders or the Agents) and costs, the Borrower shall have made other arrangements acceptable to the Agents, the Depositary, the Group Agent or such Lender(s), as the case may be, in their sole discretion).

(i) The Agents and Group Agents shall have received all such documentation and information requested by the Agents and the Group Agents that is necessary (including the names and addresses of the Borrower, taxpayer identification forms, name of officers/board members, documents and copies of government-issued identification of the Borrower, the Member or owners thereof) for the Agents, the Group Agents and each Lender to identify the Borrower, the Member or owners thereof in accordance with the requirements of the Patriot Act (including the “know your customer” and similar regulations thereunder).

(j) All Accounts required to be open as of the Closing Date under the CADA shall have been opened.

(k) The expenses incurred and invoiced as of or prior to the Closing Date shall have been paid by the Borrower or its Affiliates in accordance with Section 10.4 .

(l) The Borrower shall have delivered the most recently available unaudited financial statements of the Borrower, each Borrower Subsidiary Party, each Subject Fund and the Limited

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Guarantor (with respect to the Limited Guarantor only, to the extent not otherwise publicly available) in form and substance satisfactory to the Administrative Agent in its sole discretion.

(m) The Borrower shall have obtained all material approvals (to the extent required to have been obtained by such time) and all material consents of any Persons or modifications to Project Documents or Organizational Documents of any putative Subject Fund (including any Tax Equity Required Consent, except the [***] Tax Equity Required Consent), in each case that are necessary for its entry into the Financing Documents to which it is a party and implementation of the transactions contemplated in the Financing Documents, each of which is listed on Schedule 3.1(m) . Each of the foregoing shall be in full force and effect and in form and substance reasonably satisfactory to the Administrative Agent.

(n) The Administrative Agent shall have received the Tax Equity Model for each Subject Fund intended to be included in the Available Borrowing Base on the first Borrowing Date.

(o) The Administrative Agent shall have received the most recently available fleet report of SolarCity, prepared by an Independent Engineer, in form and substance satisfactory to the Administrative Agent.

3.2 Conditions Precedent to Each Borrowing . The obligation of each Committed Lender to make any Loans is subject to the prior satisfaction of the following conditions (unless waived pursuant to Section 9.14(a) ); provided , however , that there shall be no duplication with respect to the satisfaction of conditions precedent under Sections 3.1 and 3.2 if the Closing Date and a Borrowing Date occur on the same Business Day:

(a) All representations and warranties of the Loan Parties under the Financing Documents are true and correct in all material respects as of such Borrowing Date, other than those representations and warranties which are modified by materiality by their own terms, which shall be true and correct in all respects as of such Borrowing Date, (unless such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct in all material respects as of such earlier date).

(b) No Default or Event of Default has occurred and is continuing or will result from the making of the Borrowing of such Loan.

(c) Delivery to the Administrative Agent and each Group Agent of a Borrowing Notice in accordance with Section 2.1(a)(iii) and a Borrowing Base Certificate and Aggregate Advance Model in accordance with Section 2.1(a)(iv) .

(d) All Liens contemplated to be created and perfected in favor of the Collateral Agent pursuant to the Collateral Documents shall have been so created, perfected and filed in the applicable jurisdictions, including in respect of Borrower’s Equity Interest in the Managing Member of any Subject Fund.

(e) All amounts for which reasonably detailed invoices have been received at least one (1) Business Day prior to the applicable Borrowing Date and that are required to be paid to

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or deposited with any Secured Party hereunder or under any other Financing Document, and all taxes, fees and other costs payable in connection with the execution, delivery, recordation and filing of the documents and instruments required to be filed as a condition precedent to Section 3.1 and this Section 3.2 , shall have been paid in full (or shall be paid concurrently with the occurrence of such Borrowing) or arrangements for the payment thereof from the Loans shall have been made, which arrangements shall be acceptable to the Agents and the Group Agents.

(f) After giving effect to such proposed Borrowing and any Watched Fund identified in the Borrowing Base Certificate, the Borrower shall be in compliance with the Borrowing Base Requirements.

(g) No Material Adverse Effect has occurred or is continuing since the Closing Date, and, to the Borrower’s Knowledge, no event or circumstance exists that could reasonably be expected to result in a Material Adverse Effect.

(h) (i) No Sweep Event has occurred and is continuing and (ii) solely for purposes of determining whether the amount of the requested Borrowing would cause the Outstanding Principal (including the amounts of the requested Borrowing) to exceed the Available Borrowing Base, each Subject Fund in respect of which a Subject Fund Sweep Event has occurred and is continuing shall be deemed to have an Advance Rate of 0%, and the Borrowing Notice, Borrowing Base Certificate and Aggregate Advance Model delivered by the Borrower pursuant to Section 3.2(c) shall reflect such Advance Rate of 0%.

(i) [Reserved.]

(j) No Bankruptcy Event shall have occurred with respect to SolarCity.

(k) The conditions precedent set forth in Section 3.3 with respect to any Current Systems have been satisfied in all respects as of the Borrowing Date.

(l) All Accounts shall be funded in the amounts then required in accordance with the terms of the CADA.

(m) Other than with respect to the initial Borrowing, the Borrower shall have entered into all Interest Rate Protection Agreements required to have been entered into on such Borrowing Date under Section 2.13 .

3.3 Conditions Precedent to Addition of Current Systems to Available Borrowing Base .

(a) [Reserved].

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data, documentation, analysis or report reasonably requested by the Administrative Agent with respect to such Systems or the associated Host Customers and commercially available to the Borrower, in each case with respect to a Current System.

(d) Each Current System shall (i) be a System subject to a Subject Fund and (ii) (x) is a PTO System or (y) is an Inspected System, in each case, which shall have been funded by the applicable Investor (if any) to the extent then required pursuant to the applicable Project Document.

(e) As reasonably requested by any Group Agent for informational purposes only, to the extent not otherwise publicly available and in possession of the Borrower or its Affiliates, the Borrower has delivered to such Group Agent financial statements and/or credit reports with respect to a Current System with a commercial Host Customer that does not have a publicly available rating from a recognized national rating agency that was current as of the date that the Customer Agreement corresponding to such Current System was executed.

3.4 Conditions Precedent to Inclusion of New Subject Fund .

The inclusion of any Potential New Fund as a Subject Fund is subject to the satisfaction of the following conditions precedent:

(a) [Reserved].

(b) The Borrower has delivered to the Administrative Agent (or provided the Administrative Agent access to an online data room that contains) true, complete and correct copies of the following): (i) a complete set of Project Documents for the Potential New Fund, (ii) if such Potential New Fund is a Repeat Tax Equity Structure, redline comparisons of the transactions documents for the potential new fund marked against the transaction documents of the current Subject Fund to which it is substantially similar, (iii) the Tax Equity Model (if any) for the Potential New Fund and the revised Aggregate Advance Model including the Potential New Fund and (iv) any other data, documentation, analysis or report reasonably requested by the Administrative Agent with respect to such Potential New Fund.

(c) Borrower has delivered to the Administrative Agent either (i) written confirmation that the transaction documents of such Potential New Fund do not contain any “cash sweep” provision that would have the effect of (A) reducing the Managing Member’s cash distribution percentage, (B) increasing the Investor’s cash distribution percentage or (C) limiting, suspending or otherwise diverting cash distributions (whether temporarily, pursuant to an escrow or similar arrangement, or permanently) that would otherwise be payable to the Managing Member or (ii) written notice of the existence of such “cash sweep” provision and a written explanation of the events or circumstances that would give rise to a cash sweep, including whether in Borrower’s opinion, such “cash sweep” is either a full or a partial sweep.

(d) The Administrative Agent and Majority Group Agents have conducted due diligence with respect to such Potential New Fund in consultation with the Borrower or, if

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applicable, confirmed the Borrower’s characterization of a Potential New Fund as a Repeat Tax Equity Structure, and the Administrative Agent has given the Borrower written notice in accordance with Section 2.10 that the Administrative Agent and the Majority Group Agents have accepted such Potential New Fund and designated such Potential New Fund as a full or partial Cash-Sweep Fund, a Non-Cash-Sweep Fund or an Other Structure.

(e) If the Project Documents in respect of such Potential New Fund contain a Purchase Option, the first date on which such Purchase Option is exercisable occurs no earlier than the first anniversary of the then-current Loan Maturity Date.

(f) [Reserved].

(g) [Reserved].

(h) The Borrower has delivered an Officer’s Certificate duly executed by a Responsible Officer of the Borrower (i) making the Tax Equity Representations, Repeat Tax Equity Structure Representations or Other Structure Representations, as the case may be and (ii) certifying that each representation and warranty of the Borrower contained in Article 4 is true and correct in all material respects as of the date of such Officer’s Certificate (unless such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct in all material respects as of such earlier date) other than those representations and warranties that are modified by materiality by their own terms, which shall be true and correct in all respects as of the date of such Officer’s Certificate (unless such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct in all respects as of such earlier date).

(i) Such Potential New Fund would not be a Watched Fund if it were included in the Available Borrowing Base.

(j) Borrower shall have delivered or caused to be delivered (A) with respect to any Tax Equity Structure, a Tax Equity Required Consent for such Subject Fund, to the extent reasonably deemed necessary by the Administrative Agent following due diligence in accordance with Section 2.10 and (B) with respect to any Other Structure, all consents required by the Agents.

(k) No Default or Event of Default has occurred and is continuing or will result from the inclusion of the Potential New Fund as a Subject Fund.

(l) The Managing Member, if any, of the Subject Fund is a wholly-owned direct Subsidiary of Borrower.

(m) Each of the conditions set forth in Section 5.16 have been satisfied.

(n) Each of the conditions set forth in Sections 3.1(d)(iii) and (iv) and 3.1(f) shall have been satisfied with respect to such Subject Fund.

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(o) With respect to any Potential New Fund that is an Inverted Lease Structure or an Other Non-Financed Structure, such Potential New Fund shall have granted to the Collateral Agent, pursuant to documentation in form and substance reasonably satisfactory to the Collateral Agent and the Majority Group Agents, a security interest in substantially all assets of such Potential New Fund (other than Excluded Revenue and other customary excluded assets).

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

4.1 Representations and Warranties . The Borrower represents to each Agent, Group Agent and the Lenders as of the date such representations are given, including each Borrowing Date (other than representations that specifically relate to an earlier date and solely with respect to Subject Funds that include Current Systems in respect of which Loans are actually funded on such Borrowing Date) and, with respect to clauses (e), (f), (i), (k), (p), (s), (t) and (u) only, each Scheduled Payment Date:

(a) Organization . (i) Each Loan Party and Borrower Subsidiary Party (i) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (ii) has all requisite power and authority and all requisite government licenses, authorizations, consents and approvals to (A) own or lease its assets and carry on its business and (B) execute, deliver and perform its obligations under the Financing Documents to which it is a party, and (iii) is duly qualified and is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (ii)(A) or (iii), to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect.

(ii) The only holder of Equity Interests in the Borrower is the Member and (A) there are no outstanding Equity Interests with respect to the Borrower and (B) there are no outstanding obligations of the Borrower to repurchase, redeem, or otherwise acquire any membership or other equity interests in the Borrower or to make payments to any Person, such as “phantom stock” payments, where the amount thereof is calculated with reference to the fair market value or equity value of the Borrower. The Borrower is authorized to issue and has issued only one class of membership interests.

(iii) The only holder of Equity Interests in each Managing Member and Lessor is the Borrower and (A) there are no outstanding Equity Interests with respect to each Managing Member or Lessor and (B) there are no outstanding obligations of any Managing Member or Lessor to repurchase, redeem, or otherwise acquire any membership or other equity interests in such Managing Member or Lessor or to make payments to any Person, such as “phantom stock” payments, where the amount thereof is calculated with reference to the fair market value or equity value of such Managing Member or Lessor. Each Managing

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Member and Lessor is authorized to issue and has issued only one class of membership interests.

(iv) The LLC Agreement of the Borrower and each of the other LLC Agreements comply with Section 5.13 .

(b) Authorization; No Conflict . Each Loan Party and each Borrower Subsidiary Party has duly authorized, executed and delivered each Financing Document to which it is a party, and neither such entity’s execution and delivery thereof nor the performance thereof (i) will be in conflict with or result in a breach of such entity’s Organizational Documents; (ii) will materially violate any other Legal Requirement applicable to or binding on such Loan Party or any of their respective properties; (iii) will result in any breach of or constitute any default under, or result in or require the creation of any Lien (other than Permitted Liens) upon any of the Collateral under any agreement or instrument to which it is a party or by which it or any of the Collateral may be bound or affected; or (iv) will require the consent or approval of any Person, which has not already been obtained.

(c) Enforceability . Each Financing Document to which a Loan Party or a Borrower Subsidiary Party is a party is a legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and subject to general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law). None of the Financing Documents to which a Loan Party or Borrower Subsidiary Party is a party has been amended or modified since the later to occur of (i) the Closing Date or (ii) the immediately preceding Borrowing Date except in accordance with this Agreement and as permitted under Section 6.10(a) .

(d) ERISA . Neither the Borrower nor any ERISA Affiliate sponsors, maintains, administers, contributes to, participates in, or has any obligation to contribute to or any liability under, any Pension Plan. The Borrower and each ERISA Affiliate is in material compliance with all applicable provisions of ERISA and the Code with respect to any Pension Plan. Without limiting the generality of the foregoing, there has been no and there is not reasonably expected to be any ERISA Event.

(e) Taxes . Each Loan Party and Borrower Subsidiary Party has filed, or have caused to be filed with the appropriate tax authority, all federal, State and local tax returns that it is required to file and has paid or has caused to be paid all taxes it is required to pay to the extent due; provided , however , that any such Person may contest in good faith any such taxes and, in such event, may permit the taxes so contested to remain unpaid during any period, including appeals, when such Loan Party is in good faith contesting the same, so long as, to the extent the amount of all disputes being contested exceeds Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate, (i) adequate reserves to the extent required by GAAP have been established to the satisfaction of the Administrative Agent; (ii) enforcement of the contested tax is effectively stayed for the entire duration of such contest; and (iii) any tax determined to be due, together with any interest or penalties thereon, is paid when due after resolution of such contest. There is

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no action, suit, proceeding, investigation, audit or claim now pending by a taxing authority regarding any taxes relating to the Loan Parties and Borrower Subsidiary Parties that could, if made, individually or in the aggregate have a Material Adverse Effect.

(f) Business . The Borrower has not conducted any business other than acquisition, construction, installation, lease, ownership of, and sale of energy from, and the operation, management, maintenance and financing of, the Systems and activities related or incident thereto (including those contemplated by the Borrower’s Operative Documents or the applicable Funded Subsidiary’s organizational documents). The Borrower does not have any outstanding Debt or other material liabilities, including liabilities for taxes of material commitments that would have been required to appear on the financial statements of the Borrower in accordance with GAAP applied on a consistent basis, had such financial statements been prepared as of the Closing Date. The Borrower is not a party to or bound by any material contract other than the Operative Documents to which it is a party, this Agreement, the LLC Agreements, the other Financing Documents and any other agreement permitted by the forgoing.

(g) Collateral . The security interests granted to the Collateral Agent pursuant to the relevant Collateral Documents in the Collateral (i) constitute as to personal property included in such Collateral and, with respect to subsequently acquired personal property included in such Collateral, will constitute, a first priority perfected security interest and Lien under each applicable UCC financing statement subject to no other Liens except Permitted Liens of the type set forth in clauses (b), (c) or (d) of the definition thereof; and (ii) are, and, with respect to such subsequently acquired property, will be, as to such Collateral perfected under each applicable UCC financing statement subject to no other Liens except Permitted Liens of the type set forth in clauses (b), (c) or (d) of the definition thereof.

(h) No Default . No Loan Party is in default under or with respect to any agreement, instrument or other undertaking that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Financing Document.

(i) Margin Regulations; Investment Company Act .

(i) Federal Reserve Regulations . The Borrower is not engaged and will not engage, principally, or as one of its important activities, in the business of purchasing or carrying Margin Stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying Margin Stock.

(ii) Investment Company Act . None of the Borrower, Member, the Limited Guarantor or any Borrower Subsidiary Party is or is required to be registered as an “investment company” under the Investment Company Act of 1940 and is not relying on any exemption under Section 3(c)(1) or 3(c)(7) of the Investment Company Act of 1940.

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(j) Litigation . There are no instituted, pending or, to the Borrower’s Knowledge, threatened actions, suits or proceedings of any kind, including actions, suits or proceedings by or before any Governmental Authority, against a Loan Party or any business, property or rights of a Loan Party (i) that pertain to this Agreement or any of the other Financing Documents or (ii) that, if adversely determined against such Person, could, reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

(k) Disclosure . (i) The Borrower has disclosed to the Administrative Agent, the Group Agents and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of the Borrower Subsidiary Parties is subject, and all other matters specific to any such Person known to it, that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect, (ii) all written information that has been made available by the Loan Parties or their Affiliates to any Secured Party in connection with the transactions contemplated by this Agreement and the other Financing Documents (such information to be taken as a whole, including updated or supplemented information), or that has been furnished by the Loan Parties or their Affiliates to any third party in connection with the preparation and delivery by such third party of a report or certificate to any Secured Party, is complete and correct in all material respects, and does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading under the circumstances in which they are made, and (ii) to the Borrower’s Knowledge, each third party report or certificate furnished by or on behalf of the Borrower to any Secured Party, is complete and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading under the circumstances in which they are made; provided, however, that in each case no representation or warranty is made with respect to projections, assumptions or other forward-looking statements provided by or on behalf of the Borrower with respect to the Aggregate Advance Model other than as provided in Section 4.1(p) .

(l) [Reserved].

(m) Capital Structure . The Equity Interests of Borrower and each Funded Subsidiary have been duly authorized and validly issued and, except as otherwise provided for in such Person’s operating agreement, are fully paid and non-assessable. Except as set forth in a Funded Subsidiary’s operating agreement, there is no existing option, warrant, call, right, commitment or other agreement to which any Funded Subsidiary is a party requiring, and there is no membership interest, partnership interest, or other Equity Interests of Borrower or a Funded Subsidiary outstanding which upon conversion or exchange would require, the issuance by such Person of any additional membership interests, partnership interests or other Equity Interests of such Person or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase, a membership interest, a partnership interest or other Equity Interest of such Person.

(n) Compliance with Law . Each of the Borrower, each Funded Subsidiary and, solely with respect to Current Systems, SolarCity, has complied in all material respects with all applicable Legal Requirements, including federal, State and local consumer protection laws.

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(o) No Other Bank Accounts . The Borrower and the Managing Members have no deposit or securities other than the Accounts and the Operating Account.

(p) Projections . The Borrower has disclosed to the Administrative Agent the assumptions upon which the Aggregate Advance Model is based, and the Net Cash Flows and other projections in the Aggregate Advance Model submitted to the Administrative Agent on the Borrowing Date (i) are based on good faith estimates and commercially reasonable assumptions as to all factual matters material thereto and (ii) are generally consistent with the Project Documents, the Tax Equity Model, and other adjustments as approved by the Administrative Agent; provided , however , that (A) neither the Aggregate Advance Model, nor the assumptions set forth therein are to be viewed as facts and that actual results during the term of the Loans may differ from the Aggregate Advance Model, and that the differences may be material, and (B) the Borrower believed in good faith that the Aggregate Advance Model as of the relevant Borrowing Date was reasonable and attainable.

(q) Solvency . Immediately after the consummation of the transactions to occur on the Closing Date and immediately following the making of each Loan, and after giving effect to the application of the proceeds thereof, each Loan Party is solvent within the meaning given to such term under applicable law relating to fraudulent transfers and conveyances, including that (i) the fair value of the assets of each Loan Party, at fair valuation, will exceed its respective debts and liabilities, subordinated, contingent or otherwise, (ii) the present saleable value of the property of such Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured, (iii) the Borrower has not incurred and does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise), and (iv) each Loan Party will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the Closing Date.

(r) Sanctioned Persons . (i) No Loan Party nor, to the knowledge of the Borrower, any director, officer, agent, employee or Affiliate of a Loan Party, is (A) currently subject to any U.S. sanctions administered by OFAC or (B) located, organized or residing in any Designated Jurisdiction; (ii) no Loan Party nor, to the actual knowledge of the Borrower, any director, officer, agent, employee or Affiliate of a Loan Party, is or has been (within the previous five (5) years) engaged in any transaction with any Person who is now or was then the target of U.S. sanctions or who is located, organized or residing in any Designated Jurisdiction; (iii) no Loan, nor any part of the proceeds from any Loan, has been used or will be used, directly or indirectly, to lend, contribute, provide or otherwise make funds available in violation of the United States Foreign Corrupt Practices Act of 1977, as amended; and (iv) to the actual knowledge of the Borrower, no Loan, nor any part of the proceeds from any Loan, has been used or will be used, directly or indirectly, to fund any activity or business in any Designated Jurisdiction or to fund any activity or business of any Person located, organized or residing in any Designated Jurisdiction or who is the subject of any U.S. sanctions, or in any other manner that will result in any violation by any Person (including any Lender, Group Agent, the Joint Lead Arrangers, or any Agent) of U.S. sanctions.

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(s) OFAC . None of the Borrower or any of its Subsidiaries or, to the Borrower’s Knowledge or the knowledge of its Subsidiaries, any director, officer, employee, agent, affiliate or representative thereof, is an individual or entity that is, or is owned or controlled by any individual or entity that is (a) currently the subject or target of any Sanctions, (b) included in OFAC’s list of Specially Designated Nationals, HMT’s Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority or (c) located, organized or resident in a Designated Jurisdiction.

(t) Anti-Corruption Laws . The Borrower and its Subsidiaries have conducted their business in compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions, and have instituted and maintained policies and procedures designed to promote and achieve compliance with such Laws.

(u) Environmental Compliance . To the Borrower’s Knowledge there is no: (i) past or existing material violation of any Environmental Law by any Person relating in any way to any Funded System; (ii) Environmental Claim pending or, to the Borrower’s Knowledge, threatened against any Funded System, or Current System in the applicable Current System Group, Borrower or any Funded Subsidiary; and (iii) to the Borrower’s Knowledge, events, conditions or circumstances that would reasonably be expected to form a basis for an Environmental Claim against any Funded System, or Current System in the applicable Current System Group, Borrower or Funded Subsidiary with respect thereto.

(v) Regulatory Matters . As of the date title to a Current System was transferred to the applicable Funded Subsidiary, such Current System is a qualifying small power production facility pursuant to Section 292.203(a) of FERC’s regulations with a power production capacity of less than 20 MW and, to the extent required under FERC regulations to preserve such status, the applicable Funded Subsidiary or an Affiliate thereof shall have filed with FERC a notice of self-certification, or obtained from FERC an order granting certification, with respect to such status.

ARTICLE 5

AFFIRMATIVE COVENANTS OF BORROWER

The Borrower covenants and agrees that so long as this Agreement is in effect, unless the Administrative Agent (or if so specified, the Majority Group Agents) waives compliance in writing, the Borrower shall:

5.1 Use of Proceeds . Use the proceeds of the Loans solely (a) to make Restricted Payments to the Borrower’s direct or indirect owners for any working capital purposes (including repaying certain outstanding Debt of the Borrower’s Affiliates on the Closing Date), (b) to pay fees (including the Commitment Fees), costs and expenses, or deposit amounts in the Accounts, as required under the Financing Documents .

5.2 Notices . Promptly, upon acquiring notice or giving notice, as the case may be, or obtaining the Borrower’s Knowledge thereof, give written notice to the Administrative Agent of:

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(a) any litigation, Environmental Claim, action or proceeding pending or, to the Borrower’s Knowledge, threatened against the Borrower or a Funded Subsidiary, (i) involving claims against the Borrower or a Funded Subsidiary that would reasonably be expected to have a Material Adverse Effect or a material adverse effect on the Funded Systems or any Subject Fund or on the legality, validity or enforceability of the operating agreement of a Partnership, Lessor or Lessor Partnership in a Subject Fund, the master lease in a Subject Fund, the EPC, master purchase agreement or equity capital contribution agreement in a Subject Fund or any guaranty agreement by SolarCity in favor of an Investor or other party with respect to a Subject Fund, or claims against any Agent, any Lender or any Group Agent, (ii) seeking any material injunctive, declaratory or other equitable relief, or (iii) instituted for the purpose of revoking, terminating, suspending, withdrawing, modifying or withholding any applicable Permit that would reasonably be expected to have a Material Adverse Effect;

(b) any dispute or disputes between the Borrower or a Funded Subsidiary, on the one hand, and any Person, on the other hand, that would reasonably be expected to have a Material Adverse Effect or a material adverse effect on the Funded Systems or any Subject Fund or on the legality, validity or enforceability of the operating agreement of a Partnership or Lessor Partnership in a Subject Fund, the master lease in a Subject Fund, the EPC, master purchase agreement or equity capital contribution agreement in a Subject Fund or any guaranty agreement by SolarCity in favor of an Investor or other party with respect to a Subject Fund and that involve (i) claims against the Borrower or a Funded Subsidiary, (ii) injunctive or declaratory relief, or (iii) revocation, material modification, or suspension of any applicable Permit or imposition of additional material conditions with respect thereto;

(c) any Default or Event of Default that has occurred and is continuing (and any notice thereof shall be entitled “ Notice of Default ” or “ Notice of Event of Default ”), which notice shall (i) describe with particularity any and all provisions of this Agreement and any other Financing Document that have been breached and (ii) be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto;

(d) any matter that has, or would reasonably be expected to have, a Material Adverse Effect or a material adverse effect on the Funded Systems or any Subject Fund or on the legality, validity or enforceability of the operating agreement of a Partnership or Lessor Partnership in a Subject Fund, the master lease in a Subject Fund, the EPC, master purchase agreement or equity capital contribution agreement in a Subject Fund or any guaranty agreement by SolarCity in favor of an Investor or other party with respect to a Subject Fund;

(e) (i) the occurrence of any event that would reasonably be expected to give rise to a right to remove and/or replace a Managing Member, (ii) the occurrence of, or notice given or received by a Funded Subsidiary in respect of, any material breach, default or claim under a Project Document and (iii) notice of any material event of default or termination given to or received by a Funded Subsidiary under any Project Document;

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(f) the adoption of or participation in any Pension Plan, or intention to adopt or participate in any Pension Plan, by the Borrower or an ERISA Affiliate, or the occurrence of any ERISA Event;

(g) Borrower having received notice or otherwise having obtained knowledge of any material inaccuracy of any Eligibility Representation, Tax Equity Representation or Other Structure Representation that was made by it pursuant to this Agreement or in any certificate (solely as of the time such Eligibility Representation was made);

(h) any material change in SolarCity’s or any Subject Fund’s methodology for conducting appraisal and determining concluded fair market value; and

(i) any material change in SolarCity’s or any Subject Fund’s (i) energy production methods or (ii) inspection and quality control processes, in each case, that would reasonably be expected to result in a Material Adverse Effect.

5.3 Portfolio Reports; Financial Statements . Deliver to the Administrative Agent (or cause to be delivered to the Administrative Agent) for further distribution to each Group Agent:

(a) Each fiscal quarter, no later than ten (10) Business Days following the date of delivery to any Investor, for each Subject Fund, (i) the quarterly reporting package as is required to be delivered to any Investor under a Subject Fund’s maintenance services agreement, or (ii) to the extent delivered to an Investor under a Subject Fund for such quarter, copies of such other quarterly reporting package compiled by SolarCity’s asset management group with respect to a Subject Fund’s performance.

(b) Each fiscal quarter, no later than ten (10) Business Days following the date of delivery to the Administrative Agent of the quarterly reporting package required pursuant to Section 5.3(a) , for each Subject Fund, each of the following:

(i) detailed accounts receivable aging taken directly from the source system, including that are maintained by any third-party servicer;

(ii) detailed trial balance taken directly from the source system; and

(iii) suspense cash summary and aging.

(c) Each fiscal quarter, no later than ten (10) Business Days following the latest due date of a Subject Fund to deliver a quarterly reporting package to an Investor under the applicable maintenance services agreement, a consolidated report for all Subject Funds, including (i) financing deployment status by Subject Fund or, with respect to any Other Structure in respect of which there is no Investor, within forty-five (45) days following the end of each quarter, (ii) aggregated portfolio profile by credit composition, market composition and customer location, (iii) the cumulative amount of billed Customer Payments delinquent for 120 days or more with respect to each Subject Fund, and (iv) a summary and commentary with respect to the status of Customer Agreements that are greater than 120 days past due, to the extent not provided elsewhere within any other item delivered pursuant to Section 5.3(a) .

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(d) No later than ten (10) Business Days following the date of delivery to any Investor or, with respect to any Other Structure in respect of which there is no Investor, within forty-five (45) days following the end of each year, duplicate copies of any annual reporting package required to be delivered to any Investor with respect to a Subject Fund pursuant to the Subject Fund’s maintenance services agreement.

(e) As soon as available but no later than forty-five (45) days after the close of each quarterly fiscal period, quarterly unaudited consolidated financial statements of the (A) the Borrower, (B) SolarCity (if such financial statements are not otherwise publicly available), which such financial statements shall include a footnote to indicate the separateness of Borrower from SolarCity and will indicate that the obligations hereunder are non-recourse to the general credit of SolarCity, (C) each Managing Member ( provided , that unaudited consolidating financial statements of the Borrower showing entries on an individual basis with respect to each Managing Member shall satisfy this clause (C)), and (D) each Subject Fund, in each case prepared by the issuing entity in accordance with GAAP and certified by the chief financial officer of the issuing entity as of the end of such period, including a balance sheet and the related statement of income, stockholders’ or member’s equity and cash flows, in each case setting forth comparative figures for the corresponding periods from the prior year, to the extent available; provided, no quarterly financial statements shall be due with respect to the fourth quarter of the fiscal year.

(f) As soon as available but no later than one hundred twenty (120) days after the close of each applicable fiscal year, the audited financial statements, including a balance sheet and the related statement of income, stockholders’ or member’s equity and cash flows, and any footnotes thereto, in each case setting forth comparative figures for the prior year, to the extent available, of (A) the Borrower, as certified by Novogradac & Company LLP or another nationally-recognized independent certified public accountant selected by Borrower and reasonably acceptable to the Administrative Agent, (B) SolarCity (if such financial statements are not otherwise publicly available), which such financial statements shall include a footnote to indicate the separateness of Borrower from SolarCity and will indicate that the obligations hereunder are non-recourse to the general credit of SolarCity, and as certified by a nationally-recognized independent certified public accountant, and (C) each Managing Member, as certified by Novogradac & Company LLP or another nationally-recognized independent certified public accountant selected by Borrower and reasonably acceptable to the Administrative Agent ( provided , that audited consolidating financial statements of the Borrower showing entries on an individual basis with respect to each Managing Member shall satisfy this clause (C) ), and (D) each Subject Fund, as certified by Novogradac & Company LLP or another nationally-recognized independent certified public accountant selected by the applicable Subject Fund pursuant to its operating agreement; provided, the accountant certifications accompanying such audited financial statements shall not be qualified, or limited because of restricted or limited examination by such accountant of any material portion of the records of any entity. Such audited financial statements shall be certified by the chief financial officer or other similar officer of the issuing entity as of the end of such period.

(g) Concurrently with any delivery of the financial statements described in clauses (e) or (f) above, a certificate signed by an authorized Responsible Officer of the Borrower certifying

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that such Responsible Officer has made or caused to be made a review of the transactions and financial condition of the Borrower during the relevant fiscal period and that, to the knowledge of such Responsible Officer, no Default or Event of Default exists or if any such event or condition existed or exists, the nature thereof and the corrective actions that the Borrower has taken or proposes to take with respect thereto.

(h) The Group Agents shall have the right to make inquiries with respect to any items delivered pursuant to this Section 5.3 and discuss the same with Responsible Officers of SolarCity, the Borrower, or the Funded Subsidiaries, as applicable. Any such inquiries shall be coordinated by and delivered to the Borrower by the Administrative Agent; provided, that for so long as an Event of Default has occurred and is ongoing, such inquiries may be made by a Lender directly to the Borrower.

5.4 Reports; Other Information .

(a) Deliver to the Administrative Agent, for the benefit of each Group Agent and each Lender, promptly after the receipt or delivery thereof copies of any notices of material default pursuant to a Project Document provided to or issued by any Investor party to a Project Document.

(b) Deliver to the Administrative Agent, for the benefit of each Group Agent and each Lender, copies of any material documents and reports related to the Funded Systems furnished to the Borrower or a Funded Subsidiary by a Governmental Authority or by any counterparty to a Project Document (other than reports already delivered pursuant to Section 5.3(a) ), or furnished by the Borrower to such Governmental Authority or such counterparty.

(c) Deliver to the Administrative Agent, for the benefit of each Group Agent and each Lender, promptly after receipt thereof a copy of any “management letter” received by the Borrower or any Funded Subsidiary from its independent accounts and management’s response thereto.

(d) Deliver to the Administrative Agent, for the benefit of each Group Agent and each Lender, no later than three (3) Business Days after delivery to the applicable Investor, any True-Up Reports and models in connection therewith (however such models may be defined under any LLC Agreement or other Project Document) delivered to an Investor in a Subject Fund.

(e) Deliver to the Administrative Agent, for the benefit of each Group Agent and each Lender, no later than one hundred twenty (120) days after the close of each applicable fiscal year, copies of the Certification Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 as it relates to the audited financial statements of SolarCity (if such certifications are not otherwise publicly available).

(f) Upon the written request of the Administrative Agent, perform a credit assessment on any Non-Investment Grade Commercial Host Customer or Shadow Rated Commercial Host Customer for a Commercial System exceeding 5 mW in nameplate capacity and deliver the results thereof to the Administrative Agent.

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(g) [Reserved].

(h) Promptly, from time to time, such other information regarding the operations, business affairs and financial condition of the Borrower or any Funded Subsidiary, including any information requested with respect to any Borrowing Base Certificate, Aggregate Advance Model or material attached thereto, previously submitted by the Borrower, or compliance with the terms of any Operative Document or Customer Agreement, as the Administrative Agent or any Lender may reasonably request.

(i) As and when available (but not less than once per calendar year), the Borrower shall deliver an Independent Engineer’s report in substantially the same form, and regarding substantially the same substance, as the Independent Engineer’s report provided to the Administrative Agent pursuant to Section 3.1(o) .

5.5 Existence, Conduct of Business . Except as otherwise expressly permitted under this Agreement: (a) do or cause to be done all things required to maintain and preserve and keep in full force its existence as a Delaware limited liability company; (b) do or cause to be done, and cause each Borrower Subsidiary Party to do or cause to be done, all things required to obtain, maintain, preserve, renew, extend and keep in full force and effect all material rights, licenses, authorizations, privileges, franchises and applicable Permits necessary to the conduct of such Person’s business; (c) take all Relevant Member Action to cause each Subject Fund to do or cause to be done, all things required to obtain, maintain, preserve, renew, extend and keep in full force and effect all material rights, licenses, authorizations, privileges, franchises and applicable Permits necessary to the conduct of such Person’s business; (d) perform all of its obligations under the Operative Documents and all other material agreements and contracts by which Borrower is bound; and (e) to engage only in the ownership of the Funded Subsidiaries and activities related or incident thereto.

5.6 Books, Records, Access .

(a) Maintain books, accounts and records with respect to the Borrower on a consolidated basis in accordance with GAAP and in material compliance with applicable law and the regulations of any Governmental Authority having jurisdiction thereof.

(b) At any time during normal business hours and upon ten (10) Business Days’ prior written notice to the Borrower (and at any hour and without prior written notice if any Event of Default has occurred and is continuing), but so long as no Event of Default has occurred and is continuing, no more frequently than once per six (6) consecutive calendar month period:

(i) Permit any representatives, employees, consultants, advisers or agents of the Administrative Agent to visit the premises of the Borrower, SolarCity, and any third-party servicer to inspect all of the Borrower’s, Member’s, each Funded Subsidiaries’ books, accounts, records and properties and make copies thereof (subject to clause (e) below); and review the management and accounting of the subject financing, including the Subject Funds.

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(ii) Provide an audit view of SolarWorks or provide such documents, materials or records if not already available in SolarWorks or otherwise provided to the Administrative Agent pursuant to the terms herein, as necessary to determine compliance with the Eligibility Representations.

(c) The Administrative Agent, Borrower and the Limited Guarantor each agree to cooperate in good faith to develop a mutually agreeable process to periodically conduct sampling and testing of financial processes and reports of the Funded Subsidiaries, including the ability of any representative of any Agent to discuss the affairs, finances and condition of the Borrower and the Funded Subsidiaries with the officers thereof and independent accountants therefor.

(d) Reimburse the Administrative Agent for the out of pocket expenses incurred in connection with Section 5.6(b) by the Administrative Agent and its representatives; provided , that such expenses shall be agreed to by the Borrower and the Administrative Agent in advance on commercially reasonably terms, and provided , further , that notwithstanding anything to contrary herein, any expenses incurred pursuant to Section 5.6(b) by the Administrative Agent during the occurrence of an Event of Default shall be for the account of the Borrower and not subject to any limitations set forth herein or elsewhere.

(e) Notwithstanding the information disclosure obligations discussed above, any inspection of the Project Documents or any other agreement affiliated with a Subject Fund pursuant to Section 5.6(b) shall be limited to review by the counsel of the Administrative Agent and will not be copied, sent by mail, fax, electronic mail or any other transmission, or distributed to any Group Agent, any Lender or its counsel without the express written consent of the Borrower, such consent not to be withheld if the applicable Group Agent or Lender and its counsel are subject to a nondisclosure agreement of reasonable terms with SolarCity specifically referencing the review of Project Documents.

5.7 Preservation of Rights; Further Assurance .

(a) Use commercially reasonable efforts to maintain in full force and effect, preserve, protect and defend the material rights of each Funded Subsidiary in a Subject Fund, and take all actions necessary to prevent termination or cancellation (except as permitted by the Operative Documents) by, and enforce against, other parties the material terms of each Project Document of the applicable Subject Fund, including enforcement of any claims with respect thereto; provided that with respect to a Partnership or a Lessor Partnership, the Borrower shall be in compliance with this Section 5.7(a) if the Managing Member for such Partnership or Lessor Partnership is in compliance with its fiduciary obligation under the applicable operating agreement of the Partnership or the Lessor Partnership, as the case may be.

(b) Preserve and maintain the security interests granted under the Collateral Documents and undertake all actions that are necessary or appropriate to (i) maintain the Collateral Agent’s security interest in the Collateral in full force and effect at all times (including the priority thereof), (ii) preserve and protect the Collateral and (iii) protect and enforce the Borrower’s rights and title and the rights of the Collateral Agent and the other Secured Parties to

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the Collateral, including the making or delivery of all filings and recordations, the payment of all fees and other charges and the issuance of supplemental documentation.

(c) From time to time as reasonably requested by the Administrative Agent, execute, acknowledge, record, register, deliver and/or file all such notices, statements, instruments and other documents (including any financing statement, continuation statement, certificate of title or estoppel certificate) as are necessary or appropriate to carry out the interest and purposes of the Financing Documents or necessary to maintain the Collateral Agent’s perfected security interest in the Collateral to the extent and in the priority required pursuant to the Collateral Documents.

(d) To the extent any Funded System (i) is no longer owned by a Subject Fund and (ii) is owned by a special purpose vehicle wholly-owned by Borrower in an Other Non-Financed Structure, cause SolarCity to perform operations and maintenance service with respect to such Funded Systems pursuant to a maintenance services agreement in form and substance reasonably satisfactory to the Administrative Agent.

5.8 Taxes and Other Government Charges .

(a) Pay, or cause to be paid, as and when due and prior to delinquency, all taxes, assessments and governmental charges of any kind that may at any time be lawfully assessed or levied against or with respect to the Borrower and each Borrower Subsidiary Party, and take all Relevant Member Action to pay, or cause to be paid, as and when due and prior to delinquency, all taxes, assessments and governmental charges of any kind that may at any time be lawfully assessed or levied against or with respect to any Subject Fund; provided , that, without limiting any requirements set forth in the Organizational Documents of any Subject Fund, the Borrower or Funded Subsidiary, as applicable, may contest in good faith any such taxes, assessments and other charges and, in such event, may permit the taxes, assessments or other charges so contested to remain unpaid during any period, including appeals, when such Person is in good faith contesting the same, so long as, to the extent the amount of all disputes being contested exceeds Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate, (i) adequate reserves to the extent required by GAAP have been established to the satisfaction of the Administrative Agent, (ii) enforcement of the contested tax, assessment or other charge is effectively stayed for the entire duration of such contest and (iii) any tax, assessment or other charge determined to be due, together with any interest or penalties thereon, is paid when due after resolution of such contest.

(b) Remain and cause each Managing Member (excluding [***]) to remain classified as a disregarded entity for U.S. federal income tax purposes.

5.9 Compliance With Laws; Instruments, Etc . Comply and cause compliance by each Borrower Subsidiary Party, and take all Relevant Member Action to cause compliance by each Subject Fund, in all material respects, with all Legal Requirements, including consumer protection Laws, except that, without limiting any requirements set forth in the Organizational Documents of any Subject Fund, the Borrower or a Funded Subsidiary may contest by appropriate proceedings conducted in good faith the validity or application of any such Legal Requirements.

5.10 Indemnification .

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(a) Without duplication of the Borrower’s obligations under Section 2.4(d) or Section 2.6 , the Borrower agrees to indemnify each Secured Party (other than the Depositary, who is indemnified under Section 6.2 of the CADA ) and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and to hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable counsel fees, charges and disbursements, incurred by or asserted against any Indemnitee arising out of, in any way connected with, or as a result of (i) the execution or delivery of this Agreement or any other Financing Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto and thereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby and thereby, (ii) the use of the proceeds of the Loans, (iii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto (and regardless of whether such matter is initiated by a third party or by the Borrower, any other Loan Party or any of their respective Affiliates), or (iv) any actual or alleged presence or Release of Hazardous Materials on any property currently or formerly owned or operated by the Borrower, any other Loan Party or any Funded Subsidiary, or any Environmental Claim related in any way to the Borrower, in all cases whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence (but not gross negligence) of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted primarily from such Indemnitee’s fraud, gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower or any other Loan Party or any of their Affiliates against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Financing Document, if the Borrower or such Loan Party or such Affiliate has obtained a final or nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

(b) To the extent that the Borrower fails to pay any amount required to be paid by them to the Administrative Agent or the Collateral Agent under Section 5.10(a) or Section 10.4 , each Group severally agrees to pay to the Administrative Agent and the Collateral Agent, as the case may be, such Group’s Proportionate Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent or the Collateral Agent in its capacity as such.

(c) To the extent permitted by applicable law, the Borrower shall not assert and hereby waives any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, any transaction contemplate hereby or by the other Financing Documents, any Loan or the use of the proceeds thereof.

(d) In case any action, suit or proceeding subject to the indemnity in this Section 5.10 shall be brought against any Indemnitee, such Indemnitee shall promptly notify the Borrower in

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writing of the commencement thereof, and the Borrower shall be entitled, upon giving written notice to the Indemnitee within thirty (30) days of receipt of written notice from the Indemnitee of the commencement of such proceeding, to retain counsel reasonably satisfactory to the Indemnitee to represent the Indemnitee in such proceeding, and the Borrower shall pay the reasonable and documented fees and disbursements of such counsel related to such proceeding; provided , that the failure to notify the Borrower shall relieve the Borrower from any liability that it may have under this Section 5.10 only if, and only to the extent that, such failure causes actual prejudice to the Borrower. In any such proceeding, any Indemnitee shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnitee unless (i) the Borrower and the Indemnitee shall have mutually agreed to the retention of such counsel or (ii) the Borrower or the Indemnitee has been advised by counsel that representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the Borrower shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one (1) counsel (in addition to any local counsel) for all Indemnitees, and that all such reasonable and documented fees and expenses shall be reimbursed as they are incurred and paid.

(e) The Borrower shall have the authority and discretion to settle, compromise or consent to the entry of judgment regarding any indemnified claim subject to this Section 5.10 , the defense of which has been assumed by the Borrower, except that the Borrower may not, without the prior written consent of the Indemnitee, settle, compromise or consent to the entry of any judgment regarding such claim if such settlement, compromise or consent (i) contains any admission or statement suggesting any wrongdoing or liability on behalf of the Indemnitee, (ii) contains any equitable order, judgment or term that in any manner affects, restrains or interferes with the business of the Indemnitee or any of its Affiliates or (iii) does not contain an unconditional release of the Indemnitee, in form and substance satisfactory to such Indemnitee, from any liability related to such claim. The Indemnitee may not settle, compromise or consent to the entry of any judgment regarding any claim for which indemnification is sought and the defense of which has not been assumed by the Borrower, without the prior written consent of the Borrower, such consent not to be unreasonably withheld or delayed.

(f) The provisions of this Section 5.10 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the expiration of the Commitments, the invalidity or unenforceability of any term or provision of this Agreement or any other Financing Document, or any investigation made by or on behalf of the Administrative Agent, the Collateral Agent or any Lender. Any amounts due and payable by the Borrower under this Section 5.10 shall be payable on demand by the applicable Indemnitee, but in no event later than ten (10) Business Days after receipt of an invoice for such amounts from such Indemnitee. If such amounts are not paid within such ten (10) Business Day period, then such amounts shall bear interest at the Default Rate.

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5.11 Revenue & Operating Accounts .

(a) Revenue Account . The Borrower shall cause each Borrower Subsidiary Party to deposit all Actual Net Cash Flows directly into the Revenue Account. In the event that, notwithstanding the foregoing, the Borrower receives any such amounts, the Borrower will hold such amounts in trust and promptly (and in any event within three (3) Business Days) after receipt thereof deposit such amounts in the Revenue Account.

(b) Operating Account . The Borrower shall cause each Managing Member to cause each Subject Fund to deposit all Excluded Revenues (other than Excluded Revenues received in respect of a System prior to such System becoming a Funded System, including amounts in connection with the purchase (or contribution) of PV Systems in a Partnership Flip Structure, any Rent Prepayment, or proceeds from upfront rebates, including any proceeds from refundable State tax credits) directly into the Operating Account.

(c) Accounting . No less frequently than once per calendar month, the Borrower shall deliver to the Administrative Agent, for the benefit of each Group Agent and each Lender, an accounting of Excluded Revenues and Actual Net Cash Flows. So long as the Borrower is not currently delinquent in delivering such accounting, no consent of the Administrative Agent, Group Agents or Lenders shall be required to withdraw funds from the Operating Account. Notwithstanding the foregoing, the Administrative Agent shall have the right to audit the accounting of Excluded Revenues, and, to the extent that an error has been made with respect to the identification and deposit of funds as Excluded Revenues (“ Misdirected Revenues ”), the Administrative Agent shall provide written notice of the amount of Misdirected Revenues, and provide the Borrower with the calculation thereof or otherwise explain the error. The Borrower shall have ten (10) days to (i) cure such error by depositing an amount equal to the Misdirected Revenues into the Revenue Account or (ii) provide an explanation reasonably acceptable to the Administrative Agent that there was in fact no error in the accounting.

(d) Interest Reserve Account . The Borrower will cause the Interest Reserve Account to be funded at least to the Interest Reserve Required Balance at all times as required in accordance with the terms of the CADA.

5.12 Compliance with Sanctioned Persons Laws and Anti-Corruption Laws .

(a) Conduct its businesses in compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption Laws in other jurisdictions, and maintain policies and procedures designed to promote and achieve compliance with such Laws.

(b) If to the Borrower’s Knowledge, any Loan Party or any Affiliate thereof, is named on any OFAC List (such occurrence, an “ OFAC Violation ”), immediately (i) give written notice to the Agents of such OFAC Violation, and (ii) comply with all applicable Governmental Rules with respect to such OFAC Violation (regardless of whether the party included on such OFAC List is located within the jurisdiction of the United States of America), including the Anti-Terrorism Laws, and the Borrower hereby authorizes and consents to the Agents taking any and all steps an Agent deems necessary, in its sole discretion, to comply with

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all applicable Governmental Rules with respect to any such OFAC Violation, including the requirements of the Anti-Terrorism Laws (including the “freezing” and/or “blocking” of assets).

5.13 Separateness Provisions; Required Provisions in LLC Agreement .

(a) Cause the LLC Agreement of the Borrower to include or the Borrower shall otherwise comply with the provisions set forth on Schedule 5.13 .

(b) Cause the LLC Agreements to include each of the following terms and the provisions set forth on Schedule 5.13 (collectively, the “ Required LLC Provisions ”):

(i) require that until the Discharge Date the Borrower and each Managing Member or, in the case of an Other Non-Financed Structure, other wholly-owned Subsidiary of the Borrower, as applicable, shall have, at all times, one Independent Member; and

(ii) require unanimous written approval of all members, partners or managers, as the case may be, including the Independent Member in order to authorize the filing of any insolvency or reorganization case or proceeding, instituting proceedings to have the Borrower or Managing Member or, in the case of an Other Non-Financed Structure, other wholly-owned Subsidiary of the Borrower, as applicable, adjudicated bankrupt or insolvent, instituting proceedings under any applicable insolvency law, seeking any relief under any law relating to relief from debts or the protection of debtors, consenting to the filing or institution of bankruptcy or insolvency proceedings against the Borrower or Managing Member or, in the case of an Other Non-Financed Structure, other wholly-owned Subsidiary of the Borrower, as applicable, filing a petition seeking or consenting to reorganization, liquidation or relief with respect to the Borrower or Managing Member or, in the case of an Other Non-Financed Structure, other wholly-owned Subsidiary of the Borrower, as applicable, under any applicable federal or state law relating to bankruptcy, reorganization or insolvency, seeking or consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official for the Borrower or Managing Member or, in the case of an Other Non-Financed Structure, other wholly-owned Subsidiary of the Borrower, as applicable, or a substantial part of its property, making any assignment for the benefit of creditors, admitting in writing the inability of the Borrower or Managing Member or, in the case of an Other Non-Financed Structure, other wholly-owned Subsidiary of the Borrower, as applicable, to pay its debts as they become due, or taking action in furtherance of any of the foregoing.

5.14 Distributions by Certain Subsidiaries . The Borrower shall cause each Managing Member to cause each Subject Fund to promptly distribute cash flows as per the requirements, and in accordance with, the distribution allocations of the Subject Fund; provided , that delays in distributions of any Excluded Revenues shall not be a breach of this Section 5.14 .

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5.15 Borrowing Base Certificate . Unless otherwise waived by the Administrative Agent, (a) no less frequently than once per month on each of (i) the twenty-fifth day of such month (or, if such day is not a Business Day, the immediately succeeding Business Day), (ii) the delivery of the Borrowing Notice for such month and (iii) two (2) Business Days prior to each Scheduled Payment Date; provided , that if a Borrowing Date occurs on a Scheduled Payment Date, the Borrower shall only be required to submit one Borrowing Base Certificate three (3) Business Days prior to such date, and provided further that if multiple Borrowing Base Certificates may otherwise have to be submitted during a calendar week, the Borrowing Base Certificate delivered for the first relevant date of such calendar week shall satisfy the submission requirement for that calendar week , (b) promptly upon any Subject Fund becoming a Watched Fund, (c) promptly upon the increase of the aggregate amount of an Investor’s commitment in a Subject Fund that causes a delay in receipt or decrease in amount of Net Cash Flows, and (d) no more frequently than once per month, in addition to dates set forth in (a) through (c) of this Section 5.15 , within three days of the written request of the Administrative Agent, upon the reasonable determination by Administrative Agent that there has been a shift in interest rates that would have a material effect on any Asset Discount Rate, deliver a Borrowing Base Certificate to the Administrative Agent, for the benefit of each Lender.

5.16 New Subject Funds . In connection with the inclusion of any Potential New Fund as a Subject Fund, the Loan Parties shall simultaneously with such Potential New Fund becoming a Subject Fund:

(a) deliver to the Administrative Agent all documents representing all Equity Interests pledged by the Borrower in connection with such Subject Fund, together with undated powers of endorsements duly executed in blank;

(b) take any actions reasonably required by the Administrative Agent to ensure and/or demonstrate that the Liens and security interests granted by the applicable Financing Documents continue to be perfected under applicable law after giving effect to the Potential New Fund becoming a Subject Fund hereunder and thereunder;

(c) take all other actions necessary or advisable to ensure the validity or continuing validity of any guaranty for any Obligation or any Lien securing any Obligation, to perfect, maintain, evidence or enforce any Lien securing any Obligation or to ensure such Liens have the same priority as that of the Liens on similar Collateral set forth in the Financing Documents executed on the Closing Date (or, for Collateral located outside the United States, a similar priority acceptable to the Administrative Agent), including the execution of joinder agreements as required under the CADA and Security Agreement in respect of any Borrower Subsidiary Party and the filing of UCC financing statements in such jurisdictions as may be required by the Financing Documents or applicable law or as the Administrative Agent or Collateral Agent may otherwise reasonably request;

(d) without duplication of documents delivered pursuant to Section 3.4(b) , deliver all Project Documents for such Subject Fund to the Administrative Agent; and

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(e) in connection with any Other Structure, execute agreements and other documents indicating their consent to the incorporation of supplemental or modified terms and conditions to the Financing Documents regarding such Other Structure reasonably requested by the Agents and Majority Group Agents, including supplemental representations, warranties, covenants and defaults and amendments to the existing terms of this Agreement and the other Financing Documents.

5.17 Maintenance of Materials . Maintain, for the benefit of each Group Agent and each Lender, true, correct and complete electronic copies of materials which were delivered pursuant to Section 3.3(b) , and shall deliver upon reasonable request, true, correct and complete electronic copies of (a) material agreements entered into by any Funded Subsidiary after the Closing Date, (b) each Customer Agreement entered into after the Closing Date that relates to a PTO System, and (c) any other data, documentation, analysis or report reasonably requested by the Administrative Agent with respect to any System acquired by the Subject Funds after the Closing Date or the associated Host Customers and commercially available to the Borrower, in each case as reasonably requested by any Group Agent or any Lender for informational purposes only, to the extent not otherwise publicly available and in possession of the Borrower or its Affiliates, including financial statements and/or credit reports with respect to any such System with a commercial Host Customer that does not have a publicly available rating from a recognized national rating agency that was current as of the date that the Customer Agreement corresponding to such System was executed.

5.18 Investor Consents . Use commercially reasonable efforts to obtain tax equity consents from the Investor in each of the [***], [***], [***] and [***] Subject Funds in form and substance acceptable to the Majority Group Agents. For the avoidance of doubt, the use of “commercially reasonable efforts” shall not require the Borrower or any other Person to offer, pay or agree to any fee, compensation or other economic incentive or to otherwise agree to any amendment or modification of any Project Document in connection with any tax equity consent referred to in the immediately preceding sentence.

5.19 Correction Payments .

(a) In the event any Eligibility Representation, Tax Equity Representation, Repeat Tax Equity Structure Representations or Other Structure Representation made pursuant to this Agreement or in any certificate delivered in connection herewith shall prove to have been inaccurate in any respect as of the date such statement was made or certificate so provided, as applicable, or the Borrower shall have committed any Correction Payment Action or any uncured violation of Section 6.2 , Section 6.3 , Section 6.4 , Section 6.5 or Section 6.6 and the Administrative Agent reasonably determines that such inaccuracy, Correction Payment Action or violation has or would reasonably be expected to result in a reduction of Actual Net Cash Flow in an amount of at least $[***] (the amount of such actual reduction, the “ Correction Payment Amount ”), within five (5) Business Days of Borrower’s receipt of notice from the Administrative Agent or Borrower otherwise becoming aware thereof, (i) cause one or more Subject Funds to acquire Systems in respect of which the aggregate expected net cash flow in respect of which, as set forth in an Aggregate Advance Model to be delivered by the Borrower to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, is at

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least equal to the Correction Payment Amount or (ii) cause an Equity Contribution to be made to Borrower, the proceeds of which shall be in an amount at least equal to the Correction Payment Amount.

(b) If the Borrower shall not have (i) within ten Business Days of the Closing Date, obtained the [***] Tax Equity Required Consent and (ii) within fifteen (15) Business Days of the Closing Date, delivered to the Administrative Agent an opinion, dated as of the date of the [***] Tax Equity Required Consent, of Wilson Sonsini Goodrich & Rosati, counsel to the Loan Parties, the Borrower Subsidiary Parties and SolarCity, in form and substance reasonably acceptable to the Agents and each Group Agent, cause an Equity Contribution to be made to Borrower within five (5) Business Days, in an amount equal to the amount of Loans outstanding that were borrowed against the related Subject Fund.

5.20 Asset-Backed Commercial Paper . Has not, does not and will not during the term of the Agreement (x) issue any obligations that (a) constitute asset-backed commercial paper, or (b) are securities required to be registered under the Securities Act of 1933 or that may be offered for sale under Rule 144A of the Securities and Exchange Commission thereunder, or (y) issue any other debt obligations or equity interests other than equity interests issued to the Member under the terms of the limited liability company agreement of Borrower. Borrower further represents and warrants that its assets and liabilities are consolidated with the assets and liabilities of Limited Guarantor for purposes of generally accepted accounting principles.

ARTICLE 6

NEGATIVE COVENANTS OF BORROWER

The Borrower covenants and agrees that, so long as this Agreement is in effect, it shall not:

6.1 [Reserved].

6.2 Limitations on Liens . (a) Create or assume, or allow a Borrower Subsidiary Party to create or assume, or take any Relevant Member Action to cause or permit any Subject Fund to create or assume, any Lien on any Collateral, whether now owned or hereafter acquired, except for Permitted Liens of the type set forth in clauses (b), (c) or (d) of the definition thereof or (b) suffer to exist, or allow a Funded Subsidiary or a Lessor to suffer to exist, any Lien on any of its property or PV Systems, whether now owned or hereafter acquired, except for Permitted Liens.

6.3 Debt . Incur, create, assume or permit, or allow a Borrower Subsidiary Party, or take any Relevant Member Action to cause or permit any Subject Fund, to incur, create, assume or permit to exist any Debt except for:

(a) Debt created under the Financing Documents;

(b) Debt incurred under the Project Documents to which a Funded Subsidiary is a party;

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(c) the endorsement of negotiable instruments received in the ordinary course of the Borrower’s or the Funded Subsidiary’s business, as applicable; or

(d) Debt arising under any Hedging Agreement permitted under Section 6.18 .

6.4 Sale or Lease of Assets . Sell, lease, assign, transfer or otherwise dispose of, or allow a Borrower Subsidiary Party, or take any Relevant Member Action to allow a Funded Subsidiary, to sell, lease, assign, transfer or otherwise dispose of, Assets (including any portion of any Equity Interest owned by the Borrower in a Borrower Subsidiary Party or by a Borrower Subsidiary Party in any Subject Fund), whether now owned or hereafter acquired except:

(a) as permitted by the Operative Documents (without any consent by any Investor in the Tax Equity Structure) and the Customer Agreements;

(b) dispositions of obsolete, worn out or replaced property not used or useful in its business and disposed of in the ordinary course of its business;

(d) the Equity Interest in [***] if the Equity Contribution required under Section 5.19(b) (if any) has been made in full in cash and any corresponding prepayment required under Section 2.1(f) has been made; and

(e) with the prior written consent of the Administrative Agent, acting at the direction of the Required Group Agents.

6.5 Changes . Conduct, or allow any Borrower Subsidiary Party to conduct, any business other than the acquisition and ownership of subsidiaries which engage in the acquisition, ownership, leasing and financing of the Systems and activities related or incident thereto (including those contemplated by the Borrower’s Operative Documents), hire or become an employer of an employee or assume or incur any obligation under or in connection with any Pension Plan.

6.6 Distributions . Directly or indirectly, make or declare any Restricted Payment or incur any obligation (contingent or otherwise) to do so, except for Restricted Payments:

(a) from proceeds of the Loans in accordance with Section 5.1 ;

(b) from a Managing Member to Borrower;

(d) on any Scheduled Payment Date, so long as (i) no Default or Event of Default has occurred and is continuing or would be caused thereby, (ii) no Sweep Event has occurred and is continuing (or if a Sweep Event has occurred, it is not prior to the second fiscal quarter following the date such Sweep Event was remedied, it being understood and agreed that a Bankruptcy Event with respect to SolarCity cannot be remedied), (iii) no Subject Fund Sweep Event has

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occurred and, after giving effect to any prepayments made pursuant to Section 2.1(f)(ii) , is continuing, (iv) the Borrower, after giving effect to any prepayments made pursuant to Section 2.1(f)(ii) , is in compliance with the Borrowing Base Requirements, (v) the Borrower is in compliance with the terms of Section 5.11(c) hereof, (vi) all Accounts have been funded in the minimum amounts required under the CADA, (vii) no amounts that are to have been deposited in the Prepayment Account (as defined in the CADA) as of such Scheduled Payment Date pursuant to Section 3.2(a) of the CADA are on deposit in the Revenue Account, and (viii) the Borrower has certified in writing to the Administrative Agent that it is not aware of any event or circumstance that would reasonably be considered likely to cause or result in the occurrence of a Default or Event of Default within 30 days from such Scheduled Payment Date, from Borrower to Member from Excess Cash Flow.

6.7 Investments . Make or permit to remain outstanding any advances or loans or extensions of credit to, or purchase, redeem or own any Equity Interests in, or any assets constituting an ongoing business from, or make or permit any other investment in, any Person, except for:

(a) investments in Funded Subsidiaries; and

(b) investments permitted under the Operative Documents.

6.8 Use of Proceeds . Use the proceeds of the Borrowing, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

6.9 Fundamental Changes . Liquidate or dissolve, or sell or lease or otherwise transfer or dispose of, all or any substantial part of its property, assets or business, or combine, merge or consolidate with or into any other entity; provided , however , that the Borrower may sell, or otherwise dispose of assets as permitted by Section 6.4 .

6.10 Amendments; Other Agreements .

(a) Without the prior written consent of the Administrative Agent and the Majority Group Agents, take any Relevant Member Action to (i) terminate or cancel, exercise any right or remedy under or pursuant to any breach or default of, (ii) amend, modify, supplement or consent to any change in any material provision of (including to incur or increase any deficit restoration of a Borrower Subsidiary Party) or (iii) waive any default under, material breach of, condition, closing deliverable or other required item under, or the performance of a material obligation by any other Person under their applicable Project Documents (other than the applicable LLC Agreement); provided , however , that no consent by the Administrative Agent or any Group Agent shall be required in the case of any amendment, modification or supplement to or waiver under a Project Document (A) to correct a manifest error therein, (B) to increase the aggregate amount of an Investor’s commitment, (C) to change payment mechanics under the applicable Project Document with respect to the payment of Rent Prepayments or PV System purchase prices, as the case may be, provided , that such changes in payment mechanics do not negatively

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impact Net Cash Flows, (D) that extends the last date on which a System may be Placed in Service pursuant to the terms of the applicable Subject Fund (such date, the “Completion Deadline”) and any corresponding amendments or waivers resulting from the extension or waiver of the Completion Deadline, provided , that such extension of a Completion Deadline does not negatively impact Net Cash Flows or the net present value thereof, (E) changing any percentage restriction relating to [***] FICO score Systems in any Subject Fund to a percentage below [***] %, (F) allowing a Subject Fund to purchase Systems that include batteries, or (G) shortening the “Completion Deadline”; provided , that the Borrower shall forward any such amendments or waivers set forth in clauses (A)-(G) above to the Administrative Agent promptly after execution; provided , further , that any amendment, modification, supplement or other change of any Project Document that would cause any Tax Equity Representation not to be true and correct as of the date of such amendment, modification, supplement or other change (and giving effect thereto) shall in all cases require the prior written consent of the Administrative Agent and the Majority Group Agents.

(b) Promptly after the execution and delivery thereof, the Borrower shall furnish the Administrative Agent with copies of all waivers, amendments, supplements or modifications of any Project Document and any additional material contracts or agreements to which the Borrower becomes a party after the Closing Date.

(d) Notwithstanding the foregoing, Borrower may permit any Subject Fund to enter into an agreement for the sale of SRECs; provided that such agreement does not contain any provisions for liquidated damages, contingent liabilities or other damages, or the posting of collateral or other security.

(e) Amend any LLC Agreement without the prior written consent of the Administrative Agent and the Required Group Agents.

6.11 Name and Location; Fiscal Year . Unless 30 days’ written notice is given to the Administrative Agent, change its name, its principal place of business, accounting policies (except as permitted by GAAP) or its fiscal year without the Administrative Agent’s prior written consent.

6.12 Assignment . Assign its rights hereunder or under any other Financing Document or allow any Borrower Subsidiary Party to take any such action in each case, except as permitted under the Financing Documents.

6.13 Transfer of Equity Interest . Cause, make, suffer, permit or consent to any creation, sale, assignment or transfer of any Equity Interest in the Borrower.

6.14 ERISA . Hold “plan assets” within the meaning of 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA, except to the extent that the Borrower holds any of the foregoing as a result of any assignment or participation by any Lender pursuant to Section 9.16 or Section 9.17 , as applicable.

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6.15 Accounts . Establish or maintain, or permit any Borrower Subsidiary Party to establish or maintain, any deposit or securities account other than the Accounts and the Operating Account.

6.16 Transaction with Affiliates . Engage, or allow a Borrower Subsidiary Party to engage, or take any Relevant Member Action to allow a Subject Fund to engage, in any transactions with any of its Affiliates except in the ordinary course of business at prices and on terms and conditions not less favorable to such Person than could be obtained on arm’s-length basis from unrelated third parties.

6.17 Limitation on Dividends and Other Payment Restrictions Affecting Certain Subsidiaries . Enter into, or allow a Funded Subsidiary to enter into, any agreement, instrument or other undertaking (except for the Operative Documents) that (i) restricts the ability of any Managing Member or Lessor of a Subject Fund to make any dividend or other distribution of Actual Net Cash Flows with respect to such Equity Interests or (ii) restricts or limits the ability of Member or Borrower to create, incur, assume or suffer to exist Liens on the property of such Person for the benefit of the Secured Parties with respect to the Obligations of the Loan Parties or the Financing Documents.

6.18 Hedging Agreement . Enter into any Hedging Agreement other than an Interest Rate Protection Agreement

6.19 Operations and Maintenance . Without the prior written consent of the Administrative Agent, take any Relevant Member Action to terminate or to appoint a new operations and maintenance provider, or consent to the appointment of a new operations and maintenance provider under the applicable Project Document; provided , that if any vote or appointment is required within a certain time period under the applicable Project Document, if Administrative Agent does not consent (unless such consent was reasonably withheld and the Administrative Agent has provided written notice thereof in accordance with Section 10.1 ) within such time period, then the Borrower may take any Relevant Member Action to vote, appoint, or consent to a new operations and maintenance provider or administrative services provider in order to comply with the terms of the applicable Project Documents; provided , further , that the consent of the Administrative Agent may not be unreasonably withheld if the new operations and maintenance provider or administrative services provider meets the standards set forth in the applicable Project Documents.

6.20 Sanctions . Directly or indirectly, use the proceeds of the Borrowing, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other individual or entity, to fund any activities of or business with any individual or entity, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any individual or entity (including any individual or entity participating in the transaction, whether as Lender, Administrative Agent or otherwise) of Sanctions.

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6.21 Anti-Corruption Laws . Directly or indirectly use the proceeds of the Borrowing for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption Laws in other jurisdictions.

ARTICLE 7

ACCOUNTS; APPLICATION OF FUNDS

7.1 Accounts; Application of Funds in Accounts .

(a) On or prior to the Closing Date, the Borrower shall cause the Accounts to be established at Depositary. The Borrower shall, or shall cause, all Actual Net Cash Flows paid to the Borrower by a Partnership Managing Member, Lessor Managing Member or Lessor of a Subject Fund to be deposited in the Revenue Account.

(b) Funds on deposit in the Accounts shall be applied in the manner, at the times and in the order of priority as set forth in the CADA.

ARTICLE 8

EVENTS OF DEFAULT; REMEDIES

8.1 Events of Default . The occurrence of any of the following events shall constitute an event of default (individually, an “ Event of Default ,” and collectively, “ Events of Default ”) hereunder:

(a) Failure to Make Payments . The Borrower shall fail to pay, in accordance with the terms of this Agreement, (i) any principal (other than prepayment payable pursuant to Section 2.1(f)(ii)(A) ) with respect to any Loan on the date that such principal is due, (ii) any interest or any principal payable pursuant to Section 2.1(f)(ii)(A) on any Loan under this Agreement within three (3) Business Days after the date that such interest or such principal is due and (iii) any other payment (other than interest and principal) due under any Financing Document, within five (5) Business Days after the date that such payment is due; provided , that, (x) to the extent that an event that would otherwise be an Event of Default pursuant to this Section 8.1(a) is caused solely by the Depositary’s failure or delay, in reliance upon Section 8.10 of the CADA, to transfer funds otherwise permitted to be transferred, or (y) to the extent that an event that would otherwise be an Event of Default pursuant to this Section 8.1(a)(iii) or 8.1(a)(ii) in respect of any amount that is payable pursuant to Section 3.5(d)(6), 3.5(d)(7) or Section 3.5(d)(8) of the CADA is caused solely by the application of all amounts on deposit in the Revenue Account to the payment of amounts that are required to be paid at a higher level of priority in Section 3.5(d) of the CADA, such event shall not be an Event of Default.

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individually or in the aggregate, a Material Adverse Effect; provided , however , that any such judgment or order shall not be (and shall not constitute part of) an Event of Default under this Section 8.1 if and for so long as (A) within thirty (30) days of the judgment being entered, the amount of such judgment order is fully covered (up to customary deductibles) by a valid and binding policy of insurance or by a surety bond between the defendant and the insurer covering payment thereof and satisfactory to the Majority Group Agents and (B) such insurer or surety has been notified of, and has accepted the claim made for payment of, the amount of such judgment or order.

(c) Misstatements . Any representation or warranty made by a Loan Party in the Financing Documents, any amendment or modification thereof or waiver thereto, or in any certificate or financial statement furnished pursuant thereto to any Agent or Secured Party pursuant to this Agreement or any other Financing Document, shall prove to have been inaccurate in any respect as of the date such statement was made or certificate was so provided, as applicable and such inaccuracy could likely result in a Material Adverse Effect.

(d) Bankruptcy . Any Loan Party shall become subject to a Bankruptcy Event.

(e) ERISA . An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan that has resulted or could reasonably be expected to result in liability of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan, the PBGC or the IRS in an aggregate amount in excess of Two Hundred Fifty Thousand Dollars ($250,000).

(f) Breach of Terms of Financing Agreements . (i) SolarCity fails to pay when due or perform its obligations under Article 11 , (ii) the Borrower fails to perform or observe any term, covenant or agreement contained in any of Sections 5.1 , 5.12 , 5.13 or Article 6 (excluding Sections 6.10(a)-(d) and 6.19 ) or (iii) any Loan Party or Borrower Subsidiary Party shall fail to perform or observe any other covenant to be performed or observed by it hereunder or under any Financing Document and not otherwise specifically provided for elsewhere in this Section 8.1 , and such failure shall continue unremedied for a period of thirty (30) days after the Borrower becomes aware of such failure; provided , that if (x) such failure can be remedied, (y) such failure cannot reasonably be remedied within such 30 day period, and (z) the Borrower commences cure of such failure within such 30 day period and thereafter diligently seeks to remedy the failure, then an “Event of Default” shall not be deemed to have occurred until such time as the Borrower ceases reasonable efforts to cure such failure unless such failure continues for a period of 90 calendar days.

(g) Security . (i) Any of the Collateral Documents, once executed and delivered, (A) shall fail to provide the Collateral Agent (on behalf of the Secured Parties) a first priority perfected security interest (subject only to Permitted Liens of the type set forth in clauses (b) , (c) or (d) of the definition thereof that, pursuant to the Legal Requirements, are entitled to a higher priority than the Lien of the Collateral Agent) in the Collateral or (B) shall cease to be in full force and effect, or (ii) the validity or the applicability of any of the Collateral Documents to the Obligations to be secured or guaranteed thereby or any part thereof shall be disaffirmed by or on behalf of any Loan Party.

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(h) Change in Control . A Change in Control shall have occurred.

(i) Borrowing Base . As of any date that a Borrowing Base Certificate is delivered, the Outstanding Principal does not satisfy the Applicable Threshold and such Default is not cured within (x) in the case of an event under clause (i) of the Applicable Threshold, within ten (10) Business Days from the date of a Borrowing Base Certificate, or (y) in the case of an event under clause (ii) of the Applicable Threshold, within (two (2) Business Days from the date of a Borrowing Base Certificate, by the Borrower adding new Subject Funds to the Available Borrowing Base or prepaying Loans as provided in Section 2.1(f) (including prepayments funded with cash on hand, proceeds of Equity Contributions to Borrower from any Person or any combination thereof) in an amount sufficient to cure the Default, after giving effect to such addition of new Subject Funds or prepayment of Loans.

(j) Invalidity of Financing Documents . Any material provision of any Financing Document, at any time after its execution and delivery and for any reason, other than (i) as expressly permitted hereunder or thereunder, (ii) as a result of acts or omissions by the Administrative Agent, the Collateral Agent, any Group Agent, any Lender or any other Secured Party or (iii) the occurrence of the Discharge Date, ceases to be in full force and effect, or any Loan Party, the Limited Guarantor or any Borrower Subsidiary Party contests in any manner the validity or enforceability of any provision of any Financing Document, or any Loan Party, the Limited Guarantor or any Borrower Subsidiary Party denies that it has any or further liability or obligation under any Financing Document (other than as a result of the occurrence of the Discharge Date) or purports to revoke, terminate or rescind any Financing Document; provided , that to the extent that any material provision of any Financing Document, at any time after its execution and delivery ceases to be in full force and effect as a result of a subsequent change in Law, such cessation shall not be an Event of Default unless the Borrower shall have failed to cause all outstanding Obligations to be paid in full in cash, and all Commitments have been terminated, within five (5) Business Days of such cessation.

(k) Cross-Default . The Borrower (i) fails to make any payment beyond the applicable grace period with respect thereto, if any, (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Debt (other than the Loans) and such Debt, either individually or in the aggregate for all such Loan Parties, has an outstanding aggregate principal amount or notional amount, as applicable, equal to or greater than $2,000,000 or (ii) fails to observe or perform any other agreement or condition relating to any such Debt, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Debt (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Debt to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Debt to be made, prior to its stated maturity; provided that this clause (l)(ii) shall not apply to secured Debt that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Debt, if such sale or transfer is permitted hereunder and under the documents providing for such Debt.

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8.2 Remedies .

(a) If any Event of Default (other than any event described in Section 8.1(d) ) shall have occurred and be continuing, the Administrative Agent, upon the request of the Majority Group Agents, shall by notice to the Borrower:

(i) immediately terminate the Commitments of each Committed Lender and the obligation of each Committed Lender to make Loans;

(ii) declare the Loans then outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and any unpaid accrued fees and all other liabilities of the Borrower accrued hereunder and under any other Financing Document, shall become forthwith due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in any other Financing Document to the contrary notwithstanding; and

(iii) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Financing Documents.

(b) If any Event of Default described in Section 8.1(d) shall have occurred and be continuing:

(i) the Commitments of each Committed Lender and the obligation of each Committed Lender to make Loans shall automatically terminate (if not previously terminated or expired);

(ii) the principal of the Loans then outstanding, together with accrued interest thereon and any unpaid accrued fees and all other liabilities of the Borrower accrued hereunder and under any other Financing Document, shall automatically become due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in any other Financing Document to the contrary notwithstanding.

(c) Upon the occurrence and during the continuance of any Event of Default, in addition to the exercise of remedies set forth in clauses (a) and (b) above, each Secured Party shall be, subject to the terms of the Financing Documents, entitled to exercise the rights and remedies available to such Secured Party under and in accordance with the provisions of the other Financing Documents to which it is a party or any applicable law.

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ARTICLE 9

THE AGENTS; THE GROUP AGENTS AMENDMENTS; ASSIGNMENTS

9.1 Appointment and Authority . Each of the Lenders hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Financing Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent and the Lenders and the Borrower shall not have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Financing Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

9.2 Rights as a Lender . The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

9.3 Exculpatory Provisions . The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Financing Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Financing Documents that the Administrative Agent is required to exercise as directed in writing by the Majority Group Agents (or such other number or percentage of the Group Agents as shall be expressly provided for herein or in the other Financing Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Financing Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Bankruptcy Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Bankruptcy Law; and

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(c) shall not, except as expressly set forth herein and in the other Financing Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Majority Group Agents (or such other number or percentage of the Group Agents as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.1 and 8.2 ) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given in writing to the Administrative Agent by the Borrower or a Group Agent.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Financing Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Financing Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article 3 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

9.4 Reliance by Administrative Agent . The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any telephonic notices, Borrowing Notices, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Group Agent or a Lender, the Administrative Agent may presume that such condition is satisfactory to such Group Agent or Lender unless the Administrative Agent shall have received notice to the contrary from such Group Agent or Lender prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

9.5 Delegation of Duties . The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Financing Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions

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of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

9.6 Resignation of Administrative Agent .

(a) The Administrative Agent may at any time give notice of its resignation to the Group Agents and the Borrower. Upon receipt of any such notice of resignation, the Majority Group Agents shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Majority Group Agents or shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Majority Group Agents) (the “ Resignation Effective Date ”), then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

(b) If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Majority Group Agents may, to the extent permitted by applicable law, by notice in writing to the Borrower and such Person remove such Person as Administrative Agent and, in consultation with the Borrower, appoint a successor. If no such successor shall have been so appointed by the Majority Group Agents and shall have accepted such appointment within thirty (30) days (or such earlier day as shall be agreed by the Majority Group Agents) (the “ Removal Effective Date ”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

(c) With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (1) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Financing Documents and (2) except for any indemnity payments or other amounts then owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Group Agent for the benefit of the related Lenders directly, until such time, if any, as the Majority Group Agents appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or removed) Administrative Agent (other than as provided in Section 2.4(d)(vi) and other than any rights to indemnity payments or other amounts owed to the retiring or removed Administrative Agent as of the Resignation Effective Date or the Removal Effective Date, as applicable), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations

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hereunder or under the other Financing Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Financing Documents, the provisions of this Article and Sections 5.10 , 10.4 and 10.17 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

9.7 Non-Reliance on Administrative Agent and Other Lenders . Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Financing Document or any related agreement or any document furnished hereunder or thereunder.

9.8 No Other Duties, Etc . Anything herein to the contrary notwithstanding, no Joint Lead Arranger shall have any powers, duties or responsibilities under this Agreement or any of the other Financing Documents, except in its capacity, as applicable, as the Administrative Agent, a Group Agent and as a Lender hereunder.

9.9 Administrative Agent May File Proofs of Claim . In case of the pendency of any proceeding under any Bankruptcy Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.3 and 10.4 ) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the

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Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Group Agents on behalf of the Related Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.3 and 10.4 .

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Group Agents, to credit bid all or any portion of the Obligations (including accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (i) at any sale thereof conducted under the provisions of the Bankruptcy Code of the United States, including under Sections 363, 1123 or 1129 of the Bankruptcy Code of the United States, or any similar Bankruptcy Laws in any other jurisdictions to which a Loan Party is subject, (ii) at any other sale or foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable Law. In connection with any such credit bid and purchase, the Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that would vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) in the asset or assets so purchased (or in the Equity Interests or debt instruments of the acquisition vehicle or vehicles that are used to consummate such purchase). In connection with any such bid (1) the Administrative Agent shall be authorized to form one or more acquisition vehicles to make a bid, (2) to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or Equity Interests thereof shall be governed, directly or indirectly, by the vote of the Required Group Agents, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Group Agents contained in Section 9.14(a) , (3) the Administrative Agent shall be authorized to assign the relevant Obligations to any such acquisition vehicle pro rata by the Groups, as a result of which each of the Groups shall be deemed to have received a pro rata portion of any Equity Interests and/or debt instruments issued by such an acquisition vehicle on account of the assignment of the Obligations to be credit bid, all without the need for any Secured Party or acquisition vehicle to take any further action, and (4) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds the amount of debt credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Groups pro rata and the Equity Interests and/or debt instruments issued by any acquisition vehicle on account of the Obligations that had been

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assigned to the acquisition vehicle shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action.

9.10 Collateral Matters . Without limiting the provisions of Section 9.9 , the Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion,

(a) to instruct Collateral Agent to release any Lien on any property granted to or held by the Collateral Agent under any Financing Document (i) upon the occurrence of the Discharge Date, (ii) that is sold or otherwise disposed of or to be sold or otherwise disposed of as part of or in connection with any sale or other disposition permitted hereunder or under any other Financing Document, or (iii) subject to Section 9.14 , if approved, authorized or ratified in writing by the Majority Group Agents; and

(b) to instruct Collateral Agent to subordinate any Lien on any property granted to or held by the Collateral Agent under any Financing Document to the holder of any Lien on such property that is permitted by Section 6.2 .

Upon request by the Administrative Agent at any time, the Required Group Agents will confirm in writing the Administrative Agent’s authority to instruct the Collateral Agent to release or subordinate its interest in particular types or items of property.

The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Collateral Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure of the Collateral Agent to monitor or maintain any portion of the Collateral.

9.11 Indemnification . Without limiting the obligations (including, but not limited to, the Obligations) of the Borrower hereunder, each Group (other than any Conduit Lender) and each Interest Rate Hedge Counterparty agrees to indemnify each of the Agents, ratably in accordance with its Proportionate Share for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against such Agent in any way relating to or arising out of this Agreement or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or the enforcement of any of the terms hereof or thereof or of any such other documents; provided , however , that no Group or Interest Rate Hedge Counterparty shall be liable for any of the foregoing to the extent they arise solely from the relevant Agent’s gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction. The Agents shall be fully justified in refusing to take or to continue to take any action hereunder unless it shall first be indemnified to its satisfaction by the Groups against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Without limitation of the foregoing, each Lender agrees to reimburse the relevant Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by such Agent in connection with the preparation, execution,

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administration or enforcement of, or legal advice in respect of rights or responsibilities under, the Operative Documents, to the extent that such Agent is not reimbursed promptly for such expenses by the Borrower.

9.12 No Advisory or Fiduciary Responsibility . In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Financing Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Group Agents and the Lenders are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, the Group Agents and the Lenders, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Financing Documents; (ii) (A) the Administrative Agent, each Group Agent and each Lender is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) neither the Administrative Agent nor any Group Agent or Lender has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Financing Documents; and (iii) the Administrative Agent, Group Agents and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and neither the Administrative Agent nor any Group Agent or Lender has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against the Administrative Agent, Group Agent or any Lender with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

9.13 The Group Agents . By its execution hereof, in the case of each Conduit Lender and Committed Lender in a particular Group, and by accepting the benefits hereof, in the case of each Person providing a Liquidity Facility or Credit Facility to the Conduit Lender in such Group, each such party hereby designates and appoints the Person designated on the signature pages hereof (or in the Assignment and Acceptance pursuant to which such party became a party hereto) as the Group Agent for such Group to take all actions as agent on its behalf under this Agreement and the other Financing Documents and to exercise all powers as agent on its behalf as are granted, delegated or otherwise assigned to a Group Agent by the terms hereof, together with such powers as are reasonably incidental thereto. Each Group Agent reserves the right, in its sole discretion, to take any actions and exercise any rights or remedies under this Agreement or any other Financing Document and any related agreements and documents. No Group Agent shall have any duties or responsibilities, except those expressly set forth herein or in any other Financing Document, or any fiduciary relationship with any Related Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of any Group Agent shall be read into this Agreement or any other Transaction Document or otherwise exist for such Group Agent. Except for actions that a Group Agent is expressly required to take

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pursuant to this Agreement, such Group Agent shall not be required to take any action that exposes it to personal liability or that is contrary to applicable Law unless such Group Agent shall receive further assurances to its satisfaction from the Committed Lenders in its Group of the indemnification obligations against any and all liability and expense that may be incurred in taking or continuing to take such action. The appointment and authority of a Group Agent hereunder shall terminate upon the later of (a) the payment to (i) each Related Lender of all amounts owing to such parties under the Financing Documents and (ii) such Group Agent of all amounts due under the Financing Documents and (b) the occurrence of the Maturity Date.

Neither a Group Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by such Group Agent under or in connection with this Agreement or any related agreement or document, except for its or their own gross negligence or willful misconduct. Without limiting the foregoing, each Group Agent: (i) may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any Related Lender and shall not be responsible to any Related Lender for any statements, warranties or representations made by Borrower in connection with this Agreement or any other Financing Document; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any other Financing Document on the part of Borrower, (iv) shall not be responsible to any Related Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; and (v) shall incur no liability under or in respect of this Agreement or any other Financing Document by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by telex) believed by it in good faith to be genuine and signed or sent by the proper party or parties. No Group Agent shall be deemed to have knowledge of any Default or Event of Default unless it has received actual written notice thereof. A Group Agent shall in all cases be fully justified in failing or refusing to take any action under this Agreement or any other Financing Document unless it shall first receive such advice or concurrence of its Related Lenders and it shall first be indemnified to its satisfaction by the Committed Lenders in its Group.

Each Lender (other than the Conduit Lenders) severally agrees to indemnify its Related Group Agent from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against such Group Agent in any way relating to or arising out of this Agreement or any other Financing Document or any action taken or omitted by such Group Agent under this Agreement or any other Financing Document; provided, that (i) no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting or arising from its Related Group Agent’s gross negligence or willful misconduct and (ii) no Lender shall be liable for any amount in respect of any compromise or settlement of any of the foregoing unless such compromise or settlement is approved by all Lenders in its Group.

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A Group Agent may, upon at least five (5) days notice to the Borrower, the Administrative Agent and its Related Lenders, resign as Group Agent for its Group. Such resignation shall not become effective until a successor agent reasonably acceptable to the Administrative Agent and, as long as no Event of Default has occurred and is continuing, Borrower, is appointed by such Related Lenders for such Group and has accepted such appointment. Upon such acceptance of its appointment as Group Agent for such Group hereunder by a successor Group Agent, such successor Group Agent shall succeed to and become vested with all the rights and duties of the retiring Group Agent, and the retiring Group Agent shall be discharged from its duties and obligations under the Financing Documents.

9.14 Amendments .

(a) No amendment or waiver of any provision of this Agreement or any other Financing Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Majority Group Agents and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided , however , that no such amendment, waiver or consent shall:

(i) waive any condition set forth in Article 3 without the written consent of each Group Agent, other than the conditions set forth in Section 3.2(j) or Section 3.2(l) , which conditions shall only require the consent of the Majority Group Agents to waive;

(ii) extend or increase the Commitment of any Committed Lender (or reinstate any Commitment terminated pursuant to Section 8.2 ), including any change to the definition of “Availability Period”, without the written consent of each Committed Lender;

(iii) postpone any date fixed by this Agreement or any other Financing Document for any payment or mandatory prepayment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Financing Document, including any change to the definition of “Loan Maturity Date”, without the written consent of each Lender directly affected thereby;

(iv) reduce the principal of, or the rate of interest specified herein on, any Loan, or any fees or other amounts payable hereunder or under any other Financing Document, or change the manner of computation of any financial ratio (including any change in any applicable defined term) used in determining the Applicable Interest Rate that would result in a reduction of any interest rate on any Loan or any fee payable hereunder without the written consent of each Lender directly affected thereby; provided , however , that only the consent of the Majority Group Agents shall be necessary to amend the definition of “Default

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Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate;

(v) change any provision of this Section, the definition of “Majority Group Agents”, the definition of “Required Group Agents” or any other provision hereof specifying the number or percentage of Group Agents required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Group Agent;

(vi) release any Collateral, or release any Loan Party or Borrower Subsidiary Party from such Person’s obligations under any Collateral Document, or permit the release of any funds from the Revenue Account, in each case, unless in accordance with the Financing Documents, without the written consent of each Group Agent; or

(vii) waive any condition, grant any consent in respect of, or change any provision of Section 5.5(a) , 5.5(e) , 5.7(b) , 5.8(b) , 5.11 , 5.13 , 5.19 , 6.2 , 6.3 , 6.4 , 6.5 , 6.6 , 6.7 , 6.9 , 6.10 , 6.11 , 6.13 , 6.15 , 6.16 , 6.17 or 7.1 , Article 8 or 11 or Appendix 2 without the consent of the Group Agent representing each of Bank of America, N.A. (or any Affiliate thereof then acting as Committed Lender) and Credit Suisse AG, Cayman Islands Branch (or any Affiliate thereof then acting as Committed Lender).

and, provided further , that (A) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Group Agents required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Financing Document; (B) no amendment of any provision of this Agreement or any Financing Document relating to any Interest Rate Protection Agreement Counterparty shall be effective without the written consent of such Interest Rate Protection Agreement Counterparty; (C) the Fee Letters may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto; and (D) no amendment, waiver or consent shall, unless in writing and signed by SolarCity, affect the rights or duties of SolarCity under this Agreement (including Article 11 and Section 5.19 ) or any other Financing Document. Notwithstanding anything to the contrary herein, no Group Agent with a Related Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Group Agents or each affected Lender may be effected with the consent of the applicable Group Agents other than Related Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Committed Lender and (y) any waiver, amendment or modification requiring the consent of all Group Agents or each affected Group Agent that by its terms affects any Defaulting Lender disproportionately adversely relative to other affected Lenders shall require the consent of such Defaulting Lender.

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herein, such amendment shall become effective without any further consent of any other party to such Financing Document.

9.15 Withholding Tax .

(a) If the forms or other documentation required by Section 2.4(g) are not delivered to the Administrative Agent, then the Administrative Agent may withhold from any interest payment to any Lender not providing such forms or other documentation, an amount equivalent to the applicable withholding tax.

(b) If the Internal Revenue Service or any authority of the United States of America or other jurisdiction asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered, was not properly executed, or because such Lender failed to notify the Administrative Agent or any other Person of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason) such Lender shall indemnify promptly the Administrative Agent fully for all amounts paid, directly or indirectly, by such Person as tax or otherwise, including penalties and interest, together with all expenses incurred, including legal expenses, allocated staff costs, and any out-of-pocket expenses.

9.16 Participations .

(a) Each Lender may without the consent of the Borrower or the Administrative Agent sell participations to one or more banks or other Persons in all or a portion of its rights and obligations under this Agreement and the other Financing Documents (including all or a portion of its Commitment and the Loans owing to it); provided , however , that (i) such Lender’s obligations under this Agreement and the other Financing Documents shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the participating banks or other Persons shall be entitled to the benefit of the cost protection provisions contained in Sections 2.4(d) , 2.6 , and 2.7 to the same extent as if they were Lenders and (iv) the Borrower, the Administrative Agent, the Group Agents and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and such Lender shall retain the sole right to enforce the obligations of the Borrower relating to the Loans and to approve any amendment, modification or waiver of any provision of this Agreement (other than amendments, modifications or waivers with respect to matters requiring consent of all Lenders or Group Agents pursuant to Section 9.14 ). To the extent permitted by law, each participating bank or other Person shall also be entitled to the benefits of Section 10.2 as though it were a Lender, provided such participating bank or other Person agrees to be subject to Section 2.5(b) as though it were a Lender. Other than as otherwise specified in this clause (a) , no participating bank or other Person shall have any other rights under this Agreement, including direct rights against any Loan Party nor any rights to any remedies and shall not be considered for any purpose to be a party to this Agreement. In no event shall a Loan Party be responsible for any costs or expenses of any counsel engaged by a participating bank or other Person that has acquired a participation from a Lender.

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(b) Any Lender that sells a participation, acting solely for this purpose as an agent of the Borrower, shall (or shall cause its related Group Agent to) maintain a register in which it enters the name and address of each participant, and the principal amount (and stated interest) of each participant’s interest in the Loans under the Financing Documents (the “ Participant Register ”); provided , that no Lender (or Group Agent on its behalf) shall have an obligation to disclose the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans, letters of credit or its other obligations under any Financing Document) to any Person except to the extent that such disclosure is necessary to establish that the Loans or other obligations under this Agreement are in registered form for tax purposes under Section 5f.103-1(c) of the United States Treasury Regulation. The entries in the Participant Register shall be conclusive absent manifest error, and the Lender (or Group Agent on its behalf) maintaining the Participant Register shall treat each person whose name is recorded in the register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent, in its capacity as such, shall have no responsibility for maintaining a Participant Register.

(c) Any Lender or participant may, in connection with any participation or proposed participation pursuant to this Section 9.16 , disclose to the participant or proposed participant any information relating to the Loan Parties or their respective Affiliates furnished to such Lender (or its related Group Agent) by or on behalf of the Loan Parties; provided , that, prior to any such disclosure of information designated by the Borrower as confidential, each such participant or proposed participant shall execute an agreement whereby such participant shall agree (subject to customary exceptions) to preserve the confidentiality of such confidential information on terms no less restrictive than those applicable to the Lenders and Group Agents pursuant to Section 10.17 .

9.17 Assignments .

(a) Each Committed Lender or Group Agent may assign to one or more Eligible Assignees all or a portion of its interests, rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed), and, unless an Event of Default pursuant to Sections 8.1(a) , (d) or (f)(i) has occurred and is continuing, the Borrower (such consent not to be unreasonably withheld, conditioned or delayed); provided , however , that if such assignment is to a Committed Lender or an Affiliate of a Committed Lender whose creditworthiness is reasonably comparable to that of the transferring Committed Lender, no consent of the Borrower or the Administrative Agent shall be required; provided , further , that (i) the amount of the Commitment or Loans of the assigning Committed Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall be in an integral multiple of, and not less than One Million Dollars ($1,000,000) (or, if less, the entire remaining amount of such Committed Lender’s Commitment or Loans), provided that simultaneous assignments by two or more Related Funds shall be combined for purposes of determining whether the minimum assignment requirement is met, (ii) the parties to each assignment shall (A) execute and deliver to the Administrative Agent an Assignment and

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Acceptance via an electronic settlement system acceptable to the Administrative Agent or (B) if previously agreed with the Administrative Agent, manually execute and deliver to the Administrative Agent an Assignment and Acceptance, and, in each case, shall pay to the Administrative Agent a processing and recordation fee of Three Thousand Five Hundred Dollars ($3,500) (which fee may be waived or reduced in the sole discretion of the Administrative Agent), (iii) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire (in which the assignee shall designate one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Loan Parties and their Affiliates or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and State securities laws) and all applicable tax forms and (iv) if such assigning Committed Lender is assigning all of its interests, rights and obligations under this Agreement other than to an Affiliate of such Committed Lender and such assigning Committed Lender or an Affiliate of such assigning Committed Lender is an Interest Rate Protection Agreement Counterparty, such Interest Rate Protection Agreement Counterparty shall assign all of its interests, rights and obligations under each Interest Rate Protection Agreement to an Acceptable Hedge Bank. Upon acceptance and recording pursuant to clause ( e ) of this Section 9.17 , from and after the effective date specified in each Assignment and Acceptance, the assigning Committed Lender shall be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Committed Lender’s rights and obligations under this Agreement, such Committed Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.4(d) , 2.6 , 2.7 , and 5.10 , as well as to any Fees accrued for its account and not yet paid).

(b) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the assignee thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (i) such assigning Lender warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any Lien or adverse claim and that its Commitment, and the outstanding balances of its Loans, in each case without giving effect to assignments thereof which have not become effective, are as set forth in such Assignment and Acceptance, (ii) except as set forth in subclause (i) above, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the other Financing Documents, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any other Financing Document or any other instrument or document furnished pursuant hereto, or the financial condition of the Borrower or any other Loan Party or the performance or observance by the Borrower or any other Person of any of its obligations under this Agreement, any other Financing Document or any other instrument or document furnished pursuant hereto, or thereto, or in connection therewith; (iii) such assignee represents and warrants that it is an Eligible Assignee legally authorized to enter into such Assignment and Acceptance; (iv) such assignee confirms that it has received a copy of this Agreement and the other Financing Documents (other than the Fee Letters), together with copies of the most recent financial statements delivered pursuant to Section 5.3 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (v) such assignee will independently and without reliance upon the Administrative Agent, the Collateral Agent, such assigning Lender or

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any other Secured Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (vi) such assignee appoints and authorizes the Administrative Agent and the Collateral Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Administrative Agent and the Collateral Agent, respectively, by the terms hereof, together with such powers as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all the obligations which by the terms of this Agreement are required to be performed by it as a Lender; provided , that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

(c) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in the City of New York a copy of each Assignment and Acceptance referred delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment thereof, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive absent manifest error and the Borrower, each Lender and the Agents may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the Collateral Agent and any Lender at any reasonable time and from time to time upon reasonable prior notice.

(d) Upon its receipt of, and consent to, a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, an Administrative Questionnaire completed in respect of the assignee (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in clause (a) above, if applicable, and the written consent of the Administrative Agent and, if required, the Borrower, to such assignment and any applicable tax forms, the Administrative Agent shall (i) accept such Assignment and Acceptance and (ii) record the information contained therein in the Register. No assignment shall be effective unless it has been recorded in the Register as provided in this clause (d) .

(e) At the assigning Lender’s option, the Borrower shall execute and deliver to such new lender a new Note in the form attached hereto as Exhibit A , in a principal amount equal to the Loans being assigned, and the Borrower shall execute and exchange with the assigning Lender a replacement note for any Note in an amount equal to amount of the Loans retained by the Lender, if any.

(f) Any Lender may, in connection with any assignment or proposed assignment pursuant to this Section 9.17 , disclose to the assignee or proposed assignee any information relating to the Loan Parties or their respective Affiliates furnished to such Lender by or on behalf of the Loan Parties; provided , that, prior to any such disclosure of information designated by the Borrower as confidential, each such assignee or proposed assignee shall execute an agreement whereby such assignee shall agree (subject to customary exceptions) to preserve the confidentiality of such confidential information on terms no less restrictive than those applicable to the Lenders pursuant to Section 10.17 .

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(g) Each Conduit Lender may assign to one or more Eligible Assignees all or a portion of its interests, rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) without the prior consent of the Administrative Agent or any other Person; provided , that (i) the amount of the assigning Conduit Lender’s Loans subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall be in an integral multiple of, and not less than One Million Dollars ($1,000,000) (or, if less, the entire remaining amount of such Conduit Lender’s Loans), provided that simultaneous assignments by two or more Related Funds shall be combined for purposes of determining whether the minimum assignment requirement is met, (ii) the parties to each assignment shall (A) execute and deliver to the Administrative Agent an Assignment and Acceptance via an electronic settlement system acceptable to the Administrative Agent or (B) if previously agreed with the Administrative Agent, manually execute and deliver to the Administrative Agent an Assignment and Acceptance, (iii) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire (in which the assignee shall designate one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Loan Parties and their Affiliates or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and State securities laws) and all applicable tax forms, and (iv) if such assigning Conduit Lender is assigning all of its interests, rights and obligations under this Agreement other than to an Eligible Assignee in respect of which the Group Agent and Related Committed Lender is the same as that of such assigning Conduit Lender and an Affiliate of such assigning Conduit Lender is an Interest Rate Protection Agreement Counterparty, such Interest Rate Protection Agreement Counterparty shall assign all of its interests, rights and obligations under each Interest Rate Protection Agreement to an Acceptable Hedge Bank. Upon acceptance and recording pursuant to clause ( e ) of this Section 9.17 , from and after the effective date specified in each Assignment and Acceptance, the assigning Conduit Lender shall be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Conduit Lender’s rights and obligations under this Agreement, such Conduit Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.4(d) , 2.6 , 2.7 , 5.10 , 10.20 , 10.21 as well as to any Fees accrued for its account and not yet paid).

9.18 Assignability to Federal Reserve Bank or Central Bank .

(a) Any Lender may at any time assign all or any portion of its rights under this Agreement to secure extensions of credit to such Lender or in support of obligations owed by such Lender; provided that no such assignment shall release a Lender from any of its obligations hereunder or substitute any such assignee for such Lender as a party hereto.

(b) Any Lender or its direct or indirect parent may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any such pledge or assignment to a Federal Reserve Bank or any other central bank in the jurisdiction of such Lender, and this Section 9.18 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any

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such pledgee or assignee for such Lender as a party hereto; and provided further that any payment in respect of such pledge or assignment made by the Borrower to or for the account of the pledging or assigning Lender in accordance with the terms of this Agreement shall satisfy the Borrower’s obligations hereunder in respect of such pledged or assigned Loans to the extent of such payment.

9.19 Exercise of Discretion .

(a) To the extent that the Administrative Agent has the right to exercise discretion, make determinations or take actions pursuant to provisions of this Agreement and the other Financing Documents, the Administrative Agent hereby agrees that if, in any specific instance of exercising such discretion, making such determinations or taking such action, the Administrative Agent receives written instructions from the Majority Group Agents, the Administrative Agent will exercise such discretion, make such determinations and take such actions in accordance with the written instructions from Majority Group Agents in such instance with respect to the exercising of such discretion or the making of such determination. Notwithstanding the foregoing, each of the Group Agents and the Lenders agrees that until the Administrative Agent receives written instructions from Majority Group Agents, the Administrative Agent may reasonably exercise discretion, make determinations and take actions and that the Administrative Agent shall have no obligation to seek any such written instructions.

(b) To the extent that the Collateral Agent has the right to exercise discretion, make determinations or take actions pursuant to provisions of this Agreement and the other Financing Documents, the Collateral Agent hereby agrees that if, in any specific instance of exercising such discretion, making such determinations or taking such action, the Collateral Agent receives written instructions from the Administrative Agent, the Collateral Agent will exercise such discretion, make such determinations and take such actions in accordance with the written instructions of the Administrative Agent in such instance with respect to the exercising of such discretion or the making of such determination. Notwithstanding the foregoing, each of the Lenders and the Administrative Agent agree that until the Collateral Agent receives written instructions from the Administrative Agent, the Collateral Agent may reasonably exercise discretion, make determinations and take actions and that the Collateral Agent shall have no obligation to seek any such written instructions.

ARTICLE 10

MISCELLANEOUS

10.1 Addresses; Notices .

(a) Any communications between the parties hereto or notices provided herein to be given may be given to the following addresses:

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To the Borrower:

Megalodon Solar, LLC
3055 Clearview Way
San Mateo, CA 94402
Attention: General Counsel
Telephone: (650) 638-1028
Telecopy: (650) 638-1029
Email: contracts@solarcity.com

To the Administrative Agent (for financial/loan activity – advances, pay down, interest/fee billing and payments, rollovers, rate-settings):

Bank of America, N.A.
901 Main Street
Mail Code: TX1-492-14-12
Dallas, TX 75202-3714
Attention: [***]
Telephone: [***]
Telecopy: [***]
Email: [***]

To the Administrative Agent (for financial statements, compliance certificates, maturity extension and commitment change notices, amendments, consents, vote taking, etc.)

Bank of America Plaza
900 West Trade Street
Mail Code:  NC1-026-06-03
Charlotte, NC 28255-0001
Attention:   [***]
Telephone:   [***]
Telecopy:   [***]
Email:   [***]

To the Collateral Agent:

Bank of America Plaza
900 West Trade Street
Mail Code:  NC1-026-06-03
Charlotte, NC 28255-0001
Attention:   [***]
Telephone:   [***]
Telecopy:   [***]
Email:   [***]

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To the Lenders and Group Agent: At such address and fax number as set forth in Annex 2 or as each Lender or Group Agent may provide in writing to the Borrower and the Administrative Agent.

(b) All notices or other communications required or permitted to be given hereunder shall be in writing and shall be considered as properly given (i) if delivered in person; (ii) if sent by a nationally recognized overnight delivery service; (iii) 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; or (iv) if sent by telecopy or electronic mail with a confirmation of receipt. Notice so given shall be effective upon receipt by the addressee, except that communication or notice so transmitted by telecopy 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 to any other location by giving of thirty (30) days’ written notice to the other parties in the manner set forth hereinabove.

(c) The Borrower hereby agrees, unless directed otherwise by the Administrative Agent or unless the electronic mail address referred to below has not been provided by the Administrative Agent to the Borrower, that notwithstanding anything to the contrary in clause (b) above, it will provide to the Administrative Agent all information, documents and other materials that it is obligated to furnish to the Administrative Agent pursuant to the Financing Documents or to the Lenders under Article 5 , including all notices, requests, financial statements, financial and other reports, certificates and other information materials, but excluding any such communication that (i) is or relates to a Borrowing Notice or a notice pursuant to Section 2.1(a)(iii) , (ii) relates to the payment of any principal or other amount due under this Agreement prior to the scheduled date therefor, (iii) provides a Notice of Default or Notice of Event of Default under this Agreement or any other Financing Document or (iv) is required to be delivered to satisfy any condition precedent to the effectiveness of this Agreement and/or any Borrowing or other extension of credit hereunder (all such non-excluded communications being referred to herein collectively as “ Communications ”), by transmitting the Communications in an electronic/soft medium that is properly identified in a format acceptable to the Administrative Agent to an electronic mail address as directed by the Administrative Agent. In addition, the Borrower agrees to continue to provide the Communications to the Administrative Agent or the Lenders, as the case may be, in the manner specified in the Financing Documents but only to the extent requested by the Administrative Agent.

(d) The Borrower hereby acknowledges that (i) the Administrative Agent will make available to the Lenders and the Group Agents materials and/or information provided by or on behalf of the Borrower hereunder (collectively, the “ Borrower Materials ”) by posting the Borrower Materials on Intralinks or another similar electronic system (the “ Platform ”) and (ii) certain of the Lenders and the Group Agents may be “public-side” Lenders and the Group Agents (i.e., Lenders and the Group Agents that do not wish to receive material non-public information with respect to the Borrower or its securities) (each, a “ Public Party ”). The

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Borrower hereby agrees that (w) all Borrower Materials that are to be made available to Public Parties shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent and the Lenders and Group Agents to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States federal and state securities laws; (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated as “Public Investor;” and (z) the Administrative Agent shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not marked as “Public Investor.” The following Borrower Materials shall be marked “PUBLIC”, unless the Borrower notifies the Administrative Agent promptly that any such document contains material non-public information: (1) the Financing Documents and (2) notification of changes in the terms of the Financing Documents; provided , however , that the parties acknowledge and agree that the Fee Letters contain sensitive proprietary information and shall not be marked, treated as, or considered “PUBLIC” in any respect. Notwithstanding the foregoing, Borrower Materials marked “PUBLIC” are subject to the confidentiality provisions of Section 10.17 .

(e) Each Public Party agrees to cause at least one individual at or on behalf of such Public Party to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Party or its delegate, in accordance with such Public Party’s compliance procedures and applicable law, including United States Federal and state securities laws, to make reference to Communications that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States Federal or state securities laws.

(f) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF ITS RELATED PARTIES WARRANTS THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND EACH EXPRESSLY DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES HAVE ANY LIABILITY TO THE MEMBER, THE BORROWER, ANY LENDER OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT LIABILITY AND INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE MEMBER’S, THE BORROWER’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE PLATFORM, ANY OTHER

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ELECTRONIC PLATFORM OR ELECTRONIC MESSAGING SERVICE OR THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY SUCH PERSON IS FOUND IN A FINAL RULING BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

(g) The Administrative Agent agrees that the receipt of the Communications by the Administrative Agent at its e-mail address set forth above shall constitute effective delivery of the Communications to the Administrative Agent for purposes of the Financing Documents. Each Lender agrees that receipt of notice to it (as provided in the next sentence) specifying that the Communications have been posted to the Platform shall constitute effective delivery of the Communications to such Lender for purposes of the Financing Documents. Each Group Agent agrees to notify the Administrative Agent in writing (including by electronic communication) from time to time of such Group Agent’s e-mail address to which the foregoing notice may be sent by electronic transmission and that the foregoing notice may be sent to such e-mail address.

(h) Nothing herein shall prejudice the right of the Administrative Agent or any Lender, or any Group Agent to give notice or other communications pursuant to any Financing Document in any other manner specified in such Financing Document.

10.2 Right to Set-Off . If an Event of Default shall have occurred and be continuing, each Lender is hereby authorized at any time and from time to time, except to the extent prohibited by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement and other Financing Documents held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or such other Financing Document and although such obligations may be unmatured; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender under this Section 10.2 are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

10.3 Delay and Waiver . No failure by any Lender, Group Agent or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Financing Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under any other Financing Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Financing Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

Notwithstanding anything to the contrary contained herein or in any other Financing Document, the authority to enforce rights and remedies hereunder and under the other Financing Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions

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and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.2 for the benefit of all the Lenders; provided , however , that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Financing Documents, (b) any Lender from exercising setoff rights in accordance with Section 10.2 (subject to the terms of Section 2.5 ), or (c) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Bankruptcy Law; and provided , further , that if at any time there is no Person acting as Administrative Agent hereunder and under the other Financing Documents, then (i) the Majority Group Agents shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.2 and (ii) in addition to the matters set forth in clauses (b) and (c) of the preceding proviso and subject to Section 2.5 , any Lender may, with the consent of the Majority Group Agents, enforce any rights and remedies available to it and as authorized by the Majority Group Agents.

10.4 Costs, Expenses and Attorney’s Fees . The Borrower shall pay all reasonable and documented out-of-pocket costs and expenses (a) on the Closing Date, to the extent incurred by the Agents and their Affiliates or any Group Agent or any Lender in connection with the preparation, negotiation and closing of this Agreement and the other Financing Documents prior to the Closing Date, (b) incurred by the Agents on or after the Closing Date in connection with the costs of administering this Agreement and the other Financing Documents (whether or not the transactions contemplated hereby or thereby shall be consummated and regardless of whether any Borrowing Date occurs) or in connection with (x) any amendments, modifications or waivers of the provisions hereof and thereof (but provided that any legal fees and other out-of-pocket expenses incurred by any Agent shall be subject to a cap to be agreed upon between the Borrower and such Agent prior to the incurrence of such legal costs and expenses), or (y) review of a Potential New Fund (subject to a cap on legal fees for such review of each such Potential New Fund after the Closing Date of $20,000); provided , however , that in respect of any Potential New Fund that is a Repeat Tax Equity Structure, the Borrower will be liable for reimbursement under this Section 10.4 only for on-going costs incurred by the Agents, any Group Agent and the Lenders with respect to legally adding or attaching such Potential New Fund to the Available Borrowing Base (such costs to be agreed in advance), and not, for example, costs and expenses incurred in connection with reviewing such Potential New Fund, including the reasonable and documented fees, out-of-pocket expenses and disbursements of counsel for the Agents (but provided that any legal fees and other out-of-pocket expenses incurred by any Agent shall be subject to a cap to be agreed upon between the Borrower and such Agent prior to the incurrence of such legal costs and expenses), or (c) incurred by the Agents, Group Agent or any Lender in connection with the enforcement or protection of its rights under this Agreement and the other Financing Documents or in connection with the Loans or the performance of this Agreement (including, for the avoidance of doubt, any expenses related to an Incremental Loan Commitment).

10.5 Entire Agreement . This Agreement, the Fee Letters and the other Financing Documents constitute the entire contract between the parties relative to the subject matter hereof and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral

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agreements of the parties. Any other previous agreement among the parties with respect to the subject matter hereof is superseded by this Agreement and the other Financing Documents. There are no unwritten oral agreements among the parties. Nothing in this Agreement or in the other Financing Documents, expressed or implied, is intended to confer upon any Person (other than the parties hereto and thereto, their respective successors and assigns permitted hereunder and, to the extent expressly contemplated hereby, Depositary and the Related Parties of each of the Agents, Group Agents and the Lenders) any rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Financing Documents.

10.6 Governing Law . THIS AGREEMENT, THE OTHER FINANCING DOCUMENTS, AND ANY INSTRUMENT OR AGREEMENT REQUIRED HEREUNDER (TO THE EXTENT NOT EXPRESSLY PROVIDED FOR THEREIN) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (NOT INCLUDING SUCH STATE’S CONFLICT OF LAWS PROVISIONS OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

10.7 Severability . In case any one or more of the provisions contained in this Agreement or any other Financing Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall enter into good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

10.8 Headings . Article, Section and paragraph headings and the table of contents used herein have been inserted in this Agreement as a matter of convenience for reference only and are not a part of this Agreement and shall not be used in the interpretation of any provision of this Agreement.

10.9 Accounting Terms . All accounting terms not specifically defined herein shall be construed in accordance with GAAP and practices consistent with those applied in the preparation of the financial statements submitted by the Borrower to the Administrative Agent and Lenders pursuant to this Agreement, and (unless otherwise indicated) all financial data submitted pursuant to this Agreement shall be prepared in accordance with such principles and practices consistently applied.

10.10 No Partnership, Etc . The Agents, the Group Agents, the Lenders and the Borrower intend that the relationship between them shall be solely that of creditor and debtor. Nothing contained in this Agreement, the Notes or in any of the other Financing Documents shall be deemed or construed to create a partnership, tenancy-in-common, joint tenancy, joint venture or co-ownership by or between or among the Agents, the Group Agents, the Lenders and the Borrower or any other Person. Neither the Agents nor the Group Agents or the Lenders shall be in any way responsible or liable for the debts, losses, obligations or duties of the Borrower or any

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other Person with respect to the Systems or otherwise. All obligations to pay real property or other taxes, assessments, insurance premiums, and all other fees and charges arising from the ownership, operation or occupancy of the Systems and to perform all obligations under other agreements and contracts relating to the Systems shall be the sole responsibility of the Borrower.

10.11 Waiver of Jury Trial . EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.11 .

10.12 Consent to Jurisdiction; Service of Process .

(a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the courts of the State of New York, sitting in the Borough of Manhattan, The City of New York, New York, United States of America, or of the United States of America for the Southern District of New York sitting in the Borough of Manhattan, The City of New York, New York, United States of America, any appellate court from any thereof, in any legal action or proceeding arising out of or relating to this Agreement or the other Financing Documents, or for the recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such courts of the State of New York or, to the extent permitted by law, such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Administrative Agent, the Collateral Agent, any Group Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or the other Financing Documents against the Loan Parties or their respective properties in the courts of any jurisdiction.

(b) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the other Financing Documents in any courts of the State of New York or Federal court, each sitting in the Borough of Manhattan, The City of New York, New York, United States of America. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. Each party to this Agreement irrevocably consents to service of

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process in the manner provided for notices in Section 10.1 . Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

10.13 Interest Rate Limitation . Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “ Charges ”), shall exceed the maximum lawful rate (the “ Maximum Rate ”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 10.13 shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Rate to the date of repayment, shall have been received by such Lender.

10.14 Successors and Assigns .

(a) Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of the Borrower, SolarCity, the Agents, the Group Agents or the Lenders that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.

(b) The Borrower and SolarCity shall not assign or delegate any of its rights or duties under this Agreement or any Financing Document without the prior written consent of the Administrative Agent and each Group Agent, and any attempted assignment shall be null and void.

10.15 Patriot Act Compliance . The Administrative Agent hereby notifies the Borrower that, pursuant to the requirements of the Patriot Act, it and any other Agent, any Group Agent and any Lender shall be required to obtain, verify and record information that identifies the Borrower and the Member, which information includes the names and addresses and other information that will allow it, any other Agent, any Group Agent or any Lender to identify the Borrower and the Member in accordance with the requirements of the Patriot Act. The Borrower shall promptly deliver information described in the immediately preceding sentence when requested by the Administrative Agent, any other Agent, any Group Agent or any Lender in writing pursuant to the requirements of the Patriot Act, and shall promptly deliver such other information when requested by the Administrative Agent, any other Agent, any Group Agent or any Lender in writing pursuant to such Person’s ongoing obligations under “know your customer” and anti-money laundering rules and regulations.

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10.16 Binding Effect; Counterparts .

(a) This Agreement shall become effective when it shall have been executed by the Borrower and each of the Agents and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto.

(b) This Agreement may be executed in one or more duplicate counterparts and by facsimile or other electronic transmission, each of which shall constitute an original but all of which shall become effective as provided in clause (a) above. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterparty of this Agreement.

10.17 Confidentiality . Each of the Agents, the Group Agents and the Lenders agree to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ officers, directors, employees, agents, advisors, counsel and representatives (collectively, its “ Representatives ”) who have the need to know the Information to evaluate or engage in transactions contemplated by the Financing Documents (it being understood that, prior to any such disclosure, the Representative has signed a non-use and nondisclosure agreement in content similar to the provisions of this Section 10.17 or have otherwise been instructed by the Agent, Group Agent or Lender, as applicable, not to disclose such Information and to treat such Information confidentially in accordance with the terms of this Section 10.17 ), (b) to the extent requested or required by any governmental agency or other regulatory authority (including any self-regulatory organization having or claiming to have jurisdiction) or in connection with any legal proceedings to make any disclosure that is prohibited or otherwise constrained by this Section 10.17 , the Agent, Group Agent or Lender, as applicable, will (other than in connection with any regulatory inquiry or proceeding), to the extent reasonably practicable and permitted by law, judicial or regulatory authority, provide the Borrower and Member with prompt written notice of such requirement so that the Borrower or Member, as the case may be, may seek a protective order or other appropriate relief (at the Borrower’s sole expense), and subject to the foregoing, such Agent, Group Agent or Lender, as applicable, may furnish that portion (and only that portion) of the Information that the Agent or Lender, as applicable, is legally compelled or is otherwise required to disclose without liability hereunder, (c) subject to an agreement containing provisions substantially the same as those of this Section 10.17 , to (i) any actual or prospective assignee of or participant in any of its rights or obligations under this Agreement and the other Financing Documents or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower or any of its obligations, (d) with the consent of the Borrower, (e) to the extent such Information becomes publicly known or generally made available other than as a result of a breach of this Section 10.17 , (f) any Rating Agency, surety, guarantor, first loss provider or credit or liquidity enhancer to a Conduit Lender or a Committed Lender or (g) a Conduit Lender’s respective management companies, administrators and referral agents (each a “ Program Administrator ”), issuing agents or depositories, commercial paper dealers or investors or any holders of any loss participation notes issued by such Conduit Lender. For the purposes of this Section 10.17 , “ Information ” shall mean (A) any information disclosed by the Borrower, Member or its Affiliates, either directly or indirectly, in writing, orally or by

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inspection of tangible objects, including algorithms, business plans, customer data, customer lists, customer names, designs documents, drawing, engineering information, financial analysis, forecasts, formulas, hardware configuration information, know-how, ideas, inventions, market information, marketing plans, processes, products, product plans, research, specifications, software, data tags and content, source code, trade secrets or any other information which is designated as “confidential,” “proprietary” or some similar designation or should be reasonably be understood by the receiving party as being confidential, (B) any information otherwise obtained, directly or indirectly, by a receiving party through inspection, review or analysis of the disclosed information and (C) this Agreement, the terms hereof and the transactions contemplated hereby. Information that is disclosed orally shall be “Information” for purposes of this Section 10.17 if it is (x) designated as confidential at the time of disclosure or within a reasonable time after disclosure; or (y) should be reasonably understood to be confidential. Information may also include information of a third party that is in the possession of the Borrower, Member or its Affiliate and is disclosed to the Agents and the Lenders in connection with this Agreement. Clause (a) and (b) of the definition of Information shall not, however, include any information that (1) was publicly known and made generally available in the public domain prior to the time of disclosure, (2) becomes publicly known and made generally available after disclosure other than as a result of a breach of this Section 10.17 , (3) is already in the possession of the Agent or Lender at the time of disclosure as shown by the Agent’s or Lender’s files and records immediately prior to the time of disclosure, (4) is obtained by the Agent or Lender from a third party lawfully in possession of such information and without a breach of such third party’s obligations of confidentiality, or (5) is independently developed by the Agent or Lender without use or reference to the Borrower’s, Member’s or their Affiliates’ Information, as shown by documents and other competent evidence in the Agent’s, Group Agent’s or Lender’s possession. Any Person required to maintain the confidentiality of Information as provided in this Section 10.17 shall be considered to have complied with its obligation to do so if such Person has taken at least those measures that it take to protect its own confidential information of a similar nature, but in no case less than reasonable care (including all precautions the Agent, Group Agent or Lender employs with respect to its confidential materials). For the avoidance of doubt, any Borrower Materials, including those marked “PUBLIC” pursuant to Section 10.1(d) are subject to the confidentiality provisions of this Section 10.17 .

10.18 Survival of Agreements . All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Financing Document shall be considered to have been relied upon by the Lenders and shall survive the making by the Lenders of the Loans, regardless of any investigation made by the Lenders or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any Fees or any other amount payable under this Agreement or any other Financing Document is outstanding and unpaid and so long as the Commitments have not been terminated. The provisions of Sections 2.4(d) , 2.6 , 2.7 , 5.10 , 10.4 , this 10.18 and 10.20 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the expiration of the Commitments, the invalidity or unenforceability of any term or provision of this Agreement or any other Financing Document, or any investigation made by or on behalf of the Administrative Agent, the Collateral Agent, any Group Agent or any Lender.

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10.19 Electronic Execution of Assignments and Certain Other Documents . The words “execute,” “execution,” “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 assignment agreements, amendments or other modifications, Borrowing Notices, waivers and consents) 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; provided , that notwithstanding anything contained herein to the contrary, the Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by the Administrative Agent.

10.20 Agreement Not to Petition; Excess Funds .

(a) Each party hereto hereby covenants and agrees that it will not institute against or join any other Person in instituting against the Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States prior to the date which is one year and one day after the payment in full of all outstanding indebtedness of the Conduit Lender. The agreements set forth in this clause (a) and the parties’ respective obligations under this clause (a) shall survive the termination of this Agreement.

(b) Each party hereto hereby covenants and agrees that, prior to the date which is one year and one day after the payment in full of all Loans, it will not institute against, or join any other Person in instituting against Borrower or Member any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States. The provisions of this clause (b) shall survive the termination of this Agreement.

10.21 No Recourse .

(a) Notwithstanding anything to the contrary contained in this Agreement, the parties hereto hereby acknowledge and agree that all transactions with each Conduit Lender hereunder shall be without recourse of any kind to such Conduit Lender. Each Conduit Lender shall have no liability or obligation hereunder unless and until the Conduit Lender has received such amounts from the Notes. In addition, the parties hereto hereby agree that the Conduit Lender shall have no obligation to pay the parties hereto any amounts constituting fees, reimbursement for expenses or indemnities (collectively, the “ Expense Claims ”) and such Expense Claims shall not constitute a claim (as defined in section 101 of title 11 of the Bankruptcy Code of the United States) against the Conduit Lender, unless or until the Conduit Lender has received amounts sufficient to pay such Expense Claims pursuant to the Notes and such amounts are not required to pay the outstanding indebtedness of the Conduit Lender.

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(b) The agreements set forth in this Section 10.21 and the parties’ respective obligations under this Section 10.21 shall survive the termination of this Agreement.

ARTICLE 11
limited GUARANTY; TAX LOSS POLICIES

11.1 The Guarantee . The Limited Guarantor hereby guarantees, as a primary obligor and not as a surety to each Secured Party and their respective successors and assigns, the prompt payment in full when due or performance by the Borrower of its obligations pursuant to Section 5.19 to cause Equity Contributions to be made to the Borrower (the Equity Contributions required to be made to the Borrower under Section 5.19 being herein collectively called the “ Guaranteed Obligations ”). The Limited Guarantor hereby agrees that if the Borrower shall fail to pay in full when due or perform any of the Guaranteed Obligations, the Guarantor will promptly pay the same in cash or perform, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due in accordance with the terms of such extension or renewal. For avoidance of doubt, the Limited Guarantor does not guarantee the payment or performance of any Obligations other than the Guaranteed Obligations.

11.2 Obligations Unconditional . The obligations of the Limited Guarantor under Section 11.1 shall constitute a guarantee of payment and performance and to the fullest extent permitted by applicable Law, are absolute, irrevocable and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of the Guaranteed Obligations of the Borrower under this Agreement, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor (except for payment, performance or satisfaction in full of the Guaranteed Obligations). Without limiting the generality of the foregoing but subject in all respects to the requirements of Section 9.14(a) , it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Limited Guarantor hereunder which shall remain absolute, irrevocable and unconditional under any and all circumstances as described above:

(A)	at any time or from time to time, without notice to the Limited Guarantor, to the extent permitted by Law, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;

(B)	any of the acts mentioned in any of the provisions of this Agreement or any other agreement or instrument referred to herein or therein shall be done or omitted;

(C)

the maturity of any of the Obligations that comprise Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be amended in any respect, or any right under the Financing Documents or any other agreement or instrument referred to herein or therein shall be amended or waived in any respect or any other guarantee of any of the Guaranteed Obligations or, except as

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permitted pursuant to Section 11.9 , any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;

(D)	any Lien or security interest granted to, or in favor of any Lender or Agent as security for any of the Guaranteed Obligations shall fail to be perfected; or

(E)	the release of any other guarantor pursuant to Section 11.9 or otherwise.

The Limited Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and, to the extent permitted by Law, all notices whatsoever (other than notices expressly provided for in this Agreement or the other Financing Documents to the Limited Guarantor), and any requirement that any Secured Party exhaust any right, power or remedy or proceed against the Borrower under this Agreement or the Notes, if any, or any other agreement or instrument referred to herein or therein, or against any other person under any other guarantee of, or security for, any of the Guaranteed Obligations. The Limited Guarantor waives, to the extent permitted by Law, any and all notice of the creation, renewal, extension, waiver, termination or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any Secured Party upon this Guarantee or acceptance of this Guarantee, and the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guarantee, and all dealings between the Borrower and the Secured Parties shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guarantee. This Guarantee shall be construed as a continuing, absolute, irrevocable and unconditional guarantee of payment without regard to any right of offset with respect to the Guaranteed Obligations at any time or from time to time held by Secured Parties, and the obligations and liabilities of the Limited Guarantor hereunder shall not be conditioned or contingent upon the pursuit by the Secured Parties or any other person at any time of any right or remedy against the Borrower or against any other person which may be or become liable in respect of all or any part of the Guaranteed Obligations or against any collateral security or guarantee therefor or right of offset with respect thereto. This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Limited Guarantor and the successors and assigns thereof, and shall inure to the benefit of the Lenders, and their respective successors and assigns, notwithstanding that from time to time during the term of this Agreement there may be no Guaranteed Obligations outstanding.

11.3 Reinstatement . The obligations of the Limited Guarantor under this Article 11 shall not be satisfied and shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrower or other Loan Party in respect of the Obligations that comprise the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise but in each case solely to the extent that such rescinded or otherwise restored payment is actually returned to the Limited Guarantor or any Person (other than any Loan Party or any other Affiliate of Limited Guarantor) in respect of Limited Guarantor’s actions or inactions (it being understood and agreed that the return of such a payment to a Loan Party, any other Affiliate of Limited Guarantor or any other Person other than the Limited Guarantor or any Person (other than any Loan Party or any other Affiliate of Limited

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Guarantor) in respect of Limited Guarantor’s actions or inactions shall not result in any reinstatement of the Limited Guarantor’s obligations under this Article 11).

11.4 Subrogation; Subordination . The Limited Guarantor hereby agrees that until the payment and satisfaction in full in cash of all Guaranteed Obligations and the expiration and termination of the Commitments of the Lenders under this Agreement it shall not exercise any right or remedy, direct or indirect, arising by reason of any performance by it of its guarantee in Section 11.1, whether by subrogation or otherwise, against the Borrower or any other guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations.

11.5 Remedies . The Limited Guarantor agrees that, as between the Limited Guarantor and the Lenders, the obligations of the Borrower under this Agreement and the Notes that constitute the Guaranteed Obligations, if any, may be declared to be forthwith due and payable as provided in Section 8.2 (and shall be deemed to have become automatically due and payable in the circumstances provided in Section 8.2) for purposes of Section 11.1, notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Borrower) shall forthwith become due and payable by the Limited Guarantor for purposes of Section 11.1 .

11.6 [Reserved].

11.7 Continuing Guarantee . The guarantee in this Article 11 is a continuing guarantee of payment, and shall apply to all Guaranteed Obligations whenever arising.

11.8 General Limitation on Guarantee Obligations . In any action or proceeding involving any state corporate, limited partnership or limited liability company law, or any applicable state, federal or foreign bankruptcy, insolvency, reorganization or other Law affecting the rights of creditors generally, if the obligations of Limited Guarantor under Section 11.1 would otherwise be held or determined to be void, voidable, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 11.1, then, notwithstanding any other provision to the contrary, the amount of such liability shall, without any further action by the Limited Guarantor, any Loan 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.

11.9 Release of Guarantor . When the Discharge Date has occurred, this Agreement and the Guarantees made herein shall terminate with respect to all Guaranteed Obligations.

11.10 Representations and Warranties . Limited Guarantor represents to each Agent and the Lenders as of the Closing Date:

(a) it is a corporation duly organized and validly existing and in good standing under the laws of the State of Delaware;

128

Kronor Loan Agreement

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

(b) it has all requisite corporate power and authority to execute, deliver and perform this Agreement;

(c) it has duly authorized, executed and delivered this Limited Guaranty, and this Agreement is fully enforceable against it in accordance with its terms, subject to applicable Bankruptcy Laws, insolvency Laws and other Laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether a proceeding is sought in equity or at law);

(d) neither the execution nor delivery of this Limited Guaranty nor compliance with or fulfillment of the terms, conditions, and provisions hereof, conflicts with, results in a breach or violation of the terms, conditions, or provisions of, or constitutes a default, an event of default, or an event creating rights of acceleration, termination, or cancellation, or a loss of rights under (i) the organizational documents of the Limited Guarantor, (ii) any judgment, decree, order, contract, agreement, indenture, instrument, note, mortgage, lease, governmental permit, or other authorization, right, restriction, or obligation to which the Limited Guarantor is a party or any of its property is subject or by which Guarantor is bound, or (iii) any federal, state, or local law, statute, ordinance, rule or regulation applicable to the Limited Guarantor;

(e) no material consent, authorization, approval, order, license, certificate, or permit or act of or from, or declaration of filing with, any Governmental Authority or any party to any material contract, agreement, instrument, lease, or license to which the Limited Guarantor is a party or by which the Limited Guarantor is bound, is required for the execution, delivery, performance or compliance with the terms hereof by the Limited Guarantor, except as have been obtained as required prior to the date hereof;

(f) there is no pending, or to the best of its knowledge, threatened, litigation against the Limited Guarantor in any court or before any commission or regulatory body, whether federal, state or local, that challenges the validity or enforceability of this Limited Guaranty;

(g) the Limited Guarantor is not insolvent within the meaning of applicable Bankruptcy Laws; and

(h) with the assistance of counsel of its choice, it has read and reviewed this Limited Guaranty and such other documents as it and its counsel deemed necessary or desirable to read.

11.11 Tax Loss Policies .

(a) The Limited Guarantor shall, within sixty (60) days of the Closing Date, deliver a Tax Loss Policy in respect of each Subject Fund listed on Appendix 4 on the Closing Date other than [***] and [***], each in form and substance reasonably acceptable to the Administrative Agent.

(b) The Limited Guarantor shall, within sixty (60) days after a Potential New Fund becomes a Subject Fund, deliver a Tax Loss Policy in respect of such Subject Fund in form and substance substantially identical to any prior Tax Loss Policy delivered by Borrower pursuant to

129

Kronor Loan Agreement

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

this Agreement or otherwise in form and substance reasonably acceptable to the Administrative Agent; provided , however , no Tax Loss Policy shall be required for any Subject Fund (i) with an Inverted Lease Structure in respect of which (A) such payments to be made by the Lessee to the Lessor as rent on any date under the lease may not be reduced as a result of any Tax Loss and (B) the amount of distributions on any date from the Lessor to the Borrower may not be reduced as a result of any Tax Loss or non-payment of a Tax Loss Indemnity, (ii) in respect of which the Investor has expressly subordinated the payment of Tax Loss Indemnity to the payment of Obligations under the Financing Documents, (iii) that has a Purchase Option date that is fixed and not based upon the achievement of a target internal rate of return or otherwise impacted in any way by any Tax Loss or non-payment of a Tax Loss Indemnity or (iv) that benefits from other credit support covering substantially the same risks as a Tax Loss Policy and otherwise reasonably acceptable to the Administrative Agent.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

130

Kronor Loan Agreement

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their officers thereunto duly authorized as of the day and year first above written.

MEGALODON SOLAR, LLC ,

as Borrower

By: /s/ Brad Buss

Name: Brad Buss

Title: Treasurer

[Signature Page to Loan Agreement]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

BANK OF AMERICA, N.A. ,

as Collateral Agent for the Secured Parties and Administrative Agent for the Lenders

By: /s/ Darleen R. Parmelee

Name: Darleen R. Parmelee

Title: Vice President

[Signature Page to Loan Agreement]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

BANK OF AMERICA, N.A. ,

as a Committed Lender

By: /s/ Sheikh Omer-Farooq

Name: Sheikh Omer-Farooq

Title: Director

BANK OF AMERICA, N.A. ,

as a Group Agent

By: /s/ Sheikh Omer-Farooq

Name: Sheikh Omer-Farooq

Title: Director

[Signature Page to Loan Agreement]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

CREDIT SUISSE AG , CAYMAN ISLANDS BRANCH ,

as a Committed Lender

By: /s/ Jason Muncy

Name: Jason Muncy

Title: Director

By: /s Oliver Nisenson

Name: Oliver Nisenson

Title: Director

CREDIT SUISSE AG , NEW YORK BRANCH ,

as a Group Agent

By: /s/ Jason Muncy

Name: Jason Muncy

Title: Director

By: /s Oliver Nisenson

Name: Oliver Nisenson

Title: Director

[Signature Page to Loan Agreement]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

DEUTSCHE BANK AG, NEW YORK BRANCH ,

as a Committed Lender

By: /s/ Vinod Mukani

Name: Vinod Mukani

Title: Director

DEUTSCHE BANK AG, NEW YORK BRANCH ,

as a Group Agent

By: /s/ B. Chatterjee

Name: B. Chatterjee

Title: Managing Director

[Signature Page to Loan Agreement]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

GIFS CAPITAL COMPANY LLC ,

as a Conduit Lender

By: /s/ Thomas J. Irvin

Name: Thomas J. Irvin

Title: Manager

[Signature Page to Loan Agreement]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Solely in respect of its obligations under Article 11, Section 10.20 and Section 10.21:

SOLARCITY CORPORATION ,

as Limited Guarantor

By: /s/ Brad Buss

Name: Brad Buss

Title: Chief Financial Officer

[Signature Page to Loan Agreement]

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT A
to Loan Agreement

FORM OF NOTE

[See Attached]

Exhibit A

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

NOTE

FOR VALUE RECEIVED, the undersigned (the “ Borrower ”), hereby promises to pay to BANK OF AMERICA, N.A. or its registered assigns (the “ Group Agent ”), on behalf of the Lenders in its related Group, in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of each Loan from time to time made by the Group to the Borrower under that certain Loan Agreement, dated as of May 4, 2015 (as amended, restated, supplemented or otherwise modified in writing from time to time, the “ Agreement ;” the terms defined therein being used herein as therein defined), among the Borrower, SolarCity Corporation, solely in its capacity as limited guarantor, the Lenders from time to time party thereto, the Group Agents from time to time party thereto, Bank of America, N.A., as collateral agent for the Secured Parties (“ Collateral Agent ”), as the administrative agent for the Lenders (“ Administrative Agent ”), Bank of America, N.A. and Credit Suisse Securities (USA) LLC, as joint structuring agents, and Bank of America, N.A., Credit Suisse Securities (USA) LLC and Deutsche Bank AG, New York Branch, as joint book runners and joint lead arrangers.

The Borrower promises to pay interest on the unpaid principal amount of each Loan from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent’s office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.

This Note is one of the Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement. Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.

Exhibit A

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

MEGALODON SOLAR, LLC ,

a Delaware limited liability company

By: ___________________________________

Name:

Title:

Exhibit A

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

LOANS AND PAYMENTS with respect thereto


Date	Type of Loan Made	Amount of Loan Made	End of Interest Period	Amount of Principal or Interest Paid This Date	Outstanding Principal Balance This Date	Notation Made By

Exhibit A

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT B-1
to Loan Agreement

FORM OF BORROWING NOTICE

[See Attached]

Exhibit B-1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

BORROWING NOTICE

Date:____________ ¹
Requested Borrowing Date:_____________

Bank of America, N.A.
Administrative Agent
901 Main Street
Mail Code: TX1-492-14-12
Dallas, TX 75202-3714

Attention: [***]
Telephone: [***]
Telecopy: [***]
[***]

Bank of America, N.A.
900 West Trade Street
Mail Code:  NC1-026-06-03
Charlotte, NC 28255-0001
Attention:  [***]
Telephone:  [***]
Telecopy:  [***]
[***]

Re: Project Kronor Loan Facility

This Borrowing Notice is delivered to you pursuant to Section 2.1(a)(iii) of the Loan Agreement dated as of May 4, 2015 (as amended, restated, supplemented or otherwise modified in writing from time to time, the “ Loan Agreement ”), among Megalodon Solar, LLC, a Delaware limited liability company (the “ Borrower ”), SolarCity Corporation, solely in its capacity as limited guarantor, each lender from time to time party thereto (collectively, the “ Lenders ” and individually, a “ Lender ”), each group agent from time to time party thereto (collectively, the “ Group Agents ” and individually, a “ Group Agent ”), Bank of America, N.A., as collateral agent for the Secured Parties (the “ Collateral Agent ”), as the administrative agent for the Lenders (“ Administrative Agent ”), Bank of America, N.A. and Credit Suisse Securities (USA) LLC, as joint structuring agents, Bank of America, N.A., Credit Suisse Securities (USA) LLC and Deutsche Bank AG, New York Branch, as joint book runners and joint lead arrangers, pursuant to which the Lenders have agreed to make Loans to the Borrower. Each capitalized term used and not otherwise defined herein shall have the meaning assigned thereto in Section 1.1 of the Loan Agreement.

This Borrowing Notice constitutes a request for a Loan as set forth below:

¹	Notice must be received by Administrative Agent at least three (3) Business Days before the date of the Requested Borrowing Date.

Exhibit B-1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

1. The aggregate principal amount of the Loan requested is $____________ ² (the “ Requested Amount ”).

2. The Borrowing Date of the requested Loan is ____________ (the “ Requested Borrowing Date ”), which is a Business Day.

3. The Applicable Interest Rate of the requested Loan is [Base Rate] [Daily LIBO Rate] [LIBO Rate].

4. Schedule 1 hereto is a Borrowing Base Certificate, dated as of the date hereof, delivered pursuant to Section 2.1(a)(iv)(A) and Section 3.2(c) of the Loan Agreement.

5. [Reserved] .

6. Schedule 2 hereto contains a copy of each Interest Rate Protection Agreement to be entered into by the Borrower on the Requested Borrowing Date in accordance with Section 2.13 of the Loan Agreement, and such Interest Rate Protection Agreements constitute all Interest Rate Protection Agreements required under Section 2.13 in respect of the Borrowing requested hereunder.

7. Proceeds of the Loan should be directed [in accordance with the flow of funds memorandum delivered on the date hereof to the Administrative Agent] [to the following account[s]: ________].

The undersigned further confirms and certifies to Administrative Agent and each Lender that, as of the date hereof:

(a) All representations and warranties of the Loan Parties under the Financing Documents are true and correct in all material respects as of such Borrowing Date (unless such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct in all material respects as of such earlier date), other than those representations and warranties which are modified by materiality by their own terms, which shall be true and correct in all respects as of such Borrowing Date (unless such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct in all respects as of such earlier date).

(b) No Default or Event of Default has occurred and is continuing or will result from the making of the Borrowing of such Loan.

(c) All Liens contemplated to be created and perfected in favor of the Collateral Agent pursuant to the Collateral Documents shall have been so created, perfected and filed in the applicable jurisdictions, including in respect of Borrower’s Equity Interest in the Managing Member of any Subject Fund.

²	The Requested Amount exceeds $2,500,000 or such lesser amount as is remaining under the Commitment.

Exhibit B-1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

(d) All amounts required to be paid to or deposited with any Secured Party under any Financing Document, and all taxes, fees and other costs payable in connection with the execution, delivery, recordation and filing of the documents and instruments required to be filed as a condition precedent to Section 3.1 or Section 3.2 of the Loan Agreement have been paid in full (or shall be paid concurrently with the occurrence of Borrowing requested hereunder). ³

(e) After giving effect to the Borrowing hereby and any Watched Fund identified in the Borrowing Base Certificate attached hereto as Schedule 2 , the Borrower is in compliance with the Borrowing Base Requirements.

(f) No Material Adverse Effect has occurred or is continuing since the Closing Date, and, to the Borrower’s Knowledge, no event or circumstance exists that could reasonably be expected to result in a Material Adverse Effect.

(g) No Bankruptcy Event has occurred with respect to any Borrower Subsidiary Party or SolarCity [except, with respect to any Borrower Subsidiary Party, as noted in (k) below].

(h) The conditions precedent set forth in Sections 3.3 and 3.4 , respectively, of the Loan Agreement with respect to any new Systems or any new Subject Funds added to the Available Borrowing Base for the purpose of making the Borrowing requested hereby shall have been satisfied in all respects as of the Requested Borrowing Date.

(i) The Interest Reserve Account has been funded in an amount at least equal to the Interest Reserve Required Balance.

(j) Each Current System is an Eligible System, except as noted in (k) below.

(k) No Current System is excluded from the definition of Net Cash Flow, no Subject Fund is a Watched Fund, and no Funded System has become excluded from the definition of Net Cash Flow other than the following: [•] ⁴ .

[ Remainder of Page Intentionally left blank ]

³	Agents and Lenders may consent to other arrangements for paying such amounts.

⁴	Insert any Watched Systems and applicable Eligibility Representations not satisfied as applicable.

Exhibit B-1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

IN WITNESS WHEREOF, the undersigned has caused this Borrowing Notice to be executed as of the date first written above.

MEGALODON SOLAR, LLC ,

a Delaware limited liability company, as Borrower

By: ___________________________________

Name:

Title:

Exhibit B-1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Schedule 1

Borrowing Base Certificate

[ See Attached. ]

Exhibit B-1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Schedule 2

Interest Rate Protection Agreements

[ See Attached. ]

Exhibit B-1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT B-2
to Loan Agreement

FORM OF CONVERSION AND CONTINUATION NOTICE

[See Attached]

Exhibit B-2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

CONVERSION AND CONTINUATION NOTICE

Date: ___________

Bank of America, N.A.
Administrative Agent
901 Main Street
Mail Code:  TX1-492-14-12
Attention:  [***]
Dallas, TX  75202-3714
Telephone:  [***]
Telecopy:  [***]
[***]

Bank of America, N.A.
900 West Trade Street
Mail Code:  NC1-026-06-03
Charlotte, NC  28255-0001
Attention:  [***]
Telephone:  [***]
Telecopy:  [***]
[***]

Re: Project Kronor Loan Facility

This Conversion and Continuation Notice is delivered to you pursuant to Section 2.1(a)(vi) of the Loan Agreement dated as of May 4, 2015 (as amended, restated, supplemented or otherwise modified in writing from time to time, the “ Loan Agreement ”), among Megalodon Solar, LLC, a Delaware limited liability company (the “ Borrower ”), SolarCity Corporation, solely in its capacity as limited guarantor, each lender from time to time party thereto (collectively, the “ Lenders ” and individually, a “ Lender ”), each group agent from time to time party thereto (collectively, the “ Group Agents ” and individually, a “ Group Agent ”), Bank of America, N.A., as collateral agent for the Secured Parties (the “ Collateral Agent ”), as the administrative agent for the Lenders (“ Administrative Agent ”), Bank of America, N.A. and Credit Suisse Securities (USA) LLC, as joint structuring agents, Bank of America, N.A., Credit Suisse Securities (USA) LLC and Deutsche Bank AG, New York Branch, as joint book runners and joint lead arrangers, pursuant to which the Lenders have agreed to make Loans to the Borrower. Each capitalized term used and not otherwise defined herein shall have the meaning assigned thereto in Section 1.1 of the Loan Agreement .

This Conversion and Continuation Notice constitutes a request to [convert a Base Rate Loan to a Daily LIBO Rate Loan] [convert a LIBO Rate Loan to a Daily LIBO Rate Loan] [convert a Daily LIBO Rate Loan to a LIBO Rate Loan] as set forth below (the “ Conversion ”) :

1. The aggregate principal amount of the Loan is originally $__________ .

Exhibit B-2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

2. [The expected Borrowing Date of the Base Rate Loan was May [__], 2015] ⁵ [The Borrowing Date of the Loan to be [continued][converted]].

3. The Borrowing Date of the requested LIBO Rate Loan is May [__], 2015.

⁵	Applicable only for the initial Borrowing.

Exhibit B-2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

IN WITNESS WHEREOF, the undersigned has caused this Conversion Notice to be executed as of the date first written above.

MEGALODON SOLAR, LLC ,

a Delaware limited liability company, as Borrower

By: ___________________________________

Name:

Title:

Exhibit B-2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT C
to Loan Agreement

FORM OF ASSIGNMENT AND ACCEPTANCE

[See Attached]

Exhibit C

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ASSIGNMENT AND ACCEPTANCE

This Assignment and Acceptance (this “ Assignment and Acceptance ”) is dated as of the Effective Date set forth below and is entered into by and between [the][each] ⁶ Assignor identified in item 1 below ([the][each, an] “ Assignor ”) and [the][each] ⁷ Assignee identified in item 2 below ([the][each, an] “ Assignee ”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees] ⁸ hereunder are several and not joint.] ⁹ Capitalized terms used but not defined herein shall have the meanings given to them in the Loan Agreement identified below (as amended, restated, supplemented or otherwise modified in writing from time to time, the “ Loan Agreement ”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Acceptance as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Loan Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Loan Agreement and any other documents or instruments delivered pursuant thereto in the amount[s] and equal to the percentage interest[s] identified below of all the outstanding rights and obligations under the respective facilities identified below, and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Loan Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “ Assigned Interest ”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Acceptance, without representation or warranty by [the][any] Assignor.

⁶	For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language.

⁷	For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.

⁸	Select as appropriate.

⁹	Include bracketed language if there are either multiple Assignors or multiple Assignees.

Exhibit C

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

1.	Assignor[s] : _________________________________ _________________________________ [Assignor [is] [is not] a Defaulting Lender]

2.	Assignee[s] :_________________________________ _________________________________ [for each Assignee, indicate [Affiliate][Related Fund] of [ identify Lender ]]

3.	Borrower(s) :_________________________________

4.	Administrative Agent : Bank of America, N.A., as the administrative agent under the Loan Agreement

Loan Agreement : Loan Agreement, dated as of May 4, 2015, among Megalodon Solar, LLC, a Delaware limited liability company, SolarCity Corporation, solely in its capacity as limited guarantor, each lender from time to time party thereto, each group agent from time to time party thereto, Bank of America, N.A., as collateral agent for the Secured Parties, as the administrative agent for the Lenders, Bank of America, N.A. and Credit Suisse Securities (USA) LLC, as joint structuring agents, Bank of America, N.A., Credit Suisse Securities (USA) LLC and Deutsche Bank AG, New York Branch, as joint book runners and joint lead arrangers, pursuant to which the Lenders have agreed to make Loans to the Borrower

6.	Assigned Interest[s] :


Assignor[s] ¹⁰	Assignee[s] ¹¹	Facility Assigned ¹²	Aggregate Amount of Commitment/Loans for all Lenders ¹³	Amount of Commitment/Loans Assigned	Percentage Assigned of Commitment/ Loans ¹⁴	CUSIP Number
		__________	$___________	$__________	_________%
		__________	$___________	$__________	__________%
		__________	$___________	$__________	_________%

[7. Trade Date : __________________] ¹⁵

¹⁰	List each Assignor, as appropriate.

¹¹	List each Assignee and, if available, its market entity identifier, as appropriate.

¹²	Fill in the appropriate terminology for the types of facilities under the Loan Agreement that are being assigned under this Assignment (e.g., “Term Loan Commitment”, etc.).

¹³	Amounts in this column and in the column immediately to the right to be adjusted to take into account any payments or prepayments made between the Trade Date and the Effective Date.

¹⁴	Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

¹⁵	To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.

Exhibit C

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Effective Date: _______________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Acceptance are hereby agreed to:

ASSIGNOR[S] ¹⁶
[NAME OF ASSIGNOR]

By:
Title:

[NAME OF ASSIGNOR]

By:
Title:

ASSIGNEE[S] ¹⁷
[NAME OF ASSIGNEE]

By:
Title:

[NAME OF ASSIGNEE]

By:
Title:

¹⁶	Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).

¹⁷	Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).

Exhibit C

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Consented to and Accepted :

BANK OF AMERICA, N.A. ,

as Administrative Agent

By: ___________________________________

Name:

Title:

Exhibit C

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ANNEX 1 TO ASSIGNMENT AND ACCEPTANCE

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ACCEPTANCE

1. Representations and Warranties . ¹⁸

1.1. Assignor . [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][[the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim created by it, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and (iv) it is [not] a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Loan Agreement or any other Financing Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Financing Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Financing Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Financing Document.

1.2. Assignee . [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and to become a Lender under the Loan Agreement, (ii) it is an Eligible Assignee pursuant to the Loan Agreement, (iii) from and after the Effective Date, it shall be bound by the provisions of the Loan Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Loan Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 5.3 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Acceptance and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Loan Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender,

¹⁸	Add Section 10.20(a) of the Loan Agreement if either or both parties to the Assignment is/are (a) Conduit Lender(s).

Exhibit C

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Financing Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Financing Documents are required to be performed by it as a Lender.

2. Payments . From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date. Notwithstanding the foregoing, the Administrative Agent shall make all payments of interest, fees or other amounts paid or payable in kind from and after the Effective Date to [the][the relevant] Assignee.

3. General Provisions . This Assignment and Acceptance shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Acceptance may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Acceptance by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance. This Assignment and Acceptance shall be governed by, and construed in accordance with, the law of the State of New York.

Exhibit C

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT D
to Loan Agreement

FORM OF INCREMENTAL LOAN COMMITMENT INCREASE NOTICE

[See Attached]

Exhibit D

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

INCREMENTAL LOAN COMMITMENT INCREASE NOTICE

[ Letterhead of Borrower ]

Bank of America, N.A.
Administrative Agent
901 Main Street
Mail Code: TX1-492-14-12
Dallas, TX 75202-3714

Attention: [***]
Telephone: [***]
Telecopy: [***]
[***]

Bank of America, N.A.
900 West Trade Street
Mail Code:  NC1-026-06-03
Charlotte, NC 28255-0001
Attention:  [***]
Telephone:  [***]
Telecopy:  [***]
[***]

[DATE]

Re: MEGALODON SOLAR, LLC

Incremental Loan Commitment Increase Notice

Ladies and Gentlemen:

The undersigned, Megalodon Solar, LLC, a Delaware limited liability company (the “ Borrower ”), refers to the Loan Agreement, dated as of May 4, 2015 (as amended, restated, supplemented or otherwise modified in writing from time to time, the “ Loan Agreement ”), among the Borrower, SolarCity Corporation, solely in its capacity as limited guarantor, each lender from time to time party thereto (collectively, the “ Lenders ” and individually, a “ Lender ”), each group agent from time to time party thereto (collectively, the “ Group Agents ” and individually, a “ Group Agent ”), Bank of America, N.A., as collateral agent for the Secured Parties (the “ Collateral Agent ”), as the administrative agent for the Lenders (“ Administrative Agent ”), Bank of America, N.A. and Credit Suisse Securities (USA) LLC, as joint structuring agents, Bank of America, N.A., Credit Suisse Securities (USA) LLC and Deutsche Bank AG, New York Branch, as joint book runners and joint lead arrangers, pursuant to which the Lenders have agreed to make Loans to the Borrower. Capitalized terms used herein but not otherwise defined herein shall have the respective meanings set forth in the Loan Agreement.

The Borrower hereby requests an Incremental Loan Commitment Increase under Section 2.9 of the Loan Agreement and in connection therewith sets forth below the information relating

Exhibit D

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

to such Incremental Loan Commitment Increase (the “ Proposed Incremental Loan Commitment Increase ”) as required by such Section 2.9 of the Loan Agreement:

(a) The Business Day of the Proposed Incremental Term Loan Commitment

Increase is ____________, 20__. ¹⁹

(b) The amount of the Proposed Incremental Term Loan Commitment

Increase is _______________ Dollars ($___________) . ²⁰

(d) Immediately before and after giving effect to the Incremental Loan Commitment Increase, the Borrower is in pro forma compliance with the Borrowing Base Requirements.

(e) No Sweep Event or Subject Fund Sweep Event has occurred and remains ongoing.

(f) Since the delivery of the most recent financial statements of the Borrower delivered pursuant to Section 5.3 of the Loan Agreement, no Material Adverse Effect has occurred or is continuing.

[ The remainder of this page is intentionally blank. The next page is the signature page. ]

¹⁹	Such date must be prior to the expiry of the Availability Period.

²⁰	Increases must be in increments of $5,000,000 and be equal to or exceed a minimum of $10,000,000 or such lesser amount equal to the remaining Incremental Loan Amount.

D-2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

IN WITNESS WHEREOF, the undersigned has executed this Incremental Loan Increase Notice as of the date first written above.

MEGALODON SOLAR, LLC ,

a Delaware limited liability company, as Borrower

By: ___________________________________

Name:

Title:

Exhibit D

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT E

to Loan Agreement

FORM OF INCREASING INCREMENTAL LENDER CONFIRMATION

[See Attached]

Exhibit E

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

INCREASING INCREMENTAL LENDER CONFIRMATION

Reference is made to the Loan Agreement, dated as of May 4, 2015 (as amended, restated, supplemented or otherwise modified in writing from time to time, the “ Loan Agreement ”), among Megalodon Solar, LLC, a Delaware limited liability company (the “ Borrower ”), SolarCity Corporation, solely in its capacity as limited guarantor, each lender from time to time party thereto (collectively, the “ Lenders ” and individually, a “ Lender ”), each group agent from time to time party thereto (collectively, the “ Group Agents ” and individually, a “ Group Agent ”), Bank of America, N.A., as collateral agent for the Secured Parties (the “ Collateral Agent ”), as the administrative agent for the Lenders (“ Administrative Agent ”), Bank of America, N.A. and Credit Suisse Securities (USA) LLC, as joint structuring agents, Bank of America, N.A., Credit Suisse Securities (USA) LLC and Deutsche Bank AG, New York Branch, as joint book runners and joint lead arrangers, pursuant to which the Lenders have agreed to make Loans to the Borrower. Capitalized terms used herein but not otherwise defined herein shall have the respective meanings set forth in the Loan Agreement.

The undersigned Committed Lender hereby certifies as follows:

1. In accordance with Section 2.9(b) of the Loan Agreement, such Committed Lender has agreed to increase its Incremental Loan Commitment under the Loan Agreement as of [•], 201[•] (the “ Incremental Loan Increase Date ”). [Such Incremental Loan Commitment Increase is subject to the satisfaction (or waiver) of the conditions set forth in Section 2.9(e) of the Loan Agreement on or prior to the Incremental Loan Commitment Increase Date.] ²¹ After giving effect to such Incremental Loan Commitment Increase, the Commitments of such Committed Lender shall be in the amounts set forth on Annex 1 hereto.

[ The remainder of this page is intentionally blank. The next page is the signature page. ]

²¹	Include bracketed text to the extent increase is requested pursuant to Section 2.9 of the Loan Agreement.

Exhibit E

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

IN WITNESS WHEREOF , the undersigned have caused this Increasing Incremental Lender Confirmation to be duly executed as of the date first above written.

[NAME OF INCREASING INCREMENTAL LENDER]

By:

Name:

Title:

Date:

For acceptance and recordation in the register:

BANK OF AMERICA, N.A.,

as Administrative Agent

By:

Name:

Title:

Exhibit E

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Annex I

to Increasing Incremental Lender Confirmation


Lender’s Undisbursed Commitment Pre-Commitment Increase	Lender’s Outstanding Loans Pre-Commitment Increase	Lender’s Undisbursed Commitment Post-Commitment Increase	Lender’s Outstanding Loans Post-Commitment Increase
$	$	$	$

Exhibit E

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT F-1

to Loan Agreement

FORM OF NEW COMMITTED LENDER ACCESSION AGREEMENT

[See Attached]

Exhibit F-1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

NEW COMMITTED LENDER ACCESSION AGREEMENT

This ACCESSION AGREEMENT (this “ Accession Agreement ”), dated as of ____________, is by ________________ (the “ New Committed Lender ”).

RECITALS

WHEREAS, reference is made to the Loan Agreement, dated as of May 4, 2015 (as amended, restated, supplemented or otherwise modified in writing from time to time, the “ Loan Agreement ”), among Megalodon Solar, LLC, a Delaware limited liability company (the “ Borrower ”), SolarCity Corporation, solely in its capacity as limited guarantor, each lender from time to time party thereto (collectively, the “ Lenders ” and individually, a “ Lender ”), each group agent from time to time party thereto (collectively, the “ Group Agents ” and individually, a “ Group Agent ”), Bank of America, N.A., as collateral agent for the Secured Parties (the “ Collateral Agent ”), as the administrative agent for the Lenders (“ Administrative Agent ”), Bank of America, N.A. and Credit Suisse Securities (USA) LLC, as joint structuring agents, Bank of America, N.A., Credit Suisse Securities (USA) LLC and Deutsche Bank AG, New York Branch, as joint book runners and joint lead arrangers, pursuant to which the Lenders have agreed to make Loans to the Borrower.; and

WHEREAS, the New Committed Lender has accepted an offer to provide an Incremental Loan Commitment to the Borrower in an aggregate principal amount not to exceed ____________ Dollars ($__________), subject to the terms of the Loan 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, the parties hereto agree as follows:

SECTION 1. Definitions . All capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Loan Agreement.

SECTION 2. Assumption . As of the effective date set forth on the signature page to this Accession Agreement (the “ Effective Date ”), subject to and in accordance with the Loan Agreement, the New Committed Lender irrevocably agrees to provide the Incremental Loan Commitment. The New Committed Lender shall have all of the rights and be subject to all of the obligations in its capacity as a Committed Lender under the Loan Agreement, each other Financing Document, and any other documents or instruments delivered pursuant thereto or in connection therewith and shall have all rights to all claims, suits, causes of action and any other right of a Lender against any Person, that arise from transactions, events or occurrences on or after the Effective Date, whether known or unknown, arising under or in connection with the Loan Agreement, each other Financing Document, and any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, statutory claims and all other claims at law or in equity.

Upon acceptance and recording of the assumption made pursuant to this Accession Agreement by the Administrative Agent, from and after the Effective Date, the Administrative

Exhibit F-1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Agent shall make all payments in respect of the Incremental Loan Commitment and any Incremental Loans made by the New Committed Lender (including all payments of principal, interest, fees and other amounts) to the New Committed Lender for amounts that have accrued from and including the Effective Date.

SECTION 3. Representations, Warranties and Undertakings . The New Committed Lender: (i) represents and warrants that it has full power and authority, and has taken all action necessary, to execute and deliver this Accession Agreement and to consummate the transactions contemplated hereby and to become a Committed Lender under the Loan Agreement and the other Financing Documents, (ii) acknowledges and confirms that it has received a copy of the Loan Agreement, each other Financing Document and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Accession Agreement and to provide the Incremental Loan Commitment and any Loans made by the New Committed Lender, on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Secured Party, (iii) agrees that it will, independently and without reliance upon the Administrative Agent, the Borrower, or any other Secured Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Agreement or any other Financing Document, (iv) appoints and authorizes each Agent and the Depositary to take such action as agent on its behalf and to exercise such powers under the Loan Agreement or the other Financing Documents as are delegated to such Agent or the Depositary, as applicable, by the terms thereof, together with such powers as are reasonably incidental thereto, (v) will perform in accordance with their terms all of the obligations that by the terms of the Financing Documents are required to be performed by it as a Lender and (vi) appoints and authorizes [______] as its “ Group Agent ,” which appointment [______] hereby accepts. The New Committed Lender further confirms and agrees that in becoming a Committed Lender and in making Loans under the Loan Agreement, such actions have and will be made without recourse to, or representation or warranty, by any Secured Party.

The New Committed Lender further agrees to furnish to the Administrative Agent and, to the extent required by the Loan Agreement, the Borrower, no later than the Effective Date, an Administrative Questionnaire and any tax forms required under the Loan Agreement.

SECTION 4. Effectiveness . The effectiveness of the making of the Commitment hereunder is subject to (i) the due execution and delivery of this Accession Agreement by the New Committed Lender, (ii) consent, not to be unreasonably withheld, by the Administrative Agent and the Borrower to this Accession Agreement, (iii) the registration of such Incremental Loan Commitment by the Administrative Agent in the Register and (iv) the satisfaction (or waiver) of each of the conditions set forth in Section 2.9(e) of the Loan Agreement.

Simultaneously with the execution and delivery by the parties hereto of this Accession Agreement to the Administrative Agent for its recording in the Register, the New Committed Lender may request that Notes be executed and delivered to the New Committed Lender reflecting the amounts of the Commitment of the New Committed Lender.

Except as otherwise provided in the Loan Agreement, effective as of the Effective Date, the New Committed Lender shall be deemed automatically to have become a party to, and the

Exhibit F-1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

New Committed Lender agrees that it will be bound by the terms and conditions set forth in, the Loan Agreement, and shall have all the rights and obligations of a “Committed Lender” under the Loan Agreement and the other Financing Documents for the Loans and/or Commitments held by it as if it were an original signatory thereto or an original Committed Lender thereunder.

SECTION 5. Governing Law . THIS ACCESSION AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SECTION 6. Counterparts . This Accession Agreement 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 to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Accession Agreement by telecopy or portable document format (“pdf”) shall be effective as delivery of a manually executed counterpart of this Accession Agreement.

SECTION 7. Further Assurances . The New Committed Lender hereby agrees to execute and deliver such other instruments, and take such other action, as either the Borrower or the Administrative Agent may reasonably request in connection with the transactions contemplated by this Accession Agreement including the delivery of any notices to the Borrower or the Agents that may be required in connection herewith.

SECTION 8. Binding Effect; Amendment . This Accession Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, subject, however, to the provisions of the Loan Agreement. No provision of this Accession Agreement may be amended, waived or otherwise modified except by an instrument in writing signed by the New Committed Lender and the Administrative Agent.

SECTION 9. Administrative Agent Enforcement . The Administrative Agent shall be entitled to rely upon and enforce this Accession Agreement against the New Committed Lender in all respects.

[ The remainder of this page is intentionally blank. The next page is the signature page. ]

Exhibit F-1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

IN WITNESS WHEREOF , the undersigned have caused this Accession Agreement to be duly executed by a Responsible Officer as of the date first above written.

The effective date for this Accession Agreement is the date this Accession Agreement is acknowledged and accepted by the Administrative Agent and the Borrower ________________, 20_____ (the “ Effective Date ”).

[NEW COMMITTED LENDER]

By:

Name:

Title:

[NEW GROUP AGENT]

By:

Name:

Title:

BANK OF AMERICA, N.A. ,

as Administrative Agent

By: ___________________________________

Name:

Title:

MEGALODON SOLAR, LLC ,

a Delaware limited liability company, as Borrower

By: ___________________________________

Name:

Title:

Exhibit F-1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT F-2

to Loan Agreement

FORM OF NEW CONDUIT LENDER ACCESSION AGREEMENT

[See Attached]

Exhibit F-2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

NEW CONDUIT LENDER ACCESSION AGREEMENT

This ACCESSION AGREEMENT (this “ Accession Agreement ”), dated as of ____________, is by ________________ (the “ New Conduit Lender ”).

RECITALS

WHEREAS, the ____________ (the “ Related New Committed Lender ”) has accepted an offer to provide an Incremental Loan Commitment to the Borrower in an aggregate principal amount not to exceed ____________ Dollars ($__________), subject to the terms of the Loan Agreement;

WHEREAS, New Conduit Lender and Related New Committed Lender desire for New Conduit Lender to act as Conduit Lender in the same Group as Related New Committed Lender.

SECTION 1. Definitions . All capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Loan Agreement.

SECTION 2. Assumption . As of the effective date set forth on the signature page to this Accession Agreement (the “ Effective Date ”), subject to and in accordance with the Loan Agreement, the New Conduit Lender irrevocably agrees to act as Conduit Lender in the Group of Related New Committed Lender. The New Conduit Lender shall have all of the rights and be subject to all of the obligations in its capacity as a Conduit Lender under the Loan Agreement, each other Financing Document, and any other documents or instruments delivered pursuant thereto or in connection therewith and shall have all rights to all claims, suits, causes of action and any other right of a Lender against any Person, that arise from transactions, events or occurrences on or after the Effective Date, whether known or unknown, arising under or in connection with the Loan Agreement, each other Financing Document, and any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, statutory claims and all other claims at law or in equity.

Exhibit F-2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Upon acceptance and recording of the assumption made pursuant to this Accession Agreement by the Administrative Agent, from and after the Effective Date, the Administrative Agent shall make all payments in respect of the Incremental Loan Commitment and any Incremental Loans made by the New Conduit Lender (including all payments of principal, interest, fees and other amounts) to the New Conduit Lender for amounts that have accrued from and including the Effective Date.

SECTION 3. Representations, Warranties and Undertakings . The New Conduit Lender: (i) represents and warrants that it has full power and authority, and has taken all action necessary, to execute and deliver this Accession Agreement and to consummate the transactions contemplated hereby and to become a Conduit Lender under the Loan Agreement and the other Financing Documents, (ii) acknowledges and confirms that it has received a copy of the Loan Agreement, each other Financing Document and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Accession Agreement and to provide any Loans made by the New Conduit Lender, on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Secured Party, (iii) agrees that it will, independently and without reliance upon the Administrative Agent, the Borrower, or any other Secured Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Agreement or any other Financing Document, (iv) appoints and authorizes each Agent and the Depositary to take such action as agent on its behalf and to exercise such powers under the Loan Agreement or the other Financing Documents as are delegated to such Agent or the Depositary, as applicable, by the terms thereof, together with such powers as are reasonably incidental thereto, (v) will perform in accordance with their terms all of the obligations that by the terms of the Financing Documents are required to be performed by it as a Lender and (vi) acknowledges and accepts the appointment of [______] as its Group Agent. The New Conduit Lender further confirms and agrees that in becoming a Conduit Lender and in making Loans under the Loan Agreement, such actions have and will be made without recourse to, or representation or warranty, by any Secured Party.

The New Conduit Lender further agrees to furnish to the Administrative Agent and, to the extent required by the Loan Agreement, the Borrower, no later than the Effective Date, an Administrative Questionnaire and any tax forms required under the Loan Agreement.

SECTION 4. Effectiveness . The effectiveness of the making of the Commitment hereunder is subject to (i) the due execution and delivery of this Accession Agreement by the New Conduit Lender, (ii) consent, not to be unreasonably withheld, by the Administrative Agent and the Borrower to this Accession Agreement, (iii) the registration of such Incremental Loan Commitment by the Administrative Agent in the Register, (iv) the satisfaction (or waiver) of each of the conditions set forth in Section 2.9(e) of the Loan Agreement and (v) on or prior to the date hereof, the due execution and delivery of an accession agreement, in the form required under Section 2.9(c) of the Loan Agreement, by the Related New Committed Lender,.

Simultaneously with the execution and delivery by the parties hereto of this Accession Agreement to the Administrative Agent for its recording in the Register, the New Conduit Lender may request that Notes be executed and delivered to the New Conduit Lender reflecting the amounts of the Commitment of the Related New Committed Lender.

Exhibit F-2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Except as otherwise provided in the Loan Agreement, effective as of the Effective Date, the New Conduit Lender shall be deemed automatically to have become a party to, and the New Conduit Lender agrees that it will be bound by the terms and conditions set forth in, the Loan Agreement, and shall have all the rights and obligations of a “Conduit Lender” under the Loan Agreement and the other Financing Documents for the Loans held by it as if it were an original signatory thereto or an original Conduit Lender thereunder.

SECTION 5. Governing Law . THIS ACCESSION AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SECTION 7. Further Assurances . The New Conduit Lender hereby agrees to execute and deliver such other instruments, and take such other action, as either the Borrower or the Administrative Agent may reasonably request in connection with the transactions contemplated by this Accession Agreement including the delivery of any notices to the Borrower or the Agents that may be required in connection herewith.

SECTION 9. Administrative Agent Enforcement . The Administrative Agent shall be entitled to rely upon and enforce this Accession Agreement against the New Conduit Lender in all respects.

[ The remainder of this page is intentionally blank. The next page is the signature page. ]

Exhibit F-2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

IN WITNESS WHEREOF , the undersigned have caused this Accession Agreement to be duly executed by a Responsible Officer as of the date first above written.

[NEW CONDUIT LENDER]

By:

Name:

Title:

BANK OF AMERICA, N.A. ,

as Administrative Agent

By: ___________________________________

Name:

Title:

MEGALODON SOLAR, LLC ,

a Delaware limited liability company, as Borrower

By: ___________________________________

Name:

Title:

Exhibit F-2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT G

to Loan Agreement

FORM OF BORROWING BASE CERTIFICATE

[See Attached]

Exhibit G

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT G

to Loan Agreement

BORROWING BASE CERTIFICATE

This Borrowing Base Certificate (this “ Borrowing Base Certificate ”) dated as of __________, 20__, in respect of the period ending on __________, 20__ (the “ Computation Date ”) is delivered to you on pursuant to Section 5.15 of the Loan Agreement dated as of May 4, 2015 (as amended, restated, supplemented or otherwise modified in writing from time to time, the “ Loan Agreement ”), among Megalodon Solar, LLC, a Delaware limited liability company (the “ Borrower ”), SolarCity Corporation, solely in its capacity as limited guarantor, each lender from time to time party thereto (collectively, the “ Lenders ” and individually, a “ Lender ”), each group agent from time to time party thereto (collectively, the “ Group Agents ” and individually, a “ Group Agent ”), Bank of America, N.A., as collateral agent for the Secured Parties (the “ Collateral Agent ”), as the administrative agent for the Lenders (“ Administrative Agent ”), Bank of America, N.A. and Credit Suisse Securities (USA) LLC, as joint structuring agents, Bank of America, N.A., Credit Suisse Securities (USA) LLC and Deutsche Bank AG, New York Branch, as joint book runners and joint lead arrangers, pursuant to which the Lenders have agreed to make Loans to the Borrower. Each capitalized term used and not otherwise defined herein shall have the meaning assigned thereto in Section 1.1 of the Loan Agreement.

The undersigned Responsible Officer of Borrower hereby certifies, represents and warrants as of the date hereof that he/she is the ___________ of Borrower, and that, as such, he/she is authorized to execute and deliver this Borrowing Base Certificate to the Administrative Agent on behalf of the Borrower, and that:

(a) all information contained herein and attached hereto is true and complete, and that calculations contained herein and attached hereto as Schedule 1 (the “ Borrowing Base Certificate Calculations ”) are true and complete;

(b) Schedule 2 hereto contains the updated Aggregate Advance Model, Net Cash Flows and Revised Net Cash Flows for each Approved Subject Fund, delivered pursuant to Section 2.1(a)(iv)(B) and Section 3.2(c) of the Loan Agreement;

(c) as of the date hereof, the Subject Fund Value, Subject Fund Borrowing Base and Advance Rate for each Subject Fund, including Subject Funds being proposed to be included in the Available Borrowing Base as of a Borrowing Date, are as follows:


Subject Fund	Discounted Solar Asset Balance	Advance Rate	Subject Fund Borrowing Base

Exhibit G

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

(d) as of the date hereof, no Subject Fund is a Watched Fund [other than the following: ²²


Watched Fund	Conditions/Circumstances causing Watched Fund

];

(e) as of the date hereof, no System is a Defaulted System or a Terminated System [other than as set forth on Schedule 3 hereto];

(f) as of the date hereof, the Borrower [is] [is not] in compliance with the Borrowing Base Requirement;

(g) no Default of Event of Default has occurred or is continuing pursuant to the Loan Agreement;

(h) [no][a] Bankruptcy Event has occurred with respect to SolarCity subsequent to the immediately preceding Borrowing Base Certificate delivered pursuant to the Loan Agreement;

(i) as of the date hereof, the Available Borrowing Base is $___________, and Outstanding Principal is $________________;

(j) as of the date hereof, the percentage of Eligible Systems in each Subject Fund that constitute PTO Systems is:


Subject Fund	% of Eligible Systems that are PTO Systems

Insert any Watched Fund and the applicable clause of the definition thereof for the reason a Subject Fund is a Watched Fund. Include representation for Borrowing Base Certificate Dates that do not coincide with the delivery of Borrowing Notices (NB: Borrowing Base Certificates will be delivered after the termination of the Availability Period, at which point this representation will be required as a mechanism to alert the Lenders of any new Watched Assets).

Exhibit G

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

]; [and]

(k) as of the date hereof, the Managing Member Payment Level [is] [is not] less than [90]% as of the previous Quarterly Date and the Subject Fund Payment Level in respect of any Subject Fund [is] [is not] less than [85%] as of the previous Quarterly Date[.][; and]

[(l) To the extent this Borrowing Base Certificate relates to the delivery of a Borrowing Notice:

(1) Schedule 3 hereto lists for the Subject Fund (i) each Current System and (ii) the applicable system information in the System Consolidator with respect to the Current System;

(2) to the extent not otherwise previously delivered to the Administrative Agent, for the benefit of each Lender, in connection with the submission of this Borrowing Base Certificate, Borrower has electronically delivered to the Administrative Agent, for the benefit of each Lender copies of each Completion Certificate with respect to the Subject Funds that has been delivered to the applicable Investor since the date of the last Borrowing Base Certificate;

(3) to the extent not otherwise previously delivered to the Administrative Agent, for the benefit of each Lender, in connection with the submission of this Borrowing Base Certificate, Borrower has electronically delivered to the Administrative Agent, for the benefit of each Lender, true, correct and complete copies of (i) each Customer Agreement for each Current System and (ii) any other data, documentation, analysis or report reasonably requested by the Administrative Agent with respect to such Systems or the associated Host Customers and commercially available to the Borrower, in each case with respect to a Current System;

(4) to the extent not otherwise previously delivered to the Administrative Agent, for the benefit of each Lender, in connection with the submission of this Borrowing Base Certificate, Borrower has electronically delivered to the Administrative Agent, for the benefit of each Lender, financial statements and/or credit reports that any Lender has reasonably requested with respect to a Current System with a commercial Host Customer that does not have a publicly available rating from a recognized national rating agency that was current as of the date that the Customer Agreement corresponding to such System was executed.]

[Remainder of page intentionally left blank]

Exhibit G

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

IN WITNESS WHEREOF, the undersigned has caused this Borrowing Base Certificate to be executed and delivered, and the certifications and warranties contained herein to be made on behalf of the Borrower, by a Responsible Officer of the Borrower as of the date first written above.

MEGALODON SOLAR, LLC ,

a Delaware limited liability company, as Borrower

By: ___________________________________

Name:

Title:

Exhibit G

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Schedule 1

Borrowing Base Calculations

[ To be provided by the Borrower on each Borrowing Base Certificate Date ]

Exhibit G

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Schedule 2

Aggregate Advance Model

[ see attached. ]

Exhibit G

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Schedule 3

Current Systems

[ see attached. ]

Exhibit G

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT H-1

to Loan Agreement

FORM OF AGGREGATE ADVANCE MODEL

[See Attached File – “Aggregate Advance Model_2015-05-04_Final.xlxs” and Assumptions Page Immediately Following]

[see

Exhibit H-1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT H-2

to Loan Agreement

FORM OF SYSTEM CONSOLIDATOR

[See Attached File – “System Consolidator_2015-05-04_Final.xlsx”]

[Not Provided]

Exhibit H-2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

EXHIBIT I

to Loan Agreement

FORM OF US TAX COMPLIANCE CERTIFICATE

[See Attached]

Exhibit I

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

US TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Loan Agreement dated as of May 4, 2015 (as amended, restated, supplemented or otherwise modified in writing from time to time, the “ Loan Agreement ”), among Megalodon Solar, LLC, a Delaware limited liability company (the “ Borrower ”), SolarCity Corporation, solely in its capacity as limited guarantor (the “ Limited Guarantor ”), each lender from time to time party thereto (collectively, the “ Lenders ” and individually, a “ Lender ”), each group agent from time to time party thereto (collectively, the “ Group Agents ” and individually, a “ Group Agent ”), Bank of America, N.A., as collateral agent for the Secured Parties (the “ Collateral Agent ”), as the administrative agent for the Lenders (“ Administrative Agent ”), Bank of America, N.A. and Credit Suisse Securities (USA) LLC, as joint structuring agents, Bank of America, N.A., Credit Suisse Securities (USA) LLC and Deutsche Bank AG, New York Branch, as joint book runners and joint lead arrangers.

Pursuant to the provisions of Section 2.4(g) of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BENE (or W-8BEN, as applicable). By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them in the Loan Agreement.

[NAME OF LENDER]

By: _______________________

Name:

Title:

Date: _______________, 20[ ]

Exhibit I

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

US TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.4(g) of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BENE (or W-8BEN, as applicable). By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them in the Loan Agreement.

[NAME OF PARTICIPANT]

By: _______________________

Name:

Title:

Date: _______________, 20[ ]

Exhibit I

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

US TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.4(g) of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BENE (or W-8BEN, as applicable) or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BENE (or W-8BEN, as applicable) from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them in the Loan Agreement.

[NAME OF PARTICIPANT]

By: _______________________

Name:

Title:

Date: _______________, 20[ ]

Exhibit I

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

US TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.4(g) of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Loan Agreement or any other Financing Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BENE (or W-8BEN, as applicable) or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BENE (or W-8BEN, as applicable) from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them in the Loan Agreement.

[NAME OF LENDER]

By: _______________________

Exhibit I

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Name:

Title:

Date: _______________, 20[ ]

Exhibit I

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

SCHEDULE 1.1(A)

KNOWLEDGE INDIVIDUALS

[***]

Schedule 1.1(A)

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

SCHEDULE 1.1(B)

CHANGE IN CONTROL


Partnership Managing Member / Lessor Managing Member	Equity Interests Owned as of date related Partnership or Lessor Partnership becomes a Subject Fund
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]

Schedule 1.1(B)

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

SCHEDULE 1.1(C)

OPERATING ACCOUNT

Bank of America

100 West 33 ^rd Street

New York, NY 10001

Federal ABA # [***]

Beneficiary name: Megalodon Solar, LLC

Beneficiary account: [***]

Schedule 1.1(C)

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

SCHEDULE 3.1(m)

CONSENTS

[***]

· Consent of Investor Member

[***]

· Consent of Lessee and each Investor

[***]

· Consent of Lessee and Investor

Schedule 3.1(M)

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

SCHEDULE 5.13

SEPARATENESS PROVISIONS

The Company shall maintain its existence separate and distinct from any other Person, including taking the following actions:

(a) maintaining in full effect its existence, rights and franchises as a limited liability company under the laws of the formation state and obtaining and preserving its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement and each other instrument or agreement necessary or appropriate to properly administer this Agreement and permit and effectuate the transactions contemplated hereby and thereby;

(b) maintaining its own deposit accounts, separate from those of any other Person, any of its officers and their respective Affiliates;

(c) conducting all material transactions between the Company and any of its Affiliates on an arm’s length basis and on a commercially reasonable basis;

(d) conducting its affairs separately from those of any other Person, any of its officers or any of their respective Affiliates and maintaining accurate and separate books, records and accounts and financial statements;

(e) acting solely in its own limited liability company name and not that of any other Person, any of its officers or any of their respective Affiliates, and at all times using its own stationery, invoices and checks separate from those of any other Person, any of its officers or any of their respective Affiliates;

(f) not holding itself out as having agreed to pay, or as being liable for, the, obligations of the Member or any of its respective Affiliates;

(g) maintaining all of its assets in its own name and not commingling its assets with those of any other Person;

(h) paying its own operating expenses and other liabilities out of its own funds;

(i) observing all limited liability company formalities, including maintaining meeting minutes or records of meetings and acting on behalf of itself only pursuant to due authorization, required hereby and by the Certificate of Formation of Borrower;

(j) maintaining adequate capital for the normal obligations reasonably foreseeable in light of its contemplated business operations;

(k) paying its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its own assets;

Schedule 5.13

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

(l) holding itself out to the public as a legal entity separate and distinct from any other Person.

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ANNEX 1

ACCOUNT INFORMATION

Bank of America, N.A.

ABA #[***]

Dallas, TX

Account No: [***]

F/A: Corporate Credit Services

Ref: Megalodon Solar, LLC

Annex

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ANNEX 2

LENDERS/LENDING OFFICE


Conduit Lender	Related Committed Lender	Group Agent
None	Bank of America, N.A. 901 Main Street Mail Code: TX1-492-14-12 Dallas, TX 75202-3714 Attention: [*] Telephone: [] Telecopy: [] [] With a Copy to: Bank of America, N.A. 900 West Trade Street Mail Code: NC1-026-06-03 Charlotte, NC 28255-0001 Attention: [] Telephone: [] Telecopy: [] [*]	Bank of America, N.A. 901 Main Street Mail Code: TX1-492-14-12 Dallas, TX 75202-3714 Attention: [*] Telephone: [] Telecopy: [] [] With a Copy to: Bank of America, N.A. 900 West Trade Street Mail Code: NC1-026-06-03 Charlotte, NC 28255-0001 Attention: [] Telephone: [] Telecopy: [] [*]
GIFS Capital Company, LLC Suite 4900 227 W. Monroe St. Chicago, IL 60606 Attn: Operations Phone: [*] Email: [*]	Credit Suisse AG, Cayman Islands Branch 11 Madison Ave New York, NY 10010 Attention: [*] Telephone: [] Email: [**]	Credit Suisse AG, New York Branch 11 Madison Ave New York, NY 10010 Attention: [*] Telephone: [] Email: [**]
None	Deutsche Bank AG, New York Branch 60 Wall Street New York, NY 10005 Attention: [*] Telephone: [] Email: [**]	Deutsche Bank AG, New York Branch 60 Wall Street New York, NY 10005 Attention: [*] Telephone: [] Email: [**]

Annex

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

ANNEX 3

SCHEDULE OF LENDER COMMITMENTS


Lender	Commitment
Bank of America, N.A.	$175,000,000
Credit Suisse AG, Cayman Islands Branch	$175,000,000
Deutsche Bank AG, New York Branch	$150,000,000

Annex

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

APPENDIX 1

ADVANCE RATE

The “Advance Rate” means

(i) For a Subject Fund the following percentages:


Subject Fund	Advance Rate	Cash Sweep Fund or Non-Cash Sweep Fund
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]

(ii) In respect of any Potential New Fund that becomes a Subject Fund, a percentage as shall be determined in accordance with this Appendix 1 following the completion of due diligence by the Administrative Agent, which by way of example shall be:


Advance Rate
For each Cash Sweep Fund, Non-Cash Sweep Fund and Other Structure, the Advance Rate will be the percentage determined for each System in such Subject Fund based on the “Type of Fund,” in accordance with the table below.
Type of Fund
Cash Sweep Fund (baseline: CB (see below))	CB
Non Cash Sweep Fund (60% baseline)	[***]%
Other Non-Financed Structure (65% baseline)	[***]%
Other Financed Structure	[***]%

Kronor Loan Agreement – Appendices Appendix 1 - 1

“ CB ” or “ Cash Sweep Fund Baseline ” means, the lesser of (a) [***] % and (b) the percentage obtained by dividing (i) the maximum amount of debt that can be fully supported by Net Cash Flows distributable to the Managing Member of such Subject Fund assuming interest is accruing at the Default Rate when applying the ITC Downside Case to that particular Subject Fund and only that Subject Fund by (ii) the Discounted Solar Asset Balance of such Subject Fund.

“ ITC Downside Case ” means a scenario in which a 30% reduction in fair market value occurs in the first month that a Subject Fund is included in the Available Borrowing Base and the Aggregate Advance Model is adjusted to calculate the Net Cash Flows distributable to the Managing Member of such Subject Fund in light of such reduction in fair market value and any applicable Cash Sweep Event (as defined in Appendix 7 ).

For avoidance of doubt, the amounts set forth in this clause (ii) are indicative subject to final determination by the Administrative Agent at the time such Subject Fund is included in the Available Borrowing Base;

(iii) [Reserved].

(iv) All PV Systems in any Watched Fund shall have an Advance Rate of 0% for purposes of calculating the Available Borrowing Base. For avoidance of doubt, this shall include any PV Systems in a Watched Fund that were financed in previous tranches and whose Net Cash Flows were incorporated in previous Available Borrowing Base calculations.

(v) To the extent that, despite negotiating in good faith, the Administrative Agent and the Borrower cannot agree on the Advance Rate under clause (ii) of this Appendix 1 , the Advance Rate determined by the Administrative Agent, acting at the direction of the Majority Group Agents, shall prevail.

Kronor Loan Agreement – Appendices Appendix 1 - 2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

APPENDIX 2

BORROWING BASE CERTIFICATE CALCULATIONS

I. Borrowing Base Certificate Components

Borrower will submit a certificate (the “ Borrowing Base Certificate ”) setting forth:

a.	the Discounted Solar Asset Balance of all Systems presented for financing to date, including Systems being submitted in connection with the contemplated draw, if any, including details of:

(i)	the Aggregate Advance Model and Net Cash Flows used to calculate the Available Borrowing Base;

(ii)	Revised Net Cash Flows; and

(iii)

a list identifying each Defaulted System and Terminated System.

b.	the Subject Fund Borrowing Base for each Subject Fund;

c.	the Available Borrowing Base;

d.	the percentage of Eligible Systems included in each Subject Fund that constitute PTO Systems;

e.	the Managing Member Payment Level and the Subject Fund Payment Level in respect of each Subject Fund, in each case, as of the previous Quarterly Date;

f.	the Advance Rate for each Subject Fund;

g.	either (x) certification that no Watched Funds exist or (y) a list identifying each Subject Fund that is a Watched Fund and the condition or conditions that resulted in such Subject Fund being a Watched Fund; and

h.	either (x) certification of compliance with the Borrowing Base Requirements or (y) notice of noncompliance with the Borrowing Base Requirements.

II. Defined terms .

“ Aggregate Advance Model ” means the model that includes each of the Subject Funds in the form of Exhibit H-1 (which Exhibit H-1 may be updated from time to time with the addition of new Subject Funds or Systems pursuant to Section 2.10 or 3.3(a) ), forecasting the Net Cash Flows to each Managing Member under each Subject Fund (including in the case of a Partnership Flip Structure, before and after the expected “Flip Date,” and in the case of an Inverted Lease Structure and a Partnership Lease Pass Through Structure, before and after the expiration of the master lease and to the applicable wholly-owned subsidiary of the Borrower under each Other Non-Financed Structure), in each case: (i) calculated in accordance with and adjusted for the Assumptions, (ii) adjusted to exclude Excluded Revenues and as necessary to

Kronor Loan Agreement – Appendices Appendix 2 - 1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

calculate, as applicable, the Investor’s preferred return, the capital contributions made by each Member of a Subject Fund, and the effect of host customer prepayments, customer terminations, Defaulted Systems and Terminated Systems, (iii) accounting for the applicable system information in the System Consolidator, (iv) adjusted to account for the anticipated impact on Net Cash Flow in respect of Borrower’s interest in any Subject Fund assuming that any Investor Withdrawal Option or Purchase Option, if applicable, in respect of such Subject Fund is exercised in accordance with the applicable Project Documents for such Subject Fund, as such impact is determined by the Administrative Agent in consultation with the Borrower and is set forth on a Schedule to the Aggregate Advance Model, and (v) with respect to each Subject Fund financed pursuant to the Loan Agreement after the Closing Date, in form and substance reasonably satisfactory to the Administrative Agent and Majority Group Agents as determined in consultation with the Lenders and the Borrower. In addition, the Aggregate Advance Model will be updated as of the date such model is delivered to reflect any modifications required due to changes in System Consolidator or Revised Net Cash Flow. The System Consolidator shall identify Systems that have become Defaulted Systems and the Aggregate Advance Model shall identify Subject Funds that have become Watched Funds. Any System with a Host Customer that has no FICO score or a FICO score less than [***] at the time such Host Customer signed the applicable power purchase agreement or lease agreement will be excluded from, or assigned a value of zero in, the Aggregate Advance Model.

“ Advance Rate ” means, with respect to each Subject Fund, a percentage to be determined in accordance with Appendix 1 .

“ Assumptions ” means the assumptions set forth in the following table:


Characteristic	Assumptions
Insolation	P50
Availability (Availability loss)	100% (0%)
Degradation	0.5% per annum
Host Customer Default	0.5% per annum
Reserve Deposits	the sum of the Supplemental Reserve Deposits and the Tax Loss Required Deposits to be required under and as defined in the CADA for such Subject Fund
O&M and Administrative Costs	Year 1: $25/k/Wdc/year With escalation of 2% per annum thereafter

“ Available Borrowing Base ” means the sum of the Subject Fund Borrowing Bases for all Subject Funds less the sum of the Aggregate Sub-Limit 1 Balance, the Aggregate Sub-Limit 2 Balance, the Aggregate Sub-Limit 3 Balance, the Aggregate Sub-Limit 4 Balance, the Aggregate Sub-Limit 5 Balance, the Aggregate Sub-Limit 6 Balance, and the Aggregate Sub-Limit 7 Balance; provided , however , if as of the date of a Borrowing Base Certificate, the aggregate Subject Fund Borrowing Bases of all full Cash Sweep Funds exceed ten percent (10%) of the

Kronor Loan Agreement – Appendices Appendix 2 - 2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Available Borrowing Base, then the Subject Fund Borrowing Base of each full Cash Sweep Fund shall be deemed to be reduced on a pro rata basis (and the Available Borrowing Base shall be deemed to be reduced accordingly) in a sufficient amount so that the aggregate Subject Fund Borrowing Bases of all full Cash Sweep Funds no longer exceed ten percent (10%) of the Available Borrowing Base; provided, further that if as of the date of a Borrowing Base Certificate, the aggregate Subject Fund Borrowing Bases of all full and partial Cash Sweep Funds exceed fifty percent (50%) of the Available Borrowing Base, then the Subject Fund Borrowing Base of each full and partial Cash Sweep Fund shall be deemed to be reduced on a pro rata basis (and the Available Borrowing Base shall be deemed to be reduced accordingly) in a sufficient amount so that the aggregate Subject Fund Borrowing Bases of all full and partial Cash Sweep Funds no longer exceed fifty percent (50%) of the Available Borrowing Base.

“ Cash Sweep Event ” has the meaning set forth in Appendix 7 .

“ Carrying Cost ” means, the sum of (i) the weighted average swap rate under all Interest Rate Hedge Agreements and Interest Rate Cap Agreements, (ii) the Applicable Margin and (iii) all other relevant transaction fees, converted where necessary from a fixed amount to a relevant margin basis.

“ Defaulted System ” means any System (i) that has not been in service for 180 days or more (subject to force majeure exceptions) and is not a Terminated System, (ii) where (a) the related Host Customer is more than 120 days past due on any portion of a contractual payment due under the related Customer Agreement and (b) the related Customer Agreement has not been brought current or the related PV System has not been removed and re-deployed and/or the related Customer Agreement reassigned (or a replacement Customer Agreement executed) within 240 days after the end of such 120-day period or (iii) with respect to which a Host Customer has failed to make a buy-out payment that is due and payable under a Customer Agreement. For the avoidance of doubt, any past due amounts owed by an original Host Customer after reassignment to, or execution of, a replacement Customer Agreement with a new Host Customer shall not cause a System to be deemed to be a Defaulted System.

“ Discount Rate ” means the amount that is the greater of (i) 6.00% and (ii) the Carrying Cost.

“ Discounted Solar Asset Balance ” or “ DSAB ” means for each Subject Fund, an amount equal to the net present value of Net Cash Flow calculated using a discount rate equal to the Discount Rate.

“ Investor Guarantor ” means, with respect to any Subject Fund, the guarantor under any Guarantee issued by SolarCity and/or any of its Affiliates for the benefit of the Investor in connection with such Subject Fund.

“ Investor Withdrawal Option ” means the right of an Investor under the applicable Project Documents of a Subject Fund to withdraw from the applicable Partnership or other entity in which Investor holds an interest in such Subject Fund.

“ Month-to-Month Customer Agreement ” means a Customer Agreement without a specific length of term and which may be terminated by Host Customer for any reason at any time, pursuant to the applicable Customer Agreement.

Kronor Loan Agreement – Appendices Appendix 2 - 3

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

“ Net Cash Flow ” means an amount equal to the sum of the aggregate forecasted Distributions of On-Going Revenue (a) paid or payable to each Managing Member on account of its respective interest in a Subject Fund or (b) paid or payable to the applicable wholly-owned subsidiary of the Borrower in an Other Non-Financed Structure, in each case as set forth in the Aggregate Advance Model (provided, the forecasted Distributions of On-Going Revenue shall only include contracted cash flows attributable to the initial term (excluding any renewal period) of the applicable Customer Agreement). Net Cash Flow will not include (i) un-contracted state incentives and rebates, (ii) cash flows from Systems that fail to meet the Eligibility Representations or, as of any Scheduled Payment Date, the Ongoing Eligibility Representations, (iii) cash flows from any Defaulted Systems, (iv) cash flows from Inspected Systems that have failed to reach PTO status within 90 days of reaching Inspected Status (except for Systems residing in the following utility districts: NSTAR Electric (Boston Edison), PSE&G Long Island, PSE&G New Jersey, Portland General Electric, Arizona Public Service Company, TXU Energy, Delmarva Power (DE), and Turlock Irrigation District, in which case the limit will be 120 days and further except for Systems residing in the following utility districts: Los Angeles Department of Water & Power, PEPCO (MD); Hawaiian Electric Company; NSTAR Electric (Cambridge Electric Light);) and Xcel Energy, in which case such limit will be 180 days), and (v) cash flows from any Systems the Customer Agreement in respect of which is a Month-to-Month Customer Agreement.

“ Ongoing Eligibility Representations ” has the meaning given in Appendix 3 .

“ Revised Net Cash Flow ” means, as of each date a Borrowing Base Certificate is delivered, a revised calculation of Net Cash Flows that includes the effect of:

1. Any buy-out payment that has been received in accordance with the applicable Customer Agreement;

2. Host Customer transfers in accordance with the applicable Customer Agreement, with respect to which the transferee of a Host Customer’s interest in a System fails to meet the transfer requirements, including any credit requirements, as set forth in any applicable Project Documents. For the avoidance of doubt, the FICO score associated with the System will be updated to reflect the transferee as part of such transfer;

3. Removal of cash flows associated with Terminated Systems, Defaulted Systems, Systems that fail to meet the Ongoing Eligibility Representations and Systems that were not Eligible Systems as of the date any Loans were made in respect thereof;

4. [Reserved];

5. Changes to Managing Member cash distribution allocations or Flip Dates (as defined in each Subject Fund’s applicable Material Project Documents) as reflected in any True-Up Models (as defined in each Subject Fund’s applicable Material Project Documents) or updated Tax Equity Models, as applicable, delivered with respect to a Subject Fund; and

6. Changes to the date any System becomes an Inspected System or such System becomes a PTO System.

Kronor Loan Agreement – Appendices Appendix 2 - 4

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

“ Subject Fund Borrowing Base ” means, for each Subject Fund, (i) an amount equal to the aggregate Discounted Solar Asset Balance of Systems in such Subject Fund less (ii) the sum of the Sub-Limit 1 Balance, the Sub-Limit 2 Balance, the Sub-Limit 4 Balance and the Sub-Limit 5 Balance (all as defined below), in all instances with respect to that Subject Fund, multiplied by the applicable Advance Rate for such Subject Fund.

“ Sub-Limit 1 Assets ”, “ Sub-Limit 2 Assets ”, “ Sub-Limit 3 Assets ”, “ Sub-Limit 4 Assets ”, “ Sub-Limit 5 Assets ”, “ Sub-Limit 6 Assets ”, “ Sub-Limit 1 Balance ”, “ Aggregate Sub-Limit 1 Balance ”, “ Sub-Limit 2 Balance ”, Aggregate Sub-Limit 2 Balance ”, “ Aggregate Sub-Limit 3 Balance ”, “ Sub-Limit 4 Balance ”, Aggregate Sub-Limit 4 Balance ”, “ Sub-Limit 5 Balance ”, Aggregate Sub-Limit 5 Balance ”, “ Sub-Limit 6 Assets ”, “ Aggregate Sub-Limit 6 Balance ”, “ Sub-Limit 7 Assets ” and “ Aggregate Sub-Limit 7 Balance ” have the meanings set forth below.

Kronor Loan Agreement – AppendicesAppendix 2 - 5

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Sub-Limits
Sub-Limit 1 Assets	Any System for which the related Host Customer had a FICO score of less than [***] at the time of origination shall be deemed a “ Sub-Limit 1 Asset ”.
Sub-Limit 1 Balance	For any Subject Fund, (i) the greater of (a) 0 and (b) the amount by which the DSAB of all Sub-Limit 1 Assets exceeds 25% of the DSAB of all Eligible Systems, multiplied by (ii) 100%.
Aggregate Sub-Limit 1 Balance	For all Funded Systems, (i) the greater of (a) 0 and (b) the amount by which the Advance Rate adjusted DSAB of all Sub-Limit 1 Assets exceeds 10% of the sum of the Subject Fund Borrowing Bases, multiplied by (ii) 100%.
Sub-Limit 2 Assets	Any System for which the related Host Customer had a FICO score less than [***] at the time of origination shall be deemed a “ Sub-Limit 2 Asset ”.
Sub-Limit 2 Balance	For any Subject Fund, (i) the greater of (a) 0 and (b) the amount by which the DSAB of all Sub-Limit 2 Assets (after giving effect to the Sub-Limit 1 Balance) exceeds 35% of the DSAB of all Eligible Systems, multiplied by (ii) 30%.
Aggregate Sub-Limit 2 Balance	For all Funded Systems, (i) the greater of (a) 0 and (b) the amount by which the Advance Rate adjusted DSAB of all Sub-Limit 2 Assets (after giving effect to the Aggregate Sub-Limit 1 Balance) exceeds 25% of the sum of the Subject Fund Borrowing Bases, multiplied by (ii) 100%.
Sub-Limit 3 Assets	Inspected Systems.
Aggregate Sub-Limit 3 Balance	For all Funded Systems, the sum of (A), which equals (i) the greater of (a) 0 and (b) the amount by which the Advance Rate adjusted DSAB of all Sub-Limit 3 Assets exceeds 40% but is less than 50% of the sum of the Subject Fund Borrowing Bases, multiplied by (ii) 50%, and (B), which equals (iii) the greater of (a) 0 and (b) the amount by which the Advance Rate adjusted DSAB of all Sub-Limit 3 Assets exceeds 50% of the sum of the Subject Fund Borrowing Bases, multiplied by (iv) 100%.
Sub-Limit 4 Assets	Commercial Systems contracted with Non-Investment Grade Commercial Host Customers shall be “ Sub-Limit 4 Assets ”.
Sub-Limit 4 Balance	For any Subject Fund, the amount by which the DSAB from Sub-Limit 4 Assets exceeds 5% of the DSAB from Eligible Systems owned by such Subject Fund.
Aggregate Sub-Limit 4 Balance	For all Funded Systems, the amount by which the Advance Rate adjusted DSAB from Sub-Limit 4 Assets exceeds 25% of the Advance Rate adjusted DSAB from all Eligible Systems which are Commercial Systems.
Sub-Limit 5 Assets	Commercial Systems contracted with a Shadow Rated Commercial Host Customer shall be “ Sub-Limit 5 Assets ”.
Sub-Limit 5 Balance	For any Subject Fund, the amount by which the DSAB from Sub-Limit 5 Assets exceeds 15% of the DSAB from Eligible Systems owned by such Subject Fund.

Kronor Loan Agreement – Appendices Appendix 2 - 6

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Sub-Limits
Aggregate Sub-Limit 5 Balance	For all Funded Systems, the amount by which the Advance Rate adjusted DSAB from Sub-Limit 5 Assets exceeds 50% of the Advance Rate adjusted DSAB from all Eligible Systems which are Commercial Systems.
Sub-Limit 6 Assets	Systems the solar photovoltaic panels and inverters with respect to which were manufactured by Prohibited Manufacturers, shall be “ Sub-Limit 6 Assets ”.
Aggregate Sub-Limit 6 Balance	For all Funded Systems, the amount by which the Advance Rate adjusted DSAB from Sub-Limit 6 Assets exceeds 5% of the DSAB from all Eligible Systems, provided that Administrative Agent will review in its discretion and subject to the approval of the Majority Group Agents increases to such Sub-Limit 6 Balance.
Sub-Limit 7 Assets	Systems that include any battery storage equipment.
Aggregate Sub-Limit 7 Balance	For all Funded Systems, the amount by which the Advance Rate adjusted DSAB from Sub-Limit 7 Assets exceeds 10% of the Advance Rate adjusted DSAB from all Eligible Systems.

“ Tax Equity Model ” means for each Subject Fund, the financial model delivered to the Administrative Agent as of the Closing Date or the date such Subject Fund was designated as such pursuant to Section 2.10 of the Loan Agreement, as agreed upon by the respective Investor and Managing Member with respect to a Subject Fund and as updated in accordance with the terms of the Project Documents and the terms hereof.

“ Watched Funds ” means any Subject Fund in respect of which:

(i)	a Funded Subsidiary is subject to a Bankruptcy Event, dissolution event or liquidation event;

(ii)

for a period of more than thirty (30) consecutive days, Investor Guarantor has failed to pay any tax or other indemnity amounts over $175,000 in the aggregate due and owing to the Investor (including amounts owed by any Managing Member, whether or not such amounts are guaranteed by Investor Guarantor), unless such amounts are being contested by the applicable Funded Subsidiary or Investor Guarantor in good faith or to the extent (A) that Managing Member cash flows are escrowed pending resolution of such contest or (B) such indemnity is in respect of a Tax Loss Indemnity and such Tax Loss Indemnity is required to be paid under a Tax Loss Policy (or other independent third-party insurance) as to which the insurer (i) has acknowledged its liability or (ii) during the first 90 days following the submission of a claim under the Tax Loss Policy (or other third-party insurance), has not disputed coverage in respect of such claim;

(iii)

the number of Defaulted Systems equals or exceeds 15% of the total number of Systems included in such Subject Fund (including, for the avoidance of doubt, any removed Systems);

Kronor Loan Agreement – Appendices Appendix 2 - 7

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

(iv)

as of a Scheduled Payment Date or Borrowing Base Certificate Date, for any trailing six (6) month period ending on such date and beginning on the date on which the related Subject Fund Sweep Event first occurred with respect to a Subject Fund, the ratio of: (a) Distributions of Ongoing Revenue in respect of such Subject Fund during such period, to (b) Net Cash Flow for such Subject Fund during such trailing six (6) month period, through and including such date (or if shorter, such period from Closing Date through and including such date) is less than 85%;

(v)	the Managing Member is removed or a notice of the removal of the Managing Member is given and not rescinded or withdrawn within thirty (30) days following the date such notice is given;

(vi)

the occurrence of any default by a Managing Member, Lessor Partnership or Subject Fund under any Project Document or any other material agreement and contracts by which such Person is bound, in each case, that has a Material Adverse Effect or a material adverse effect on the aggregate value of the Collateral;

(vii)

Eligibility Representations with respect to Systems constituting twenty percent (20%) or more of the Discounted Solar Asset Balance of the Subject Fund (as determined by the Administrative Agent with prior written notice to the Borrower) were not true and correct as of the applicable Borrowing Date on which such Eligibility Representations were made with respect to such System;

(viii)

there is entered (i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding One Hundred Thousand Dollars ($175,000) (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a material adverse effect on such Subject Fund or any related Funded Subsidiary, except to the extent that (A) within thirty (30) days of the judgment being entered, the amount of such judgment order is fully covered (up to customary deductibles) by a valid and binding policy of insurance or by a surety bond between the defendant and the insurer covering payment thereof and satisfactory to the Majority Group Agents and (B) such insurer or surety has been notified of, and has accepted the claim made for payment of, the amount of such judgment or order;

(ix)

any action, suit, proceeding, claim or dispute is brought or, to the Borrower’s Knowledge, threatened in writing or contemplated, at law, in equity, in arbitration or before any Governmental Authority, either individually or in the aggregate, in respect of which GAAP requires the establishment of a reserve of $350,000 or greater, unless, if such reserve (individually or in the aggregate) is $350,000 or greater but less than 15% of the DSAB of all Eligible Systems, the Borrower has established a cash reserve in the amount of the required GAAP reserve; and

Kronor Loan Agreement – Appendices Appendix 2 - 8

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

(x)

the Borrower Subsidiary Party fails to own 100% of the Equity Interests owned by it as of the date the related Subject Fund becomes a Subject Fund under this Agreement and as set forth on Schedule 1.1(b) hereto (as such schedule may be updated prior to the funding of any new Subject Fund after the Closing Date), in each case, other than any disposition that (x) complies with the terms of Section 2.10 or Section 6.4 , (y) is a transfer of less than 1% of such Equity Interests required by the applicable Project Document or (z) otherwise constitutes a Change in Control.

For the avoidance of doubt, at such time as none of the conditions set forth in clauses (i) through (x) above is true in respect of any Subject Fund previously classified as a “Watched Fund”, then such Subject Fund shall no longer be a “Watched Fund” for any purpose under the Loan Agreement to which this Appendix 2 is attached or any other Financing Document referenced therein.

Kronor Loan Agreement – Appendices Appendix 2 - 9

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

APPENDIX 3

ELIGIBILITY REPRESENTATIONS

As of the initial Borrowing Date with respect to each System to be added to the Available Borrowing Base pursuant to Sections 3.3 , 3.4 or otherwise, the Borrower hereby makes the following representations (the “Eligibility Representations”) with respect to such System:

1. Accuracy of System Consolidator: The applicable system information in the System Consolidator for the System is complete, accurate, true and correct in all material respects and does not omit any necessary information that makes such entry misleading.

2. Form of Customer Agreement: The Customer Agreement signed by an obligor relating to such System (x) is substantially in the form of one of the template agreements attached to the Subject Funds at the time such Subject Fund was included pursuant to Section 2.10 or (y) is in a form otherwise approved by the Required Group Agents and complies with and satisfies the following conditions:

Customer Agreement: Except to the extent amended, waived, extended or modified in accordance with paragraph 2.b below, the related Customer Agreement provides that an affiliate of Borrower agrees to design, procure and install and maintain and repair PV Systems (subject to force majeure exceptions) at the property specified in such Customer Agreement for no charge (other than any fees related to activation, removal and reinstallation of the system, or other fees as set forth in the form of Customer Agreements as delivered by or on behalf of Borrower to Administrative Agent other than for power purchases or lease payments) over the term of the contract, and the Host Customer agrees to purchase electric energy produced by such Systems or lease such Systems.

Modification to Customer Agreement: The terms of the related Customer Agreement have not been amended, waived, extended, or modified in any material respect since the System’s date of PTO, except, in the case of a residential Customer Agreement, in compliance with SolarCity’s Credit Underwriting Policy and Collections Policy and in the case of a commercial or governmental Customer Agreement, in compliance with SolarCity’s Commercial Contract Negotiations and Modifications Policy.

c.	Host Customer Payments in U.S. Dollars: The related Host Customer is obligated per the terms of the related Customer Agreement to make payments in U.S. dollars to the counterparty of the related Customer Agreement.

Host Customer: The related Host Customer satisfied SolarCity’s Credit Underwriting Policy at the time of origination, or if such Host Customer is an MHPI SPE, then at the time of origination, such MHPI SPE (i) had an investment grade credit rating and its base was not on a Defense Base Closure and Realignment Commission (“BRAC”) list of bases and military installations recommended to be closed or (ii) if such MHPI SPE is unrated, its base was not on a BRAC list of bases and military installations recommended to be closed and,

Kronor Loan Agreement – Appendices Appendix 3 - 1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

upon review of the financials of such MHPI SPE for the past three years (i.e. the last two audited financials) the revenues to cash operating expenses ratio was at least 1.756x in each period and interest and principal on any MHPI SPE bond was current and not in technical default.

e.	Host Customer FICO Score: The related residential Host Customer had a minimum FICO of [***] at the time of origination.

W.A. FICO Score: After giving effect to the System’s inclusion, the weighted average FICO score for residential Host Customers of Eligible Systems (measured at the time the related Customer Agreement was originated) (i) in all Subject Funds, on an aggregate basis, is at least [***] and (ii) in the individual Subject Fund to which such System is to be added is at least [***] for such Subject Fund.

Absolute and Unconditional Obligation: The related Customer Agreement is by its terms an absolute and unconditional obligation of the Host Customer to pay for electricity generated and delivered or will be generated and delivered by the related PV System to such Host Customer after the related PV System has received permission to operate from the local utility in writing or in such other form as is customarily given by such local utility (“PTO”), and such payment obligations under the related Customer Agreement do not provide for offset for any reason including non-payment or non-performance under any customer warranty agreement or performance guaranty provided to the applicable Host Customer; provided, however, that [***].

Non-cancelable; Prepayable: The related Customer Agreement is non-cancelable by its terms after the start of installation of the System and, other than with respect to Customer Agreements that have been fully prepaid or partially prepaid prior to the Borrowing Date, prepayable by its terms only in connection with a Host Customer selling their home to a transferee that is not approved in accordance with the terms of such Customer Agreement in an amount equal to an amount determined by discounting all projected payments that would have become payable thereunder by the Host Customer at a pre-determined discount rate of 5% .

Governing Law of Customer Agreement: The related Customer Agreement is governed by the laws of a state of the United States and was not originated in, nor is it subject to the laws of, any jurisdiction, the laws of which would make unlawful the sale, transfer or assignment of the related Customer Agreement under the applicable Project Document.

j.	Indemnity Provisions: The related Customer Agreement does not add or remove any indemnity or contingent liability provisions from the applicable form that would reasonably be expected to have a material negative impact on the Borrower’s cash flows.

k.	Liquidated Damages: The related Customer Agreement may contain liquidated damages or other penalty provisions, including in connection with performance, deliverability, availability or other similar obligations or guarantees over the term

Kronor Loan Agreement – Appendices Appendix 3 - 2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

of the Customer Agreement, provided that such obligations or guarantees (i) relate to construction deadlines or otherwise are not applicable for events after Placement in Service or (ii) are backstopped by the corresponding obligations or guarantees under the Project Documents and could not reasonably be expected to have a material adverse effect on Net Cash Flow including any guaranty of System generation performance that is reasonably anticipated to be achieved by a System as of its installation.

3. Legal Compliance: The Customer Agreement and the origination thereof and the installation of the related System, in each case, was in compliance in all material respects with applicable federal, state and local laws and regulations (including all consumer protection laws) at the time such Customer Agreement was originated and executed and such System was installed.

4. Legal, Valid and Binding Agreement: The related Customer Agreement is legal, valid and binding on the related Host Customer, enforceable against such related Host Customer in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally, and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity).

5. Full Force and Effect: With respect to the applicable Subject Fund or Other Non-Financed Structure counterparty, the related Customer Agreement is in full force and effect in accordance with its respective terms.

6. Ordinary Course of Business: The related Customer Agreement relates to the sale of power from or the leasing of a PV System originated in the ordinary course of business of an affiliate of Borrower.

7. System: The related System was properly delivered to and installed for the related Host Customer in good repair, without defect, and in satisfactory order. The related Host Customer has accepted the related PV System, and the PV System is an Inspected System or a PTO System.

8. Project States: The PV System is either (i) located in a state or locality that is approved in Project Documents corresponding to the applicable Subject Fund, if any, or (ii) solely with respect to any Residential System that is owned by a Subject Fund in respect of which the Project Documents do not limit the sites or localities in which a PV System may be located, is located in a state or locality that is approved in Project Documents corresponding to any Subject Fund.

9. No Condemnation: No condemnation is pending or, to Borrower’s knowledge, threatened with respect to the PV System, or any portion thereof material to the ownership or operation of the PV System, and no unrepaired casualty exists with respect to the PV System or any portion thereof material to the ownership or operation of the PV System or the sale of electricity therefrom.

Kronor Loan Agreement – Appendices Appendix 3 - 3

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

10. No Defaults or Terminations: The related Customer Agreement is not in default and the related System is not a Terminated System or Defaulted System. Furthermore, the Host Customer associated with the related Customer Agreement is not a Host Customer for any other Customer Agreement that was originated, acquired and/or serviced by an Affiliate of Borrower that would meet the definition of a Defaulted System.

11. No Delinquencies: The related PV System has not been turned off due to a Host Customer delinquency.

12. Warranties: All manufacturer warranties relating to the related Customer Agreement and the related PV System are in full force and effect and can be enforced by the owner or lessee of such PV System, as applicable (other than with respect to those manufacturer warranties that are no longer being honored by the relevant manufacturer with respect to all customers generally).

13. Covered Assets: Upon Placement in Service, certain maintenance and administrative services associated with such PV System shall be covered in accordance with the applicable servicing arrangement for such Subject Fund and the standards set forth in the Project Documents.

14. Liens: Such PV System and the related Customer Agreement have been assigned (i) to and are owned by the Lessor or Lessor Partnership or Partnership within the Subject Fund, to which the Managing Member has an Equity Interest (or such other ownership arrangement acceptable to the Administrative Agent), or (ii) to another special purpose vehicle wholly owned by Borrower related to an Other Non-Financed Structure, in each case of clause (i) and (ii) hereof, free and clear of all liens and encumbrances, except for liens permitted under the applicable Project Documents of the applicable Subject Fund, as applicable.

15. Fixture Filings: Prior to Placement in Service, an affiliate of Borrower has filed a precautionary fixture filing in respect of the related System or such other similar filing as may be required by applicable law including pursuant to Cal. Pub. Util. Code §§ 2868-2869; provided, however, that (i) certain of such filings may be released from time-to-time in order to assist the applicable Host Customer in a pending refinancing of such Host Customer’s mortgage loan or sale of home, (ii) such filings may not have been filed or maintained in a manner that would provide priority under applicable law over an encumbrance or owner of the real property subject to the filing, (iii) no fixture filings have been made with respect to fully prepaid Systems and (iv) fixture filings may not have been made on Systems located on military property.

16. Insurance: (i) If the applicable Subject Fund is a Partnership Flip Structure or an Other Non-Financed Structure, the PV System is insured as specified under the applicable Project Documents and (ii) if the applicable Subject Fund is an Inverted Lease Structure or Partnership Lease Pass Through Structure, none of the Borrower, the Lessor or Lessor Partnership, as applicable, or SolarCity is aware of a breach of Lessee’s covenant to insure the PV System pursuant to the terms of the applicable Project Documents.

Kronor Loan Agreement – Appendices Appendix 3 - 4

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

17. Maximum Remaining Term: For any Residential System, the original term of the related Customer Agreement does not exceed [***] months, and for any Commercial System, the original term of the related Customer Agreement does not exceed [***] months.

18. Maximum Annual Escalator: For any Residential System, the annual escalator of the related Customer Agreement does not exceed [***]%, and for any Commercial System, the annual escalator of the related Customer Agreement does not exceed [***]%.

19. No Adverse Selection: No selection procedures reasonably believed by the Borrower to be adverse to the Lenders were utilized in selecting the Subject Funds, Systems and the related Customer Agreements.

20. No Defenses Asserted: The related Customer Agreement has not been satisfied, subordinated or rescinded and no lawsuit is pending with respect to such Customer Agreement.

21. Delivery of Customer Agreements and Other Documentation: The related Customer Agreement and any amendments or modifications have been converted into an electronic form (an “Electronic Copy”) and the related original Customer Agreement and any amendments or modifications have been destroyed on or before the later of (x) the Borrowing Date or (y) thirty (30) days after the System receives PTO, in compliance with SolarCity’s document storage policies (which include exceptions for preservation of originals where the local utility or governmental authority requires such preservation). An Electronic Copy is being maintained by (a) the Maintenance Services Provider on behalf of the related Subject Fund (in the case of any Tax Equity Structure or Other Financed Structure) or Investor, as the case may be, or (b) the Manager on behalf of the Subject Fund (in the case of any Other Non-Financed Structure) and such Electronic Copy is a true and complete copy of such original Customer Agreement and any material amendments or modifications thereto. Each original Customer Agreement in the form of a “Lease Agreement” that has been retained by SolarCity as Maintenance Services Provider in a custodial capacity in compliance with such exception to its document storage policies has been labeled on or before the Borrowing Date to indicate that such Lease Agreement was transferred to the Subject Fund or Investor, as the case may be.

22. Payment Terms of Customer Agreement: Except as otherwise permitted in the related Customer Agreement, the related Customer Agreement provides that the Host Customer thereunder is required to make periodic “Host Customer Payments”, which are due and payable on a monthly basis, during the term of the related Customer Agreement.

23. PBI Payments:

All applications, forms and other filings required to be submitted in connection with the procurement of performance based incentives (“PBI”) payments have been properly made, or will be in the process of being made, in all material respects under applicable law, rules and regulations and the related PBI obligor is in the process of approving or has provided a written reservation approval (which may be in the form of electronic mail from the related PBI obligor) for the payment of PBI payments.

Kronor Loan Agreement – Appendices Appendix 3 - 5

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

All conditions to the payment of PBI payments by the related PBI obligor have been satisfied or approved or will be in the process of being satisfied or approved, as applicable, and the PBI obligor’s payment obligation will be or is an absolute and unconditional obligation of the PBI obligor that is not subject to offset for any reason.

If final forms and related agreements (including all applications, forms and other filings and any written reservation approvals, interconnection agreements and REC purchase agreements, each, a “Performance Based Incentive Agreement”) are required by the laws, rules or regulations governing the obligations of the PBI obligor to pay the PBI payments, to the Borrower’s Knowledge, such Performance Based Incentive Agreement is, or will be, as applicable, the legal valid and binding payment obligation of the PBI obligor, enforceable against such PBI obligor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally, and except as such enforceability may be limited by general principles of equity (whether considered at law or in equity).

Kronor Loan Agreement – Appendices Appendix 3 - 6

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

APPENDIX 4

TAX EQUITY STRUCTURES, PARTNERSHIPS, LESSOR PARTNERSHIPS, LESSORS, SUBJECT FUNDS, MANAGING MEMBERS, FUNDED SUBSIDIARIES, LESSEES, CASH SWEEP DESIGNATIONS AND INVESTORS


Tax Equity Structure	Partnership / Lessor Partnership (Subject Fund)	Partnership Managing Member / Lessor Partnership Managing Member	Funded Subsidiaries (Subject Fund and Managing Member, if any)	Lessee	Cash-Sweep Fund or Non-Cash Sweep Fund	Investor
[***]	[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]	[***]

Kronor Loan Agreement – Appendices Appendix 4 - 1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

APPENDIX 5

PROJECT DOCUMENTS

1.	[***] Subject Fund

·	Limited Liability Company Agreement of [*], dated as of [], by and between [**] and [On File with Administrative Agent].

·	Amendment No. 1 to Limited Liability Company Agreement of [*], dated as of [], by and between [**] and [On File with Administrative Agent].

·	Amendment No. 2 to Limited Liability Company Agreement of [*], dated as of [], by and between [**] and [On File with Administrative Agent].

·	Second Amended and Restated Limited Liability Company Agreement of [*], dated as of [], by [**].

·	Maintenance Services Agreement, dated as of [*], by and between SolarCity and [*].

·	Master Development, EPC & Purchase Agreement, dated as of [*], by and between SolarCity and [*].

·	Administrative Services Agreement, dated as of [*], by and between SolarCity and [*].

·	Amendment No. 1 to Master Development, EPC & Purchase Agreement, dated as of [*], by and between SolarCity and [*].

2.	[***] Subject Fund

·	Limited Liability Company Agreement of [*], dated as of [], by and between [] and [*].

·	Amendment No. 1 to Limited Liability Company Agreement of [*], dated as of [], by and between [] and [*].

·	Second Amended and Restated Limited Liability Company Agreement of [*], dated as of [], by [**].

·	Maintenance Services Agreement, dated as of [*], by and between SolarCity and [*].

·	Master Development, EPC & Purchase Agreement, dated as of [*], by and between SolarCity and [*].

Kronor Loan Agreement – Appendices Appendix 5 - 1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

·	Amendment No. 1 to Master Development, EPC & Purchase Agreement, dated as of [*], by and between SolarCity and [*].

·	Guaranty, dated as of [*], from SolarCity in favor of [] and [**].

·	Guaranty, dated as of [***], from [On File with Administrative Agent] in favor of Solar Integrated Fund III, LLC.

·	Asset Management Agreement, dated as of [*], by and between SolarCity and [*].

·	Affirmation Agreement, dated as of [*], by [On File with Administrative Agent] to [*].

3.	[***] Subject Fund

·	Master Lease, dated as of [*], by and between [] and [**].

·	Equity Capital Contribution Agreement, dated as of [*], by and among SolarCity, [] and [**].

·	Amendment to Equity Capital Contribution Agreement, dated as of [*] (to add [*] as a Project State).

·	Operating Agreement of [*], dated as of [], by and between [] and [*].

·	Operating Agreement of [*], dated as of [], by and among [On File with Administrative Agent], [] and [*].

·	Second Amended and Restated Limited Liability Company Agreement of [*] dated as of [], by [**].

·	Pass-Through Agreement, dated as of [*], by and between [] and [**].

·	Guaranty, dated as of [*], from SolarCity in favor of [On File with Administrative Agent], [] and [**].

4.	[***] Subject Fund

·	Master Lease, dated as of [*], by and between [] and [**].

·	Equity Capital Contribution Agreement, dated as of [*], by and among SolarCity, [] and [**].

·	Amendment to Equity Capital Contribution Agreement, dated as of [*] (to add [] as a Project State) by and among SolarCity, [] and [*].

Kronor Loan Agreement - Appendices

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

·	First Amendment to Equity Capital Contribution Agreement, dated as of [*] , by and among SolarCity, [] and [**] .

·	Operating Agreement of [*], dated as of [], by and between [] and [*].

·	Operating Agreement of [*], dated as of [], by and between [On File with Administrative Agent] and [**].

·	Second Amended and Restated Limited Liability Company Agreement of [*] dated as of [], by [**].

·	Pass-Through Agreement, dated as of [*], by and between [] and [**].

·	Guaranty, dated as of [*], from SolarCity in favor of [On File with Administrative Agent] and [*].

5.	[***] Subject Fund

·	Limited Liability Company Agreement of [*], dated as of [], by and between [] and [*].

·	Second Amended and Restated Limited Liability Company Agreement of [*], dated as of [], by [**].

·	Maintenance Services Agreement, dated as of [*], by and between SolarCity and [*].

·	Master Development, EPC & Purchase Agreement, dated as of [*], by and between SolarCity and [*].

·	Administrative Services Agreement, dated as of [*], by and between SolarCity and [*].

·	Guaranty, dated as of [*], by SolarCity in favor of [*].

·	Guaranty, dated as of [*], by [On File with Administrative Agent], in favor of [*].

·	Transition Management Agreement, dated as of [*], by and among [], SolarCity and [**].

·	Amendment No. 1 to the Transition Management Agreement, dated as of [*], by and among [], SolarCity and [**].

Kronor Loan Agreement - Appendices

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

APPENDIX 6

SYSTEM INFORMATION

Truncated list of system information included in System Consolidator:

(a)	the applicable Subject Fund;

(b)	SolarWorks ID number;

(c)	type of agreement (i.e., power purchase agreement or lease agreement);

(d)	Host Customer city, state and zip code;

(e)	Sub-Limit 1 Flag, Binary indicator of "1" if customer has FICO less than [***], as applicable;

(f)	Sub-Limit 2 Flag, Binary indicator of "1" if customer has FICO less than [***], as applicable;

(g)	Sub-Limit 3 Flag, Binary indicator of "1" if system has been Inspected, but not yet received PTO, as applicable

(h)	Sub-Limit 4 Flag, Binary indicator of "1" if system is a Commercial System contracted with a Non-Investment Grade Commercial Host Customer

(i)	Sub-Limit 5 Flag, Binary indicator of "1" if system is a Commercial System contracted with a Shadow Rated Commercial Host Customer

(j)	Sub-Limit 6 Flag, Binary indicator of "1" if the solar photovoltaic panels or inverters with respect to the system were manufactured by Prohibited Manufacturers

(k)	PV System size;

(l)	projected PTO dates (in respect of Inspected Systems) and actual PTO dates (in respect of PTO Systems);

(m)	date such System became an Inspected System or PTO System, as applicable;

(n)	whether the applicable Customer Agreement provides for any form of prepayment and a description thereof;

(o)	term of the applicable Customer Agreement; and

(p)

Utility.

Kronor Loan Agreement – Appendices Appendix 6 - 1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

APPENDIX 7

TAX EQUITY REPRESENTATIONS AND OTHER REPRESENTATIONS

Tax Equity Representations

As of the date that a Tax Equity Structure is designated as a Subject Fund, with respect to such Subject Fund, the Borrower hereby makes the following representations (the “Tax Equity Representations”):

Part I –– If the Subject Fund is a Partnership Flip and Partnership Lease Pass Through

(a) The Managing Member (i) has entered into only one tax equity transaction, namely the applicable Tax Equity Structure, and has entered into no agreements other than the Project Documents or other agreements relating to the Subject Fund and (ii) owns no assets other than (x) its Equity Interests in the Subject Fund or Subject Funds related to such Tax Equity Structure as set forth on Appendix 4 and (y) its contractual rights arising from the Project Documents related to such Tax Equity Structure. The Project Documents for such Managing Member and Subject Fund are listed on Appendix 4 . Copies of all Project Documents as currently in effect have been delivered via electronic dataroom to the Administrative Agent by the Borrower. Each Project Document to which the Funded Subsidiary is a party is a legal, valid and binding obligation of such Funded Subsidiary, enforceable against such Funded Subsidiary in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar Laws affecting the enforcement of creditors’ rights generally and subject to general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law). None of the Project Documents to which a Funded Subsidiary is a party has been amended or modified since the effective date of such Project Document other than as set forth on Appendix 4 or permitted by Section 6.10(a) . No Subject Fund is party to any material contract, agreement or other undertaking except the Project Documents and any other contract, agreement or undertaking previously disclosed in writing to the Administrative Agent.

(b) All Project Documents with respect to such Subject Fund are in full force and effect and no material breach, default or event of default has occurred and is continuing thereunder or in connection therewith, except in either case to the extent that such breach, default or event of default could not reasonably be expected to have a Material Adverse Effect or that could have a material adverse effect on the Funded Systems or any Subject Fund or on the legality, validity or enforceability of the operating agreement of a Partnership or Lessor Partnership in a Subject Fund, the master lease in the Subject Fund, the EPC, master purchase agreement or equity capital contribution agreement in a Subject Fund or any guaranty agreement by SolarCity in favor of an Investor or other party with respect to a Subject Fund.

(c) Neither the Managing Member nor the Subject Fund has incurred any Debt or other obligations or liabilities, direct or contingent other than (i) with respect to the Managing Member, (x) the Debt and other obligations and liabilities arising under the Financing Documents and (y) contingent indemnification obligations and loans required to be made to the Subject Fund, in each case under clause (y) , under the Project Documents, (ii) with respect to the

Kronor Loan Agreement – Appendices Appendix 7 - 1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Subject Fund, the Debt and other obligations and liabilities (including for Taxes) arising under or in relation to the Project Documents or (iii) Debt in accordance with Section 6.3 of the Loan Agreement and otherwise in connection with Permitted Liens. No claim with respect to the contingent indemnification obligations of the Managing Member under any Project Document has been asserted on or prior to the date hereof and remains outstanding.

(d) No loan to the Subject Fund required or permitted to be made under the Project Documents has been made and remains outstanding, except loans required to be made under a Project Document that have been disclosed in writing to the Administrative Agent and the Lenders or that otherwise constitute Debt in accordance with Section 6.3 of the Loan Agreement. All preferred return payments required to be made on or prior to such date pursuant to the Subject Fund operating agreement(s) have been made.

(e) Except as otherwise listed on Appendix 4 , the Managing Member is a limited liability company that is disregarded for federal income tax purposes.

(f) Neither the Managing Member nor the Subject Fund is in breach or default under or with respect to any contractual obligation for or with respect to any outstanding amount or amounts payable under such contractual obligation that equals or exceeds $ [***] individually or $[***] in the aggregate.

(g) Neither the Managing Member nor the Subject Fund has conducted any business other than the business contemplated by the Project Documents applicable to such Managing Member and the Subject Fund.

(h) The Managing Member has not been removed as Managing Member under the Subject Fund operating agreement(s) nor has the Managing Member given or received notice of an action, claim or threat of removal nor, to the Borrower’s Knowledge, has any event occurred that permits removal.

(i) No event has occurred under the Subject Fund operating agreement(s) that would allow the Investor or another member to remove, or give notice of removal of, the Managing Member.

(j) No event or circumstance occurred and is continuing that has resulted or would reasonably be expected result in or trigger any limitation, reduction, suspension or other restriction on distributions or other periodic payments to the Managing Member or the Subject Fund under the applicable Project Documents (any such event or circumstance, a “ Cash Sweep Event ”). For the avoidance of doubt, “ Cash Sweep Event ” shall not include any insolation-, customer default-, or serial defect-related events or circumstances, or other events or circumstances, that are not specifically addressed in the applicable Project Documents as limiting, reducing, suspending or otherwise restricting distributions or other periodic payments to the Managing Member or the Subject Fund.

(k) There are no actions, suits, proceedings, claims or disputes pending or, to the Borrower’s Knowledge, threatened in writing or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Subject Fund or the Managing Member, or against either of their properties or revenues that, either individually or in the aggregate, could

Kronor Loan Agreement – Appendices Appendix 7 - 2

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

reasonably be expected to have a Material Adverse Effect or that could have a material adverse effect on the Funded Systems owned by the Subject Fund or the Subject Fund or on the legality, validity or enforceability of any of the Loan Documents, the operating agreement of the Subject Fund, the master lease in the Subject Fund, the EPC, master purchase agreement or equity capital contribution agreement in the Subject Fund or any guaranty agreement by SolarCity in favor of an Investor or other party with respect to the Subject Fund.

(l) No notice or action challenging the tax structure, tax basis validity, tax characterization or tax-related legal compliance of the Subject Fund or the tax benefits associated with the Subject Fund is ongoing or has been resolved in a manner adverse to the Subject Fund or Managing Member, in each case, that would reasonably be expected to have a material adverse effect on such Subject Fund or Managing Member.

(m) The only holders of Equity Interests in each Subject Fund are with respect to a Partnership or Lessor Partnership, (i) the applicable Managing Member and (ii) either an Investor or a Lessee and, except as expressly set forth in each Subject Fund’s operating agreement, (A) there are no additional outstanding Equity Interests with respect to such Subject Fund and (B) there are no outstanding obligations of any Subject Fund to repurchase, redeem, or otherwise acquire any membership or other equity interests in such Subject Fund or to make payments to any Person, such as “phantom stock” payments, where the amount thereof is calculated with reference to the fair market value or equity value of such Subject Fund. The class or classes of membership interests that each Subject Fund is authorized to issue and has issued are expressly set forth in its operating agreement.

(n) With respect to [***], the Loans made under this Agreement are a “Qualifying Class B Borrowing” as defined in LLC Agreement for [***].

(o) The Subject Fund has filed, or has caused to be filed with the appropriate tax authority, all federal, State and local tax returns that it is required to file and has paid or has caused to be paid all taxes it is required to pay to the extent due; provided , however , that the Subject Fund may contest in good faith any such taxes and, in such event, may permit the taxes so contested to remain unpaid during any period, including appeals, when the Subject Fund is in good faith contesting the same, so long as such contest is pursued in accordance with the requirements of each applicable Project Document. There is no action, suit, proceeding, investigation, audit or claim now pending by a taxing authority regarding any taxes relating to the Subject Fund that could, if made, individually or in the aggregate have a Material Adverse Effect or that could have a material adverse effect on the Subject Fund.

(p) The Borrower has delivered to the Administrative Agent the most recent financial statements (including the notes thereto) prepared in respect of each Subject Fund pursuant to the requirements of such Subject Fund’s Organizational Documents, and such financial statements (if any) (a) fairly present in all material respects the financial condition of such Subject Fund as of the date thereof and (b) have been prepared in accordance with the requirements of such Subject Fund’s Organizational Documents. Such financial statements and notes thereto disclose all direct or contingent material liabilities of such Subject Fund as of the dates thereof, including liabilities for taxes, material commitments and Debt.

Kronor Loan Agreement – Appendices Appendix 7 - 3

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

(q) Except to the extent a Tax Equity Required Consent is obtained in respect of a Subject Fund that is a Partnership or Lessor Partnership, the limited liability company agreement of the Subject Fund permits (i) the initial assignment of the Equity Interests in the Managing Member to the Borrower, (ii) the pledge by the Borrower of its Equity Interest in the Managing Manager to the Collateral Agent pursuant to the Security Agreement and (iii) the pledge by the Member of its Equity Interest in the Borrower to the Collateral Agent pursuant to the Pledge Agreement, in each case without any prior written consent or approval of the Investor or Lessee, as applicable. Except to the extent a Tax Equity Required Consent is obtained in respect of a Subject Fund that is a Lessor Partnership with respect to each Partnership Lease Pass-Through Structure, the Collateral Agent may exercise remedies in respect of its security interest in the Equity Interest of the Borrower or in the Equity Interest of the applicable Lessor Managing Member, including foreclosure and transfer thereof in lieu of foreclosure, in each case without any prior written consent or approval of any Lessee or the application of any other conditions. Except to the extent a Tax Equity Required Consent is obtained in respect of a Subject Fund that is a Partnership, with respect to each Partnership Flip Structure, the Collateral Agent may exercise remedies in respect of its security interest in the Equity Interest of the Borrower or in the Equity Interest of the applicable Partnership Managing Member, including foreclosure and transfer thereof in lieu of foreclosure, on the terms and subject to the conditions (if any) expressly set forth in the limited liability company agreement of the applicable Subject Fund.

(r) Each Partnership is party to each Customer Agreement in respect of each System owned by such Partnership and is entitled to receive the payments made by each Host Customer each the related Customer Agreement.

Part II –– If the Subject Fund is an Inverted Lease

(a) The Subject Fund (i) has entered into only one tax equity transaction, namely the applicable Tax Equity Structure, and has entered into no agreements other than the Project Documents or other agreements relating to the transactions contemplated therein and (ii) owns no assets other than (x) the PV Systems and related Customer Agreements and (y) its contractual rights arising from the Project Documents related to such Tax Equity Structure. The Project Documents for such Subject Fund are listed on Appendix 4 . Copies of all Project Documents as currently in effect have been delivered via electronic dataroom to the Administrative Agent by the Borrower. Each Project Document to which the Subject Fund is a party is a legal, valid and binding obligation of such Subject Fund, enforceable against such Subject Fund in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar Laws affecting the enforcement of creditors’ rights generally and subject to general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law). None of the Project Documents to which the Subject Fund is a party has been amended or modified since the effective date of such Project Document other than as set forth on Appendix 4 or permitted by Section 6.10(a) . The Subject Fund is not party to any material contract, agreement or other undertaking except the Project Documents and any other contract, agreement or undertaking previously disclosed in writing to the Administrative Agent.

Kronor Loan Agreement – Appendices Appendix 7 - 4

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

or event of default could not reasonably be expected to have a Material Adverse Effect or that could have a material adverse effect on the Funded Systems or any Subject Fund or on the legality, validity or enforceability of the operating agreement of the Subject Fund, or the master lease in the Subject Fund or any guaranty agreement by SolarCity in favor of an Investor or other party with respect to a Subject Fund.

(c) The Subject Fund has not incurred any Debt or other obligations or liabilities, direct or contingent other than (i) the Debt and other obligations and liabilities (including for Taxes) arising under or in relation to the Project Documents or (ii) Debt in accordance with Section 6.3 of the Loan Agreement and otherwise in connection with Permitted Liens. No claim with respect to the contingent indemnification obligations of the Subject Fund under any Project Document has been asserted on or prior to the date hereof and remains outstanding.

(d) Except as otherwise listed on Appendix 4 , the Subject Fund is a limited liability company that is disregarded for federal income tax purposes.

(e) The Subject Fund is not in breach or default under or with respect to any contractual obligation for or with respect to any outstanding amount or amounts payable under such contractual obligation that equals or exceeds $50,000 individually or $250,000 in the aggregate.

(f) The Subject Fund has not conducted any business other than the business contemplated by the Project Documents applicable to the Subject Fund.

(g) There are no actions, suits, proceedings, claims or disputes pending or, to the Borrower’s Knowledge, threatened in writing or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Subject Fund, or against its properties or revenues that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or that could have a material adverse effect on the Funded Systems owned by the Subject Fund or the Subject Fund or on the legality, validity or enforceability of any of the Loan Documents, the operating agreement of the Subject Fund, the master lease in the Subject Fund or any guaranty agreement by SolarCity in favor of an Investor or other party with respect to the Subject Fund.

(h) No notice or action challenging the tax structure, tax basis validity, tax characterization or tax-related legal compliance of the Subject Fund or the tax benefits associated with the Subject Fund is ongoing or has been resolved in a manner adverse to the Subject Fund that would reasonably be expected to have a material adverse effect on such Subject Fund or Managing Member.

(i) The only holders of Equity Interests in the Subject Fund is the Borrower, and except as expressly set forth in each Subject Fund’s operating agreement, (A) there are no additional outstanding Equity Interests with respect to such Subject Fund and (B) there are no outstanding obligations of any Subject Fund to repurchase, redeem, or otherwise acquire any membership or other equity interests in such Subject Fund or to make payments to any Person, such as “phantom stock” payments, where the amount thereof is calculated with reference to the fair market value or equity value of such Subject Fund. The class or classes of membership

Kronor Loan Agreement – Appendices Appendix 7 - 5

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

interests that each Subject Fund is authorized to issue and has issued are expressly set forth in its operating agreement.

(j) The Subject Fund has filed, or has caused to be filed with the appropriate tax authority, all federal, State and local tax returns that it is required to file and has paid or has caused to be paid all taxes it is required to pay to the extent due; provided , however , that the Subject Fund may contest in good faith any such taxes and, in such event, may permit the taxes so contested to remain unpaid during any period, including appeals, when the Subject Fund is in good faith contesting the same, so long as such contest is pursued in accordance with the requirements of each applicable Project Document. There is no action, suit, proceeding, investigation, audit or claim now pending by a taxing authority regarding any taxes relating to the Subject Fund that could, if made, individually or in the aggregate have a Material Adverse Effect or that could have a material adverse effect on the Subject Fund.

(k) The Borrower has delivered to the Administrative Agent the most recent financial statements (including the notes thereto) prepared in respect of each Subject Fund pursuant to the requirements of such Subject Fund’s Organizational Documents, and such financial statements (if any) (i) fairly present in all material respects the financial condition of such Subject Fund as of the date thereof and (ii) have been prepared in accordance with the requirements of such Subject Fund’s Organizational Documents. Such financial statements and notes thereto disclose all direct or contingent material liabilities of such Subject Fund as of the dates thereof, including liabilities for taxes, material commitments and Debt.

(l) Except to the extent a Tax Equity Required Consent is obtained in respect to a Subject Fund, the master lease agreement of the Subject Fund permits (i) the initial assignment of the Equity Interests in the Lessor to the Borrower, (ii) the pledge by the Borrower of its Equity Interest in the Lessor to the Collateral Agent pursuant to the Pledge Agreement and (iii) the pledge by the Member of its Equity Interest in the Borrower to the Collateral Agent pursuant to the Pledge Agreement, in each case without any prior written consent or approval of the Investor or Lessee, as applicable.

Part III –– If the Subject Fund is a Repeat Tax Equity Structure

(a) Solely with respect to a Repeat Tax Equity Structure, the Subject Fund uses a Tax Equity Structure that is on substantially similar terms as those previously approved by the Administrative Agent and Lenders with respect to the same Investor (or an Affiliate of such Investor), the Borrower has provided the Administrative Agent with a written explanation of those terms that are not substantially similar to those of the previously approved transaction, and any terms that are not substantially similar have not been materially and adversely changed relative to that of the Subject Fund previously approved by the Administrative Agent and Lenders.

Kronor Loan Agreement – Appendices Appendix 7 - 6

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Other Financed Structure or Other Non-Financed Structure Representations

Part IV – Other Financed Structure or Other Non-Financed Structure Representations

As of the date that an Other Financed Structure or Other Non-Financed Structure is designated as a Subject Fund, with respect to such Subject Fund, Borrower hereby makes the following representations:

(a) The Subject Fund owns no assets other than the Systems and the contractual rights related thereto and has engaged in no other business (other than owning and managing the Systems).

(b) The Project Documents of the Subject Fund are in full force and effect and no material breach, default or event of default has occurred and is continuing thereunder, except as would not reasonably be expected to have a Material Adverse Effect or that could have a material adverse effect on the Funded Systems or any Subject Fund or on the legality, validity or enforceability of the operating agreement of a Subject Fund, the master lease, if any, in a Subject Fund, the EPC, master purchase agreement or equity capital contribution agreement, if any, in a Subject Fund or any guaranty agreement by SolarCity in favor of an Investor or other party with respect to a Subject Fund.

(c) Neither the Managing Member, if any, nor the Subject Fund has incurred any Debt or other obligations or liabilities, direct or contingent other than (i) with respect to the Managing Member, if any, (x) the Debt and other obligations and liabilities arising under the Financing Documents and (y) contingent indemnification obligations and loans required to be made to the Subject Fund, in each case under clause (y) , under the Project Documents, (ii) with respect to the Subject Fund, the Debt and other obligations and liabilities (including for Taxes) arising under or in relation to the Project Documents or (iii) Debt in accordance with Section 6.3 of the Loan Agreement and otherwise in connection with Permitted Liens.

(d) [Reserved.]

(e) The Subject Fund or related Managing Member or wholly-owned subsidiary of the Borrower, as applicable, is a limited liability company that is disregarded for federal income tax purposes.

(f) The Subject Fund is not in breach or default under or with respect to any contractual obligation for or with respect to any outstanding amount or amounts payable under such contractual obligation that equals or exceeds $50,000 individually or $250,000 in the aggregate.

(g) All revenue received by the Managing Member or wholly-owned subsidiary of the Borrower that is a Funded Subsidiary, as applicable, net of operating expenses, shall at all times be distributed to the Borrower.

(h) There are no actions, suits, proceedings, claims or disputes pending or threatened in writing or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Subject Fund or Managing Member or wholly-owned subsidiary of

Kronor Loan Agreement – Appendices Appendix 7 - 7

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

the Borrower, as applicable, or its properties or revenues that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

Kronor Loan Agreement – Appendices Appendix 7 - 8

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

APPENDIX 8

APPROVED MANUFACTURERS

Panels

[***]

Inverters

[***]

Kronor Loan Agreement – Appendices Appendix 8 - 1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

APPENDIX 9

FUNDAMENTAL TAX EQUITY STRUCTURE CHARACTERISTICS

Part I – Fundamental Partnership Flip Structure

1.	Borrower or an affiliate shall have formed a limited liability company (the “ Subject Fund” ) that has been formed for the sole purpose of owning PV Systems that have been leased to or are producing power for sale to host customers (the “ Systems ”).

2.	The Limited Liability Company Agreement of the Subject Fund (the “ LLCA ”) provides for two classes of limited liability company interests – for purposes of this Part I, “ SolarCity Units ” and “ Investor Units .”

3.	The LLCA provides that the Subject Fund will make no election to be treated other than as a partnership for federal tax purposes.

A wholly owned subsidiary of the Borrower owns the SolarCity Units (as holder thereof, the “ SolarCity Member ”) and the tax equity investor (the “ Investor ”) owns the Investor Units (as holder thereof, the “ Investor Member ”). The SolarCity Member and the Investor Member are collectively referred to herein as the “ Members .”

5.	SolarCity Member has been appointed as the initial managing member of the Subject Fund (in such capacity, the “ Manager ”).

6.	The LLCA provides a standard of care that requires the Manager to manage the Subject Fund in accordance with prudent industry standards or to observe the duty of good faith and fair dealing.

7.	The Subject Fund will acquire each System pursuant to an agreement (the “ EPC Contract ”) with an affiliate of the Borrower (the “ Seller ”).

Part II – Fundamental Partnership Lease Pass Through Structure

Borrower or an affiliate has formed two limited liability companies, one for the sole purpose of owning PV Systems that have been leased to or are producing power for sale to Host Customers pursuant to Customer Agreements (the “ Systems ”) (such entity, the “ Subject Fund ”) and one for the sole purpose of leasing the Systems from the Subject Fund and managing the Systems (the “ Master Tenant ”).

2.	The Limited Liability Company Agreement of the Subject Fund (the “ Subject Fund LLCA ”) provides for two classes of limited liability company interests – for purposes of this Part II, “ Subject Fund Class A Units ” and “ Subject Fund Class B Units .”

3.	The LLCA provides that the Subject Fund will make no election to be treated other than as a partnership for federal tax purposes.

Kronor Loan Agreement – Appendices Appendix 9 - 1

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

A wholly owned subsidiary of the Borrower owns the Subject Fund Class A Units (as holder thereof, the “ Subject Fund Class A Member ”) and the Master Tenant (as holder thereof, the “ Subject Fund Class B Member ”) owns the Subject Fund Class B Units. The Subject Fund Class A Member and the Subject Fund Class B Member are collectively referred to herein as the “ Subject Fund Members .”

A wholly owned subsidiary of SolarCity that is different than the Subject Fund Class A Member and owns the Class A Units of the Master Tenant (as holder thereof, the “ Master Tenant Class A Member ”) and the tax equity investor(s) (collectively, the “ Investor ”) owns the Class B Units of the Master Tenant (as holder thereof, the “ Master Tenant Class B Member ”). The Master Tenant Class A Member and the Master Tenant Class B Member are collectively referred to herein as the “ Master Tenant Members .”

6.	The Subject Fund Class A Member has been appointed as the initial managing member of the Subject Fund (in such capacity, the “ Subject Fund Manager ”).

7.	Master Tenant Class A Member has been appointed as the initial managing member of the Master Tenant (in such capacity, the “ Master Tenant Manager ”).

8.	The Subject Fund LLCA provides a standard of care that requires the Subject Fund Manager to manage the Subject Fund in accordance with prudent industry standards or to observe the duty of good faith and fair dealing.

Subject Fund has acquired each System pursuant to an agreement (the “ ECCA ”) with an affiliate of the Borrower (the “ Seller ”). Each System was acquired prior to it receiving permission to operate. Master Tenant has leased each System from Subject Fund pursuant to a lease agreement (the “ Master Lease ”). A portion of the rent or power payments paid to the Master Tenant by the host customers is used to pay rent to Subject Fund on a quarterly basis under the Master Lease.

Part III – Fundamental Inverted Lease Structure

Borrower shall own 100% of the membership interests of a limited liability company (the “ Subject Fund ”) that has been formed for the sole purpose of owning PV Systems that have been leased to or are producing power for sale to host customers (the “ Systems ”) and leasing such Systems to a bankruptcy-remote subsidiary of an Investor, as lessee (the “ Lessee ”).

2.	The Lessor has entered into a master lease (the “ Master Lease ”) with the Lessee.

The Lessee is required at its cost and expense to (i) keep all Systems in good repair, good operating condition, appearance and working order in compliance with Applicable Law, all manufacturer’s warranties and recommendations, and Lessee’s standard practices (but in no event less than prudent industry standards; (ii) properly service all components of all PV Systems following the manufacturer’s written operating and servicing procedures; (iii) enter into and keep in full force and effect during the duration of the Master Lease an operation, maintenance and administration agreement covering the PV Systems with a

Kronor Loan Agreement – Appendices Appendix 9 - 2

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maintenance services provider; and (iv) replace any part of, and make modifications and alterations to, a System in accordance with the Master Lease.

Kronor Loan Agreement – Appendices Appendix 9 - 3

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Appendix 10

CONVENTIONAL TAX EQUITY STRUCTURE CHARACTERISTICS

Part I – Conventional Partnership Flip Structure

1.	The Investor shall execute in favor of the Administrative Agent a written acknowledgement that the Partnership Managing Member’s discretion to consent to the imposition of any Lien on any System may be subject to the prior written consent of the Administrative Agent under this Agreement.

2.	The Managing Member is a limited liability company that is disregarded for federal income tax purposes.

3.	Any priority return payable to the Investor has not materially and adversely changed relative to that of any Partnership Flip Structure previously approved by the Administrative Agent.

As a condition to the inclusion of such Partnership as a Subject Fund, the Partnership Managing Member shall grant the Collateral Agent a security interest in all assets of the Partnership Managing Member, and all necessary actions shall be taken to perfect such security interest in the assets of the Partnership Managing Member.

5.	As a condition to the inclusion of such Partnership as a Subject Fund, Borrower shall deliver an opinion of counsel confirming that the liens to be granted to the Collateral Agent in respect of such Subject Fund do not violate the LLCA.

6. The Subject Fund is not a Cash Sweep Fund.

Manager is solely responsible for the management of the Systems (other than with respect to the obligations of any third party the Subject Fund has engaged to provide maintenance services in respect of the PV Systems) and the Subject Fund subject to certain customary approval rights of the Investor Member. The Subject Fund shall be prohibited from incurring any indebtedness above a limit specified in the Subject Fund operating agreement without the Investor Member’s consent and from incurring or granting or suffering to exist any liens on its assets other than such liens in the ordinary course of such business that are customarily permitted without the Investor Member’s consent.

8.	The Manager is required to manage the Subject Fund in accordance with prudent industry standards or subject to the fiduciary duties of care and loyalty.

9.	Cash available for distribution to the Members will be distributed at least quarterly (or annually with respect to certain items) in accordance with an agreed upon priority, subject to customary exceptions (including end of year true-up and curative flip allocations).

Kronor Loan Agreement – Appendices Appendix 10 - 1

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10.	After certain criteria have been satisfied, the SolarCity Member will have the option to purchase all of the Investor Units from the Investor Member for a stated amount or pursuant to an agreed methodology (which may include a purchase price equal to the greater of (x) [*] or (y) [*] .

11.	The LLCA may not be amended without the written consent of each Member.

12.	SolarCity Member’s obligation to indemnify the Investor Member, if any, is limited to customary indemnities for breach of the LLCA or bad acts, standard tax indemnities (but not structure or tax ownership) and [*]. [*].

13.	No provision in the LLCA would require or cause the SolarCity Member to forfeit, transfer or otherwise divest itself of such Member’s economic interest in the Subject Fund or would under any circumstance revise or otherwise modify any rights associated with the SolarCity Units, [***].

14.	The Project Documents require the Managing Member to appoint and maintain an operations and maintenance provider for each System.

15.

The LLCA identifies fixed tax assumptions regarding the treatment of the Subject Fund as a partnership, tax ownership of the Systems, depreciation, allocations of income and loss, and economic substance and requires that the Investor Member’s return be calculated in accordance with the fixed tax assumptions and that tax returns be prepared in accordance with the fixed tax assumptions.

16.

The Manager may not be removed in its capacity as managing member of the Subject Fund other than as a result of (i) failure by the Manager to pay (or have paid on its behalf) any indemnity amount due and payable by it to any other Member, (ii) any material uncured breach of the LLCA, (iii) the Manager violating or causing the Subject Fund or the Systems to violate any applicable Law, (iv) fraud, gross negligence, willful misconduct, misappropriation or mishandling of funds or breach of fiduciary duties, (v) bankruptcy or insolvency of the Manager or the Subject Fund, (vi) the Manager ceasing to be an Affiliate of SolarCity or (vii) failure of the Manager to enforce the Subject Fund’s material rights under any material document to which the Subject Fund is a party.

Part II – Conventional Partnership Lease Pass Through Structure

1.	The Investor shall execute in favor of the Administrative Agent a written acknowledgement that the Lessor Managing Member’s discretion to consent to the imposition of any Lien on any System may be subject to the prior written consent of the Administrative Agent under this Agreement.

2.	The Managing Member is a limited liability company that is disregarded for federal income tax purposes.

3.	Any priority return payable to Subject Fund Class B Member has not materially and adversely changed relative to that of any Inverted Lease Structure previously approved by the Administrative Agent.

Kronor Loan Agreement – Appendices Appendix 10 - 2

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As a condition to the inclusion of such Lessor Partnership as a Subject Fund, the Lessor Managing Member shall grant the Collateral Agent a security interest in all assets of the Lessor Managing Member, and all necessary actions shall be taken to perfect such security interest in the assets of the Lessor Managing Member.

5.	As a condition to the inclusion of such Lessor Partnership as a Subject Fund, Borrower shall deliver an opinion of counsel confirming that the liens to be granted to the Collateral Agent in respect of such Subject Fund do not violate the Subject Fund LLCA.

6. The Subject Fund is not a Cash Sweep Fund.

Master Tenant Manager is solely responsible for the management of the Systems and the Master Tenant subject to certain customary approval rights of the Master Tenant Class B Member. Subject Fund Manager is solely responsible for the management of the Owner subject to certain customary approval rights of the Subject Fund Class B Member, which also requires the approval of the Master Tenant Class B Member.

The Subject Fund is prohibited from incurring any indebtedness above a limit specified in the Subject Fund LLCA without the Subject Fund Class B Member’s consent, which decision requires the consent of the Investor, and from incurring or granting or suffering to exist any liens on its assets other than ordinary course liens that are customarily permitted. The Master Tenant is prohibited from incurring or granting or suffering to exist any liens on any System (or any portion thereof) other than ordinary course liens that are customarily permitted.

9.	Aside from specially allocated items, profits, losses and deductions are generally allocated between the Subject Fund Members in proportion to their respective percentages interests as set forth in the Subject Fund LLCA.

10.	Cash available for distribution to the Subject Fund Members will be distributed at least quarterly (or annually with respect to certain items) in accordance with the agreed upon priority in the Subject Fund LLCA. Subject Fund has elected to pass through the ITC benefits to Master Tenant.

11.	The Subject Fund LLCA may not be amended without the written consent of each Subject Fund Member.

12.	Subject Fund Class A Member’s obligation to indemnify the Subject Fund Class B Member or Investor, if any, is limited to customary indemnities for breach of the Subject Fund LLCA or bad acts, standard tax indemnities (but not structure or tax ownership) and [*]. [*].

13.

No provision in the Subject Fund LLCA would require or cause the Subject Fund Class A Member to forfeit, transfer or otherwise divest itself of such Member’s economic interest in the Subject Fund or would under any circumstance revise or otherwise modify any rights associated with the Subject Fund Class A Units, [***].

14.	[Reserved.]

Kronor Loan Agreement – Appendices Appendix 10 - 3

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15.

The Subject Fund Manager may not be removed in its capacity as managing member of the Subject Fund other than as a result of (i) any material uncured breach of the Subject Fund LLCA or any other transaction documents relating to the Subject Fund, (ii) violation of any applicable Law, (iii) fraud, gross negligence, intentional misconduct, intentional malfeasance, acting outside the scope of authority, failure to exercise reasonable care, misappropriation or mishandling of funds or breach of fiduciary duties, (iv) bankruptcy or insolvency of the Manager, SolarCity or the Subject Fund, (v) removal of the Master Tenant Manager by the Investor pursuant to the Master Tenant operating agreement, (vi) failure of the Subject Fund to qualify as a limited liability company, (vii) termination of the Subject Fund for federal income tax purposes or (viii) the Subject Fund being treated as an association, taxable as a corporation for federal income tax purposes.

Part III – Conventional Inverted Lease Structure

1.	Lessee has agreed to subordinate the payments by and obligations of Lessor to the lender and other secured parties under the financing documents relating to the Lessor Financing.

2.	Periodic rent is payable at least quarterly and the Lessee has no right to set-off any amounts with respect to the payment of such rents, including as a result of any failure to make indemnification payments.

The Subject Fund’s obligation to indemnify the Lessee, if any, will be limited to customary indemnities for breach of the Master Lease or bad acts, standard tax indemnities (but not structure, including that the Master Lease is a “true lease”) and environmental indemnities. Any such obligation to indemnify the Lessee is guaranteed by SolarCity.

4.	The Subject Fund is a limited liability company that is disregarded for federal income tax purposes.

The Lessee is required to enter into a maintenance services agreement in form and substance satisfactory to the Subject Fund with, in the Subject Fund’s reasonable discretion, a creditworthy maintenance services provider, and the Lessee may not materially amend or terminate any maintenance services agreement without the written consent of Lessor.

The Subject Fund may, without Lessee’s consent, incur debt to monetize the future rents to be received by Subject Fund (the “Lessor Financing”); provided, that the Lessor Financing is non-recourse to Lessee and lenders will agree that, so long as Lessee continues to perform under the Master Lease, the Master Lease will stay in place and the lender cannot disturb Lessee’s rights thereunder (with the lender or its assignee having the right to assume Lessor’s position under this Agreement, should there be a foreclosure under the Lessor Financing).

7.	The The Master Lease may not be amended without the written consent of each party thereto.

Kronor Loan Agreement – Appendices Appendix 10 - 4

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8.	No Lessor Section 467 Loan Balance (as defined in the Master Lease) is payable without a payment of a corresponding Termination Value.

9.	There is no right of Lessee to renew the Master Lease, or if there is a renewal option, the periodic rents for the renewal term will be no less than an independently-assessed fair rental value of the Projects, determined at the end of the initial term by an appraisal.

10.	Lessee does not have a right to purchase all the Systems at the end of the Master Lease term.

Kronor Loan Agreement – Appendices Appendix 10 - 5

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Exhibit 10.19a

CONFIDENTIAL TREATMENT REQUESTED

MAJORITY GROUP AGENT ACTION NO. 1

This MAJORITY GROUP AGENT ACTION NO. 1, dated as of May 18, 2015 (this “ Consent ”), is entered into among the undersigned in connection with that certain Loan Agreement dated as of May 4, 2015 (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “ Loan Agreement ”), by and among Megalodon Solar, LLC (the “ Borrower ”), SolarCity Corporation, a Delaware corporation, solely in its capacity as limited guarantor, the lenders from time to time party thereto, the group agents from time to time party thereto (collectively, the “ Group Agents ”), Bank of America, N.A., as the administrative agent (the “ Administrative Agent ”) and as the collateral agent, Bank of America, N.A. and Credit Suisse Securities (USA) LLC, as joint structuring agents, and Bank of America, N.A., Credit Suisse Securities (USA) LLC and Deutsche Bank AG, New York Branch, as joint book runners and joint lead arrangers. As used in this Consent, capitalized terms which are not defined herein shall have the meanings ascribed to such terms in the Loan Agreement.

W I T N E S S E T H

WHEREAS, under the terms of Section 2.13(a) of the Loan Agreement, the Borrower shall have ten (10) Business Days from the initial Borrowing Date to enter into one or more Interest Rate Hedge Agreements in respect of the initial Borrowing;

WHEREAS, under the terms of Section 5.19(b) of the Loan Agreement, the Borrower has ten (10) Business Days from the Closing Date to obtain the [***] Tax Equity Required Consent (the “ [***] Consent ”) and fifteen (15) Business Days from the Closing Date to deliver an opinion of Wilson Sonsini Goodrich & Rosati in respect of the [***] Tax Equity Required Consent (“ [***] WSGR Opinion ”);

WHEREAS, the Borrower has requested that the Majority Group Agents consent to extend such deadline of the Interest Rate Hedge Agreements to June 19, 2015;

WHEREAS, the Borrower has requested that the Group Agents representing each of Bank of America, N.A., in its capacity as Committed Lender, Credit Suisse AG, Cayman Islands Branch, in its capacity as Committed Lender, and GIFS Capital Company LLC, in its capacity as Conduit Lender, consent to extend (i) such deadline of the [***] Consent to May 29, 2015 and (ii) such deadline of the [***] WSGR Opinion to June 5, 2015; and

WHEREAS, the Administrative Agent and the Majority Group Agents (including the Group Agents representing each of Bank of America, N.A. and Credit Suisse AG, Cayman

-1- Majority Group Agent Action No. 1

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Islands Branch, each in their capacity as Committed Lenders) are willing to grant such consents subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Consent .

(a) Pursuant to Section 9.14(a) of the Loan Agreement, the Majority Group Agents hereby agree (i) to extend the deadline under Section 2.13(a) of the Loan Agreement, with respect to the initial Borrowing only, to June 19, 2015 and (ii) that, notwithstanding anything in the Loan Agreement to the contrary, entering into any Interest Rate Protection Agreement shall not constitute a condition to any Borrowing prior to June 19, 2015 nor shall failure to enter into such Interest Rate Protection Agreements in connection with any such Borrowing constitute a Default or Event of Default; provided , that the Borrower shall enter into such Interest Rate Protection Agreements by June 19, 2015 with respect to any Borrowing made on or prior to such date.

(b) Pursuant to Section 9.14(a)(vii) of the Loan Agreement, the Group Agents representing each of Bank of America, N.A., in its capacity as Committed Lender, Credit Suisse AG, Cayman Islands Branch, in its capacity as Committed Lender, and GIFS Capital Company LLC, in its capacity as Conduit Lender, hereby agree to extend (i) the deadline of the [***] Consent to May 29, 2015 and (ii) the deadline of the [***] WSGR Opinion to June 5, 2015.

2. Miscellaneous .

(a) The consents provided in Section 1 hereof shall be applicable solely with respect to those matters expressly provided therein, and no other amendments, waivers or consents are given herein or may be otherwise construed or implied. This Consent shall be binding upon and inure to the benefit of and be enforceable by the respective successors and permitted assigns of the parties hereto.

(b) Each of the Loan Agreement and the other Financing Documents is and shall remain unchanged and in full force and effect, and, except as expressly set forth herein, nothing contained in this Consent shall, by implication or otherwise, limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Administrative Agent or any of the other Secured Parties, or shall alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in each of the Loan Agreement and any other Financing Document.

(c) Incorporation by Reference . Sections 10.5 ( Entire Agreement ), 10.6 ( Governing Law ), 10.7 ( Severability ), 10.8 ( Headings ), 10.11 ( Waiver of Jury Trial ), 10.12 ( Consent to Jurisdiction ), 10.14 ( Successors and Assigns ) and 10.16 ( Binding Effect; Counterparts ) of the Loan Agreement are hereby incorporated by reference herein, mutatis mutandis .

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(d) Financing Document . This Consent shall be deemed to be a Financing Document.

(e) Acknowledgement . Each party hereto acknowledges that the terms of this Consent shall not constitute a course of dealing among the parties hereto.

[ Signature Pages Follow ]

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IN WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed and delivered by their duly authorized officers as of the day and year first above written.

MEGALODON SOLAR, LLC ,
as Borrower

By: /s/ Brad Buss

Name: Brad Buss

Title: Treasurer

Majority Group Agent Action No 1

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BANK OF AMERICA, N.A. , as a Group Agent

By: /s/ Sheikh Omer-Farooq

Name: Sheikh Omer-Farooq

Title: Director

Majority Group Agent Action No 1

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CREDIT SUISSE AG, NEW YORK BRANCH , as a Group Agent

By: /s/ Erin McCutcheon

Name: Erin McCutcheon

Title: Vice President

By: /s/ Patrick J. Hart

Name: Patrick J. Hart

Title: Vice President

Majority Group Agent Action No 1

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DEUTSCHE BANK AG, NEW YORK BRANCH , as a Group Agent

By: /s/ Vinod Mukani

Name: Vinod Mukani

Title: Director

By: /s/ Vanessa Lamort de Gail

Name: Vanessa Lamort de Gail

Title: Director

Majority Group Agent Action No 1

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Acknowledged:

bank of america, n.a. , as

Administrative Agent

By: /s/ Darleen R. Parmelee

Name: Darleen R. Parmelee

Title: Vice President

Majority Group Agent Action No 1

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Exhibit 10.19b

CONFIDENTIAL TREATMENT REQUESTED

REQUIRED GROUP AGENT ACTION NO. 2

This REQUIRED GROUP AGENT ACTION NO. 2 (this “ Action ”), dated as of June 26, 2015 (the “ Effective Date ”), is entered into by and among Megalodon Solar, LLC, a Delaware limited liability company (“ Borrower ”), Bank of America, N.A., as the Administrative Agent (“ Administrative Agent ”), the Collateral Agent for the Secured Parties (“ Collateral Agent ”) and the Depositary for the Secured Parties (the “ Depositary ”) and each of Bank of America, N.A. (“ BA Agent ”), Credit Suisse AG, New York Branch (“ CS Agent ”) and Deutsche Bank AG, New York Branch (“ DB Agent ”, and collectively with BA Agent and CS Agent, the “ Group Agents ”), as Group Agents party to the Loan Agreement, dated as of May 4, 2015 (as amended, the “ Loan Agreement ”), by and among the Borrower, Administrative Agent, Collateral Agent, the Group Agents, the Lenders and the other parties from time to time party thereto. As used in this Action, capitalized terms which are not defined herein shall have the meanings ascribed to such terms in the Loan Agreement .

A. The Borrower has requested the Required Group Agents to provide their consent to the addition and inclusion to the Loan Agreement and the other Financing Documents of (the “ Subject Fund Transactions ”): (1) [***] (“ [***] ”), as a Subject Fund, and [***] (“ [***] ”), as a Borrower Subsidiary Party, and (2) [***] (“ [***] ”), a Delaware limited liability company, as a Subject Fund (collectively, [***] , [***] and [***] , the “ New Entities ”);

B. The Required Group Agents are willing to provide their consent to the Subject Fund Transactions on the terms and subject to the conditions set forth in this Action; and

C. The Borrower, the Required Group Agents, the Administrative Agent, the Collateral Agent and the Depositary, as applicable, desire to amend the Loan Agreement and the CADA as set forth herein.

Accordingly, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and subject to the conditions set forth herein, the parties hereto hereby agree as follows:

Section 1. Amendments. Subject to the prior satisfaction of the conditions precedent described in Section 3 hereof:

(a) the Loan Agreement will be amended as set forth in Exhibit 1 attached hereto (the “ Amended Loan Agreement ”); and

(b) the CADA will be amended as set forth in Exhibit 2 attached hereto (the “ Amended CADA ”).

Section 2. Consents to the Loan Agreement . Subject to the prior satisfaction of the conditions precedent described in Section 3 hereof:

Required Group Agent Action No. 2

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(a) the Required Group Agents, consent to the amendments as set forth in the Amended Loan Agreement and the Amended CADA, with acknowledgement by each of the Administrative Agent, the Collateral Agent (solely with respect to its obligations under Article 9 of the Loan Agreement) and the Depositary (solely with respect to its obligations under the CADA); and

(b) the Administrative Agent and the Required Group Agents (i) consent to the Subject Fund Transactions pursuant to and in accordance with Section 2.10(a) of the Loan Agreement and (ii) agree (A) to extend the deadline under Section 11.11(a) of the Loan Agreement with respect to delivery of a Tax Loss Policy to the date that is 60 days after the Effective Date (such date, the “ Required Delivery Date ”) and (B) that failure to deliver any Tax Loss Policy before the Required Delivery Date shall not constitute a Default or Event of Default .

Section 3. Conditions Precedent. This Action shall be effective upon the satisfaction of the following conditions precedent:

(a) Each party to this Action shall have received counterparts of this Action, executed and delivered by each of the other parties hereto.

(b) The Administrative Agent shall have received a certificate of the Borrower dated as of the Effective Date signed by a Responsible Officer of the Borrower (i) making the Tax Equity Representations with respect to the [***] , (ii) making the Other Structure Representations with respect to the [***] and (iii) certifying that each representation and warranty of the Borrower contained in Article 4 of the Loan Agreement is true and correct in all material respects as of the Effective Date (unless such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct in all material respects as of such earlier date) other than those representations and warranties that are modified by materiality by their own terms, which shall be true and correct in all respects as of the Effective Date (unless such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct in all respects as of such earlier date).

(c) The Borrower shall have delivered or caused to be delivered to the Administrative Agent a waiver from each of [***] and [***] , of the obligation set forth in Section 9.2(a) of the Limited Liability Company Agreement of [***] , dated as of [***] , by and among [***] , [***] and [***] , in connection with the collateral assignment of each of (i) the [***] membership interests of [***] in [***] and (ii) the membership interests of Borrower in [***] , in each case to the Collateral Agent pursuant to the applicable Financing Documents.

(d) Each the Administrative Agent and each Group Agent shall have received an opinion, dated no earlier than the Effective Date, of Wilson Sonsini Goodrich & Rosati, counsel to the Loan Parties, the Borrower Subsidiary Parties and SolarCity, in form and substance reasonably acceptable to the Administrative Agent, the Collateral Agent and the Majority Group Agents, with respect to the Subject Fund Transactions.

(e) Each the Administrative Agent and each Group Agent shall have received opinions, dated no earlier than the Effective Date, of Proskauer Rose LLP, special bankruptcy counsel to the Loan Parties, the Borrower Subsidiary Parties and SolarCity, each in form and substance reasonably acceptable to the Administrative Agent, the Collateral Agent and the Majority Group Agents, with respect to the Subject Fund Transactions.

(f) The Administrative Agent and the Collateral Agent shall have received (i) searches of UCC filings in the jurisdiction of incorporation or formation, as applicable, of each of the New Entities and the Borrower and each jurisdiction where a filing would need to be made in

2 Required Group Agent Action No. 2

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order to perfect the security interest of the Collateral Agent (for the benefit of the Secured Parties) in the Collateral in respect of the New Entities (the “ New Collateral ”), (ii) copies of the financing statements on file in such jurisdictions and evidence that no Liens exist on the New Collateral pledged by [***] other than Permitted Liens, (iii) copies of the financing statements on file in such jurisdictions and evidence that no liens exist on the New Collateral pledged by [***] other than Permitted Liens of the type set forth in clauses (b), (c) or (d) of the definition thereof and (iv) copies of tax lien, judgment and bankruptcy searches in such jurisdictions.

(g) The Collateral Agent shall have received all documentation in connection with the New Collateral, including (i) a Joinder Agreement in the form attached as Exhibit C to the Security Agreement, executed by each of [***] , [***] , the Collateral Agent and the Borrower, dated as of the Effective Date, (ii) a Joinder Agreement in the form attached as Exhibit B-1 to the CADA, executed by each of [***] , [***] , the Collateral Agent and the Borrower, dated as of the Effective Date, (iii) the Pledge and Security Agreement (the “ Borrower Subsidiary Party Security Agreement ”), executed by each of [***] , [***] and the Collateral Agent, dated as of the Effective Date, in the form attached hereto as Exhibit 3 and (iv) any other data, documentation, analysis or report reasonably requested by the Administrative Agent with respect to the New Entities.

(h) The Administrative Agent shall have received a copy of the fully executed Maintenance Services Agreement, dated as of the Effective Date, by and among [***] and SolarCity Corporation and a fully executed Administrative Services Agreement, dated as of the Effective Date, by and among [***] and SolarCity Corporation.

(i) (i) The UCC financing statements relating to the New Collateral shall have been duly filed in each office and in each jurisdiction where required in order to create and perfect the first Lien and security interest set forth in the Collateral Documents (as supplemented and as such term is defined in the Amended Loan Agreement) and (ii) the Borrower shall have properly delivered or caused to be delivered to the Collateral Agent all New Collateral in which the Lien and security interest described above is permitted to be perfected by possession or control, including delivery of original certificates representing all issued and outstanding Equity Interests in [***] and [***] , and the pledged interests in the [***] pursuant to the Borrower Subsidiary Party Security Agreement, along with the applicable blank transfer powers and proxies

(j) Each of the other conditions precedent as set forth in Section 3.4 of the Loan Agreement shall have been satisfied with respect to the Subject Fund Transactions.

(k) The Administrative Agent shall have received for its own account all costs and expenses described in Section 6 of this Action, for which invoices have been presented in connection herewith.

Section 4. Reference to and Effect on Financing Documents. Each of the Loan Agreement, the CADA and the other Financing Documents is and shall remain unchanged and in full force and effect, and, except as expressly set forth herein, nothing contained in this Action shall, by implication or otherwise, limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Administrative Agent or any of the other Secured Parties, or shall alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in each of the Loan Agreement, the CADA and any other Financing Document . This Action shall also constitute a “Financing Document” for all purposes of the Loan Agreement and the other Financing Documents.

3 Required Group Agent Action No. 2

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Section 5. Incorporation by Reference . Sections 10.5 ( Entire Agreement ), 10.6 ( Governing Law ), 10.7 ( Severability ), 10.8 ( Headings ), 10.11 ( Waiver of Jury Trial ), 10.12 ( Consent to Jurisdiction ), 10.14 ( Successors and Assigns ) and 10.16 ( Binding Effect; Counterparts ) of the Loan Agreement are hereby incorporated by reference herein, mutatis mutandis.

Section 6. Expenses. The Borrower agrees to reimburse the Administrative Agent in accordance with Section 10.4(b) of the Loan Agreement for its reasonable and documented out-of-pocket expenses in connection with this Action, including reasonable and documented fees and out-of-pocket expenses of legal counsel.

Section 7. Construction. The rules of interpretation specified in Section 1.2 of the Loan Agreement also apply to this Action, mutatis mutandis.

[ Signature Pages Follow ]

4 Required Group Agent Action No. 2

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IN WITNESS WHEREOF, the parties hereto have caused this Action to be duly executed by their respective authorized officers as of the day and year first written above.

MEGALODON SOLAR, LLC ,

as Borrower

By: /s/ Brad Buss

Name: Brad Buss

Title: Treasurer

[ Signature Page to Required Group Agent Action No. 2 ]

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BANK OF AMERICA, N.A. ,

as a Group Agent

By: /s/ Sheikh Omer-Farooq

Name: Sheikh Omer-Farooq

Title: Director

[ Signature Page to Required Group Agent Action No. 2 ]

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CREDIT SUISSE AG, NEW YORK BRANCH ,

as a Group Agent

By: /s/ Patrick J. Hart

Name: Patrick J. Hart

Title: Vice President

By: /s/ Erin McCutcheon

Name: Erin McCutcheon

Title: Vice President

[ Signature Page to Required Group Agent Action No. 2 ]

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DEUTSCHE BANK AG, NEW YORK BRANCH ,

as a Group Agent

By: /s/ Vinod Mukani

Name: Vinod Mukani

Title: Director

By: /s/ Daniel Fuchs

Name: Daniel Fuchs

Title: Director

[ Signature Page to Required Group Agent Action No. 2 ]

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Acknowledged by:

BANK OF AMERICA, N.A.

as Administrative Agent and Collateral Agent

By: /s/ Darleen R. Parmelee

Name: Darleen R. Parmelee

Title: Vice President

[ Signature Page to Required Group Agent Action No. 2 ]

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Acknowledged by:

BANK OF AMERICA, N.A.

as Depositary

By: /s/ Wayne M. Evans

Name: Wayne M. Evans

Title: Vice President

[ Signature Page to Required Group Agent Action No. 2 ]

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EXHIBIT 1

AMENDED LOAN AGREEMENT

Exhibit 1

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Exhibit 1

Amendments in Required Group Agent Action No. 2, dated as of June 26, 2015

CONFIDENTIAL TREATMENT REQUESTED

LOAN AGREEMENT

dated as of May 4, 2015

EACH OF THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTY HERETO,
(as the Committed Lenders);

EACH OF THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTY HERETO,
(as the Group Agents);

BANK OF AMERICA, N.A.
(as the Collateral Agent and Administrative Agent);

BANK OF AMERICA, N.A.
(as Lead Syndication Agent);

BANK OF AMERICA, N.A. and CREDIT SUISSE SECURITIES (USA) LLC
(as Joint Structuring Agents)

BANK OF AMERICA, N.A., CREDIT SUISSE SECURITIES (USA) LLC and DEUTSCHE BANK AG, NEW YORK BRANCH
(as Joint Book Runners and Joint Lead Arrangers)

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Table of Contents

Page

ARTICLE 1

DEFINITIONS 1

1.1	Definitions1

1.2	Rules of Interpretation33

ARTICLE 2

THE LOAN FACILITY35

2.1	Loan Facility35

2.2	Commitments41

2.3

Fees41

2.4	Other Payment Terms42

2.5	Pro Rata Treatment51

2.6	Change of Circumstances51

2.7	Funding Losses53

2.8	Alternate Office; Minimization of Costs; Replacement of Lenders54

2.9	Increase in Loan Facility55

2.10	Addition of Subject Funds; Release of Subject Funds57

2.11	Defaulting Lenders59

2.12	Extended Availability Period and Loans60

2.13	Interest Rate Protection61

ARTICLE 3

CONDITIONS PRECEDENT62

3.1	Conditions Precedent to the Closing Date62

3.2	Conditions Precedent to Each Borrowing65

3.3	Conditions Precedent to Addition of Current Systems to Available Borrowing Base67

3.4	Conditions Precedent to Inclusion of New Subject Fund67

ARTICLE 4

REPRESENTATIONS AND WARRANTIES69

4.1	Representations and Warranties69

ARTICLE 5

AFFIRMATIVE COVENANTS OF BORROWER74

5.1	Use of Proceeds74

5.2

Notices75

5.3	Portfolio Reports; Financial Statements76

5.4	Reports; Other Information78

5.5	Existence, Conduct of Business79

5.6	Books, Records, Access79

5.7	Preservation of Rights; Further Assurance80

5.8	Taxes and Other Government Charges81

5.9	Compliance With Laws; Instruments, Etc81

5.10	Indemnification81

5.11	Revenue & Operating Accounts83

5.12	Compliance with Sanctioned Persons Laws and Anti-Corruption Laws84

5.13	Separateness Provisions; Required Provisions in LLC Agreement84


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Table of Contents

(continued)

Page

5.14	Distributions by Certain Subsidiaries 85

5.15	Borrowing Base Certificate85

5.16	New Subject Funds86

5.17	Maintenance of Materials86

5.18	Investor Consents87

5.19	Correction Payments87

5.20	Asset-Backed Commercial Paper87

ARTICLE 6

NEGATIVE COVENANTS OF BORROWER88

6.1	[Reserved]88

6.2	Limitations on Liens88

6.3

Debt88

6.4	Sale or Lease of Assets88

6.5

Changes89

6.6	Distributions89

6.7	Investments89

6.8	Use of Proceeds90

6.9	Fundamental Changes90

6.10	Amendments; Other Agreements90

6.11	Name and Location; Fiscal Year91

6.12	Assignment91

6.13	Transfer of Equity Interest91

6.14

ERISA91

6.15	Accounts91

6.16	Transaction with Affiliates91

6.17	Limitation on Dividends and Other Payment Restrictions Affecting Certain Subsidiaries91

6.18	Hedging Agreement91

6.19	Operations and Maintenance92

6.20	Sanctions92

6.21	Anti-Corruption Laws92

ARTICLE 7

ACCOUNTS; APPLICATION OF FUNDS92

7.1	Accounts; Application of Funds in Accounts92

ARTICLE 8

EVENTS OF DEFAULT; REMEDIES92

8.1	Events of Default92

8.2	Remedies95

ARTICLE 9

THE AGENTS; THE GROUP AGENTS AMENDMENTS; ASSIGNMENTS96

9.1	Appointment and Authority96

9.2	Rights as a Lender96


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Table of Contents

(continued)

Page

9.3	Exculpatory Provisions 96

9.4	Reliance by Administrative Agent97

9.5	Delegation of Duties98

9.6	Resignation of Administrative Agent98

9.7	Non-Reliance on Administrative Agent and Other Lenders99

9.8	No Other Duties, Etc99

9.9	Administrative Agent May File Proofs of Claim99

9.10	Collateral Matters101

9.11	Indemnification101

9.12	No Advisory or Fiduciary Responsibility102

9.13	The Group Agents102

9.14	Amendments104

9.15	Withholding Tax106

9.16	Participations106

9.17	Assignments107

9.18	Assignability to Federal Reserve Bank or Central Bank110

9.19	Exercise of Discretion111

ARTICLE 10

MISCELLANEOUS111

10.1	Addresses; Notices111

10.2	Right to Set-Off115

10.3	Delay and Waiver115

10.4	Costs, Expenses and Attorney’s Fees116

10.5	Entire Agreement116

10.6	Governing Law116

10.7	Severability117

10.8	Headings117

10.9	Accounting Terms117

10.10

No Partnership, Etc117

10.11

Waiver of Jury Trial117

10.12

Consent to Jurisdiction; Service of Process118

10.13

Interest Rate Limitation118

10.14

Successors and Assigns119

10.15

Patriot Act Compliance119

10.16

Binding Effect; Counterparts119

10.17

Confidentiality119

10.18

Survival of Agreements121

10.19

Electronic Execution of Assignments and Certain Other Documents121

10.20

Agreement Not to Petition; Excess Funds121

10.21

No Recourse122

ARTICLE 11

limited GUARANTY; TAX LOSS POLICIES123

11.1	The Guarantee123


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Table of Contents

(continued)

Page

11.2	Obligations Unconditional 123

11.3	Reinstatement124

11.4	Subrogation; Subordination124

11.5	Remedies125

11.6	[Reserved]125

11.7	Continuing Guarantee125

11.8	General Limitation on Guarantee Obligations125

11.9	Release of Guarantor125

11.10

Representations and Warranties125

11.11

Tax Loss Policies126


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INDEX OF EXHIBITS


Exhibit A	Form of Note
Exhibit B-1	Form of Borrowing Notice
Exhibit B-2	Form of Conversion and Continuation Notice
Exhibit C	Form of Assignment and Acceptance
Exhibit D	Form of Incremental Loan Commitment Increase Notice
Exhibit E	Form of Increasing Incremental Lender Confirmation
Exhibit F-1	Form of New Committed Lender Accession Agreement
Exhibit F-2	Form of New Conduit Lender Accession Agreement
Exhibit G	Form of Borrowing Base Certificate
Exhibit H-1	Form of Aggregate Advance Model
Exhibit H-2	Form of System Consolidator
Exhibit I	Form of US Tax Compliance Certificate
Exhibit J	Provisions of Tax Equity Required Consent

INDEX OF SCHEDULES


Schedule 1.1(a)	Knowledge Individuals
Schedule 1.1(b)	Change in Control
Schedule 1.1(c)	Operating Account
Schedule 3.1(m)	Consents
Schedule 5.13	Separateness Provisions

INDEX OF ANNEXES


Annex 1	Account Information
Annex 2	Lenders/Lending Office
Annex 3	Schedule of Lender Commitments

INDEX OF APPENDICES


Appendix 1	Advance Rate
Appendix 2	Borrowing Base Certificate Calculations
Appendix 3	Eligibility Representations
Appendix 4	List of Subject Funds, Managing Members, Funded Subsidiaries, Full and Partial Cash Sweep Fund Designations and Investors
Appendix 5	Project Documents
Appendix 6	System Consolidator
Appendix 7	Tax Equity Representations and Other Representations
Appendix 8	Approved Manufacturers
Appendix 9	Fundamental Tax Equity Structure Characteristics
Appendix 10	Conventional Tax Equity Structure Characteristics

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LOAN AGREEMENT

WHEREAS, the Lenders from each Group are willing to make such loans upon the terms and subject to the conditions of this Agreement.

ARTICLE 1

DEFINITIONS

1.1 Definitions . Except as otherwise expressly provided, capitalized terms used in this Agreement and its exhibits and schedules shall have the meanings set forth below:

“ Acceptable Hedge Bank ” means any Committed Lender, Affiliate of a Committed Lender, Joint Lead Arranger, or Affiliate of a Joint Lead Arranger.

Kronor Loan Agreement

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“ Accounts ” has the meaning given in the CADA.

“ Additional Commitment Lender ” shall have the meaning set forth in Section 2.9(c) .

“ Administrative Agent ” has the meaning given in the introductory paragraph of this Agreement.

“ Administrative Questionnaire ” means an administrative questionnaire in the form supplied by the Administrative Agent.

“ Advance Rate ” has the meaning given in Appendix 1 .

“ Agent Fees ” has the meaning given in Section 2.3(b) .

“ Agents ” has the meaning given in the introductory paragraph of this Agreement.

“ Agreement ” has the meaning given in the introductory paragraph of this Agreement.

“ Aggregate Advance Model ” has the meaning given in Appendix 2 .

“ Applicable Interest Rate ” means (a) with respect to Loans advanced by any Lender other than through the issuance of Commercial Paper notes or with respect to any Group that does not include a Conduit Lender, (i) for any LIBO Loan, during each Interest Period applicable thereto, the per annum rate equal to the sum of the LIBO Rate for such Interest Period or the Daily LIBO Rate, as specified in Section 2.1(b)(i) or otherwise elected by the Borrower pursuant to an applicable Borrowing Notice or Conversion and Continuation Notice, plus the Applicable Margin or (ii) for any Base Rate Loan, during each Interest Period applicable thereto, the per annum rate equal to the sum of the Base Rate for such Interest Period plus the Applicable Margin

Kronor Loan Agreement

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or (b) with respect to Loans advanced by a Conduit Lender through the issuance of Commercial Paper notes, the CP Rate plus the Applicable Margin.

“ Applicable Margin ” means (a) with respect to Loans other than Incremental Loans, 2.75% per annum and (b) with respect to each Incremental Loan, the per annum rate specified in the terms of the Incremental Loan Commitment related to such Incremental Loan.

“ Applicable Threshold ” means, with respect to any date of determination (for purposes of this definition, the “ Test Date ”):

For the avoidance of doubt, on any date on which the Outstanding Principal is less than or equal to the Available Borrowing Base, the Applicable Threshold shall be deemed to be satisfied.

“ Available Borrowing Base ” has the meaning given in Appendix 2 .

“ Bank of America ” means Bank of America, N.A., a national banking association.

Kronor Loan Agreement

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“ Bankruptcy Event ” shall be deemed to have occurred with respect to any Person, if (a) such Person shall institute a voluntary case seeking liquidation or reorganization under the Bankruptcy Law or shall consent to the institution of an involuntary case thereunder against it; (b) such Person shall file a petition, answer or consent or shall otherwise institute any similar proceeding under any other applicable federal, State or other applicable Law, or shall consent thereto; (c) such Person shall apply for, or by consent there shall be an appointment of, a custodian, conservator, rehabilitator, receiver, liquidator, sequestrator, trustee or other officer with similar powers for itself or any substantial part of its assets; (d) such Person shall make an assignment for the benefit of creditors; (e) such Person shall become unable or admit in writing its inability to pay its debts generally as they become due; (f) if an involuntary case shall be commenced seeking the liquidation or reorganization of such Person under the Bankruptcy Law or any similar proceeding shall be commenced against such Person under any other applicable federal, State or other applicable Law and (i) the petition commencing the involuntary case is not timely controverted; (ii) the petition commencing the involuntary case is not dismissed within 60 days of its filing; (iii) an interim trustee is appointed to take possession of all or a portion of the property, and/or to operate all or any part of the business of such Person and such appointment is not vacated within 60 days; or (iv) an order for relief shall have been issued or entered therein; or a decree or order of a court having jurisdiction in the premises for the appointment of a custodian, conservator, rehabilitator, receiver, liquidator, sequestrator, trustee or other officer having similar powers of such Person or of all or a part of its property, shall have been entered; (g) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 60 days after its issue or levy; or (h) any other similar relief shall be granted against such Person under any federal, State or other applicable Law.

“ Base Rate Loan ” means any Loan that bears interest at rates based upon the Base Rate.

“ Benefited Lender ” has the meaning given in Section 2.5(b) .

“ Borrower ” has the meaning given in the introductory paragraph of this Agreement.

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“ Borrower Materials ” has the meaning given in Section 10.1(d) .

“ Borrower Subsidiary Party ” means each of [***], [***], [***], [***], [***]and each other Person that becomes a party to the CADA as a “Subsidiary Party”, the Security Agreement as a “Borrower Subsidiary” or the Borrower Subsidiary Party Security Agreement as a “Grantor”, in each case in accordance with the terms thereof, including each Managing Member and each Lessor.

“ Borrower Subsidiary Party Security Agreement ” means Pledge and Security Agreement, dated as of June [__], 2015, among the Collateral Agent and the Borrower Subsidiary Parties party thereto.

“ Borrowing ” means Loans of the same Type made on the same date.

“ Borrowing Base Certificate ” means the certificate in the form of Exhibit G .

“ Borrowing Base Certificate Calculations ” means those calculations to be set forth in the Borrowing Base Certificate as described in Appendix 2 .

“ Borrowing Base Certificate Date ” means each date upon which a Borrowing Base Certificate is submitted in accordance with the terms of Section 2.1(a)(iv) or Section 5.15 .

“ Borrowing Base Requirements ” means, as of the date of a Borrowing Base Certificate, the Available Borrowing Base exceeds the Outstanding Principal.

“ Borrowing Date ” means that date on which a Borrowing occurs.

“ Borrowing Notice ” has the meaning given in Section 2.1(a)(iii) .

“ Breakage Event ” has the meaning given in Section 2.7 .

“ Capital Adequacy Requirement ” has the meaning given in Section 2.6(b) .

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A “ Change in Control ” shall be deemed to have occurred if:

(a) SolarCity (or any successor entity thereto) shall cease to directly or indirectly own, beneficially and of record, 100% of the issued and outstanding equity interests in Member;

(b) Member shall cease to directly own, beneficially and of record, 100% of the issued and outstanding equity interests in the Borrower;

(c) the Borrower shall cease to directly own, beneficially and of record, 100% of the issued and outstanding equity interests in each Borrower Subsidiary Party

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successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change of Law”, regardless of the date enacted, adopted or issued.

“ Charges ” has the meaning given in Section 10.13 .

“ Closing Date ” means the date when each of the conditions precedent listed in Section 3.1 has been satisfied (or waived in writing by the Agents and the Lenders), which date is May 4, 2015.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Collateral Agent ” has the meaning given in the introductory paragraph of this Agreement.

“ Collateral Documents ” means the CADA, the Member Pledge, the Security Agreement, the Borrower Subsidiary Party Security Agreement, each Tax Equity Required Consent, each security agreement executed upon the admission of an Other Non-Financed Fund and delivered pursuant to Section 3.4 , each control agreement and any other security documents, financing statements and other documentation filed or recorded in connection with the foregoing, in each case, that are executed or otherwise authorized by a Loan Party or Borrower Subsidiary Party for the benefit of the Secured Parties; provided that, in the case of Tax Equity Required Consents and any other documents executed by an Investor, such documents shall be “Collateral Documents” only if such documents contain substantive covenants or similar obligations by the Investor for the benefit of the Secured Parties with respect to the applicable Subject Fund. For the avoidance of doubt, a mere acknowledgment by an Investor of any Lien on the Loan Parties’ assets or any related rights shall not constitute a “Collateral Document” for purposes of this Agreement.

“ Commercial Paper ” means short-term notes issued by or on behalf of the Conduit Lender in the ordinary course of its financing business.

“ Commercial Systems ” means any System in respect of which the Host Customer is a commercial Host Customer, other than any MHPI SPE.

“ Commitment ” means, at any time with respect to each Committed Lender, the commitment of such Committed Lender to make Loans hereunder, expressed as a maximum aggregate principal amount of the Loans to be made by such Committed Lender hereunder as such amount may be (a) reduced from time to time pursuant to Section 2.2(c) , (b) reduced or modified from time to time pursuant to assignments by or to such Lender pursuant to Section 9.17 or (c) increased pursuant to Section 2.9 (it being understood that Incremental Loan Commitments made by such Lender pursuant to Section 2.9 may have different maturity, Applicable Margin, and fee terms than such Lender’s existing Commitments). The initial amount

Kronor Loan Agreement

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of each Committed Lender’s Commitment as of the date of this Agreement is set forth in Annex 3 hereto, or, thereafter, in the Assignment and Acceptance pursuant to which such Committed Lender shall have assumed its Commitment, as applicable.

“ Commitment Fee ” has the meaning given to such term in the Fee Letters.

“ Committed Lender ” means each Person designated as a Committed Lender on its signature page hereto or in the Assignment or Acceptance pursuant to which it became a party hereto.

“ Communications ” has the meaning given in Section 10.1(c) .

“ Completion Certificate ” means that certificate delivered by SolarCity or the applicable Lessor pursuant to the terms of the applicable Project Document of the applicable Subject Fund.

“ Conduit Lender ” means each Person designated as a Conduit Lender on its signature page hereto, or in the Assignment or Acceptance pursuant to which it became a party hereto.

“ Connection Income Taxes ” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“ Conversion and Continuation Notice ” has the meaning given in Section 2.1(a)(vi) .

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foreclosure or asserting counterclaims in any action to foreclose or any other action, or otherwise results in any damage or diminution in value of any of the Collateral.

“ Correction Payment Amount ” has the meaning set forth in Section 5.19(a) .

“ CP Rate ” means for any day, the rate determined by the Conduit Lender based upon a per annum money market equivalent rate (or if more than one rate, the weighted average of rates) which may be paid or is payable by the Conduit Lender from time to time as interest on, plus, without duplication, amounts owed by the Conduit lender in respect of Commercial Paper that is allocated, in whole or in part, by the Conduit Lender, to fund the purchase of or maintain the funding of the CP Rate Loans by the Conduit Lender, which rates, in the case of such Commercial Paper, shall reflect and give effect to the commissions and charges of placement agents and dealers in respect of such Commercial Paper ( provided , however , that if any component of such rate is a discount rate, in calculating the “CP Rate” the Conduit Lender shall for such component use the rate resulting from converting such discount rate to an interest bearing an equivalent rate per annum). For the avoidance of doubt, the “CP Rate” shall include rates that are a result of payments received after the time they are due.

“ CP Rate Loan ” means any Loan that bears interest at rates based upon the CP Rate.

“ Current System Group ” means the new System Group being added to the Borrowing Base Certificate in connection with the applicable draw.

“ Customer Agreement ” means a long term power purchase agreement or lease agreement entered into with a Host Customer relating to a System subject to a Subject Fund.

“ Customer Payments ” means all payments made by the Host Customers in accordance with its Customer Agreement.

“ Daily LIBO Rate ” means, for any Interest Period on each day during such Interest Period, the greater of (i) the fluctuating rate of interest equal to LIBOR, as published on the applicable Reuters screen page (or such other commercially available source providing quotations of LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London local time, on each day (or, if such day is not a Business Day, on the immediately preceding Business Day) any such Loan is outstanding, for dollars deposited with a term equivalent to a one-month interest period and (ii) zero percent (0%). If such rate is not available at such time for any reason, then the Daily LIBO Rate shall be the greater of (A) the rate per annum determined by the Administrative Agent to be the rate at which deposits in

Kronor Loan Agreement

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dollars for delivery in same day funds in the approximate amount of the initial Loan with a term equivalent to a one-month interest period would be offered by Bank of America’s London branch to major banks in the London interbank Eurodollar market at their request at approximately 11:00 a.m. (London local time), on each day (or, if such day is not a Business Day, on the immediately preceding Business Day) such Loan is outstanding and (ii) zero percent (0%).

“ Debt ” of any Person at any date means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (f) all Debt of others secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all Guarantees by such Person of Debt of others, (h) all Capital Lease Obligations of such Person, (i) all Synthetic Lease Obligations of such Person, (j) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests of such Person or any other Person or any warrants, rights or options to acquire such Equity Interests, valued, in the case of redeemable preferred interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (k) all obligations of such Person as an account party in respect of letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (l) net obligations of such Person under any Hedging Agreement and (m) all obligations of such Person in respect of bankers’ acceptances. For all purposes hereof, the Debt of any Person shall include the Debt of any partnership in which such Person is a general partner, unless such Debt is expressly made non-recourse to such Person. The amount of any net obligation under any Hedging Agreement on any date shall be deemed to be the Hedging Termination Value thereof as of such date. The amount of any Capital Lease Obligation or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

“ Default Rate ” means, with respect to the Loans, the interest rate per annum equal to the Applicable Interest Rate plus 2.0% per annum.

“ Defaulted System ” has the meaning given in Appendix 2 .

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Committed Lender’s determination that one or more of the conditions precedent set forth in Sections 3.1 and 3.2 with respect to the relevant Borrowing (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) have not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two (2) Business Days of the date when due, (b) has notified the Borrower or the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Committed Lender’s obligation to fund a Loan hereunder and states that such position is based on such Committed Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Committed Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a public proceeding under Bankruptcy Law, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect, or (ii) had publicly appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the FDIC or any other state, federal or national regulatory authority acting in such a capacity; provided that a Committed Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Committed Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Committed Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Committed Lender. Any determination by the Administrative Agent that a Committed Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Committed Lender shall be deemed to be a Defaulting Lender (subject to Section 2.11(b) ) as of the date established therefor by the Administrative Agent in a written notice of such determination which shall be delivered by the Administrative Agent to the Borrower and each other Group Agent (other than the Related Group Agent with respect to such Defaulting Lender) promptly following such determination.

“ Depositary ” means Bank of America, N.A.

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“ Discount Rate ” has the meaning given in Appendix 2 .

“ Distributions of On-Going Revenue ” means all distributions paid or payable to any Borrower Subsidiary Party on account of its interest in a Subject Fund, other than Excluded Revenues.

“ Eligibility Representations ” has the meaning given in Appendix 3 .

“ Eligible Systems ” means Inspected Systems and PTO Systems that, as of the applicable Borrowing Date, meet all of the Eligibility Representations set forth in Appendix 3 .

Kronor Loan Agreement

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limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.) (“ CERCLA ”), and the Superfund Amendments and Reauthorization Act of 1986, the Emergency Planning and Community Right to Know Act (42 U.S.C. §§ 11001 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. §§ 6901 et seq.), and the Hazardous and Solid Waste Amendments Act of 1984, the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Federal Water Pollution Control Act (also known as the Clean Water Act) (33 U.S.C. §§ 1251 et seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Safe Drinking Water Act (42 U.S.C. §§ 300f et seq.), the Endangered Species Act (16 U.S.C. §§ 1531 et seq.), the Migratory Bird Treaty Act (16 U.S.C. §§ 703 et seq.), the Bald Eagle Protection Act (16 U.S.C. §§ 668 et seq.), the Oil Pollution Act of 1990 (33 U.S.C. §§ 2701 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §§ 1801 et seq.), and any similar or analogous state and local statutes or regulations promulgated thereunder, and decisional law of any Governmental Authority, as each of the foregoing may be amended or supplemented from time to time in the future, in each case to the extent applicable with respect to the property or operation to which application of the term “Environmental Laws” relates.

“ Equity Contributions ” has the meaning given in the CADA.

“ ERISA ” means the Employee Retirement Income Security Act of 1974.

Kronor Loan Agreement

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

“ Event of Default ” and “ Events of Default ” have the meanings given in Section 8.1 .

“ Excess Cash Flow ” has the meaning given to such term in the CADA.

“ Excluded Revenues ” means (a) the sum of distributions to the Borrower in respect of (i) amounts contributed by an Investor or a partnership that received capital contributions from one or more Investors and the managing member of such partnership or a Lessee that received capital contributions from one or more Investors, in each case in connection with the purchase (or contribution) of PV Systems, (ii) any Rent Prepayment, (iii) proceeds from upfront rebates, including any proceeds from refundable State tax credits, (iv) proceeds from upfront customer prepayments, (v) proceeds from the monetization of SRECs, and (vi) proceeds from any Excluded System distributable to the applicable Partnership Managing Member or paid as rent to the applicable Lessor or Lessor Partnership, minus (b) reductions of cash flow distributable to the applicable Partnership Managing Member or, solely to the extent the master lease has been terminated, to the applicable Lessor Managing Member in respect of (w) the proportionate share of costs incurred pursuant to any applicable operations and maintenance agreements with respect to Excluded Systems, (x) the proportionate share of overhead expenses corresponding to Excluded Systems, to the extent such fees, costs and expenses are the responsibility of the Subject Fund outside of the fixed fees set forth the maintenance services agreement or administrative services agreement, as applicable, (y) any extraordinary expenses corresponding to the collection of fees, removal or relocation or other expenses with respect to the such Excluded Systems, to the extent expenses are the responsibility of the Subject Fund outside of the fixed fees set forth the maintenance services agreement or administrative services agreement, as applicable, and (z) any other expenses related to Excluded Systems; provided , that to the extent that the net amount of revenues that, but for this proviso, would constitute Excluded Revenues with respect to Excluded Systems for any Subject Fund, excluding any net Excluded Revenues of the types set forth in clauses (i), (ii), (iv) and (v) above, exceeds five percent (5%) of Actual Net Cash Flows for such Subject Fund, such excess shall not constitute Excluded Revenues.

Kronor Loan Agreement

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respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such recipient’s failure to comply with Section 2.4(g) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

“ Expense Claims ” has the meaning given in Section 10.21 .

“ Extension Request ” has the meaning given in Section 2.12(a) .

“ FDIC ” means the Federal Deposit Insurance Corporation and its successors.

“ Fees ” refers to all fees, costs and expenses payable in accordance with the Financing Documents.

Kronor Loan Agreement

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“ FRB ” means the Board of Governors of the Federal Reserve System of the United States.

“ Funded System ” refers to any System against which a Loan has been advanced in accordance with the terms of this Agreement.

“ Funded Subsidiary ” means those Subsidiaries of the Borrower associated with a Subject Fund and listed on Appendix 4 as updated from time to time.

“ GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“ Group Limit ” means, with respect to any Group at any time, the sum of the Commitments of the Committed Lenders in such Group at such time.

Kronor Loan Agreement

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assuring the obligee in respect of such Debt or other obligation of the payment or performance of such Debt or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Debt or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Debt or other obligation of any other Person, whether or not such Debt or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Debt to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“ Guaranteed Obligations ” has the meaning given in Section 11.1 .

“ Hedge Fix Fees ” has the meaning given in Section 2.13(c) .

Kronor Loan Agreement

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Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a) , the amount(s) determined as the mark-to-market value(s) for such Hedging Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Agreements (which may include a Lender or any Affiliate of a Lender ) .

“ Host Customer ” means a customer under a Customer Agreement relating to any System subject to a Subject Fund.

“ Increasing Incremental Lender Confirmation ” has the meaning given in Section 2.9(b) .

“ Incremental Loan ” means a Loan resulting from a Borrowing against an Incremental Loan Commitment.

“ Incremental Loan Amount ” has the meaning given in Section 2.9(a) .

“ Incremental Loan Commitment ” has the meaning given in Section 2.9(a) .

“ Incremental Loan Commitment Increase ” has the meaning given in Section 2.9(a) .

“ Incremental Loan Commitment Increase Notice ” has the meaning given in Section 2.9(a) .

“ Incremental Loan Increase Date ” has the meaning given in Section 2.9(a) .

“ Indemnitee ” has the meaning given in Section 5.10(a) .

Kronor Loan Agreement

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Member under clause (a) or (b) of this definition; or (e) a Person who received, or a member or employee of a firm or business that received, fees or other income from the Borrower or any of its Affiliates in the aggregate in excess of five percent (5%) of the gross income, for any applicable year, of such Person; provided, however, that notwithstanding the foregoing, for the purposes of clause (a), an equity interest shall be deemed to exclude de minimis or otherwise immaterial holdings of equity interests of an Affiliate of the Borrower which are traded on public stock exchanges. The initial Independent Member is Jennifer A. Schwartz.

“ Information ” has the meaning given in Section 10.17 .

“ Inspected Systems ” means any Residential System, Commercial System or MHPI System for which SolarWorks classifies the related System to be at or past the point of the “Inspection Passed” stage as defined by SolarCity’s PV System Lifecycle Policy, as in effect on the date hereof.