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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________________

FORM 10-K
_______________________________________________________________________________
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
OR
☐
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: 001-38995
_______________________________________________________________________________
Sunnova Energy International Inc.
(Exact name of registrant as specified in its charter)
_______________________________________________________________________________
Delaware
 
30-1192746
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification Number)
20 East Greenway Plaza, Suite 475
Houston, Texas 77046
(Address, including zip code, of principal executive offices)

(281) 985-9904
(Registrant's telephone number, including area code)
_______________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which Registered
Common Stock, $0.0001 par value per share
NOVA
New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
 
Accelerated filer
☐
Non-accelerated filer
☒
 
Smaller reporting company
☐
 
 
 
Emerging growth company
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The aggregate market value of the common stock held by non-affiliates of the Registrant, based on the closing price of such shares of common stock of $11.20 as reported on the New York Stock Exchange on July 29, 2019, was approximately $339.8 million. The Registrant has elected to use July 29, 2019, which was the closing date of its initial public offering on the New York Stock Exchange, as the calculation date because on June 30, 2019 (the last business day of the Registrant's most recently completed second fiscal quarter), the Registrant was a privately held company.

The registrant had 84,001,062 shares of common stock outstanding as of February 21, 2020.

Portions of the information called for by Part III of this Form 10-K are hereby incorporated by reference from either the definitive Proxy Statement for our annual meeting of stockholders or an amendment to this Form 10-K, either of which will be filed with the Securities and Exchange Commission not later than 120 days after December 31, 2019.

Table of Contents



SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements generally relate to future events or Sunnova's future financial or operating performance. Actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. In some cases, you can identify these statements because they contain words such as "may," "will," "likely," "should," "expect," "anticipate," "could," "contemplate," "target," "future," "plan," "believe," "intend," "goal," "seek," "estimate," "project," "target," "predict," "potential," "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this report include, but are not limited to, statements about:

•
federal, state and local statutes, regulations and policies;
•
determinations of the Internal Revenue Service of the fair market value of our solar energy systems;
•
the price of centralized utility-generated electricity and electricity from other sources and technologies;
•
technical and capacity limitations imposed by operators of the power grid;
•
the availability of tax rebates, credits and incentives, including changes to the rates of, or expiration of, federal tax credits and the availability of related safe harbors;
•
our need and ability to raise capital to finance the installation and acquisition of distributed residential solar energy systems, refinance existing debt or otherwise meet our liquidity needs;
•
our expectations concerning relationships with third parties, including the attraction, retention and continued existence of our dealers;
•
our ability to retain or upgrade current customers, further penetrate existing markets or expand into new markets;
•
our investment in our platform and new product offerings and the demand for and expected benefits of our platform and product offerings;
•
the ability of our solar energy systems, energy storage systems or other product offerings to operate or deliver energy for any reason, including if interconnection or transmission facilities on which we rely become unavailable;
•
our ability to maintain our brand and protect our intellectual property and customer data;
•
our ability to manage the cost of solar energy systems, energy storage systems and our service offerings;
•
the willingness of and ability of our dealers and suppliers to fulfill their respective warranty and other contractual obligations;
•
our expectations regarding litigation and administrative proceedings; and
•
our ability to renew or replace expiring, canceled or terminated solar service agreements at favorable rates or on a long-term basis.

Our actual results and timing of these events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those discussed under "Risk Factors" and elsewhere in this Annual Report on Form 10-K. 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 Annual Report on Form 10-K 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 update publicly any forward-looking statements for any reason after the date of this Annual Report on Form 10-K to conform these statements to actual results or to changes in our expectations, except as required by law.


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Table of Contents



Table of Contents

 
 
Page
PART I
 
 
Item 1.
4
Item 1A.
17
Item 1B.
53
Item 2.
53
Item 3.
53
Item 4.
53
 
 
 
PART II
 
 
Item 5.
54
Item 6.
55
Item 7.
56
Item 7A.
83
Item 8.
84
Item 9.
138
Item 9A.
138
Item 9B.
138
 
 
 
PART III
 
 
Item 10.
139
Item 11.
139
Item 12.
139
Item 13.
139
Item 14.
139
 
 
 
PART IV
 
 
Item 15.
140
 
144

3
Table of Contents



PART I

Item 1. Business.

Mission

Our mission is to power energy independence.

Overview

We are a leading residential solar and energy storage service provider, serving more than 80,000 customers in more than 20 United States ("U.S.") states and territories. Our goal is to be the leading provider of clean, affordable and reliable energy for consumers, and we operate with a simple mission: to power energy independence. We were founded to deliver customers a better energy service at a better price; and, through our solar and solar plus energy storage service offerings, we are disrupting the traditional energy landscape and the way the 21st century customer generates and consumes electricity.

We have a differentiated residential solar dealer model in which we partner with local dealers who originate, design and install our customers' solar energy systems and energy storage systems on our behalf. Our focus on our dealer model enables us to leverage our dealers' specialized knowledge, connections and experience in local markets to drive customer origination while providing our dealers with access to high quality products at competitive prices and technical oversight and expertise. We believe this structure provides operational flexibility, reduced exposure to labor shortages and lower fixed costs relative to our peers, furthering our competitive advantage.

We offer customers products to power their homes with affordable solar energy. We are able to offer savings and storage opportunities to most customers compared to utility-based retail rates with little to no up-front expense to the customer, and we are able to provide energy resiliency and reliability to our solar plus energy storage customers. Our solar service agreements take the form of a lease, power purchase agreement ("PPA") or loan. The initial term of our solar service agreements is typically either 10 or 25 years. Service is an integral part of our agreements and includes operations and maintenance, monitoring, repairs and replacements, equipment upgrades, on-site power optimization for the customer (for both supply and demand), the ability to efficiently switch power sources among the solar panel, grid and energy storage system, as appropriate, and diagnostics. During the life of the contract we have the opportunity to integrate related and evolving home servicing and monitoring technologies to upgrade the flexibility and reduce the cost of our customers' energy supply.

In the case of leases and PPAs, we also currently receive tax benefits and other incentives from federal, state and local governments, a portion of which we finance through tax equity, non-recourse debt structures and hedging arrangements in order to fund our upfront costs, overhead and growth investments. We have an established track record of attracting capital from diverse sources. From our inception through December 31, 2019, we have raised more than $4.7 billion in total capital commitments from equity, debt and tax equity investors.

In addition to providing ongoing service as a standard component of our solar service agreements, we also offer ongoing energy services to customers who purchased their solar energy system through unaffiliated third parties. Under these arrangements, we agree to provide such monitoring, maintenance and repair services to these customers for the life of the service contract they sign with us. We believe the quality and scope of our comprehensive energy service offerings, whether to customers that obtained their solar energy system through us or through another party, is a key differentiator between us and our competitors.


4



We commenced operations in January 2013 and began providing solar energy services under our first solar energy system in April 2013. Since then, our brand, innovation and focused execution have driven significant growth in our market share and in the number of customers on our platform. We operate one of the largest fleets of residential solar energy systems in the U.S., comprising more than 572 megawatts of generation capacity and serving more than 80,000 customers. We define number of customers to include each customer that is party to an in-service solar service agreement. For further discussion of how we define number of customers, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operational Metrics". The following chart illustrates the growth in our number of customers from December 31, 2015 through December 31, 2019.

CHART-D719B213DDCB2C01BA2A01.JPG

Our Dealer Network Model

While many of our competitors maintain a large, geographically diverse base of employees in local markets, including a direct sales force comprised of home improvement installers, we limit the cost associated with that structure by utilizing a network of local, independent dealers to market, sell and install solar energy systems and energy storage systems on our behalf. Our dealers typically reside and work within the markets they serve and provide a localized, customer-focused marketing, installation and servicing process. These dealers are often leading local solar installation companies who serve customers that are actively searching for solar power or who were referred by existing customers. When entering new markets, our dealer model immediately provides scale by enabling us to develop relationships with existing local businesses and avoiding the delay and expense required to establish new sales and installation offices. Similarly, because we do not typically maintain local offices, we can quickly refocus our origination efforts and capital deployment strategy to different markets in response to changing dynamics and regulatory developments. Furthermore, because of the low marginal cost to maintain relationships with individual dealers in currently unfavorable markets, we can maintain a strategic presence in anticipation of future developments that may make the economics of distributed residential solar energy in those markets more attractive.

Our dealers realize value in partnering with us for a variety of reasons. Although each of our dealer relationships is unique, we believe our dealers choose to work with us because:

•
we do not compete with our dealers;
•
we receive preferred equipment pricing as a result of our strong supplier relationships;
•
we offer a wide variety of product structures;
•
we provide easy-to-use software to dealers to assist with the installation process and to price potential solar energy systems and energy storage systems;
•
dealers can leverage our brand to support their businesses;
•
we provide comprehensive training to dealers; and
•
we are a stable counterparty our dealers can trust to make payments on time.


5



Origination, Installation, Monitoring and Servicing Processes

Through our dealer network model, we provide a streamlined approach for the origination of solar service agreements and the installation of solar energy systems and energy storage systems. The principal elements of our origination, installation, monitoring and servicing processes are described below:

•
Customer Origination and Consultation. Our dealers serve as a local, direct-to-home sales force providing in-person consultations to source potential customers in each geographic market where we operate. Our dealers reach potential customers through various means, including online, telemarketing, in-store sales, cross-marketing with complementary products and door-to-door canvasing. Using our technology platform and proprietary pricing tool, the dealer and the customer select one of our standard-form solar service agreements for the relevant market and the dealer submits its proposal to us for approval. Before proceeding to the design phase, we call every customer to validate the customer understands the terms of their contract with us as well as the expected benefits of the system.

•
Design and Engineering. Prior to the dealer's purchase and installation of the equipment, we and the dealers work together to design each solar energy system and, if applicable, energy storage system. All of our solar energy systems and energy storage systems are designed with equipment from a pre-approved list of manufacturers. We utilize our extensive tools and services platform, standardized procedures and existing databases to help our dealers comply with our pricing requirements, residential solar best practices, contract terms, and state, territorial and local regulations. For each solar service agreement, an individualized power production estimate is created by analyzing geographic, solar and weather data with the design's proposed orientation, components and shading. We continue to pursue technological innovation to streamline our review of design and engineering, to expedite installation and to lower costs for our dealers.

•
Installation, Commissioning and Interconnection. The installation and commissioning phase requires the dealer to obtain all necessary permits for installation and complete our commissioning process for the solar energy system and energy storage system (if applicable), which entails submitting supporting documentation and photographs illustrating the installation of the solar energy system and energy storage system (if applicable) to our engineering team for review. Following completion of these steps and our approval of these materials the dealer submits required paperwork to the applicable electric distribution utility to obtain permission to operate the equipment, schedule required regulatory inspections and arrange for interconnection of the solar energy system to the electrical grid. The customer's billing begins at the earlier of (a) 90 days after installation or (b) completion of interconnection.

•
Monitoring and Servicing. Our monitoring systems utilize cellular connections that allow us to confirm the continuing operation of the solar energy system and energy storage system (if applicable) and identify and solve maintenance issues through our dealers, third-party service providers or our own personnel. We also collect performance data to improve our pricing, generation estimates and services for our customers.

Our Relationships With Our Dealers

We carefully recruit our dealers, who must meet and maintain our standards to be an approved dealer. Qualifications to be a dealer include: experience in the residential solar industry (or success in complementary industries such as home security, heating, ventilation and air-conditioning, electrical services, and satellite television), experienced and appropriately certified employees (including multiple installation teams) and possession of applicable licenses. We also perform a review of the prospective dealer's financial condition as part of our recruitment process as well as a background check on the principal owners of the organization. Upon engagement, the dealer enters into a standard dealer agreement with us, which may be amended from time to time, that sets ongoing standards for operations and payment obligations based on different milestones for each project. We provide training, field support and continuing education to help our dealers operate efficiently. This includes training related to our processes, standards and services platform, sales training and compliance education regarding applicable rules and regulations. We actively review our dealers' performance and compliance with our requirements to determine whether to terminate our relationship with any dealer that is unable to meet our performance standards.

We devote significant resources to maintaining and expanding our relationships with existing dealers. Although most of our dealer agreements allow the dealer to sell services and products from our competitors, we believe dealers find our proprietary technology and operations platform, established supply chain group, commitment to training, quality of service and prompt payment to be an incentive to prioritize selling our services. Furthermore, many of our dealers may be hesitant to work with our competitors that have developed internal sales and installation personnel that may compete with certain aspects of the dealers' business. Taken as a whole, we believe these considerations promote long-lasting relationships with our dealers.


6



For the years ended December 31, 2019 and 2018, Trinity Solar, Inc. ("Trinity") accounted for approximately 41% and 52% of our originations for such periods, respectively. In March 2019, we amended our agreement with Trinity pursuant to which Trinity has agreed to perform services or work exclusively for us for four years, with certain exceptions, including (a) the sale of solar energy systems to individuals on a "cash" basis that do not involve any third-party financing, (b) the sale of solar energy systems pursuant to customer agreements we do not elect to accept under the terms of the arrangement and (c) the sale of solar energy systems pursuant to customer agreements executed prior to the date of the amendment to the dealer agreement. In addition, Trinity may market, sell and install solar energy systems for our competitors in instances in which such competitor has provided the leads for such solar energy system customer directly to Trinity. Under this arrangement, we have agreed to provide annual bonuses to Trinity in the amount of $20 million in year one and $10 million each year thereafter, subject to clawback if minimum annual origination targets are not reached and additional per watt incentive payments if higher annual origination targets are exceeded. The minimum and higher origination targets increase by approximately 15% to 20% each year and limits competing work by Trinity to 10% of Trinity's annual gross revenues. Unlike most of our dealer agreements, the arrangement with Trinity does not permit the parties to terminate for convenience and only permits termination in specified circumstances including material breach (subject to applicable cure periods), prolonged force majeure events, a change of control, certain insolvency events or mutual agreement. For purposes of the Trinity agreement, "change of control" means (a) the sale of all or substantially all of the assets of a party or (b) any merger, acquisition, or other transaction or series of transactions that results in a change of ownership of more than fifty percent of the voting securities of a party (other than in connection with an initial public offering of either party or a transfer among Trinity's existing owners). Additionally, the arrangement provides for a $10 million liquidated damages payment by the applicable party in the event of termination for material breach, certain insolvency events of or wrongful termination by the other party.

We have similar contractual arrangements with several other key dealers. For certain other dealers, substantially all of the solar service agreements originated by such dealers are Sunnova agreements, although they are under no exclusivity arrangement. No dealer other than Trinity and Infinity Energy, Inc. accounted for more than 10% of our total expenditures to dealers relating to costs incurred for solar energy systems for the year ended December 31, 2019. Only Trinity accounted for more than 10% of our total expenditures to dealers relating to costs incurred for solar energy systems for the year ended December 31, 2018.

Platform of Tools and Services

We have developed a cloud-based technology platform for origination, installation, administration and servicing of our solar energy systems and energy storage systems. All of our dealers are trained in and use this platform. Our software platform includes a proprietary technology suite, including a contact center to assist dealers in lead generation, project tracking and service obligations, a quoting tool to standardize customer quotes and solar service agreements, and other services to manage payments, billing and monitoring. The technology suite also includes tools to streamline the approval process for the design and installation of solar energy systems and energy storage systems and establish a standard process for ongoing service and warranty management. The platform leverages cloud-based infrastructure and software capabilities using multiple third-party providers, including Salesforce, Amazon Web Services, Heroku and FinancialForce. It is compatible with multiple end-user device types, including smartphone, tablet and desktop/laptop interfaces.

We have invested in proprietary software systems and technology that have been designed to tie into third-party platforms and applications of our dealers and other systems. Our key software systems include:

•
Pricing Tool: Customer pricing and quoting is delivered by a combination of cloud-based technologies including Genability, PV Watts (a service of the National Renewable Energy Laboratory) and proprietary applications running on Amazon Web Services and Heroku. This collection of tools is made available to us and our dealers through a web, tablet or mobile device interface. We permit dealers to generate solar service agreement quotes and proposal documents on demand for presentation to prospective customers. Each completed quote is transferred into Salesforce for solar service agreement generation, customer access and reporting.

•
MySunnova: MySunnova is our online portal for customers that allows them to view their solar energy systems' production history, view energy storage system data, pay their bills, manage their online account and contact information, make referrals and contact our customer service team.

•
Salesforce: Salesforce is our central repository and system of record for all contracts, process documentation, customer account information, maintenance information and payment tracking for the life of the solar service agreement. This single system allows for integrated and comprehensive reporting for the entire life cycle of the customer, from quote to end of the solar service agreement term. Many of our other systems interact with the Salesforce platform.

7




•
FinancialForce: FinancialForce is a cloud-based accounting system built on the Salesforce platform. Because it shares similar architecture to our Salesforce system, FinancialForce allows for integration between our operations and accounting.

Customer Agreements

Agreement
Sunnova Offering(s)
Description
Initial Term
Lease
Easy Save
Lease of solar energy system
25 years
PPA
Easy Save Simple
Sale of solar energy production
Easy Save Monthly
Loan
Easy Own
Sale of solar energy system
10 or 25 years
Energy Storage
Sunnova SunSafe
Lease or sale of energy storage system to be used with a solar energy system
10, 15 or 25 years
Sunnova +SunSafe
Service Only
Sunnova Protect Services
Monitoring & warranty services for non-Sunnova solar energy systems
1, 5, 10 or 20 years

We focus on growing a geographically diverse customer base with a strong credit profile. We perceive our recurring customer payments as high-quality assets given the broad and relatively inelastic demand for electricity and because our customers typically have high credit scores. As of December 31, 2019, our customers had, at the time of signing the solar service agreement, an average FICO® score of 739. The purpose of our stringent credit approval policy is to ensure reliability of collecting payment over the duration of the solar service agreements. As of December 31, 2019, approximately 0.8% of our customers were in default (over 120 days past due) under their solar service agreements.

Most of our solar service agreements have an initial term of 25 years with an opportunity for customers to renew for up to an additional 10 years via two five-year renewal periods. The customer is obligated to make payments to us on a monthly basis and we operate and maintain the solar energy system and energy storage system, if applicable, in good condition throughout the duration of the agreement. Under our lease agreements and PPAs, the customer's monthly payment or price per kilowatt hour ("kWh") is set based on a calculation that takes into account expected solar energy generation. The customer has an option of choosing a flat rate without an escalator or a lower initial rate with an escalator. As of December 31, 2019, approximately 68% of our lease agreements and PPAs contained a price escalator, ranging from 0.9% to 3.0% annually.

Our solar service agreements are designed to offer the customer energy cost savings and bill stability relative to centralized utility prices, often resulting in an immediate reduction in the customer's overall utility bill, with little or no upfront costs. We provide our services through long-term residential solar service agreements in the following formats:

•
Lease Agreements. Under a lease agreement, or Easy Save Agreement, the customer leases a solar energy system from us at a fixed monthly rate that is typically subject to annual escalation. We own, operate and maintain the solar energy system under our lease agreements. In most cases, lease agreements include a performance guarantee under which we will refund payments or credit the customer if the solar energy system fails to meet a guaranteed minimum level of power production for specified time periods.

•
PPAs. We offer PPAs through our Easy Save Monthly Agreement, for monthly generation billing, and the Easy Save Simple Agreement, for a levelized monthly payment. We own, operate and maintain the solar energy system under our PPAs.

•
Easy Save Monthly Agreements. Pursuant to an Easy Save Monthly Agreement, the customer agrees to pay for all power generated by a solar energy system at a price per kWh that is typically lower than the local utility rate. The monthly rate is typically subject to annual escalation.

•
Easy Save Simple Agreements. The Easy Save Simple Agreement is similar to the Easy Save Monthly Agreement except the customer's payments are levelized over the course of a year based on an annual production estimate so the customer's payments are insulated from monthly fluctuations in electricity production subject to a true-up at the end of such period. The fixed monthly rate is typically subject to annual escalation. Should the annual

8



production estimate exceed actual production, the customer will receive a bill credit at the end of the applicable period and we may decrease the estimated production (and corresponding monthly payments) for the subsequent year. Should actual production exceed the annual estimate, we may apply the overproduction to a subsequent year or increase the estimated annual production and corresponding monthly payments for the subsequent year. The estimated annual production will not increase more than 110% from the estimated annual production for the first year.

•
Loan Agreements. Pursuant to an Easy Own Agreement, the customer purchases the solar energy system from a dealer using financing provided by us. The customer repays the amount financed plus a finance charge through monthly payments for a typical term of 10 or 25 years. We purchase the Easy Own Agreement from the dealer and agree to operate and maintain the solar energy system. We operate and maintain the solar energy system through our network of dealers. In most cases, Easy Own Agreements include a production guarantee under which we will refund payments or credit the customer if the solar energy system fails to meet a guaranteed minimum level of power production for specified time periods. Customers under our Easy Own Agreements have the option to prepay outstanding principal amounts, in part or in full, without penalty.

•
Energy Storage Systems. Our Sunnova SunSafe program offers customers the option of a solar energy system integrated with a solar storage system. Our Sunnova SunSafe Easy Save Agreement and Sunnova SunSafe Easy Own Agreement are similar to our Easy Save Agreement and Easy Own Agreement, respectively, but include energy storage systems with the solar energy systems. The customer may select a term of 10 or 25 years for the SunSafe Easy Own Agreement. These agreements have a production guarantee, similar to the Easy Own Agreements and Easy Save Agreements, except in Guam, Saipan, Hawaii, Puerto Rico and Florida. Additionally, we introduced the Sunnova +SunSafe Agreement to existing customers in several states and territories, under which the customer purchases the energy storage system from a dealer using financing provided by us. Under the Sunnova +SunSafe Agreement, the customer repays the amount financed plus a finance charge through monthly payments for a term of 10 or 15 years. We intend to roll-out these energy storage system offerings to additional geographic regions in the coming years.

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Sunnova Protect Service. For solar energy systems not owned or sold by us, our Sunnova Protect Agreements provide customers maintenance and repairs as well as system monitoring and diagnostics. We provide three levels of service: (a) Basic, which is monitoring only; (b) Premium, which is monitoring plus repair and/or replacement of all equipment under a manufacturer's warranty; and (c) Platinum, which is monitoring, repair and/or replacement of all equipment under and outside the manufacturer's warranty and a production guarantee. The customer may select the level of service and a term of 1, 5, 10 or 20 years. Prior to commencing coverage, we will run a diagnostic evaluation on the customer's solar energy system and will identify any underperforming equipment and estimate production. The customer may elect to repair underperforming equipment, on a time and materials basis, so that it may be included in the coverage going forward. Should the underperforming equipment not be repaired, it will not be covered under the Sunnova Protect Agreement.

As of December 31, 2019, approximately 32% of our customers had lease agreements, approximately 54% had PPAs, and approximately 14% had loan agreements. Less than 1% of our customers have our Sunnova SunSafe and Sunnova Protect agreements.

We have developed a standardized protocol and set of policies to qualify potential customers. During the solar energy system origination phase, we review the customer's credit application for compliance with our credit standards. Solar service agreements that are accepted must comply with our underwriting standards, which emphasize the prospective customer's ability to pay and the value of the customer's estimated savings under the solar energy service agreement compared to traditional utility rates.

We maintain reporting and controls in place to monitor the timeliness of customer payments. As of December 31, 2019, approximately 94% of all payments received pursuant to our solar service agreements are collected via Automated Clearing House payments (i.e., the funds are deducted automatically on a monthly basis from the customer's bank account), approximately 3% are collected via automatic recurring credit card payments and approximately 3% are collected through non-recurring means. If a customer becomes delinquent on one or more monthly installment payments, we typically begin a collection process with respect to the customer.

In the event that a customer elects to sell his or her home, the customer's solar service agreement may be transferred to the prospective purchaser through prescribed reassignment procedures, subject to certain conditions related to the prospective purchaser's creditworthiness. To initiate the reassignment process, the customer must notify us of the pending sale, after which we will provide a copy of the solar service agreement, including any amendments, to the prospective purchaser. The

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prospective purchaser will then be required to complete a customer profile and a credit application. Each prospective purchaser's FICO® Score and Experian TEC Score (Telecommunications, Energy and Cable) will be evaluated on the same basis as a customer in a new origination and will be evaluated by our computer auto-decisioning system.

In the event that a prospective purchaser does not meet our credit criteria or elects not to be subject to such credit inquiry, the current customer will be required to prepay the solar service agreement in full or the prospective purchaser will be required to provide a security deposit in cash in accordance with such customer's solar service agreement or our transfer policy prior to the approval of the reassignment. Each such security deposit is held in a separate account until the earlier of (a) the time at which the prospective purchaser satisfies our established credit criteria or (b) upon 12 consecutive months of on-time payments following the date of reassignment.

On a case-by-case basis, we may remove a solar energy system and, if applicable, energy storage system from the property on which it is installed if, among other reasons, the solar service agreement is canceled or otherwise terminated, the customer or solar energy system and energy storage system is relocated, any of the component parts are damaged or the new homeowner rejects the reassignment of the solar service agreement upon home transfer, if applicable.

Monitoring and Maintenance Service and Warranties

Our residential solar service agreements typically are accompanied by a warranty and/or monitoring and service agreement. The warranty and monitoring services provided with each type of solar service agreement vary but can include operations and maintenance, equipment repairs, monitoring or site power controls and management for both supply and demand. Additionally, our Sunnova Protect program offers monitoring, service and production guarantees across three tiers of service for solar energy systems owned by the homeowner and installed by an unaffiliated third party.

Regardless of the type of our solar service agreement, we provide ongoing service during the entire term of the customer relationship, including monitoring, maintenance and warranty services of the solar energy system and energy storage system, if applicable. We have an operations and maintenance administration organization consisting of administration staff and a dedicated residential monitoring and production team that evaluates the solar energy systems' and energy storage systems' performance daily. When a performance or operation issue is detected via our monitoring system, we provide or arrange for troubleshooting or field services as necessary. We rely on our dealer network and our own personnel to complete the field services required to maintain the solar energy systems. After completion of the resolution steps, the maintenance administration organization verifies remotely the issue has been resolved and the system or energy service is performing as expected.

Additionally, customers under our solar service agreements receive a range of warranties on the related solar energy systems and energy storage systems, including warranties for module production and against defects in workmanship and against component or materials breakdown. We also provide the customers with a warranty on roof penetrations of up to 10 years in compliance with applicable state, territorial or local law. Through our agreements with our dealers, the dealer is obligated, at its sole cost and expense, to correct defects in its installation work for a period of 10 years and provide a roof warranty on roof penetrations of five years. Furthermore, we provide a pass-through of the solar photovoltaic panel manufacturers' warranty coverage to our customers, generally of 25 years, and of the inverter and energy storage system manufacturers' warranty coverage, typically of 10 to 25 years. We typically exercise our rights under the manufacturer's equipment warranties or dealer installation warranties before incurring direct charges or costs. Many service expenses are borne by our dealers and not us directly because of the workmanship warranty provided by the dealers to us. Additionally, many component costs are covered by manufacturer warranties.

Seasonality

The amount of electricity our solar energy systems produce is dependent in part on the amount of sunlight, or irradiation, where the assets are located. Because shorter daylight hours in winter months and poor weather conditions due to rain or snow results in less irradiation, the output of solar energy systems will vary depending on the season or the year. While we expect seasonal variability to occur, the geographic diversity in our assets helps to mitigate our aggregate seasonal variability.

Our Easy Save Monthly PPAs are subject to seasonality because we sell all the solar energy system's energy output to the customer at a fixed price per kWh. Our Easy Save Simple PPAs are not subject to seasonality (from a cash flow perspective or the customer's perspective) within a given year because the customer's payments are levelized on an annualized basis so we insulate the customer from monthly fluctuations in production. However, our Easy Save Simple PPAs are subject to seasonality from a revenue perspective because, similar to the Easy Save Monthly PPAs, we sell all the solar energy system's energy output to the customer. Our lease agreements are not subject to seasonality within a given year because we lease the solar energy system to the customer at a fixed monthly rate and the reference period for any production guarantee payments is a full year.

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Finally, our loan agreements are not subject to seasonality within a given year because the monthly installment payments for the financing of the customers' purchase of the solar energy system are fixed and the reference period for any production guarantee is a full year.

In addition, weather may impact our dealers' ability to install solar energy systems and energy storage systems. For example, the ability to install solar energy systems and energy storage systems during the winter months in the Northeastern U.S. is limited. This can impact the timing of when solar energy systems and energy storage systems can be installed and when we can acquire and begin to generate revenue from solar energy systems and energy storage systems.

Intellectual Property

We rely on intellectual property laws, primarily a combination of copyright and trade secret laws in the U.S., as well as license agreements and other contractual provisions, to protect our proprietary technology. We also rely on several registered and unregistered trademarks to protect our brand. In addition, we generally require our employees and independent contractors involved in the development of intellectual property on our behalf to enter into agreements to limit access to, and disclosure and use of, our confidential information and proprietary technology. We also continue to expand our technological capabilities through licensing technology and intellectual property from third parties.

Government Regulations

While we are not regulated as extensively as a public utility where our business is conducted in the U.S., we are subject to various national, state, territorial and other local regulatory regimes. For example, in California and New York, we are subject to regulations concerning marketing and contracting promulgated by state public utility commissions. In some states such as Arizona and Florida, we are limited to offering only a lease agreement or a loan agreement to homeowners and are prohibited from offering a PPA, which is deemed a retail sale of electricity in such states and can only be made by a regulated utility. In Puerto Rico, we are subject to regulation as an electric power company by the Puerto Rico Energy Bureau and are required to comply with certain filing, certification, reporting and annual fee requirements. Regulation by the Puerto Rico Energy Bureau as an electric power company does not currently subject us to centralized utility-like regulation or require the Puerto Rico Energy Bureau's approval of charges to customers.

To operate the solar energy systems and energy storage systems, our dealers work with customers to obtain interconnection permission from the applicable local electric distribution utility. In many states and territories, by statute, regulations or administrative order, there are standardized procedures for interconnecting distributed residential solar energy and related energy storage systems to the electric utility's local distribution system. In some states, such as New Jersey and Massachusetts, certain utilities such as municipal utilities or electric cooperatives are exempt from some interconnection requirements. Provided that the system and energy, if applicable, qualify for the standardized procedures based upon size, use of industry-standard components, location on a suitable local network and other applicable requirements, utilities in some states or territories are required to interconnect qualifying solar energy systems and energy storage systems on an expedited basis relative to non-qualifying systems. Expedited procedures, when available, streamline the installation and interconnection process for solar energy systems and energy storage systems to begin operating. In the U.S. states and territories in which we operate, our dealers typically obtain interconnection permission on behalf of us and our customers using standardized interconnection procedures.

In certain states, such as California, independent solar energy producers who enter into solar service agreements with homeowners for residential solar energy systems are required to make certain disclosures to the homeowner regarding the solar energy system and the terms of the agreement and record a notice against the title to the real property on which the electricity is generated and against the title to any adjacent real property on which the electricity will be used. The notice does not constitute a title defect, lien or encumbrance against the real property.

In June 2019, the U.S. Environmental Protection Agency ("EPA") issued the final Affordable Clean Energy ("ACE") rule replacing the previous Clean Power Plan, which established standards to limit carbon dioxide emissions from existing power generation facilities and was expected to increase the cost of certain forms of fossil fuel-derived energy. We estimate the power generated by our solar energy systems has displaced more than 1.2 million metric tons of carbon emissions based on approximately 1.7 billion kWh of electricity produced since our inception and applying the EPA's online greenhouse gas equivalencies calculator (https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator). The ACE rule would establish emission guidelines for states to develop plans to limit greenhouse gas emissions from existing coal-fired power plants but does not have the expected increase in cost for fossil fuel-derived energy. We cannot predict what effects, if any, the ACE rule may have on photovoltaic solar markets.


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Our operations, as well as the operation of our dealers, are subject to stringent and complex federal, state, territorial and local laws, including regulations governing the occupational health and safety of employees, wage regulations and environmental protection. For example, we and our dealers are subject to the regulations of the U.S. Department of Labor, Occupational Safety and Health Administration ("OSHA"), the U.S. Department of Transportation ("DOT"), the EPA and comparable state and territorial entities that protect and regulate employee health and safety and the environment. These include, for example, regulations regarding the disposal of solid and hazardous wastes from the solar energy systems we own. In addition, environmental laws can result in the imposition of liability in connection with end-of-life system disposal, such as in connection with disposal and recycling of batteries.

We and our dealers are also subject to laws and regulations relating to interactions with residential consumers, including those pertaining to sales and trade practices, privacy and data security, equal protection, consumer financial and credit transactions, consumer collections, mortgages and re-financings, home improvements, trade and professional licensing, warranties and various means of customer solicitation, as well as specific regulations pertaining to solar installations.

For a discussion of these and other regulatory requirements, see "Risk Factors—Risks Related to Regulations".

Government Incentives

U.S. federal, state, territorial and local governments have established various incentives and financial mechanisms to reduce the cost of solar energy and to accelerate the adoption of solar energy. These incentives come in various forms, including rebates, tax credits and other financial incentives such as payments for renewable energy credits associated with renewable energy generation, exclusion of solar energy systems and energy storage systems from property tax assessments, system performance payments, accelerated depreciation and net energy metering, or net metering, programs. These incentives make solar energy system and energy storage system ownership more attractive to some homeowners and enable us to charge our customers lower prices to purchase energy generated by our solar energy systems and energy storage systems or to lease or purchase our solar energy systems and energy storage systems than they would normally be expected to pay for utility-provided energy. These incentives also help catalyze private sector investments in solar energy and efficiency measures, including the installation and operation of residential and commercial solar energy systems and energy storage systems.

Net metering is one of several key policies that have enabled the growth of distributed solar in the U.S., providing significant value to certain customers with solar energy systems for the electricity generated by their systems but not directly consumed on site. Net metering allows a customer to pay the local electric utility only for power usage net of production from the customer's solar energy system. Customers receive a credit for the energy an interconnected solar energy system generates in excess of that needed by the home and that is provided to the electrical grid. The credit offsets energy usage incurred by the customer at times when the customer requires more electricity than is generated by the solar energy system. In many markets, this credit is equal to the residential retail rate for electricity and in other markets the rate is less than the retail rate and may be based, for example, in whole or in part on the centralized electric utility's "avoided cost" for electricity that it would have had to generate or purchase at wholesale to meet the customer's demand. Furthermore, when coupled with a time of use rate program in certain electric utility territories, a homeowner may offset usage billed at lower rates with net metering credits provided at a higher rate.

For these reasons, net metering credits incentivize consumers to use distributed solar in certain jurisdictions, including some of those in which we operate. In some electric utility territories, any excess credits are rolled over to the next billing period and may also be cashed out later at a rate lower than the retail rate. Most states, the District of Columbia, Puerto Rico and Guam have adopted some form of net metering by statute, regulation, administrative order or a combination thereof, although some of these jurisdictions provide for a credit at less than the retail rate. In some jurisdictions, centralized electric utilities have also adopted net metering on a voluntary basis. Some of the states in which we operate, including New Jersey, Maryland, Massachusetts, Rhode Island, Delaware, Illinois and Hawaii, have in place policies that limit or permit utilities to limit the amount of total electricity generated through net metering and/or solar energy systems, and some of these states as well as other states or territories, including Pennsylvania, Nevada, New Mexico and Guam, have policies that limit or place conditions on the size of individual solar energy systems.

Net metering and other incentive programs are subject to legislative and regulatory review in many states and territories in which we operate and the availability and value of these programs could be limited, reduced or phased out. Some states such as Arizona, Nevada and Kentucky have reduced their net metering credits. Further reviews by these states and others are anticipated and the subsequent amount of net metering credits will continue to be assessed over the next few years in states that have net metering policies. For example, net metering rates in California, Connecticut, Puerto Rico and South Carolina are up for consideration over the next few years. New York is working on developing an alternative to net metering through a Value of Distributed Energy Resources credit that would allow certain customers to receive direct monetary compensation as opposed to

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a net metering credit. This program is expected to be implemented in 2021. Other states such as California have implemented non-bypassable fees for customers enrolled in a net metering program, which requires customers to pay certain fees regardless of whether they are drawing energy from the electrical grid. As a result of the Definitive Restructuring Support Agreement ("DRSA") between the Puerto Rico Electric Power Authority ("PREPA") and its creditors submitted on May 3, 2019, which is currently pending before the U.S. District Court for the District of Puerto Rico, net metering customers in Puerto Rico may be impacted by transition charges and other requirements.

Many states and territories have adopted renewable portfolio energy production requirements. The majority of states, the District of Columbia and Puerto Rico have adopted a renewable portfolio standard ("RPS") that requires regulated electric utilities to generate or procure a specified percentage of total electricity delivered to customers in the state or territory from eligible renewable energy sources, such as solar energy systems, by a series of specified dates. In addition, several other states have set voluntary goals for renewable generation.

Roughly one-third of states with RPS policies require a minimum portion of the RPS be met by electric generation from solar energy systems, with substantial penalties for non-compliance. To demonstrate compliance with such RPS mandates, electric generation providers must submit state renewable energy certificates ("SRECs") to the applicable authority. One SREC is generated for a specified amount of energy generated for an eligible solar energy system. The specified amount of energy is dependent on system size and when the solar energy system receives a "permission to operate" order. Electric generation providers can either generate their own SRECs through solar energy systems they own or they can purchase SRECs owned by other parties.

SRECs are a distinct product, separate from the electricity generated by solar energy systems. We and our customers apply for and receive SRECs in certain jurisdictions for power generated by the solar energy systems we own. As a distinct product from the electricity generated by solar energy systems, SRECs represent a separate source of cash flow from the sale of electricity. SRECs can be sold with or without the actual electricity associated with the renewable-based generation. Solar energy system owners are typically able to sell SRECs to electric generation providers, such as electric utilities, or in the SREC commodity market. We have hedged a portion of our expected SREC production under fixed price forward contracts. The forward contracts require us to physically deliver the SRECs upon settlement.

Several states have an energy storage mandate or policies designed to encourage the adoption of storage. For example, California offers a cash rebate for storage installations through the Self Generation Incentive Program and Massachusetts and New York offer performance-based financial incentives for storage. Storage installations also are supported in certain states by state public utility commission policies that require utilities to consider alternatives such as storage before they can build new generation. In February 2018, the Federal Energy Regulatory Commission ("FERC") issued Order 841 directing regional transmission operators and independent system operators to remove barriers to the participation of storage in wholesale electricity markets and to establish rules to help ensure storage resources are compensated for the services they provide.

Some state and territorial governments, centralized electric utilities, municipal utilities and co-operative utilities offer a cash rebate or other payment incentive for the installation and operation of a solar energy or energy storage system or to customers undertaking other energy efficiency measures. Capital cost or "up-front" rebates provide funds to solar customers or developers or solar energy system owners such as us based on the cost, size or expected production of a customer's solar energy system. Performance-based incentives and tariff-based incentives provide payments to solar customers or a solar energy system owner based on the energy generated by the solar energy system during a pre-determined period. These rebates and payment incentives, when available, improve the economics of distributed solar to both us and our customers.

The economics of purchasing a solar energy system and energy storage system are also improved by eligibility for accelerated depreciation, which allows for the depreciation of equipment according to an accelerated schedule set forth by the Internal Revenue Service ("IRS"). This accelerated schedule allows a taxpayer to recognize the depreciation of tangible solar property on a five-year basis even though the useful life of such property is greater than five years. The acceleration of depreciation creates a valuable tax benefit that increases the return on investment from a solar energy system and energy storage systems. We benefit from accelerated depreciation on the solar energy systems and energy storage systems we own, which account for substantially all of our solar energy systems and energy storage systems.

The federal government currently provides business investment tax credits under Section 48(a) (the "Section 48(a) ITC") and residential energy credits under Section 25D (the "Section 25D Credit") of the U.S. Internal Revenue Code of 1986, as amended (the "Code"). The Section 48(a) ITC allows taxpayers to claim a federal tax credit equal to 30% of qualified expenditures for certain commercially owned solar energy systems that began construction before 2020. The Section 48(a) ITC percentage decreases to 26% of the basis of a solar energy system that begins construction during 2020, 22% for 2021 and 10% if construction begins after 2021 or if the solar energy system is placed into service after 2023. In June 2018, the IRS provided

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guidance as to when construction is considered to begin for such purposes, including a safe harbor that may apply when a taxpayer pays or incurs (or in certain cases, a contractor of the taxpayer pays or incurs) 5% or more of the costs of a system before the end of the applicable year (the "5% ITC Safe Harbor"). We are also able to claim the Section 48(a) ITC for energy storage systems installed in conjunction with solar energy systems as long as they are only charged by on-site solar. A reduced Section 48(a) ITC may be available for energy storage systems charged in part from sources other than on-site solar as long as the solar energy systems are charged at least 75% by on-site solar.

The Section 25D Credit allows an individual to claim a federal tax credit equal to 26% of qualified expenditures with respect to a residential solar energy system that is owned by the homeowner. This 26% rate was reduced from 30% for solar energy systems placed in service prior to 2020 and is scheduled to be reduced to 22% for solar energy systems placed in service during 2021. The Section 25D Credit is scheduled to expire effective January 1, 2022. The Section 25D Credit reduces the cost of consumer ownership of solar energy systems, such as under loan agreements.

Certain states and territories in which we operate offer a personal and/or corporate investment or production tax credit for solar energy. Further, most of the states and local jurisdictions have established sales and/or property tax incentives for renewable energy systems that include exemptions, exclusions, abatements and credits. For a discussion of these and other governmental incentives, see "Risk Factors—Risks Related to Regulations".

Competition

We believe our primary competitors are centralized electric utilities that supply electricity to our potential customers. We compete with these centralized electric utilities primarily based on price (cents per kWh), predictability of future prices (by providing pre-determined annual price escalations), reliability and the ease by which customers can switch to electricity generated by solar energy systems. We believe we compete favorably with centralized electric utilities based on these factors in the states and territories where our solar service agreements are offered.

We also compete with retail electric providers and independent power producers that are not regulated like centralized electric utilities but have access to the centralized utilities' electricity transmission and distribution infrastructure pursuant to state, territorial and local pro-competitive and consumer choice policies. Furthermore, we compete with solar companies with vertically integrated business models, such as Vivint Solar, Inc. and Sunrun Inc. In addition, we compete with other solar companies who sell or finance products directly to consumers, inclusive of programs like Property-Assessed Clean Energy. For example, we face competition from solar installation businesses that seek financing from external parties or utilize competitive loan products or state and local programs. In the future, we may also compete with solar companies that have business models similar to our own, some of which are marketed to potential customers by our dealers. We compete with these companies based on the competitiveness of the products, the overall customer relationship and the commissions we are willing to pay dealers for the origination of new end customers.

Suppliers

The major components of the solar energy systems include solar photovoltaic panels that turn sunlight into direct current ("DC") electricity, inverters that convert solar-generated DC electricity into alternating current ("AC") electricity, the form of energy used by most standard household appliances, racking systems that attach the solar photovoltaic panels to the roof or ground, a remote monitoring system that measures and monitors all energy generated by the solar energy system and provides alerts about system performance and in some cases, an energy storage system (battery) that stores excess energy generated by the photovoltaic panels to supplement energy supply during hours when energy consumption exceeds energy produced by the photovoltaic panels. The solar energy system may also be connected to the electrical grid or other supplemental energy sources, such as fuel cells and generators, with additional wiring and electrical hardware.

We require our dealers to choose all major components of the solar energy system or energy storage system from a pre-approved list of manufacturers and models. By allowing dealers to choose from several manufacturers and models without direct supplier obligations, we have greater flexibility to satisfy customer demand, ensure competitive pricing and adequate supply of components and reduce the concentration of warranty risks. We have entered into master contractual arrangements with each vendor on our pre-approved list of vendors that defines the general terms and conditions of our purchases and those of our dealers, including warranties, product specifications, indemnities, delivery and certain other terms. Our dealers typically purchase solar panels and inverters on an as-needed basis from our pre-approved suppliers at then-prevailing prices pursuant to purchase orders having the benefit of our master contractual arrangements. At times, we will also procure equipment directly and sell it to our dealers. For 2020, we have purchased substantially all the inverters that will be deployed under our lease and PPA agreements that we expect will allow the related solar energy systems to qualify for the 30% Section 48(a) ITC by satisfying the 5% ITC Safe Harbor.

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We evaluate and qualify our manufacturers and their product offerings based on total cost of ownership, reliability, warranty coverage, credit quality and other factors. All equipment must be listed on the California Energy Commission's SB1 List of Eligible Equipment. All approved solar photovoltaic panels must have a minimum 25-year power warranty and 10-year workmanship warranty. We also require approved solar photovoltaic panels to undergo extended reliability testing as an indication of a 25-year or greater lifetime. Beginning in April 2016, we required all our manufacturers carry a 25-year warranty, or offer a warranty extension to 25 years, on all product offerings to be eligible for inclusion on our approved vendor list. Prior to April 2016, we sourced inverter manufacturers offering a warranty of no less than 10 years. All approved racking systems are required to be solar energy system Fire Class Rated "A" with a Type 1 module per recent California Fire requirements. Additionally, the racking system must have a Professional Engineers stamp as proof of structural analysis and wind speed certification and the racking system must be certified as conforming to the integrated grounding and bonding requirements of UL Subject 2703. All replacement parts and components must meet or exceed the same standards as those of the original installation.

In September 2018, the Office of the United States Trade Representative ("USTR") determined to modify its prior actions in its investigation into certain acts, policies and practices of the government of China related to technology transfer, intellectual property and innovation pursuant to Section 301 of the Trade Act of 1974 by imposing an additional 10% duty on $200 billion worth of products from China, including inverters. In May 2019, the tariffs were increased from 10% to 25% and may be raised by the USTR in the future. If inverter production is not shifted to other countries before any tariff rate increase on these products, the price of inverters could increase. However, the cost of solar photovoltaic panels and inverters generally do not comprise a meaningful portion of our operating expenses. In addition, many of the solar photovoltaic panel and inverter manufacturers on our approved vendor list are from countries other than China, including Canada, the United States, Vietnam and Malaysia. See "Risk Factors—Increases in the cost of our solar energy systems due to tariffs imposed by the U.S. government could have a material adverse effect on our business, financial condition and results of operations". These tariffs have not had a material impact on our business or our operations.

For the year ended December 31, 2019, Hanwha Q-Cells and Yingli Green Energy supplied approximately 50% and 17%, respectively, of our solar photovoltaic panels installed and no other supplier represented more than 10% of our solar photovoltaic panels installed. In 2018, Hanwha Q-Cells and Trina Solar Limited supplied approximately 52% and 22%, respectively, of our solar photovoltaic panels installed and no other supplier represented more than 10% of our solar photovoltaic panels installed. For the year ended December 31, 2019, Enphase Energy, Inc. and SolarEdge Technologies Inc. accounted for approximately 58% and 42%, respectively, of the inverters used in our solar energy system installations. In 2018, Enphase Energy, Inc. and SolarEdge Technologies Inc. accounted for approximately 55% and 43%, respectively, of the inverters used in our solar energy system installations. For the year ended December 31, 2019, Tesla, Inc. accounted for 100% of our energy storage systems purchases. In 2018, Tesla, Inc. and LG Chem Ltd. accounted for approximately 86% and 13%, respectively, of our energy storage system purchases. Our dealers generally source the additional equipment and parts needed for installation of the solar energy systems, such as fasteners, wiring and electrical fittings, through distributors or direct purchase procurement from manufacturers.

Employees and Contractors

As of December 31, 2019, we had 324 full-time employees and 328 total employees. We also engage independent contractors and consultants. We are not party to any collective bargaining agreements and have not experienced any strikes or work stoppages.

Insurance

We maintain the types and amounts of insurance coverage we believe are consistent with customary industry practices. Our insurance policies cover employee and contractor-related accidents and injuries, property damage, business interruption, storm damage, fixed assets, facilities, cyber, crime and liability deriving from our activities. Our insurance policies also cover directors', employee and fiduciary liability and officers' liability. We may also be covered for certain liabilities by insurance policies issued to third parties, including, but not limited to, our dealers and vendors.

Available Information

We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act. The Securities and Exchange Commission ("SEC") maintains a website at www.sec.gov that contains reports, proxy and information statements and other information we file with the SEC electronically. Copies of our reports on Form 10-K, Form 10-Q, Form 8-K and amendments to those reports

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may also be obtained, free of charge, electronically on the investor relations page on our website located at investors.sunnova.com as soon as reasonably practical after we file such material with, or furnish it to, the SEC.

We also use the investor relations page on our website as a channel of distribution for important company information. Important information, including press releases, analyst presentations and financial information regarding us, as well as corporate governance information, is routinely posted and accessible on the investor relations page on our website. Information on or that can be accessed through our website is not part of this Annual Report on Form 10-K and the inclusion of our website address is an inactive textual reference only.

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Item 1A. Risk Factors.

Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below together with all of the other information included in this Annual Report on Form 10-K, including the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes, before deciding to invest in our common stock. We may experience additional risks and uncertainties not currently known to us; or, as a result of developments occurring in the future, conditions that we currently deem to be immaterial may also materially and adversely affect our business, financial condition, cash flows and results of operations. If any of the risks actually occur, they may materially and adversely affect our business, financial condition, cash flows and results of operations. In this event, the trading price of our common stock could decline and you could lose all or part of your investment in us.

Risks Related to Our Business

Historically, we have incurred operating and net losses and we may be unable to achieve or sustain profitability in the future.

We incurred operating losses of $22.3 million, $13.7 million and $10.4 million and net losses of $133.4 million, $68.4 million and $90.2 million for the years ended December 31, 2019, 2018 and 2017, respectively. These historical operating and net losses were due to a number of factors, including increased expenses to fund our growth and related financing needs. We expect to incur significant expenses as we finance the expansion of our operations and implement additional internal systems and infrastructure to support our growth. In addition, as a public company, we incur significant additional legal, accounting and other expenses we did not incur as a private company. We do not know whether our revenue will grow rapidly enough to absorb these costs. Our ability to achieve profitability depends on a number of factors, including:

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growing our customer base and originating new solar service agreements on economic terms;
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maintaining or lowering our cost of capital;
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reducing operating costs by optimizing our operations and maintenance processes;
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maximizing the benefits of our dealer network;
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finding additional tax equity investors and other sources of institutional capital; and
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the continued availability of various governmental incentives for the solar industry.

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

Certain of our key operational metrics, including estimated gross contracted customer value, are based on various assumptions and estimates we make over an extended period of time. Actual experience may vary materially from these estimates and assumptions and therefore undue reliance should not be placed on these metrics.

Our key operational metrics include a number of assumptions and estimates we make over an extended period of time (up to 35 years) and may not prove accurate. In calculating estimated gross contracted customer value, we estimate projected monthly customer payments over the remaining life of our solar service agreements, which are typically 25 years in length with an opportunity for customers to renew for up to an additional 10 years, and from the future sale of related SRECs. These estimated future cash flows depend on various factors including but not limited to solar service agreement type, contracted rates, customer loss rates, expected sun hours and the projected production capacity of the solar equipment installed. Additionally, in calculating estimated gross contracted customer value we also estimate cash distributions to tax equity fund investors and operating, maintenance and administrative expenses associated with the solar service agreements, including expenses related to accounting, reporting, audit, insurance, maintenance and repairs over the remaining life of our solar service agreements.

Furthermore, in calculating estimated gross contracted customer value, we discount our future net cash flows at 6% based on industry practice and the interest rate on certain recent securitizations. This discount rate might not be the most appropriate discount rate based on interest rates in effect from time to time and industry or company-specific risks associated with these cash flows and the appropriate discount rate for these estimates may change in the future due to the level of inflation, rising interest rates, our cost of capital, customer default rates and consumer demand for solar energy systems, among other things. We also assume customer losses of 0% in calculating these metrics even though we expect to have some minimal level of customer losses over the life of our contracts. To illustrate the way in which actual results may change, we present sensitivities around the discount rate and the rate of customer losses, although these sensitivities may not capture the most appropriate discount rate or the rate of customer losses we will experience. For a discussion of estimated gross contracted customer value

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and the related discount rate, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operational Metrics—Estimated Gross Contracted Customer Value".

PricewaterhouseCoopers LLP has not audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to these operational metrics or their components. The estimates discussed above are based on a combination of assumptions that may prove to be inaccurate over time. Such inaccuracies could be material, particularly given the estimates relate to cash flows up to 35 years in the future.

Our growth strategy depends on the continued origination of solar service agreements by us and our dealers.

Our growth strategy depends on the continued origination of solar service agreements by us and our dealers. We may be unable to originate additional solar service agreements and related solar energy systems and energy storage systems in the numbers or at the pace we currently expect for a variety of reasons, including, among other things, the following:

•
demand for solar energy systems and energy storage systems failing to develop sufficiently or taking longer than expected to develop;
•
residential solar energy technology being available at economically attractive prices as a result of factors outside of our control, including utility prices not rising as quickly as anticipated;
•
issues related to identifying, engaging, contracting, compensating and maintaining relationships with dealers and the negotiation of dealer agreements;
•
issues related to financing, construction, permitting, the environment, governmental approvals and the negotiation of solar service agreements;
•
a reduction in government incentives or adverse changes in policy and laws for the development or use of solar energy, including net metering, SRECs and tax credits;
•
other government or regulatory actions that could impact our business model;
•
negative developments in public perception of the solar energy industry; and
•
competition from other solar companies and energy technologies, including the emergence of alternative renewable energy technologies.

If the challenges of originating solar service agreements and related solar energy systems and energy storage systems increase, our pool of available opportunities may be limited, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

If sufficient additional demand for residential solar energy systems does not develop or takes longer to develop than we anticipate, our ability to originate solar service agreements may decrease.

The distributed residential solar energy market is at a relatively early stage of development in comparison to fossil fuel-based electricity generation. If additional demand for distributed residential solar energy systems fails to develop sufficiently or takes longer to develop than we anticipate, we may be unable to originate additional solar service agreements and related solar energy systems and energy storage systems to grow our business. In addition, demand for solar energy systems and energy storage systems in our targeted markets may not develop to the extent we anticipate. As a result, we may be unsuccessful in broadening our customer base through origination of solar service agreements and related solar energy systems and energy storage systems within our current markets or in new markets we may enter.

Many factors may affect the demand for solar energy systems, including the following:

•
availability, substance and magnitude of solar support programs including government targets, subsidies, incentives, renewable portfolio standards and residential net metering rules;
•
the relative pricing of other conventional and non-renewable energy sources, such as natural gas, coal, oil and other fossil fuels, wind, utility-scale solar, nuclear, geothermal and biomass;
•
performance, reliability and availability of energy generated by solar energy systems compared to conventional and other non-solar renewable energy sources;
•
availability and performance of energy storage technology, the ability to implement such technology for use in conjunction with solar energy systems and the cost competitiveness such technology provides to customers as compared to costs for those customers reliant on the conventional electrical grid; and
•
general economic conditions and the level of interest rates.

The residential solar energy industry is constantly evolving, which makes it difficult to evaluate our prospects. We cannot be certain if historical growth rates reflect future opportunities or whether growth anticipated by us will be realized. The failure

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of distributed residential solar energy to achieve, or its being significantly delayed in achieving, widespread adoption could have a material adverse effect on our business, financial condition and results of operations.

If we fail to manage our operations and 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 measured by our number of customers and we intend to continue our efforts to expand our business within existing and new markets. This growth has placed, and any future growth may place, a strain on our management, operational and financial infrastructure. Our growth requires our management to devote a significant amount of time and effort to maintain and expand our relationships with customers, dealers and other third parties, attract new customers and dealers, arrange financing for our growth and manage our expansion into additional markets.

In addition, our current and planned operations, personnel, information technology and other 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 operations and growth, we may be unable to meet our expectations regarding growth, opportunity and financial targets, take advantage of market opportunities, execute our business strategies, meet our tax equity financing commitments or respond to competitive pressures. This could also result in declines in quality or customer satisfaction, increased costs, difficulties in introducing new offerings or other operational difficulties. Any failure to effectively manage our operations and growth could adversely impact our reputation, business, financial condition, cash flows and results of operations.

A material reduction in the retail price of electricity charged by electric utilities or other retail electricity providers would harm our business, financial condition and results of operations.

Decreases in the retail price of electricity from electric utilities or from other retail electric providers, including other renewable energy sources such as larger-scale solar energy systems, could make our offerings less economically attractive. The price of electricity from utilities could decrease as a result of:

•
the construction of a significant number of new power generation plants, whether generated by natural gas, nuclear power, coal or renewable energy;
•
the construction of additional electric transmission and distribution lines;
•
a reduction in the price of natural gas or other natural resources as a result of increased supply due to new drilling techniques or other technological developments, a relaxation of associated regulatory standards or broader economic or policy developments;
•
less demand for electricity due to energy conservation technologies and public initiatives to reduce electricity consumption or to recessionary economic conditions; and
•
development of competing energy technologies that provide less expensive energy.

A reduction in electric utilities' rates or changes to peak hour pricing policies or rate design (such as the adoption of a fixed or flat rate) could also make our offerings less competitive with the price of electricity from the electrical grid. If the cost of energy available from electric utilities or other providers were to decrease relative to solar energy generated from residential solar energy systems or if similar events impacting the economics of our offerings were to occur, we may have difficulty attracting new customers or existing customers may default or seek to terminate, cancel or otherwise avoid the obligations under their solar service agreements. For example, large utilities in California have started transitioning customers to time-of-use rates and also have adopted a shift in the peak period for time-of-use rates to later in the day. Unless grandfathered under a different rate, residential customers with solar energy systems are required to take service under time-of-use rates with the later peak period. Moving utility customers to time-of-use rates or the shift in the timing of peak rates for utility-generated electricity to include times of day when solar energy generation is less efficient or non-operable could also make our offerings less competitive. Time-of-use rates could also result in higher costs for our customers whose electricity requirements are not fully met by our offerings during peak periods.

Additionally, the price of electricity from utilities may grow less quickly than the escalator feature in certain of our solar service agreements, which could also make our solar energy systems less competitive with the price of electricity from the electrical grid and result in a material adverse effect on our business, financial condition and results of operations.


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Our growth is dependent on our dealer network and our failure to retain or replace existing dealers or to grow our dealer network could adversely impact our business. In addition, one of our dealers currently accounts for approximately half of our recently added customers.

Our dealer network is an integral component of our business strategy and serves as the means by which we are able to originate solar service agreements and related solar energy systems and energy storage systems in existing and prospective markets. Poor performance by our dealers in originating solar service agreements could have a material adverse effect on our business, financial condition and results of operations. We have in the past had disputes and litigation with certain of our dealers over their performance.

As we grow, particularly in new jurisdictions, we will need to expand our dealer network. We are subject to significant competition for the recruitment and retention of dealers from our competitors and we may not be able to recruit new or replacement dealers in the future. We compete for our dealers with other solar service providers primarily based on the amount and timing of payments for originating solar service agreements, financial ability and our suite of technology tools.

Most of our dealers are not restricted in their ability to work with our competitors and are not obligated to continue working with us. In the past, some of our dealers have chosen to work with competitors of ours or terminated their relationships with us and dealers may reduce or terminate their work with us in the future. The departure of a significant number of our dealers for any reason, or the failure to replace departing dealers in the event of such departures, could reduce our potential origination opportunities and could have a material adverse effect on our business, financial condition and results of operations. As we develop and expand our Sunnova Protect services, dealers may view us as a competitor and choose to end their relationship with us.

Additionally, dependence on any one dealer or small group of dealers further concentrates our exposure to risks related to termination of the dealer arrangement, poor service provided by such dealer, the deterioration in financial condition of the dealer and other risks inherent in such a relationship. For the years ended December 31, 2019, 2018 and 2017, Trinity accounted for approximately 41%, 52% and 29% of our originations for such periods, respectively. Although we have entered into a four‑year exclusivity agreement with Trinity, pursuant to which Trinity may only originate solar service agreements for us, there are various exceptions to this obligation. For a discussion of exclusivity arrangements with certain of our dealers, see "Business—Our Relationships with Our Dealers".

If we or our dealers fail to hire and retain a sufficient number of employees and service providers in key functions, our growth and our ability to timely complete customer projects and successfully manage customer accounts would be constrained.

To support our growth, we and our dealers need to hire, train, deploy, manage and retain a substantial number of skilled employees, engineers, installers, electricians and sales and project finance specialists. Competition for qualified personnel in our industry has increased substantially, particularly for skilled personnel involved in the installation of solar energy systems. We and our dealers also compete with the homebuilding and construction industries for skilled labor. These industries are cyclical and when participants in these industries seek to hire additional workers, it puts upward pressure on our and our dealers' labor costs. Companies with whom our dealers compete to hire installers may offer compensation or incentive plans that certain installers may view as more favorable. As a result, our dealers may be unable to attract or retain qualified and skilled installation personnel. The further unionization of our industry's labor force or the homebuilding and construction industries' labor forces could also increase our dealers' labor costs. Shortages of skilled labor could significantly delay a project or otherwise increase our dealers' costs. Further, we need to continue to increase the training of our customer service team to provide high-end account management and service to homeowners before, during and following the point of installation of our solar energy systems. Identifying and recruiting qualified personnel and training them requires significant time, expense and attention. It can take several months before a new customer service team member is fully trained and productive at the standards we have established. If we are unable to hire, develop and retain talented customer service or other personnel, we may not be able to grow our business.

We need to obtain substantial additional financing arrangements to provide working capital and growth capital and if financing is not available to us on acceptable terms when needed, our ability to continue to grow our business would be materially adversely impacted.

Distributed residential solar power is a capital-intensive business that relies heavily on the availability of debt and equity financing sources to fund solar energy system purchase, design, engineering and other capital expenditures. From our inception through December 31, 2019, we have raised more than $4.7 billion in total capital commitments from equity, debt and tax equity investors.

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Our future success depends on our ability to raise capital from third-party investors and commercial sources, such as banks and other lenders, on competitive terms to help finance the deployment of our solar energy systems. We seek to minimize our cost of capital in order to improve profitability and maintain the price competitiveness of the electricity produced by, the payments for and the cost of our solar energy systems. We rely on access to capital, including through tax equity financing and indebtedness in the form of debt facilities and asset-backed securities, to cover the costs related to bringing our solar energy systems and energy storage systems in service, although our customers ultimately bear responsibility for those costs pursuant to our solar service agreements.

To meet the capital needs of our growing business, we will need to obtain additional debt or equity financing from current and new investors. If any of our current debt or equity investors decide not to invest in us in the future for any reason, or decide to invest at levels inadequate to support our anticipated needs or materially change the terms under which they are willing to provide future financing, we will need to identify new investors and financial institutions to provide financing and negotiate new financing terms. In addition, our ability to obtain additional financing through the asset-backed securities market or other secured debt markets is subject to our having sufficient assets eligible for securitization as well as our ability to obtain appropriate credit ratings. If we are unable to raise additional capital in a timely manner, our ability to meet our capital needs and fund future growth may be limited.

Delays in obtaining financing could cause delays in expansion in existing markets or entering into new markets and hiring additional personnel. Any future delays in capital raising could similarly cause us to delay deployment of a substantial number of solar energy systems for which we have signed solar service agreements with customers. Our future ability to obtain additional financing depends on banks' and other financing sources' continued confidence 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 themselves. We face intense competition from a variety of other companies, technologies and financing structures for such limited investment capital. 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 to us on terms less favorable than those received by our competitors. For example, if we experience higher customer default rates than we currently experience, it could be more difficult or costly to attract future financing. Any inability to secure financing could lead us to cancel planned installations, impair our ability to accept new customers or increase our borrowing costs, any of which would have a material adverse effect on our business, financial condition and results of operations.

Our ability to provide our solar service offerings to homeowners on an economically viable basis depends in part on our ability to finance these solar energy systems with tax equity investors that depend on particular tax and other benefits.

Historically, there have been a limited number of investors that generate sufficient profits and possess the requisite financial sophistication to benefit from the tax benefits our tax equity vehicles provide, and a lack of depth in this market may limit our ability to complete such tax equity financing. Potential investors seeking tax-advantaged financing must remain satisfied the structures we offer qualify for the tax benefits associated with solar energy systems available to these investors, which depends both on the investors' assessment of tax law and the absence of any unfavorable interpretations of that law. Changes in existing law and interpretations by the IRS and the courts could reduce the willingness of tax equity investors to invest in tax equity vehicles associated with these solar energy system investments or cause these investors to require a larger allocation of customer payments. We are not certain this type of financing will continue to be available to us as the legal and regulatory landscape may shift in a manner that reduces or eliminates the attractiveness of such financing opportunities. For example, a step down of Section 48(a) ITCs is scheduled to occur from 2020 to 2023. Additionally, we may be unable to identify investors interested in engaging in this type of financing with us. As of December 31, 2019, we have raised six tax equity vehicles to which investors such as banks and other large financial investors have committed to invest approximately $374.5 million. The undrawn committed capital for these tax equity vehicles as of December 31, 2019 is approximately $50.7 million. We plan to continue to form new tax equity vehicles as long as existing tax law and regulations make such financing attractive. See "—Risks Related to Regulations—Our business currently depends in part on the availability of rebates, tax credits and other financial incentives. The expiration, elimination or reduction of these rebates, credits or incentives or our ability to monetize them could adversely impact our business".

The contractual terms in certain of our tax equity vehicle documents impose conditions on our ability to draw on financing commitments from the tax equity investors, including if an event occurs that could reasonably be expected to have a material adverse effect on the tax equity vehicle or on us. The terms and conditions of our tax equity vehicles can vary and may require us to alter our products, services or product mix. If we do not satisfy such conditions due to events related to our business or a specific tax equity vehicle or developments in our industry or otherwise, and as a result we are unable to draw on existing commitments, it could have a material adverse effect on our business, financial condition, results of operations and liquidity. In addition to our inability to draw on the investors' commitments, we may incur financial penalties for non-performance,

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including delays in the installation process and interconnection to the power grid of solar energy systems and other factors. Based on the terms of the tax equity vehicle agreements, we will either reimburse a portion of the tax equity investor's capital or pay the tax equity investor a non-performance fee.

Under the terms of certain of our tax equity vehicles, we may be required to make payments to the tax equity investors if certain tax benefits allocated to such tax equity investors are not realized as expected. Our financial condition may be adversely impacted if a tax equity vehicle is required to make any tax-related payments.

Our tax equity vehicles require that, prior to a date which is at least five years after the last project was placed in service, the tax equity investor receives substantially all the non-cash value attributable to the solar energy systems; however, we receive a majority of the cash distributions. In the event the tax equity investor has tax liability as a result of its investment and the cash distributions payable to the tax equity investor are not sufficient to pay such tax liability, the amount of distributions payable to us will be reduced. The amounts of potential tax liability (and the potential for a reduced distribution to us) depend on the tax benefits that accrue to such investors from the tax equity vehicles' activities and may be impacted by changes in tax law.

Additionally, we may have payment obligations to our tax equity investors under indemnity obligations contained in those financings. See "—Risks Related to Taxation—If the IRS makes a determination that the fair market value of our solar energy systems is materially lower than what we have reported in our tax equity vehicles' tax returns, we may have to pay significant amounts to our tax equity vehicles, our tax equity investors and/or the U.S. government. Such determinations could have a material adverse effect on our business and financial condition" and "—Risks Related to Taxation—If our solar energy systems either cease to be qualifying property or undergo certain changes in ownership within five years of the applicable placed in service date, we may have to pay significant amounts to our tax equity vehicles, our tax equity investors and/or the U.S. government. Such recapture could have a material adverse effect on our business and financial condition".

Due to uncertainties associated with estimating the timing and amounts of cash distributions and allocations of tax benefits to such investors, we cannot determine the potential impact on our cash flows under current or future arrangements. Any significant reductions in the cash we expect to receive from these structures could adversely affect our financial condition.

We enter into securitization structures, warehouse financings and other debt financings that may limit our ability to access the cash of our subsidiaries and include acceleration events that, if triggered, could adversely impact our financial condition.

Since April 2017, we have pooled and transferred eligible solar energy systems and the related asset receivables into five special purpose entities, which sold solar asset-backed notes and solar loan-backed notes to institutional investors, the net proceeds of which were distributed to us. We intend to monetize additional solar energy systems in the future through contributions to new special purposes entities for cash. There is a risk the institutional investors that have purchased the notes issued by these special purpose entities will be unwilling to make further investments in our solar energy systems at attractive prices. Although the creditors of these special purpose entities have no recourse to our other assets except as expressly set forth in the terms of the notes, the special purpose entities are typically required to maintain a liquidity reserve account, a reserve account for inverter replacements as well as, in certain cases, reserve accounts to finance purchase option/withdrawal right exercises, storage system replacement or payment of liquidated damages for the benefit of the lenders under the applicable series of notes, each of which are funded from initial deposits or cash flows to the levels specified therein.

The securitization structures, warehouse financings and other debt financings often include certain other features designed to protect investors. The primary feature relates to the availability and adequacy of cash flows in the pool of assets to meet contractual requirements, the insufficiency of which triggers an early repayment of the indebtedness. We refer to this as "early amortization" which may be based on, among other things, a debt service coverage ratio falling or remaining below certain levels. In the event of an early amortization, the notes issuer would be required to repay the affected indebtedness using available collections received from the asset pool. An early amortization event would impair our liquidity and may require us to utilize other available contingent liquidity or rely on alternative funding sources, which may not be available at the time. Certain of the securitizations, warehouse financings and other debt financings also contain a "cash trap" feature, which requires excess cash flow to be held in an account based on, among other things, a debt service coverage ratio falling or remaining below certain levels. If the cash trap conditions are not cured within a specified period, then the cash in the cash trap account must be applied to repay the indebtedness. If the cash trap conditions are timely cured, the cash is either released back to the borrower or used to repay the indebtedness at the borrower's option. The indentures of our securitizations also typically contain customary events of default for solar securitizations that may entitle the noteholders to take various actions, including the acceleration of amounts due and foreclosure on the issuer's assets. Any significant payments we may be required to make as a

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result of these arrangements could adversely affect our financial condition. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financing Arrangements".

Servicing our existing debt requires a significant amount of cash. We may not have sufficient cash flow from our business to timely pay our interest and principal obligations and may be forced to take other actions to satisfy our payment obligations.

As of December 31, 2019, our total indebtedness was approximately $1.4 billion and the available borrowing capacity under our credit facilities was approximately $88.3 million. 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 generate cash flow from operations sufficient to service our debt and make necessary capital expenditures to operate our business. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as slowing or ceasing the origination of new solar service agreements, selling assets, restructuring debt or obtaining additional debt and equity capital on terms that may be onerous or highly dilutive. Our ability to timely repay or otherwise refinance our 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.

Furthermore, we and our subsidiaries expect to incur additional debt in the future, subject to the restrictions contained in our debt instruments. Increases in our existing debt obligations would further heighten the debt related risk discussed above. In addition, we may not be able to enter into new debt instruments on acceptable terms or at all. If we were unable to satisfy financial covenants and other terms under existing or new instruments, or obtain waivers or forbearance from our lenders, or if we were 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 are exposed to the credit risk of our customers.

Our customers purchase solar energy or lease solar energy systems from us pursuant to one of two types of long-term contracts: a PPA or a lease. The PPA and lease terms are typically for 25 years. In addition, under our loan agreements the customer finances the purchase of a solar energy system and we agree to operate and maintain the solar energy system throughout the 25-year term of the agreement. Our solar service agreements require the customer to make monthly payments to us throughout the term of the contract, unless prepaid. Because we have long-term, contractual relationships with our customers, we are subject to the credit risk of our customers and screen our customers based upon their credit rating in an attempt to mitigate the risk of customer default. As of December 31, 2019, the average FICO® score of our customers was 739 at the time of signing the solar service agreement. The accuracy of independent third-party information provided to the credit reporting agency cannot be verified. A FICO® score purports only to be a measurement of the relative degree of risk a borrower represents to a lender, i.e., a borrower with a higher score may be less likely to default in payment than a borrower with a lower score.

As of December 31, 2019, approximately 0.8% of our customers were in default under their solar service agreements. However, as we grow our business, the risk of customer defaults may increase as credit scores are dynamic and may deteriorate over a 25-year period. During an economic downturn, the risk of customer defaults may increase. In addition, our customers may assign their solar service agreements to other customers who have lower credit scores or we may enter into new solar service agreements in the future with customers who have lower credit scores than our current customers. In addition, future developments, including competition from other renewables, could decrease the attractiveness of our current contracts. Although our solar service agreements grant us the ability to terminate the agreement with the customer and repossess the defaulting customers' solar energy system in certain circumstances, enforcement of these rights under the solar service agreement may be difficult, expensive and time-consuming.

Restrictive covenants in certain of our debt agreements could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests.

Our debt agreements impose operating and financial restrictions on us. These restrictions limit our ability and that of our subsidiaries to, among other things:

•
incur additional indebtedness;
•
make investments or loans;
•
create liens;
•
consummate mergers and similar fundamental changes;

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•
make restricted payments;
•
make investments in unrestricted subsidiaries;
•
enter into transactions with affiliates; and
•
use the proceeds of asset sales.

We may be prevented from taking advantage of business opportunities that arise because of the limitations imposed on us by the restrictive covenants under certain of our debt agreements. The restrictions contained in the covenants could:

•
limit our ability to plan for or react to market conditions, to meet capital needs or otherwise to restrict our activities or business plan; and
•
adversely affect our ability to finance our operations, enter into acquisitions or divestitures to engage in other business activities that would be in our interest.

A breach of any of these covenants or our inability to comply with the required financial ratios or financial condition tests could result in a default under our debt agreements that, if not cured or waived, could result in acceleration of all indebtedness outstanding thereunder and cross-default rights under our other debt. In addition, in the event of an event of default under one of the credit facilities, the affected lenders could foreclose on the collateral securing such credit facility and require repayment of all borrowings outstanding thereunder. If the amounts outstanding under the credit facilities or any of our other indebtedness were to be accelerated, our assets may not be sufficient to repay in full the amounts owed to the lenders or to our other debt holders.

Rising interest rates may adversely impact our business.

Rising interest rates will increase our cost of capital. Our future success depends on our ability to raise capital from investors and obtain secured lending to help finance the deployment of our solar service agreements. As a result, rising interest rates may have an adverse impact on our ability to offer attractive pricing on our solar service agreements to our customers.

The majority of our cash flows to date have been from solar service agreements monetized under various tax equity fund structures and secured lending arrangements. One of the components of this monetization is the present value of the payment streams from customers who enter into these long-term solar service agreements. If the rate of return required by capital providers, including debt providers, 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 derived from this type of monetization. Any measures we could take to mitigate the impact of rising interest rates on our ability to secure third-party financing could ultimately have an adverse impact on the value proposition we offer our customers or our profitability.

The phase-out of the London Interbank Offered Rate ("LIBOR") may adversely affect a portion of our outstanding debt.

LIBOR is scheduled to be phased out by the end of 2021. It is unclear whether new methods of determining LIBOR will be established such that it continues to exist after 2021, or if alternative floating borrowing rates will be adopted. Changes in the method of determining LIBOR, or the replacement of LIBOR with an alternative floating borrowing rate, may adversely affect our borrowing costs. Certain of our debt instruments have interest rates that are LIBOR based and will not have matured prior to the phase-out of LIBOR. We cannot predict the effect of the potential changes to LIBOR or the establishment and use of alternative floating borrowing rates on the portion of our outstanding debt that is LIBOR based. Challenges in changing to a different borrowing rate may result in less favorable pricing on certain of our debt instruments and could have an adverse effect on our financial results and cash flows.

Our business has benefited from the declining cost of solar energy system components and our business may be harmed to the extent the cost of such components stabilize or increase in the future.

Our business has benefited from the declining cost of solar energy system components and to the extent such costs stabilize, decline at a slower rate or increase, our future growth rate may be negatively impacted. The declining cost of solar energy system components and the raw materials necessary to manufacture them has been a key driver in the price of solar energy systems we own, the prices charged for electricity and customer adoption of solar energy. Solar energy system component and raw material prices may not continue to decline at the same rate as they have over the past several years or at all. In addition, growth in the solar industry and the resulting increase in demand for solar energy system components and the raw materials necessary to manufacture them may also put upward pressure on prices. An increase of solar energy system components and raw materials prices could slow our growth and cause our business and results of operations to suffer. Further, the cost of solar energy system components and raw materials has increased and could increase in the future due to tariff penalties, duties, the loss of or changes in economic governmental incentives or other factors. See "—Increases in the cost of

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our solar energy systems due to tariffs imposed by the U.S. government could have a material adverse effect on our business, financial condition and results of operations".

We do not directly control certain costs related to our business, which could put us at a disadvantage relative to companies who have a vertically integrated business model.

We do not have direct control over the costs our suppliers charge for the components of our solar energy systems and energy storage systems or the costs to our dealers of installing and marketing such products. This may lead us to charge higher prices for our solar energy systems and energy storage systems than our competitors with a vertically integrated business model, causing us to be unable to maintain or increase market share.

We may be unsuccessful in introducing new service and product offerings, including our distributed energy storage services and energy storage management systems.

We intend to introduce new offerings of services and products to both new and existing customers in the future, including battery-based distributed energy storage services and energy storage management systems, home automation products and additional home technology solutions. We may be unsuccessful in significantly broadening our customer base through the addition of these services and products within our current markets or in new markets we may enter. Additionally, we may not be successful in generating substantial revenue from any additional services and products we may introduce in the future and may decline to initiate new product and service offerings.

We face competition from centralized electric utilities, retail electric providers, independent power producers 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 centralized electric utilities. We believe our primary competitors are the centralized electric utilities that supply electricity to our potential customers. We compete with these centralized electric utilities primarily based on price (cents per kWh), predictability of future prices (by providing pre-determined annual price escalations) 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, our business may not grow.

Centralized electric utilities generally have substantially greater financial, technical, operational and other resources than we do. As a result, these competitors may be able to devote more resources to the research, development, promotion and sale of their products or services or respond more quickly to evolving industry standards and changes in market conditions than we can. Centralized electric utilities could also offer other value-added products or services that could help them to 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. Centralized electric utilities could also offer customers the option of purchasing electricity obtained from renewable energy resources, including solar, which would compete with our offerings.

We also compete with retail electric providers and independent power producers not regulated like centralized electric utilities but which have access to the centralized utilities' electricity transmission and distribution infrastructure pursuant to state, territorial and local pro-competition and consumer choice policies. These retail electric providers and independent power producers are able to offer customers electricity supply-only solutions that are competitive with our solar energy system options on both price and usage of renewable energy technology while avoiding the long-term agreements and physical installations our current business model requires. This may limit our ability to acquire new customers, particularly those who wish to avoid long-term agreements or have an aesthetic or other objection to putting solar panels on their roofs.

We also compete with solar companies with vertically integrated business models, including sales, financing, engineering, manufacturing, installation, maintenance and monitoring services. If the integrated approach of our competitors is successful, it may limit our ability to originate solar energy systems. Many of our vertically integrated competitors are larger than we are. As a result, these competitors may be able to devote more resources to the research, development, promotion and sale of their products or services or respond more quickly to evolving industry standards and changes in market conditions than we can. Solar companies with vertically integrated business models could also offer other value-added products or services that could help them to compete with us.

In addition, we compete with other solar companies who sell or finance products directly to consumers, inclusive of programs like Property-Assessed Clean Energy financing programs established by local governments. For example, we face

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competition from solar installation businesses that seek financing from external parties or utilize competitive loan products or state and local programs.

We also compete with solar companies with business models similar to our own, some of which are marketed to potential customers by our dealers. Some of these competitors specialize in the distributed residential solar energy market and some may provide energy at lower costs than we do. Some of our competitors offer or may offer similar services and products as we do, such as leases, PPAs and direct outright sales of and consumer loan products for solar energy systems. Many of our competitors also have significant brand name recognition and have extensive knowledge of our target markets.

We also compete with solar companies that offer community solar products and utility companies that provide renewable power purchase programs. Some customers might choose to subscribe to a community solar project or renewable subscriber programs instead of installing a solar energy system on their home, which could affect our sales. Additionally, some utility companies (and some utility-like entities, such as community choice aggregators in California) have generation portfolios that are increasingly renewable in nature. In California, for example, due to recent legislation, utility companies and community choice aggregators in that state are required to have generation portfolios comprised of 60% renewable energy by 2030 and state regulators are planning for utility companies and community choice aggregators to sell 100% greenhouse gas free electricity to retail customers by 2045. As utility companies offer increasingly renewable portfolios to retail customers, those customers might be less inclined to install a solar energy system at their home, which could adversely affect our growth.

We have historically provided our services only to residential customers and do not currently intend to expand to commercial, industrial or governmental customers. We compete with companies who sell solar energy systems and services in the commercial, industrial and government markets, in addition to the residential market, in the U.S. and foreign markets. There is intense competition in the residential solar energy sector in the markets in which we operate. As new entrants continue to enter into these markets, we may be unable to grow or maintain our operations and we may be unable to compete with companies that earn revenue in both the residential market and non-residential markets. Further, because we provide our services exclusively to residential customers, we have a less diverse market presence and are more exposed to potential adverse changes in the residential market than our competitors that sell solar energy systems and services in the commercial, industrial, government and utility markets.

As the solar industry grows and evolves, we will also face new competitors and technologies who are not currently in the market. Our industry is characterized by low technological barriers to entry and well-capitalized companies, including utilities and integrated energy companies, could choose to enter the market and compete with us. Our failure to adapt to changing market conditions and to compete successfully with existing or new competitors will limit our growth and will have a material adverse effect on our business, financial condition and results of operations.

Developments in technology or improvements in distributed solar energy generation and related technologies or components may materially adversely affect demand for our offerings.

Significant developments in technology, such as advances in distributed solar power generation, energy storage solutions such as batteries, energy storage management systems, the widespread use or adoption of fuel cells for residential or commercial properties or improvements in other forms of distributed or centralized power production may materially and adversely affect demand for our offerings and otherwise affect our business. Future technological advancements may result in reduced prices to consumers or more efficient solar energy systems than those available today, either of which may result in current customer dissatisfaction. We may not be able to adopt these new technologies as quickly as our competitors or on a cost-effective basis.

Due to the length of our solar service agreements, the solar energy system deployed on a customer's residence may be outdated prior to the expiration of the term of the related solar service agreement, reducing the likelihood of renewal of our solar service agreement at the end of the applicable term and possibly increasing the occurrence of customers seeking to terminate or cancel their solar service agreements or defaults. If current customers become dissatisfied with the price they pay for their solar energy system under our solar service agreements relative to prices that may be available in the future or if customers become dissatisfied by the output generated by their solar energy systems relative to future solar energy system production capabilities, or both, this may lead to customers seeking to terminate or cancel their solar service agreements or higher rates of customer default and have an adverse effect on our business, financial condition and results of operations. Additionally, recent technological advancements may impact our business in ways we do not currently anticipate. Any failure by us to adopt or have access to new or enhanced technologies or processes, or to react to changes in existing technologies, could result in product obsolescence or the loss of competitiveness of and decreased consumer interest in our solar energy services, which could have a material adverse effect on our business, financial condition and results of operations.


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The value of our solar energy systems at the end of the associated term of the lease or PPA may be lower than projected, which may adversely affect our financial performance and valuation.

We depreciate the costs of our solar energy systems over their estimated useful life of 35 years. At the end of the initial term (typically 25 years) of the lease or PPA, customers may choose to purchase their solar energy systems, ask us to remove the solar energy system at our cost or renew their lease or PPA. Homeowners may choose to not renew or purchase for any reason, such as pricing, decreased energy consumption, relocation of residence, switching to a competitor product or technological obsolescence of the solar energy system. We are also contractually obligated to remove, store and reinstall the solar energy systems, typically for a nominal fee, if customers need to replace or repair their roofs. Furthermore, it is difficult to predict how future environmental regulations may affect the costs associated with the removal, disposal or recycling of our solar energy systems. If the residual value of the solar energy systems is less than we expect at the end of the customer contract, after giving effect to any associated removal and redeployment costs, we may be required to accelerate the recognition of all or some of the remaining unamortized costs. This could materially impair our future results of operations.

We and our dealers depend on a limited number of suppliers of solar energy system components and technologies to adequately meet demand for our solar energy systems. Due to the limited number of suppliers in our industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, price change, imposition of tariffs or duties or other limitation in our or our dealers' ability to obtain components or technologies we use could result in sales and installation delays, cancelations and loss of customers.

We rely on our dealers to install solar energy systems and energy storage systems, each of whom has direct supplier arrangements. Our dealers purchase solar panels, inverters, energy storage systems and other system components and instruments from a limited number of suppliers, approved by us, making us susceptible to quality issues, shortages and price changes. For the year ended December 31, 2019, Hanwha Q-Cells and Yingli Green Energy supplied approximately 50% and 17%, respectively, of our solar photovoltaic panels installed and no other supplier represented more than 10% of our solar photovoltaic panels installed. Yingli Green Energy is currently undergoing a restructuring of its debt. There is no guarantee Yingli Green Energy will honor its existing warranty coverage or will continue to supply us with solar photovoltaic panels in the future following the completion of this restructuring. In 2018, Hanwha Q-Cells and Trina Solar Limited supplied approximately 52% and 22%, respectively, of our solar photovoltaic panels installed and no other supplier represented more than 10% of our solar photovoltaic panels installed. For the year ended December 31, 2019, Enphase Energy, Inc. and SolarEdge Technologies Inc. accounted for approximately 58% and 42%, respectively, of the inverters used in our solar energy system installations. In 2018, Enphase Energy, Inc. and SolarEdge Technologies Inc. accounted for approximately 55% and 43%, respectively, of the inverters used in our solar energy system installations. For the year ended December 31, 2019, Tesla, Inc. accounted for 100% of our energy storage system purchases. In 2018, Tesla, Inc. and LG Chem Ltd. accounted for approximately 86% and 13%, respectively, of our energy storage system purchases. If one or more of the suppliers we and our dealers rely upon to meet anticipated demand ceases or reduces production due to its financial condition, acquisition by a competitor or otherwise, is unable to increase production as industry demand increases or is otherwise unable to allocate sufficient production to us and our dealers, it may be difficult to quickly identify alternative suppliers or to qualify alternative products on commercially reasonable terms and our ability and the ability of our dealers to satisfy this demand may be adversely affected. There are a limited number of suppliers of solar energy system components, instruments and technologies. While we believe there are other sources of supply for these products available, a dealer's need to transition to a new supplier may result in additional costs and delays in originating solar service agreements and deploying our related solar energy systems or energy storage systems, which in turn may result in additional costs and delays in our acquisition of such solar service agreements and related solar energy systems and energy storage systems. These issues could have a material adverse effect on our business, financial condition and results of operations.

There have also been periods of industry-wide shortages of key components and instruments, including batteries and inverters, in times of rapid industry growth. The manufacturing infrastructure for some of these 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 solar industry is currently experiencing rapid growth and, as a result, shortages of key components or instruments, including solar panels, may be more likely to occur, which in turn may result in price increases for such components. Even if industry-wide shortages do not occur, suppliers may decide to allocate key components or instruments with high demand or insufficient production capacity to more profitable customers, customers with long-term supply agreements or customers other than us, our dealers or other third parties from whom we may originate solar energy systems and our ability to originate solar service agreements and related solar energy systems and energy storage systems may be reduced as a result.

During January 2020, a strain of coronavirus surfaced in Wuhan, China. In an effort to halt the outbreak, the Chinese government has placed significant restrictions on travel within China and closed certain businesses, including solar

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manufacturers, in numerous provinces, and governments and other parties outside of China have halted or sharply curtailed the movement of people, goods and services to and from China. The substantial majority of our inverters, as well as other goods used in our business, are sourced from China. If the impacts of the coronavirus outbreak, including the accompanying travel restrictions and business closures, continue for an extended period of time or worsen, the supply and pricing of our inverters and other goods and therefore the ability of our dealers to install new solar energy systems could be adversely affected. The extent of the impact of the coronavirus on our business and operations will depend on, among other factors, the ultimate geographic spread of the virus, the duration and severity of the outbreak, travel restrictions and business closures imposed in China or other countries, the ability of our suppliers to increase their production of goods in jurisdictions other than China, our ability to contract for supply from other sources on acceptable terms and the willingness of our lenders to permit us to switch suppliers.

Increases in the cost of our solar energy systems due to tariffs imposed by the U.S. government could have a material adverse effect on our business, financial condition and results of operations.

China is a major producer of solar cells and other solar products. Certain solar cells, modules, laminates and panels from China are subject to various U.S. antidumping and countervailing duty rates, depending on the exporter supplying the product, imposed by the U.S. government as a result of determinations that the U.S. was materially injured as a result of such imports being sold at less than fair value and subsidized by the Chinese government. While historically our dealers have purchased a number of these products from manufacturers in China, currently such purchases are immaterial and sourced from manufacturers in other jurisdictions. If these alternative sources are no longer available on competitive terms in the future, we and our dealers may seek to purchase these products from manufacturers in China. In addition, tariffs on solar cells, modules and inverters in China may put upwards pressure on prices of these products in other jurisdictions from which our dealers currently purchase equipment, which could reduce our ability to offer competitive pricing to potential customers.

The antidumping and countervailing duties discussed above are subject to annual review and may be increased or decreased. Furthermore, under Section 301 of the Trade Act of 1974, the U.S. Trade Representative imposed tariffs on $200 billion worth of imports from China, including inverters and certain AC modules and non-lithium-ion batteries, effective September 24, 2018. In May 2019, the tariffs were increased from 10% to 25% and may be raised by the U.S. Trade Representative in the future. Since these tariffs impact the purchase price of the solar products, these tariffs raise the cost associated with purchasing these solar products from China and reduce the competitive pressure on providers of solar cells not subject to these tariffs.

In addition, on January 22, 2018, the President of the U.S. announced, effective February 7, 2018, the imposition of a global 30% ad valorem tariff, with certain qualifications and exceptions, on certain imported solar cells and modules, which steps down by five percentage points each year over the next three years and then phases out in 2022. Since such actions increase the cost of imported solar products, to the extent we or our dealers use imported solar products or domestic producers are able to raise their prices for their solar products, the overall cost of the solar energy systems will increase, which could reduce our ability to offer competitive pricing in certain markets.

We cannot predict what additional actions the U.S. may adopt with respect to tariffs or other trade regulations or what actions may be taken by other countries in retaliation for such measures. If additional measures are imposed or other negotiated outcomes occur, our ability or the ability of our dealers to purchase these products on competitive terms or to access specialized technologies from other countries could be further limited, which could adversely affect our business, financial condition and results of operations.

Warranties provided by the manufacturers of equipment for our assets and maintenance obligations of our dealers may be limited by the ability of a supplier and/or dealer to satisfy its warranty or performance obligations or by the expiration of applicable time or liability limits, which could reduce or void the warranty protections or may be limited in scope or magnitude of liabilities and thus, the warranties and maintenance obligations may be inadequate to protect us.

We agree to maintain the solar energy systems and energy storage systems installed on our customers' homes during the length of the term of our solar service agreements, which is typically 25 years. We are exposed to any liabilities arising from the solar energy systems' failure to operate properly and are generally under an obligation to ensure each solar energy system remains in good condition during the term of the agreement. We are the beneficiary of the panel manufacturers' warranty coverage, typically of 10 years for material and workmanship and 25 years for performance, the inverter manufacturers' warranty coverage, typically from 10 to 25 years and the energy storage manufacturers' warranty coverage, typically of 10 years. Furthermore, our dealers provide warranties as to their workmanship. In the event that such warranty providers or dealers file for bankruptcy, cease operations or otherwise become unable or unwilling to fulfill their warranty or maintenance obligations, we may not be adequately protected by such warranties or maintenance obligations. Even if such warranty or

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maintenance providers or dealers fulfill their obligations, the warranty or maintenance obligations may not be sufficient to protect us against all of our losses. In addition, our warranties are of limited duration, ranging from one year, in the case of certain solar energy system and transformer warranties, to 25 years, in the case of certain panel performance warranties, after the date each equipment item is delivered or commissioned, although the useful life of our solar energy systems is 35 years. These warranties are subject to liability and other limits. If we seek warranty protection and a warranty provider is unable or unwilling to perform its warranty obligations, or if a dealer is unable or unwilling to perform its maintenance obligations, whether as a result of its financial condition or otherwise, or if the term of the warranty or maintenance obligation has expired or a liability limit has been reached, there may be a reduction or loss of protection for the affected assets, which could have a material adverse effect on our business, financial condition and results of operations.

Our failure to accurately predict future liabilities related to material quality or performance expenses could result in unexpected volatility in our financial condition. Because of the long estimated useful life 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 made these assumptions based on the historic performance of similar solar energy systems or on accelerated life cycle testing. Our assumptions could prove to be materially different from the actual performance of our solar energy systems, causing us to incur substantial expense to repair or replace defective solar energy systems in the future or to compensate customers for solar energy systems that do not meet their performance guarantees. Equipment defects, serial defects or operational deficiencies also would reduce our revenue from solar service agreements because the customer payments under such agreements are dependent on solar energy system production or would require us to make refunds under performance guarantees. Any widespread product failures or operating deficiencies may damage our market reputation and adversely impact our financial results. For further discussion of these potential charges and related proposals, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Components of Results of Operations".

Our operating results and our ability to grow may fluctuate from quarter to quarter and year to year, which could make our future performance difficult to predict and could cause our operating results for a particular period to fall below expectations.

Our quarterly and annual operating results and our ability to grow are difficult to predict and may fluctuate significantly in the future. We have experienced seasonal and quarterly fluctuations in the past and expect to experience such fluctuations in the future. In addition to the other risks described in this "Risk Factors" section, the following factors could cause our operating results to fluctuate:

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expiration or initiation of any governmental rebates or incentives;
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significant fluctuations in customer demand for our solar energy services, solar energy systems and energy storage systems;
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our dealers' ability to complete installations in a timely manner;
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our and our dealers' ability to gain interconnection permission for an installed solar energy system from the relevant utility;
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the availability and costs of suitable financing;
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the amount, timing of sales and potential decreases in value of SRECs;
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our ability to continue to expand our operations and the amount and timing of expenditures related to this expansion;
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announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments;
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changes in our pricing policies or terms or those of our competitors, including centralized electric utilities;
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actual or anticipated developments in our competitors' businesses, technology or the competitive landscape; and
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natural disasters or other weather or meteorological conditions.

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.

If we are unable to make acquisitions on economically acceptable terms, our future growth would be limited, and any acquisitions we may make may reduce, rather than increase, our cash flows.

We may make acquisitions of solar energy systems, energy storage systems and related businesses and joint ventures. The consummation and timing of any future acquisitions will depend upon, among other things, whether we are able to:

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identify attractive acquisition candidates;
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negotiate acceptable purchase agreements;

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obtain any required governmental or third party consents;
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obtain financing for these acquisitions on economically acceptable terms, which may be more difficult at times when the capital markets are less accessible; and
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outbid any competing bidders.

Additionally, any acquisition involves potential risks, including, among other things:

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mistaken assumptions about assets, revenues and costs of the acquired company, including synergies and potential growth;
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an inability to secure adequate customer commitments to use the acquired systems or facilities;
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an inability to successfully integrate the assets or businesses we acquire;
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coordinating geographically disparate organizations, systems and facilities;
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the assumption of unknown liabilities for which we are not indemnified or for which our indemnity is inadequate;
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mistaken assumptions about the acquired company's suppliers or dealers or other vendors;
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the diversion of management's and employees' attention from other business concerns;
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unforeseen difficulties operating in new geographic areas and business lines;
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customer or key employee losses at the acquired business; and
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poor quality assets or installation.

If we consummate any future acquisitions, our capitalization, results of operations and future growth may change significantly and our stockholders will not have the opportunity to evaluate the economic, financial and other relevant information we will consider in deciding to engage in these future acquisitions, which may not improve our results of operations or cash flow to the extent we projected.

The solar energy systems we own or may originate have a limited operating history and may not perform as we expect.

Many of the solar energy systems we currently own or may originate in the future have not commenced operations, have recently commenced operations or otherwise have a limited operating history. Of the solar energy systems we owned as of December 31, 2019, 23%, 19% and 16% were placed into service in 2019, 2018 and 2017, respectively. The ability of our solar energy systems to perform as we expect will also be subject to risks inherent in newly constructed renewable energy assets, including breakdowns and outages, latent defects, equipment that performs below our expectations, system failures and outages. As a result, our assumptions and estimates regarding the performance of these solar energy systems are, and will be, made without the benefit of a meaningful operating history, which may impair our ability to accurately assess the potential profitability of the solar energy systems and, in turn, our results of operations, financial condition and cash flows.

The cost of maintenance or repair of solar energy systems or energy storage systems throughout the term of the associated solar service agreement or the removal of solar energy systems at the end of the term of the associated solar service agreement may be higher than projected today and adversely affect our financial performance and valuation.

If we incur repair and maintenance costs on our solar energy systems or energy storage systems after the individual component warranties have expired and if they then fail or malfunction, we will be liable for the expense of repairing these solar energy systems or energy storage systems without a chance of recovery from our suppliers. In addition, we typically bear the cost of removing the solar energy systems at the end of the term of the lease or PPA if the customer does not renew his or her agreement or elect to purchase the solar energy system at the end of its term. Furthermore, it is difficult to predict how future environmental regulations may affect the costs associated with the repair, removal, disposal or recycling of our solar energy systems. This could materially impair our future operating results.

Problems with performance of our solar energy systems may cause us to incur expenses, may lower the value of our solar energy systems and may damage our market reputation and adversely affect our business.

Our long-term leases and loan agreements contain a performance guarantee in favor of the customer. Solar service agreements with performance guarantees require us to provide a bill credit (or in limited cases, refund money) to the customer if the solar energy system fails to generate the minimum amount of electricity, as specified in the solar service agreement, in a given term, beginning with the first three year period after execution of the solar service agreement and annually thereafter. We may also suffer financial losses associated with such credit and refunds if significant performance guarantee payments are triggered. For a description of our performance guarantee obligations, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Components of Results of Operations—Revenue".


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We and our dealers are subject to risks associated with installation and other contingencies.

Our dealers design and install solar energy systems and energy storage systems on our behalf. Because the solar service agreement is entered into between us and the customer, we may be liable to our customers for any damage our dealers cause to our customers' homes, belongings or property during the installation of our solar energy systems and energy storage systems or otherwise.

For example, dealers may penetrate our customers' roofs during the installation process and we may incur liability for the failure to adequately weatherproof such penetrations following the completion of installation of solar energy systems. In addition, because our solar energy systems and energy storage systems are high-voltage energy systems, we may incur liability for a dealer's failure to comply with electrical standards and manufacturer recommendations. Furthermore, prior to obtaining permission to operate our solar energy systems and energy storage systems, the solar energy systems and energy storage systems must pass various inspections. Any delay in passing, or inability to pass, such inspections, would adversely affect our results of operations. Because our profit on a particular solar service agreement and related solar energy system and energy storage system, if applicable, is based in part on assumptions as to the ongoing cost of the related solar energy system and energy storage system, if applicable, cost overruns, delays or other execution issues may cause us to not achieve our expected results or cover our costs for that solar service agreement and related solar energy system and energy storage systems, if applicable.

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

It is possible our solar energy systems or energy storage systems could injure our customers or other third parties or our solar energy systems or energy storage systems could cause property damage as a result of product malfunctions, defects, improper installation, fire or other causes. Any product liability claim we face could be expensive to defend and may divert management's attention. The successful assertion of product liability claims against us could result in potentially significant monetary damages, potential increases in insurance expenses, penalties or fines, subject us to adverse publicity, damage our reputation and competitive position and adversely affect sales of solar energy systems or energy storage systems. In addition, product liability claims, injuries, defects or other problems experienced by other companies in the residential solar industry could lead to unfavorable market conditions to the industry as a whole and may have an adverse effect on our ability to expand our portfolio of solar service agreements and related solar energy systems and energy storage systems, thus affecting our business, financial condition and results of operations.

Inflation could result in decreased value from future contractual payments and higher expenses for labor and equipment, which, in turn, could adversely impact our reputation, business, financial condition, cash flows and results of operations.

Any future increase in inflation may adversely affect our costs, including our dealers' cost of labor and equipment, and may result in a decrease in value in our future contractual payments. Many of our solar service agreements, which generally have a term of 25 years, do not contain any pricing escalators. The pricing escalators we do have may not keep pace with inflation, which would result in the agreement yielding decreased value over time. These factors could adversely impact our reputation, business, financial condition, cash flows and results of operations.

We are not able to insure against all potential risks and we may become subject to higher insurance premiums.

We are exposed to numerous risks inherent in the operation of solar energy systems and energy storage systems, including equipment failure, manufacturing defects, natural disasters such as hurricanes, fires and earthquakes, terrorist attacks, sabotage, vandalism and environmental risks. Furthermore, components of our solar energy systems and energy storage systems, such as panels, inverters and batteries, could be damaged by severe weather, such as tsunamis, hurricanes, tornadoes, hailstorms or lightning. If our solar energy systems or energy storage systems are damaged in the event of a natural disaster beyond our control, losses could be outside the scope of insurance policies or exceed insurance policy limits and we could incur unforeseen costs that could harm our business and financial condition. We may also incur significant additional costs in taking actions in preparation for, or in reaction to, such events.

Our insurance policies also cover legal and contractual liabilities arising out of bodily injury, personal injury or property damage to third parties and are subject to policy limits. We also maintain coverage for physical damage to our solar energy assets.

However, such policies do not cover all potential losses and coverage is not always available in the insurance market on commercially reasonable terms. In addition, we may have disagreements with our insurers on the amount of our recoverable

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damages and the insurance proceeds received for any loss of, or any damage to, any of our assets may be claimed by lenders under our financing arrangements or otherwise may not be sufficient to restore the loss or damage without a negative impact on our results of operations. Furthermore, the receipt of insurance proceeds may be delayed, requiring us to use cash or incur financing costs in the interim. To the extent we experience covered losses under our insurance policies, the limit of our coverage for potential losses may be decreased or the insurance rates we have to pay increased. Furthermore, the losses insured through commercial insurance are subject to the credit risk of those insurance companies. While we believe our commercial insurance providers are currently creditworthy, we cannot assure you such insurance companies will remain so in the future.

We may not be able to maintain or obtain insurance of the type and amount we desire at reasonable rates. The insurance coverage we do obtain may contain large deductibles or fail to cover certain risks or all potential losses. In addition, our insurance policies are subject to annual review by our insurers and may not be renewed on similar or favorable terms, including coverage, deductibles or premiums, or at all. If a significant accident or event occurs for which we are not fully insured or we suffer losses due to one or more of our insurance carriers defaulting on their obligations or contesting their coverage obligations, it could have a material adverse effect on our business, financial condition and results of operations.

We typically bear the risk of loss and the cost of maintenance, repair and removal on solar energy systems that are owned by our subsidiaries and included in securitization and tax equity vehicles.

We typically bear the risk of loss and are generally obligated to cover the cost of maintenance, repair and removal for any solar energy system we sell to subsidiaries and include in securitization and tax equity vehicles. At the time we enter into a tax equity or securitization transaction, we enter into a maintenance services agreement where we agree to operate and maintain the solar energy system for a fixed fee calculated to cover our future expected maintenance costs. If our solar energy systems require an above-average amount of repairs or if the cost of repairing the solar energy systems were higher than our estimate, we would need to perform such repairs without additional compensation. If our solar energy systems are damaged as the result of a natural disaster beyond our control, losses could exceed or be excluded from our 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 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.

Certain of our solar energy systems are located in, and we conduct business in, Puerto Rico and weakness in the fiscal health of the government and PREPA, the damage caused by Hurricane Maria, a series of earthquakes which affected the island in December 2019 and early 2020 and potential tax increases that may increase our cost of conducting business in Puerto Rico, create uncertainty that may adversely impact us. In addition, we are subject to administrative proceedings instituted by the Puerto Rico Energy Bureau.

Puerto Rico is a significant market for our business, representing 12% and 14% of our solar energy systems as of December 31, 2019 and 2018, respectively, and has suffered from economic difficulties in recent years. As a result of the continued weakness of the Puerto Rico economy, liquidity constraints and a lack of market access, the credit ratings of the Puerto Rico government's general obligation bonds and guaranteed bonds, as well as the ratings of most of the Puerto Rico public corporations, including PREPA, have been lowered to non-investment grade by Moody's, S&P and Fitch Ratings.

Puerto Rico has also enacted certain measures that could increase the cost of solar energy systems. In 2015, the Puerto Rico government increased the sales and use tax on repair and maintenance services on tangible personal property that are not capital expenditures, such as the repair and maintenance of solar energy systems, from 7% to 11.5%. As of October 1, 2015, most services became subject to a 4% or 11.5% sales and use tax, as applicable, except for limited exceptions such as certain leases of solar energy generating equipment which became exempt during 2019. Although leases are currently exempt from such sales and use tax, should that exemption expire or additional taxes be imposed, the tax increase may impose greater costs on our future and current customers, which may hinder our future origination efforts and adversely impact our business, financial condition, results of operations and future growth. Future changes in Puerto Rico tax law could affect our tax position and adversely impact our business.

In September 2017, Hurricanes Irma and Maria made landfall in Puerto Rico, causing catastrophic damage to Puerto Rico's infrastructure, homes and businesses, including its communication systems and transportation networks, and disrupting the markets in which we operate. Following Hurricane Maria, all of Puerto Rico was left without electrical power and other basic utility and infrastructure services (such as water, communications, ports and other transportation networks) were severely curtailed. Many of our solar energy systems located in Puerto Rico were damaged in the hurricanes. Further, Puerto Rico's electrical grid, which is necessary to operate solar energy systems that were not paired with energy storage systems, was damaged. There was intermittent or reduced electrical grid operation during the fourth quarter of 2017 and the first quarter of

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2018. During this period, many of our solar energy systems produced reduced levels or no power and therefore generated reduced or no revenue and cash receipts, even where solar energy systems remained functional. Although power has been restored, many residents left Puerto Rico following the storm. In many cases, Puerto Rico residents who abandoned their properties suspended payments to us under their solar service agreements.

In addition, a series of earthquakes in the southern and southwest parts of the island in December 2019 and early 2020 caused widespread power outages and damaged numerous structures in the affected areas, including the Costa Sur power facility which provides close to 25% of the electricity distributed in Puerto Rico and could remain offline for an extended period of time. PREPA has stated that with the absence of the Costa Sur power facility, it does not have enough reserve capacity to supply demand, which may lead to blackouts and brownouts during that period. Solar energy systems installed in areas affected by the earthquakes that are not paired with an energy storage system are likely to generate lower levels of power or no power at all. In addition, structures with installed solar energy systems that were damaged by the earthquakes may be demolished or abandoned if such structures are not repairable. Moreover, Puerto Rico could also experience additional emigration of people, many of whom might cease payments under their solar service agreements. We cannot predict whether or not these events will have a material adverse impact on our operations at this time.

Although Puerto Rico had already suffered from economic difficulties in recent years, the hurricanes and earthquakes caused a significant disruption to the island's economic activity. The continued weakness of the Puerto Rico economy has strained the fiscal health of the government, which may create uncertainty that may adversely impact us. Furthermore, the future financial condition and prospects of PREPA are uncertain, which could negatively impact the availability and the reliability of Puerto Rico's electrical grid and adversely impact our operations on the island.

While we do not currently contract directly with the Puerto Rico government or PREPA, continued weakness in the Puerto Rico economy or the failure of the Puerto Rico government to manage its fiscal challenges in an orderly manner could result in policy decisions we do not anticipate and may directly or indirectly adversely impact our business, financial condition and results of operations.

The Puerto Rico Energy Bureau has instituted administrative proceedings regarding customer complaints about our Puerto Rican operations, the operations of some of our dealers in Puerto Rico and certain Sunnova policies and procedures relating to contract disclosures and invoice disputes in Puerto Rico. At this time, we are unable to determine whether the Puerto Rico Energy Bureau will seek penalties against us in the future in connection with these proceedings or require a change in our practices and procedures. Based on this matter, the U.S. Better Business Bureau listed Sunnova as not accredited. We have not experienced a material impact as a result of the listing.

Our business is concentrated in certain markets, putting us at risk of region-specific disruptions.

As of December 31, 2019, approximately 26%, 25% and 12% of our solar energy systems were located in New Jersey, California and Puerto Rico, respectively. In addition, we expect much of our near-term future growth to occur in these same markets, further concentrating our customer base and operational infrastructure. Accordingly, our business and results of operations are particularly susceptible to adverse economic, regulatory, political, weather and other conditions in such markets and in other markets that may become similarly concentrated. See " —We are not able to insure against all potential risks and we may become subject to higher insurance premiums" and "—Certain of our solar energy systems are located in, and we conduct business in, Puerto Rico and weakness in the fiscal health of the government and PREPA, the damage caused by Hurricane Maria, a series of earthquakes which affected the island in December 2019 and early 2020 and potential tax increases that may increase our cost of conducting business in Puerto Rico, create uncertainty that may adversely impact us. In addition, we are subject to administrative proceedings instituted by the Puerto Rico Energy Bureau". Any of these conditions, even if only in one such market, could have a material adverse effect on our business, financial condition and results of operations. In addition, all of our current solar energy systems are located in the U.S. and its territories, which makes us particularly susceptible to adverse changes in U.S. tax laws. See "—Risks Related to Taxation—Recent tax legislation and future changes in law could adversely affect our business". For a discussion of expenses related to Hurricane Maria and the California wildfires in October 2017 and November 2018, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Components of Results of Operations—Operations and Maintenance Expense".

Dealer and marketplace confidence in our liquidity and long-term business prospects is important for building and maintaining our business.

Our financial condition, operating results and business prospects may suffer materially if we are unable to establish and maintain confidence about our liquidity and business prospects among dealers, consumers and within our industry. Our dealer network is an integral component of our business strategy and serves as the means by which we are able to rapidly and

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successfully expand within existing and prospective markets. Dealers and other third parties will be less likely to enter into dealer agreements with us or originate new solar service agreements if they are uncertain we will be able to make payments on time, our business will succeed or our operations will continue for many years.

Our solar energy systems and energy storage systems require ongoing maintenance and support. If we were to reduce operations, even years from now, buyers of our solar energy systems and energy storage systems from years earlier might have difficulty having us provide or arrange repairs or other services to our and their solar energy systems and energy storage systems, which remain our responsibility under the terms of our solar service agreements. As a result, consumers may be less likely to enter into solar service agreements with us if they are uncertain our business will succeed or our operations will continue for many years.

Accordingly, in order to build and maintain our business, we must maintain confidence among dealers, customers and other parties in our liquidity and long-term business prospects. We may not succeed in our efforts to build this confidence.

Damage to our brand and reputation or change or loss of use of our brand could harm our business and results of operations.

We depend significantly on our reputation for high-quality products, excellent customer service and the brand name "Sunnova" to attract new customers and grow our business. If we fail to continue to deliver our solar energy systems or energy storage systems within the planned timelines, if our offerings do not perform as anticipated or if we damage any of our customers' properties or delay or cancel projects, our brand and reputation could be significantly impaired. Future technological improvements may allow us to offer lower prices or offer new technology to new customers; however, technical limitations in our current solar energy systems and energy storage systems may prevent us from offering such lower prices or new technology to our existing customers. The inability of our current customers to benefit from technological improvements could cause our existing customers to lower the value they perceive our existing products offer and impair our brand and reputation.

In addition, given the sheer number of interactions our personnel or dealers operating on our behalf have with customers and potential customers, it is inevitable that some customers' and potential customers' interactions with our company or dealers operating on our behalf will be perceived as less than satisfactory. This has led to instances of customer complaints, some of which have affected our digital footprint on rating websites and social media platforms. If we cannot manage our hiring and training processes to avoid or minimize these issues to the extent possible, our reputation may be harmed and our ability to attract new customers would suffer.

In addition, if we were to no longer use, lose the right to continue to use or if others use the "Sunnova" brand, we could lose recognition in the marketplace among customers, suppliers and dealers, which could affect our business, financial condition, results of operations and would require financial and other investment and management attention in new branding, which may not be as successful.

The installation and operation of solar energy systems and energy storage systems depends heavily on suitable solar and 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 solar energy systems and energy storage systems may be adversely impacted.

The energy produced and the revenue and cash receipts generated by a solar energy system depend on suitable solar, atmospheric and weather conditions, all of which are beyond our control. Our economic model and projected returns on our solar energy systems require achievement of certain production results from our systems and, in some cases, we guarantee these results to our consumers. If the solar energy systems underperform for any reason, our business could suffer. For example, the amount of revenue we recognize in a given period from our PPAs and the amount of our obligations under the performance guarantees of our solar service agreements are dependent in part on the amount of energy generated by solar energy systems under such solar service agreements. As a result, revenue derived from our standard PPAs is impacted by seasonally shorter daylight hours in winter months. In addition, the ability of our dealers to install solar energy systems and energy storage systems is impacted by weather. For example, the ability to install solar energy systems and energy storage systems during the winter months in the Northeastern U.S. is limited. Such solar, atmospheric and weather conditions can delay the timing of when solar energy systems and energy storage systems can be installed and when we can originate and begin to generate revenue from solar energy systems. This may increase our expenses and decrease revenue and cash receipts in the relevant periods. Furthermore, prevailing weather patterns could materially change in the future, making it harder to predict the average annual amount of sunlight striking each location where we install a solar energy system and energy storage system. This could make our solar energy systems less economical overall or make individual solar energy systems less economical. Any of these events or conditions could harm our business, financial condition and results of operations.

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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 founder and CEO, William J. Berger. We also depend on our ability to retain and motivate key employees and attract qualified new employees. None of our key executives are bound by employment agreements for any specific term. We may be unable to replace key members of our management team and key employees if we lose their services. Integrating new employees into our 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 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 New York Stock Exchange ("NYSE") and other applicable securities rules and regulations. Complying with these rules and regulations has increased and will continue to increase our 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 may be 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.

As a public company, our director and officer liability insurance expense increased significantly and we may be required to accept reduced coverage or incur substantially higher costs to maintain coverage. These factors could also make it more difficult for us to attract and retain qualified executive officers and members of our board of directors (our "Board"), particularly to serve on our audit committee.

Our inability to protect our intellectual property could adversely affect our business. We may also be subject to intellectual property rights claims by third parties, which are extremely costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies.

Any failure to protect our proprietary rights adequately could result in our competitors offering similar residential solar technology or energy storage services more quickly than anticipated, potentially resulting in the loss of some of our competitive advantage and a decrease in our revenue which would adversely affect our business prospects, financial condition and operating results. Our success depends, at least in part, on our ability to protect our core technology and intellectual property. We rely on intellectual property laws, primarily a combination of copyright and trade secret laws in the U.S., as well as license agreements and other contractual provisions, to protect our proprietary technology and brand. We cannot be certain our agreements and other contractual provisions will not be breached, including a breach involving the use or disclosure of our trade secrets or know-how, or that adequate remedies will be available in the event of any breach. In addition, our trade secrets may otherwise become known or lose trade secret protection.

We cannot be certain our products and our business do not or will not violate the intellectual property rights of a third party. Third parties, including our competitors, may own patents or other intellectual property rights that cover aspects of our technology or business methods. Such parties may claim we have misappropriated, misused, violated or infringed third-party intellectual property rights and if we gain greater recognition in the market, we face a higher risk of being the subject of claims we have violated others' intellectual property rights. Any claim we violated a third party's intellectual property rights, whether with or without merit, could be time-consuming, expensive to settle or litigate and could divert our management's attention and other resources, all of which could adversely affect our business, results of operations, financial condition and cash flows. If we do not successfully settle or defend an intellectual property claim, we could be liable for significant monetary damages and could be prohibited from continuing to use certain technology, business methods, content or brands. To avoid a prohibition, we could seek a license from third parties, which could require us to pay significant royalties, increasing our operating expenses. If a license is not available at all or not available on commercially reasonable terms, we may be required to develop or license a non-violating alternative, either of which could adversely affect our business, results of operations, financial condition and cash flows.

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We currently use or plan to use software that is licensed under "open source", "free" or other similar licenses that may subject us to liability or require us to release the source code of our proprietary software to the public.

We currently use open source software that is licensed under "open source", "free" or other similar licenses. Open source software is made available to the general public on an "as-is" basis under the terms of a non-negotiable license. If we fail to comply with these licenses, we may be subject to certain conditions, including requirements that we offer our services that incorporate the open source software for no cost, we make available source code for modifications or derivative works we create based upon incorporating or using the open source software and we license such modifications or alterations under the terms of the particular open source license. We do not plan to integrate our proprietary software with this open source software in ways that would require the release of the source code of our proprietary software to the public. However, our use and distribution of open source software may entail greater risks than use of third-party commercial software. Our authorized developers may contribute to this open source software community but they will be prohibited from providing any proprietary process or proprietarily developed source code of ours. Open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code. In addition, if we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of our proprietary software to the public. This would allow our competitors to create similar offerings with lower development effort and time. We may also face claims alleging noncompliance with open source license terms or infringement or misappropriation of proprietary software.

These claims could result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to change our software, any of which would have a negative effect on our business and operating results. In addition, if the license terms for open source software that we use change, we may be forced to re-engineer our technology platform or incur additional costs.

Although we monitor our use of open source software to avoid subjecting our technology platform to unintended conditions, few courts have interpreted open source licenses and there is a risk these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our business. We cannot guarantee we have incorporated open source software in our software in a manner that will not subject us to liability or in a manner consistent with our current policies and procedures.

We may be subject to interruptions or failures in our information technology systems.

We rely on information technology systems and infrastructure to support our business. Any of these systems may be susceptible to damage or interruption due to fire, floods, power loss, telecommunication failures, usage errors by employees, computer viruses, cyberattacks or other security breaches or similar events. A compromise of our information technology systems or those with which we interact could harm our reputation and expose us to regulatory actions and claims from customers and other persons, any of which could adversely affect our business, financial condition, cash flows and results of operations. If our information systems are damaged, fail to work properly or otherwise become unavailable, we may incur substantial costs to repair or replace them and we may experience a loss of critical information, customer disruption and interruptions or delays in our ability to perform essential functions.

Disruptions to our solar monitoring systems could negatively impact our revenues and increase our expenses.

Our ability to accurately charge our customers for the energy produced by our solar energy systems primarily depends on the cellular connection for the related monitoring system, which we are responsible for maintaining in a functional state so that we may receive data regarding the solar energy systems' production from their residences. We could incur significant expenses or disruptions of our operations in connection with failures of our solar monitoring systems, including failures of such connections, that would prevent us from accurately monitoring solar energy production. In addition, sophisticated hardware and operating system software and applications we procure from third parties may contain defects in design or manufacture, including "bugs" and other problems that could unexpectedly interfere with the operation of our solar energy systems or energy storage systems. The costs to us to eliminate or alleviate viruses and bugs, or any problems associated with failures of our cellular connections could be significant. We have in the past experienced periods where some of our cellular connections have been unavailable and, as a result, we have been forced to estimate the production of their solar energy systems. Such estimates may prove inaccurate and could cause us to underestimate the power being generated by our solar energy systems and undercharge our customers, thereby harming our results of operations.


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Any unauthorized access to or disclosure or theft of personal information we gather, store or 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, credit card and financial account information and other housing and energy use information. We also store information of our dealers, including employee, financial and operational information. We rely on the availability of data collected from our customers and our dealers in order to manage our business and market our offerings. We take certain steps in an effort to protect the security, integrity and confidentiality of the personal information we collect, store or transmit, but there is no guarantee inadvertent or unauthorized use or disclosure will not occur or third parties will not gain unauthorized access to this information despite our efforts. We also rely on third-party suppliers or vendors to host certain of the systems we use. Although we take precautions to provide for disaster recovery, our ability to recover systems or data may be expensive and may interfere with our normal operations. Also, although we obtain assurances from such third parties they will use reasonable safeguards to secure their systems, we may be adversely affected by unavailability of their systems or unauthorized use or disclosure or our data maintained in such systems. Because techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they are launched against a target, we, our suppliers or vendors and our dealers may be unable to anticipate these techniques or to implement adequate preventative or mitigation measures.

Cyberattacks in particular are becoming more sophisticated and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in critical systems, disruption of our customers' operations, loss or damage to our data delivery systems, unauthorized release of confidential or otherwise protected information, corruption of data and increased costs to prevent, respond to or mitigate cybersecurity events. In addition, certain cyber incidents, such as advanced persistent threats, may remain undetected for an extended period.

Unauthorized use, disclosure of or access to any personal information maintained by us or on our behalf, whether through breach of our systems, breach of the systems of our suppliers, vendors or dealers by an unauthorized party or through employee or contractor error, theft or misuse or otherwise, could harm our business. If any such unauthorized use, disclosure of or access to such personal information were to occur, our operations could be seriously disrupted and we could be subject to demands, claims and litigation by private parties and investigations, related actions and penalties by regulatory authorities.

In addition, we could incur significant costs in notifying affected persons and entities and otherwise complying with the multitude of federal, state and local laws and regulations relating to the unauthorized access to, use of or disclosure of personal information. Finally, any perceived or actual unauthorized access to, use of or disclosure of such information could harm our reputation, substantially impair our ability to expand our portfolio of solar service agreements and related solar energy systems and energy storage systems and have an adverse impact on our business, financial condition and results of operations.

Our business is subject to complex and evolving U.S. laws and regulations regarding privacy and data protection ("data protection laws"). Many of these laws and regulations are subject to change and uncertain interpretation and could result in claims, increased cost of operations or otherwise harm our business.

The regulatory environment surrounding data privacy and protection is constantly evolving and can be subject to significant change. New data protection laws, including recent California legislation which affords California consumers an array of new rights, including the right to be informed about what kinds of personal data companies have collected and why it was collected, pose increasingly complex compliance challenges and potentially elevate our costs. Complying with varying jurisdictional requirements could increase the costs and complexity of compliance and violations of applicable data protection laws can result in significant penalties. Any failure, or perceived failure, by us to comply with applicable data protection laws could result in proceedings or actions against us by governmental entities or others, subject us to significant fines, penalties, judgments and negative publicity, require us to change our business practices, increase the costs and complexity of compliance and adversely affect our business. As noted above, we are also subject to the possibility of security and privacy breaches, which themselves may result in a violation of these laws.

We may become involved in the future in legal proceedings that could adversely affect our business.

We may, from time to time, be involved in litigation and claims, such as those relating to employees, customers, our dealers or other third parties with whom we contract, including consumer claims and class action lawsuits. In the ordinary course of business, we have disputes with dealers and customers. In general, litigation claims or regulatory proceedings can be expensive and time consuming to bring or defend against, may result in the diversion of management attention and resources from our business and business goals and could result in injunctions or other equitable relief, settlements, penalties, fines or damages that could significantly affect our results of operations and the conduct of our business. It is impossible to predict with

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certainty whether any resulting liability would have a material adverse effect on our financial position, results of operations or cash flows.

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

Our long-term strategic plans include international expansion, including expansion into jurisdictions that have characteristics similar to those in which we currently operate. Risks inherent to international operations include the following:

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the inability to work successfully with dealers with local expertise to originate international solar service agreements;
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multiple, conflicting and changing laws and regulations, including export and import laws and regulations, economic sanctions laws and regulations, tax laws and regulations, environmental regulations, labor laws and other government requirements, approvals, permits and licenses;
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laws and legal systems less developed or less predictable than those in the U.S.;
•
changes in general economic and political conditions in the jurisdictions where we operate, including changes in government incentives relating to power generation and solar electricity;
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political and economic instability, including wars, acts of terrorism, political unrest, boycotts, curtailments of trade and other business restrictions;
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difficulties and costs in recruiting and retaining individuals skilled in international business operations;
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international business practices may conflict with U.S. customs or legal requirements, including anti‑bribery and corruption regulations;
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financial risks, such as longer sales and payment cycles and greater difficulty collecting accounts receivable or executing self-help remedies, if necessary;
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deficient or unreliable records relating to real property ownership;
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potentially lower margins due to a lower average income level;
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fluctuations in currency exchange rates relative to the U.S. dollar; and
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the inability to obtain, maintain or enforce intellectual property rights, including inability to apply for or register material trademarks in foreign countries, which could make it easier for competitors to capture increased market position.

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 future operations may subject us to risks associated with currency fluctuations.

Our future international operations may subject us to risks relating to currency fluctuations. Foreign currencies periodically experience rapid and/or large fluctuations in value against the U.S. dollar. A weakened U.S. dollar could increase the cost of procurement of raw materials, by our suppliers, from foreign jurisdictions and operating expenses in foreign locations, which could have a material adverse effect on our business and results of operations. Our planned international expansion further subjects us to currency risk.

Since the price at which we originate solar energy systems from our dealers is generated in U.S. dollars, we are mostly insulated from currency fluctuations. However, since suppliers of our dealers often incur a significant amount of their costs by purchasing raw materials and generating operating expenses in foreign currencies, if the value of the U.S. dollar depreciates significantly or for a prolonged period of time against these other currencies, this may cause those suppliers to raise the prices they charge us and our dealers, which in turn could harm our business and results of operations. Although the value of the U.S. dollar has been high relative to other currencies in recent periods, there is no guarantee this trend will continue.

Our actual financial results may differ materially from any guidance we may publish from time to time.

We may, from time to time, provide guidance regarding our future performance that represents our management's estimates as of the date such guidance is provided. Any such guidance would be based upon a number of assumptions with respect to future business decisions (some of which may change) and estimates, while presented with numerical specificity, are inherently subject to significant business, economic and competitive uncertainties and contingencies (many of which are beyond our control). Guidance is necessarily speculative in nature and it can be expected some or all the assumptions that inform such guidance will not materialize or will vary significantly from actual results. Our ability to meet any forward-looking guidance is impacted by a number of factors including, but not limited to, the number of our solar energy systems sold versus leased, changes in installation costs, the availability of additional financing on acceptable terms, changes in the retail prices of

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traditional utility-generated electricity, the availability of rebates, tax credits and other incentives, changes in policies and regulations including net metering and interconnection limits or caps, the availability of solar panels, inverters, batteries and other raw materials, as well as the other risks to our business described in this "Risk Factors" section. Accordingly, our guidance is only an estimate of what management believes is realizable as of the date such guidance is provided. Actual results may vary from such guidance and the variations may be material. Investors should also recognize the reliability of any forecasted financial data diminishes the farther into the future the data is forecast. In light of the foregoing, investors should not place undue reliance on our financial guidance and should carefully consider any guidance we may publish in context.

Terrorist or cyberattacks against centralized utilities could adversely affect our business.

Assets owned by utilities such as substations and related infrastructure have been physically attacked in the past and will likely be attacked in the future. These facilities are often protected by limited security measures, such as perimeter fencing. Any such attacks may result in interruption to electricity flowing on the grid and consequently interrupt service to our solar energy systems not combined with an energy storage system, which could adversely affect our operations. Furthermore, cyberattacks, whether by individuals or nation states, against utility companies could severely disrupt their business operations and result in loss of service to customers, which would adversely affect our operations.

Risks Related to Regulations

We are not currently regulated as an electric public utility under applicable law but may be subject to regulation as an electric utility in the future.

We are not currently regulated as an electric public utility in the U.S. under applicable national, state or other local regulatory regimes where we conduct business. As a result, we are not currently subject to the various federal, state and local standards, restrictions and regulatory requirements applicable to centralized public utilities. Any federal, state or local regulations that cause us to be treated as an electric utility or to otherwise be subject to a similar regulatory regime of commission-approved operating tariffs, rate limitations and related mandatory provisions, could place significant restrictions on our ability to operate our business and execute our business plan by prohibiting, restricting or otherwise regulating our sale of electricity. If we were subject to the same state or federal regulatory authorities as centralized electric utilities in the U.S. and its territories or if new regulatory bodies were established to oversee our business in the U.S. and its territories or in foreign markets we enter, our operating costs would materially increase or we might have to change our business in ways that could have a material adverse effect on our business, financial condition and results of operations.

While we are not regulated as extensively as an electric public utility, we are subject to certain utility-like regulations in California, New York and Puerto Rico. In New York, distributed energy providers are subject to regulation by the New York Public Service Commission (the "NYPSC") with respect to customer interactions (including contracting and marketing) and are required to comply with the NYPSC's Uniform Business Practices. In connection with approving the Uniform Business Practices, the NYPSC also established an oversight framework under which it could impose other regulatory requirements on distributed energy providers. In Puerto Rico, we are regulated as an electric power company under applicable Puerto Rico Energy Bureau regulations in connection with the sale and invoicing of energy generated by distributed generation systems having an aggregate capacity of more than 1 megawatt. Among other requirements, these regulations impose certain filing, certification, reporting and annual fee requirements upon us but do not currently subject the companies to centralized utility-like regulation or require the Puerto Rico Energy Bureau's approval of their charges. In California, the California Public Utilities Commission ("CPUC") issued an order approving several consumer protection measures for solar customers, including a requirement for solar providers to provide customers with the California Solar Consumer Protection Guide, which provides customers with information regarding the selection of a contractor, solar financing, bill savings estimates, net energy metering and electric rates, low-income options and related matters. The CPUC order also requires the investor-owned utilities in California to adopt procedures to verify during the interconnection process that the customer received the California Solar Consumer Protection Guide and that the solar provider is licensed, and to collect and report on complaints regarding solar providers. If we become subject to new, additional regulatory requirements in California, New York or Puerto Rico or other jurisdictions adopt regulatory requirements similar to California, New York or Puerto Rico, our operating costs would materially increase or we might have to change our business in ways that could have a material adverse effect on our business, financial condition and results of operations.


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Electric utility policies and regulations, including those affecting electric rates, may present regulatory and economic barriers to the purchase and use of solar energy systems that may significantly reduce demand for electricity from our solar energy systems and adversely impact our ability to originate new solar service agreements.

Federal, state and local government regulations and policies concerning the electric utility industry, utility rates and rate structures and 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. Policies and regulations that promote renewable energy and distributed energy generation have been challenged by centralized electric utilities and questioned by those in government and others arguing for less governmental spending and involvement in the energy market. To the extent such views are reflected in government policies and regulations, the changes in such policies and regulations could adversely affect our business, financial condition and results of operations.

Furthermore, the current administration has made public statements regarding overturning or modifying policies of, or regulations enacted by, the prior administration that placed limitations on coal and gas electric generation, mining and/or exploration. Any effort to overturn federal and state laws, regulations or policies that are supportive of solar energy generation or that remove costs or other limitations on other types of energy generation that compete with solar energy projects could materially and adversely affect our business.

In the U.S., governmental authorities and state public service commissions that determine utility rates, rate structures and the terms and conditions of electric service continuously modify these regulations and policies. These regulations and policies could result in a significant reduction in the potential demand for electricity from our solar energy systems and could deter customers from entering into solar service agreements with us.

With regard to rates, customers with residential solar energy systems may currently pay or be subject in the future to increased charges due to increased rates or changes in rate design and structures. Utilities in certain jurisdictions may assess fees which apply only to customers with distributed generation systems, including residential solar energy systems or impose charges on solar customers which are significantly higher than comparable charges billed to non-solar customers.

These fees may include demand, stand-by or departing load charges or monthly minimum charges. Certain jurisdictions may permit utilities to change their rate design and structures which could result in charges that would disproportionately impact customers with solar energy systems. For example, a reduction in the number of tiers of residential rates could result in increased charges for lower-demand customers, including many solar customers, by moving them to a new rate tier with higher rates. It could also result in lower charges for higher-demand customers, who may then become less incentivized to consider solar energy to meet their electricity needs. Similarly, a change in rate design to recover more costs from fixed charges as opposed to variable charges (i.e. "decoupled" rates, by which the utility's revenue requirement is "decoupled" from its level of electricity sales in designing rates) may have the same effect. Additionally, depending on the region, electricity generated by solar energy systems competes most effectively with the most expensive retail rates for electricity from the electrical grid, rather than the less expensive average price of electricity. Modifications to the centralized electric utilities' peak hour pricing policies or rate design could make our current product offerings less competitive with the price of electricity from the electrical grid. A shift in the timing of peak rates for utility-generated electricity to include times of day when solar energy generation is less efficient or non-operable could make our solar energy systems less competitive and reduce demand for our product offerings. Time-of-use rates could also result in higher costs for solar customers whose electricity requirements are not fully met by the solar energy system during peak periods.

Utilities in California, New Jersey and Puerto Rico, among other states and jurisdictions, have proposed or received approval by state regulators for such rate measures as described in this risk factor. Any such changes affecting rates could increase our customers' cost to use our solar energy systems and make our service and product offerings less desirable, thereby harming our business, financial condition and results of operations. The imposition of any such rate measures could limit the ability of distributed residential solar power companies to compete with the price of electricity generated by centralized electric utilities, which may reduce the number of solar energy systems installed in those jurisdictions. Additionally, any 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, terminations or cancelations under our solar service agreements. In addition, changes to government or internal utility regulations and policies that favor centralized electric utilities could reduce our competitiveness and cause a significant reduction in demand for our product offerings.

Any of the foregoing results could limit our ability to expand our portfolio of solar service agreements and related solar energy systems and energy storage systems or harm our business, financial condition and results of operations.


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We rely on net metering and related policies to offer competitive pricing to our customers in most of our current markets and changes to net metering policies may significantly reduce demand for electricity from residential solar energy systems.

Net metering is one of several key policies that have enabled the growth of distributed generation solar energy systems in the U.S., providing significant value to customers for electricity generated by their residential solar energy systems but not directly consumed on-site. Net metering allows a homeowner to pay his or her local electric utility for power usage net of production from the solar energy system or other distributed generation source. Homeowners receive a credit for the energy an interconnected solar energy system generates in excess of that needed by the home to offset energy purchases from the centralized utility made at times when the solar energy system is not generating sufficient energy to meet the customer's demand. In many markets, this credit is equal to the residential retail rate for electricity and in other markets, such as Hawaii and Nevada, the rate is less than the retail rate and may be set, for example, as a percentage of the retail rate or based upon a valuation of the excess electricity. In some states and utility territories, customers are also reimbursed by the centralized electric utility for net excess generation on a periodic basis.

Net metering programs have been subject to legislative and regulatory scrutiny in some states and territories including, but not limited to, New Jersey, California, Arizona, Nevada, Connecticut, Maine, Kentucky, Puerto Rico and Guam. These jurisdictions, by statute, regulation, administrative order or a combination thereof, have recently adopted or are considering new restrictions and additional changes to net metering programs either on a state-wide basis or within specific utility territories. Many of these measures were introduced and supported by centralized electric utilities. These measures vary by jurisdiction and may include a reduction in the rates or value of the credits customers are paid or receive for the power they deliver back to the electrical grid, caps or limits on the aggregate installed capacity of generation in a state or utility territory eligible for net metering, expiration dates for and phasing out of net metering programs, replacement of net metering programs with alternative programs that may provide less compensation and limits on the capacity size of individual distributed generation systems which can qualify for net metering. Net metering and related policies concerning distributed generation also received attention from federal legislators and regulators.

In New Jersey, the Board of Public Utilities ("BPU") has the option under state law of limiting participation in the retail rate net metering program if the aggregate capacity of owned and operating systems reaches 5.8% of total annual kWh sold in the state. As of December 31, 2019, that threshold had not yet been reached. On September 22, 2017, the BPU opened a generic proceeding to review the state of the solar market in New Jersey and solicit input from stakeholders in the industry and convene public hearings across the state. The BPU held hearings and received public comments, but no rule or policy changes have been proposed by the BPU to date.

In California, the CPUC issued an order in 2016 retaining retail-based net metering credits for residential customers of California's major utilities as part of Net Energy Metering 2.0 ("NEM 2.0"). Under NEM 2.0, new distributed generation customers receive the retail rate for electricity exported to the grid, less certain non-bypassable fees. Customers under NEM 2.0 also are subject to interconnection charges and time‑of-use rates. Existing customers who receive service under the prior net metering program, as well as new customers under the NEM 2.0 program, are grandfathered for a period of 20 years. It is expected the CPUC will begin review of its net metering policies in 2020 to develop Net Energy Metering 3.0 ("NEM 3.0") with the goal of implementing NEM 3.0 in 2021. Proceedings on distributed energy policy and utility rates before the CPUC could also result in changes that affect customers with distributed generation systems.

In Puerto Rico, legislation enacted in April 2019 would require the Public Service Regulatory Board's Energy Bureau to undertake a study of net metering to be completed within five years and may result in revisions to the net metering rules based on the study's findings. However, no changes can be made to retail net metering for two years after the date the legislation was enacted. Meanwhile, "true" net metering will continue to apply, meaning the credit for energy exported by net metering clients will equal the value of such energy under the rate applicable to those clients and accordingly, their charges will be based on their net consumption. Customers subject to this regime would be grandfathered for a period of 20 years from the date of their net metering agreements.

Net metering customers in Puerto Rico may be impacted by transition charges and other requirements contemplated in the DRSA. If approved by the court and implemented as proposed, these transition charges will be assessed on all customers at a rate of 2.768 c/kWh, which is set to increase periodically until eventually reaching 4.552 c/kWh in fiscal year 2044. For customers grandfathered prior to the DRSA's implementation date, the transition charge will equal the transition charge rate multiplied by the customer's average net consumption over the previous 24 months, after accounting for a three month lag time. For non-grandfathered customers, the monthly transition charge will equal the greater of either (a) the transition charge rate multiplied by the monthly average of the customer's gross consumption over the past 24 months or (b) the transition charge rate multiplied by the customer's net consumption in the given month. Non-grandfathered customers also will be required to comply

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with certain notice requirements and will also be responsible for the costs associated with installing a revenue grade meter to measure "behind the meter" generation.

In Guam, the Consolidated Commission on Utilities ("CCU") adopted a resolution in 2018 recommending retail rate net metering for customers of the Guam Power Authority ("GPA") be replaced with a "buy all/sell all" or similar program that provides for compensation to homeowners at a lower, avoided cost rate. The GPA is a public corporation that provides electricity in Guam and is overseen by the CCU and regulated by the Guam Public Utilities Commission ("GPUC"). In 2019, the GPUC, who has the authority to approve or reject the CCU's recommendations, rejected the resolution and instead voted to cap participation in the net metering program from 1,000 customers to 261 megawatts, which represents 10% of the GPA system's peak power demand. The GPA has also proposed to eliminate the option for customers to roll over any excess net metering credits to the next year or receive a payment for excess credits remaining at the end of the year. Instead, the GPA proposes that any unused credits would be surrendered to the utility. The GPA also proposes that new customers be required to install a battery in order to qualify for net metering credits from solar generation. These proposals have not been acted upon by the GPUC.

In other jurisdictions, replacing net metering with a "value of distributed energy", "feed-in", or "sell-all/ buy-all" tariff is also being considered or has been adopted. Under a "value of distributed energy" tariff, the customer would be compensated at a rate that accounts for the electricity, capacity, environmental and other attributes provided by distributed generation to the grid and the electricity market. Under a "feed-in" or "sell-all/ buy-all" tariff, all the solar energy system's generation is exported to the grid and purchased by the utility at an established rate and the customer is required to purchase all of its electricity requirements from the utility at the retail rate. In New York, the NYPSC adopted a "value of distributed energy" policy but grandfathered existing net metering customers and continuing net metering for new residential customers interconnected before January 1, 2021 for a period of 20 years. Residential customers otherwise still eligible for net metering may also elect to be compensated under a "value of distributed energy" tariff. New solar customers interconnecting after January 1, 2021 will be subject to a "value of distributed energy" tariff and potentially a monthly fixed fee. Compensation for those customers covered by a "value of solar" tariff varies and may not favorably compare to that provided by net metering.

Net metering and related policies concerning distributed generation also received attention from federal legislators and regulators. Changes in federal law, including those made by statute, regulation, rule or order, could negatively affect net metering or other related policies which otherwise promote and support solar energy and enhance the economic viability of distributed residential solar.

If net metering caps in certain jurisdictions are reached while they are still in effect, if the value of the credit that customers receive for net metering is significantly reduced, if net metering is discontinued or replaced by a different regime which values solar energy at a lower rate or if other limits or restrictions on net metering are imposed, current and future customers may be unable to recognize the same level of cost savings associated with net metering. The absence of favorable net metering policies or of net metering entirely, or the imposition of new charges that only or disproportionately impact customers that use net metering would likely significantly limit customer demand for distributed residential solar energy systems and the electricity they generate and result in an increased rate of defaults, terminations or cancelations under customer agreements. Our ability to lease, finance and sell our solar energy systems and services or sell the electricity generated from our solar energy systems 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 or reductions in the amount or value of credit customers receive through net metering. This could adversely impact our ability to expand our portfolio of solar service agreements and related solar energy systems and energy storage systems, our business, financial condition and results of operations.

Additionally, distributed residential solar customers in certain jurisdictions may be subject to higher charges from centralized electric utilities than non-solar customers and such charges should be evaluated together with the net metering policies in place. If such charges are imposed, the cost savings associated with switching to solar energy may be significantly reduced and our ability to expand our portfolio of solar service agreements and related solar energy systems and energy storage systems and compete with centralized electric utilities could be impacted.

For further discussion of these potential charges and related proposals, see "—Electric utility policies and regulations, including those affecting electric rates, may present regulatory and economic barriers to the purchase and use of solar energy systems that may significantly reduce demand for electricity from our solar energy systems and adversely impact our ability to originate new solar service agreements".


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Our business currently depends in part on the availability of rebates, tax credits and other financial incentives. The expiration, elimination or reduction of these rebates, credits or incentives or our ability to monetize them could adversely impact our business.

Our business depends in part on current government policies that promote and support solar energy and enhance the economic viability of distributed residential solar. Revenues from SRECs constituted approximately 29%, 29% and 32% of our revenues for the years ended December 31, 2019, 2018 and 2017, respectively. U.S. federal, state and local governments established various incentives and financial mechanisms to reduce the cost of solar energy and to accelerate the adoption of solar energy. These incentives come in various forms, including rebates, tax credits and other financial incentives such as payments for renewable energy credits associated with renewable energy generation, exclusion of solar energy systems from property tax assessments or other taxes and system performance payments. However, these programs may expire on a particular date, end when the allocated funding is exhausted or be reduced or terminated as solar energy adoption rates increase. For example, in New Jersey, legislation requires the SREC program be closed by the earlier of the share of electricity sold by the state's utilities supplied by solar reaching 5.1% or June 2021. Following the close of the program, customers may be eligible for Transitional Renewable Energy Credits ("TRECS") under an interim transitional program replacing SRECs that will be in place until New Jersey adopts a long-term successor program. It is expected the TREC program will provide a lower level of revenue than the SREC program. The financial value of certain incentives decreases over time. The value of SRECs in a market tends to decrease over time as the supply of SREC‑producing solar energy systems installed in that market increases. If we overestimate the future value of these incentives, it could adversely impact our business, results of operations and financial results. See "Business—Governmental Incentives".

A loss or reduction in such incentives could decrease the attractiveness of new solar energy systems to customers, which could adversely impact our business and our access to capital. We also enter into hedges related to expected production of SRECs through forward contracts that require us to physically deliver the SRECs upon settlement. These arrangements may, depending on the instruments used and the level of additional hedges involved, limit any potential upside from SREC production increases. We may be exposed to potential economic loss should a counterparty be unable or unwilling to perform their obligations under the terms of a hedging agreement. In addition, we are exposed to risks related to changes in interest rates and may engage in hedging activities to mitigate related volatility. We may fail to properly hedge these SRECs or may fail to do so economically, which may also adversely affect our results of operations.

The economics of purchasing a solar energy system and energy storage system are also improved by eligibility for accelerated depreciation, also known as the modified accelerated cost recovery system ("MACRS"), which allows for the depreciation of equipment according to an accelerated schedule set forth by the IRS. This accelerated schedule allows a taxpayer, such as us and investors in tax equity financing arrangements, to recognize the depreciation of tangible solar property on a five-year basis even though the useful life of such property is generally greater than five years. We benefit from accelerated depreciation on the solar energy systems and energy storage systems we own. To the extent these policies are changed in a manner that reduces the incentives that benefit our business, we may experience reduced revenues and reduced economic returns, experience increased financing costs and encounter difficulty obtaining financing.

The federal government currently provides business investment tax credits under Section 48 and residential energy credits under Section 25D of the Code. Section 48(a) of the Code allows taxpayers to claim an investment tax credit equal to 30% of the qualified expenditures for certain commercially owned solar energy systems that began construction before 2020. The Section 48(a) ITC percentage decreases to 26% of the basis of a solar energy system that begins construction during 2020, 22% for 2021 and 10% if construction begins after 2021 or if the solar energy system is placed into service after 2023. In June 2018, the IRS provided guidance as to when construction is considered to begin for such purposes, including the 5% ITC Safe Harbor that may apply when a taxpayer pays or incurs (or in certain cases, a contractor of the taxpayer pays or incurs) 5% or more of the costs of a solar energy system before the end of the applicable year. For 2020, we have purchased substantially all the inverters that will be deployed under our lease and PPA agreements that we expect will allow the related solar energy systems to qualify for the 30% Section 48(a) ITC by satisfying the 5% ITC Safe Harbor. There can be no assurances our solar energy systems that incorporate such inventory will be successful in claiming the 5% ITC Safe Harbor and therefore qualify for a higher Section 48(a) ITC.

We would be able to claim the Section 48(a) ITC when available for solar energy systems we originate under lease agreements or PPAs based on our ownership of the solar energy system at the time it is placed in service. We are also able to claim the Section 48(a) ITC for energy storage systems installed in conjunction with solar energy systems as long as they are only charged by on-site solar. A reduced Section 48(a) ITC may be available for energy storage systems charged in part from sources other than on-site solar as long as the energy storage systems are charged at least 75% by on-site solar.


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Section 25D of the Code allows an individual to claim a 26% federal tax credit with respect to a residential solar energy system that is owned by the homeowner. As a result, the Section 25D Credit is claimed by customers who purchase solar energy systems. This 26% rate is scheduled to be reduced to 22% for solar energy systems placed in service during 2021. This credit is scheduled to expire effective January 1, 2022. The Section 25D Credit reduces the cost of consumer ownership of solar energy systems, such as under the loan program.

The Section 48(a) ITC has been a significant driver of the financing supporting the adoption of residential solar energy systems in the U.S. and the Section 25D Credit has been a significant driver of consumer demand for ownership of solar energy systems. The reduction in, or expiration of, these tax credits will likely impact the attractiveness of residential solar and could harm our business. For example, we expect the expiration of the Section 25D Credit will increase the cost of consumer ownership of solar energy systems, such as under the loan program.

The scheduled reductions in the Section 48(a) ITC could adversely impact our financing structures that monetize a substantial portion of such Section 48(a) ITC and provide financing for our solar energy systems, including if solar energy systems that incorporate our inventory are unsuccessful in claiming the 5% ITC Safe Harbor and therefore fail to qualify for a higher Section 48(a) ITC. To the extent we have a reduced ability to raise tax equity as a result of this reduction or an inability to continue to monetize such benefits in our financing arrangements, the rate of growth of installations of our residential solar energy systems and our ability to maintain such solar energy systems could be negatively impacted. In addition, future changes in existing law and interpretations by the IRS or the courts with respect to certain matters, including but not limited to, treatment of the Section 48(a) ITC, the 5% ITC Safe Harbor and our financing arrangements and the taxation of business entities including the deductibility of interest expense could affect the amount tax equity investors are willing to invest, which could reduce our access to capital. See "Business—Governmental Incentives".

In addition, the tax legislation signed into law on December 22, 2017, commonly known as the "Tax Cuts and Jobs Act" (the "2017 Tax Act") contains several provisions that may significantly impact the attractiveness of tax benefits to tax equity investors. See "—Risks Related to Taxation—Recent tax legislation and future changes in law could adversely affect our business". The 2017 Tax Act reduced the highest marginal corporate tax rate from 35% to 21%, which caused MACRS to have less value to investors and may result in investors having less interest in Section 48(a) ITCs. The 2017 Tax Act also added a base erosion and anti-abuse tax ("BEAT") provision that imposes a minimum tax on certain multinational corporations and only 80% of the value of such corporation's Section 48(a) ITCs can be applied to reduce such corporation's BEAT liability. Beginning in 2026, no amount of Section 48(a) ITCs can be applied to offset BEAT liability. The BEAT provision generally applies to corporations that are part of a group with at least $500 million of applicable annual gross receipts and that make certain payments to related foreign persons. Accordingly, the BEAT provision could reduce the incentive for certain investors to invest in tax equity financing arrangements and could materially impact financing sources in the solar industry. Any such impact could materially and adversely affect our business.

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 or expirations of or additional application requirements for governmental incentives could adversely impact our results of operations and ability to compete in our industry by increasing our cost of capital, causing distributed residential solar power companies to increase the prices of their 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 lenders and our ability to expand our portfolio of solar service agreements and related solar energy systems and energy storage systems.

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

Our lease and PPA agreements are third-party ownership arrangements. Retail sales of electricity by third parties such as us face regulatory challenges in some states and jurisdictions, including states and jurisdictions we intend to enter where the laws and regulatory policies have not historically embraced competition to the service provided by the vertically integrated centralized electric utility. Some of the principal challenges pertain to whether third-party owned solar energy systems qualify for the same levels of rebates or other non-tax incentives available for customer‑owned solar energy systems, whether third-party owned solar energy systems are eligible at all for these incentives and whether third-party owned solar energy systems are eligible for net metering and the associated significant cost savings. Furthermore, in some states and utility territories third parties are limited in the way they may deliver solar to their customers. In jurisdictions such as Arizona, Kentucky, North Carolina, Utah and Los Angeles, California, laws have been interpreted to prohibit the sale of electricity pursuant to PPAs, leading distributed residential solar energy system providers to use leases in lieu of PPAs, in addition to customer ownership. These regulatory constraints may, for example, give rise to various property tax issues. See "Risks Related to Taxation". Changes in law and reductions in, eliminations of or additional requirements for, benefits such as rebates, tax incentives and favorable net metering policies decrease the attractiveness of new solar energy systems to distributed residential solar power

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companies and the attractiveness of solar energy systems to customers, which could reduce our acquisition opportunities. Such a loss or reduction could also adversely impact our access to capital and reduce our willingness to pursue solar energy systems due to higher operating costs or lower revenues from leases and PPAs.

Technical and regulatory limitations regarding the interconnection of solar energy systems to the electrical grid may significantly reduce our ability to sell electricity from our solar energy systems in certain markets or delay interconnections and customer in-service dates, harming our growth rate and customer satisfaction.

Technical and regulatory limitations regarding the interconnection of solar energy systems to the electrical grid may curb or slow our growth in key markets. Utilities throughout the country follow different rules and regulations regarding interconnection and regulators or utilities have or could cap or limit the amount of solar energy that can be interconnected to the grid. Our solar energy systems do not provide power to homeowners until they are interconnected to the grid.

With regard to interconnection limits, the FERC, in promulgating the first form of small generator interconnection procedures, recommended 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 many states as a de facto standard and could constrain our ability to market to customers in certain geographic areas where the concentration of solar installations exceeds this limit.

Furthermore, in certain areas, we benefit from policies that allow for expedited or simplified procedures related to connecting solar energy systems and energy storage systems to the electrical grid. We also are required to obtain interconnection permission for each solar energy system from the local utility. In many states and territories, by statute, regulations or administrative order, there are standardized procedures for interconnecting distributed residential solar energy systems and related energy storage systems to the electric utility's local distribution system. However, approval from the local utility could be delayed as a result of a backlog of requests for interconnection or the local utility could seek to limit the number of customer interconnections or the amount of solar energy on the grid. In some states, such as New Jersey and Massachusetts, certain utilities such as municipal utilities or electric cooperatives are exempt from certain interconnection requirements. If expedited or simplified interconnection procedures are changed or cease to be available, if interconnection approvals from the local utility are delayed or if the local utility seeks to limit interconnections, this could decrease the attractiveness of new solar energy systems and energy storage systems to distributed residential solar power companies, including us, and the attractiveness of solar energy systems and energy storage systems to customers. Delays in interconnections could also harm our growth rate and customer satisfaction scores. Such limitations or delays could also adversely impact our access to capital and reduce our willingness to pursue solar energy systems and energy storage systems due to higher operating costs or lower revenues from solar service agreements. Such limitations would negatively impact our business, results of operations, future growth and cash flows.

As adoption of solar distributed generation rises, along with the increased operation of utility-scale solar generation (such as in key markets including California), the amount of solar energy being contributed to the electrical grid may surpass the capacity anticipated to be needed to meet aggregate demand. Some centralized public utilities claim in less than five years, solar generation resources may reach a level capable of producing an over-generation situation, which may require some existing solar generation resources to be curtailed to maintain operation of the electrical grid. In the event such an over-generation situation were to occur, this could also result in a prohibition on the addition of new solar generation resources. The adverse effects of such a curtailment or prohibition without compensation could adversely impact our business, results of operations, future growth and cash flows.

We and our dealers are subject to risks associated with construction, regulatory compliance and other contingencies.

We utilize our growing dealer network to market, design, construct and install solar energy systems and energy storage systems in each of the markets in which we operate. The marketing and installation of solar energy systems and energy storage systems is subject to oversight and regulation in accordance with national, state and local laws and ordinances relating to consumer protection, building, fire and electrical codes, professional codes, safety, environmental protection, utility interconnection, metering and related matters. We also rely on certain of our dealers and third-party contractors to obtain and maintain permits and professional licenses, including as contractors, and other authorizations from various regulatory authorities and abide by their respective conditions and requirements in many of the jurisdictions in which we operate. A failure by us to obtain necessary permits or encounter delays in obtaining or renewing such permits or to use properly licensed dealers and third-party contractors could adversely affect our operations in those jurisdictions. Furthermore, we may become subject to similar regulatory requirements in some jurisdictions in which we operate. It is difficult and costly to track the requirements of every authority with jurisdiction over our operations and our solar energy systems. Separately, we are subject to regulations and potential liability under the Resource Conservation and Recovery Act and the Comprehensive Environmental Response,

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Compensation, and Liability Act related to the disposal of wastes generated in connection with our operations. Regulatory authorities may impose new government regulations or utility policies, change existing government regulations or utility policies, may seek expansive interpretations of existing regulations or policies pertaining to our services or solar energy systems and energy storage systems or may initiate associated investigations or enforcement actions or impose penalties or reject solar energy systems and energy storage systems. Any of these factors may result in regulatory and/or civil litigation, significant additional expenses to us or our customers, cause delays in our or our dealers' ability to originate solar service agreement or install or interconnect solar energy systems and energy storage systems or cause other harm to our business. As a result, this could cause a significant reduction in demand for our services and solar energy systems and energy storage systems or otherwise adversely affect our business, financial condition and results of operations.

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 and ongoing operations and maintenance of solar energy systems and energy storage systems requires individuals hired by us, our dealers or third-party contractors, potentially including our employees, to work at heights with complicated and potentially dangerous electrical systems. The evaluation and modification of buildings as part of the installation process requires these individuals to work in locations that may contain potentially dangerous levels of asbestos, lead, mold or other materials known or believed to be hazardous to human health. There is substantial risk of serious injury or death if proper safety procedures are not followed. Our operations are subject to regulation under OSHA, DOT regulations and equivalent state and local laws. Changes to OSHA or DOT requirements, or stricter interpretation or enforcement of existing laws or regulations, could result in increased costs. If we fail to comply with applicable OSHA or DOT 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. Because individuals hired by us or on our behalf to perform installation and ongoing operations and maintenance of our solar energy systems and energy storage systems, including our dealers and third-party contractors, are compensated on a per project basis, they are incentivized to work more quickly than installers compensated on an hourly basis. While we have not experienced a high level of injuries to date, this incentive structure may result in higher injury rates than others in the industry and could accordingly expose us to increased liability. Individuals hired by or on behalf of us may have workplace accidents and receive citations from OSHA regulators for alleged safety violations, resulting in fines. Any such accidents, citations, violations, injuries or failure to comply with industry best practices may subject us to adverse publicity, damage our reputation and competitive position and adversely affect our business.

A failure to comply with laws and regulations relating to interactions by us or our dealers with current or prospective residential customers could result in negative publicity, claims, investigations and litigation and adversely affect our financial performance.

Our business substantially focuses on solar service agreements and transactions with residential customers. We and our dealers must comply with numerous federal, state and local laws and regulations that govern matters relating to interactions with residential consumers, including those pertaining to consumer protection, marketing and sales, privacy and data security, consumer financial and credit transactions, mortgages and refinancings, home improvement contracts, warranties and various means of customer solicitation. These laws and regulations are dynamic and subject to potentially differing interpretations and various federal, state and local legislative and regulatory bodies may initiate investigations, expand current laws or regulations, or enact new laws and regulations regarding these matters. Changes in these laws or regulations or their interpretation could dramatically affect how we and our dealers do business, acquire customers and manage and use information collected from and about current and prospective customers and the costs associated therewith. We and our dealers strive to comply with all applicable laws and regulations relating to interactions with residential customers. It is possible, however, these requirements may be interpreted and applied in a manner inconsistent from one jurisdiction to another and may conflict with other rules or the practices of us or our dealers.

Although we require our dealers to meet our consumer compliance requirements and provide regular training to help them do so, we do not control our dealers and their suppliers or their business practices. Accordingly, we cannot guarantee they follow ethical business practices such as fair wage practices and compliance with environmental, safety and other local laws. A lack of demonstrated compliance could lead us to seek alternative dealers or suppliers, which could increase our costs and have a negative effect on our business and prospects for growth. Violation of labor or other laws by our dealers or suppliers or the divergence of a dealer or supplier's labor or other practices from those generally accepted as ethical in the U.S. or other markets in which we do or intend to do business could also attract negative publicity for us and harm our business.


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Violations of anti-bribery, anti-corruption and/or international trade laws to which we are subject could have a material adverse effect on our business operations, financial position and results of operations.

We are subject to laws concerning our business operations and marketing activities in the U.S. and its territories where we conduct business. Further, we are subject to the U.S. Foreign Corrupt Practices Act, which generally prohibits companies and their intermediaries from making improper payments to non-U.S. government officials for the purpose of obtaining or retaining business. We currently only operate in the U.S. and its territories. However, in the future we may conduct business outside of the U.S. and operate in parts of the world that experienced governmental corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices. In addition, due to the level of regulation in our industry, our entry into new jurisdictions through internal growth or acquisitions requires substantial government contact where norms can differ from U.S. standards. Additionally, we regularly interact with domestic municipalities and municipal-owned centralized electric utilities. We will consider our interactions with these domestic governmental bodies when designing our policies and procedures and conducting training designed to facilitate compliance with domestic and international anti-bribery laws. Although we believe these policies and procedures will mitigate the risk of violations of such laws, our employees, dealers and agents may take actions in violation of our policies and anti-bribery laws. Any such violation, even if prohibited by our policies, 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.

Violations of export control and/or economic sanctions laws and regulations to which we are subject could have a material adverse effect on our business operations, financial position and results of operations.

Our products may be subject to export control regulations, including the Export Administration Regulations administered by the U.S. Department of Commerce's Bureau of Industry and Security. We are also subject to foreign assets control and economic sanctions regulations administered by the U.S. Department of the Treasury's Office of Foreign Assets Control, which restrict or prohibit our ability to transact with certain foreign countries, individuals and entities. We currently only operate in the U.S. and its territories. However, export control regulations may restrict our ability to exchange technical information with foreign manufacturers and suppliers and economic sanctions regulations may restrict our ability to source from certain suppliers. In addition, in the future we may conduct business outside of the U.S. We will consider these scenarios when designing our policies and procedures and conducting training designed to facilitate compliance with U.S. export control and economic sanctions laws and regulations. Although we believe these policies and procedures will mitigate the risk of violations of such laws, our employees, dealers and agents may take actions in violation of our policies or these laws. Any such violation, even if prohibited by our policies, 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.

Risks Related to Our Common Stock

We do not intend to pay, and our credit facilities currently prohibit us from paying, cash dividends on our common stock and, consequently, your only opportunity to achieve a return on your investment is if the price of our common stock appreciates.

We do not plan to declare dividends on shares of our common stock in the foreseeable future. Additionally, we are currently prohibited from making any cash dividends pursuant to the terms of certain of our credit facilities. Consequently, your only opportunity to achieve a return on your investment in us will be if you sell your common stock at a price greater than you paid for it. There is no guarantee the price of our common stock that will prevail in the market will ever exceed the price you paid for it.

The market price of our common stock could be materially adversely affected by sales of substantial amounts of our common stock in the public markets, including sales by Energy Capital Partners ("ECP").

As of December 31, 2019, ECP owned approximately 46% of our common stock. Sales by ECP or other large stockholders or the perception that such sales might occur could have a material adverse effect on the price of our common stock or could impair our ability to obtain capital through an offering of equity securities.

An active, liquid and orderly trading market for our common stock may not develop and the price of our common stock is volatile and may decline in value.

An active, liquid and orderly trading market for our common stock may not develop. Active, liquid and orderly trading markets usually result in less price volatility and more efficiency in carrying out investors' purchase and sale orders. The market price for our common stock has experienced substantial price volatility in the past and may remain volatile in the future.

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The market price of our common stock may also be influenced by many factors, some of which are beyond our control, including:

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public reaction to our press releases, announcements and filings with the SEC;
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our operating and financial performance;
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fluctuations in broader securities market prices and volumes, particularly among securities of technology and solar companies;
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changes in market valuations of similar companies;
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departures of key personnel;
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commencement of or involvement in litigation;
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variations in our quarterly results of operations or those of other technology and solar companies;
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changes in general economic conditions, financial markets or the technology and solar industries;
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announcements by us or our competitors of significant acquisitions or other transactions;
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changes in accounting standards, policies, guidance, interpretations or principles;
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speculation in the press or investment community;
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actions by our stockholders;
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the failure of securities analysts to cover our common stock or changes in their recommendations and estimates of our financial performance;
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future sales of our common stock; and
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the other factors described in these "Risk Factors".

If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our common stock, our common stock price and trading volume could decline.

The trading market for our common stock is influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of the analysts currently covering our common stock ceases coverage of us, the trading price for our common stock would be negatively impacted. If any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our common stock performance, or if our operating results fail to meet the expectations of analysts, our common stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our common stock price or trading volume to decline.

If we fail to comply with the reporting requirements under the Exchange Act or maintain adequate internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, it could result in late or non-compliant filings or inaccurate financial reporting and have a negative impact on the price of our common stock or our business.

Effective internal controls are necessary for us to provide timely, reliable financial reporting and prevent fraud. Our accounting predecessor was not a public company and was not required to comply with the reporting requirements of the Exchange Act, or with the standards adopted by the Public Company Accounting Oversight Board in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act regarding internal controls over financial reporting. As a public company, we are required to report our financial results on the timeline and in the form prescribed by the Exchange Act and to evaluate and report on our internal control over financial reporting. This requires management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of internal control over financial reporting.

Though we will be required to disclose material changes made in our internal controls and procedures on a quarterly basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 until the year following our first annual report required to be filed with the SEC. Pursuant to the Jumpstart Our Business Startups Act ("JOBS Act"), our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting until the year following our first annual report required to be filed with the SEC. We cannot assure you we will not in the future have material weaknesses or significant deficiencies. Material weaknesses and significant deficiencies may exist when we report on the effectiveness of our internal control over financial reporting as required by reporting requirements under Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act.

The process of documenting and further developing our internal controls to become compliant with Section 404 will take a significant amount of time and effort to complete and will require significant attention of management. Completing implementation of new controls, documentation of our internal control system and financial processes, remediation of control deficiencies and management testing of internal controls will require substantial effort by us. We may experience higher than

48



anticipated operating expenses, as well as increased independent auditor and other fees and expenses during the implementation of these changes and thereafter.

Certain of our directors have significant duties with, and spend significant time serving, entities that may compete with us in seeking business opportunities and, accordingly, may have conflicts of interest in allocating time or pursuing business opportunities.

Certain of our directors, who are responsible for managing the direction of our operations and acquisition activities, hold positions of responsibility with other entities whose businesses are similar to our business. The existing positions held by these directors may give rise to fiduciary or other duties in conflict with the duties they owe to us. These directors may become aware of business opportunities that may be appropriate for presentation to us as well as to the other entities with which they are or may become affiliated. Due to these existing and potential future affiliations, they may present potential business opportunities to other entities prior to presenting them to us, which could cause additional conflicts of interest. They may also decide certain opportunities are more appropriate for other entities with which they are affiliated and as a result, they may elect not to present those opportunities to us. These conflicts may not be resolved in our favor.

Conflicts of interest could arise in the future between us, on the one hand, and any of our stockholders and its affiliates and affiliated funds and its and their current and future portfolio companies on the other hand, concerning, among other things, potential competitive business activities or business opportunities.

Conflicts of interest could arise in the future between us, on the one hand, and any of our stockholders and its affiliates and affiliated funds and its and their current and future portfolio companies, on the other hand, concerning, among other things, potential competitive business activities or business opportunities. For example, certain of our existing investors and their affiliated funds may invest in companies that operate in the traditional energy industry and solar and other renewable industries. As a result, our existing investors and their affiliates' and affiliated funds' current and future portfolio companies which they control may now, or in the future, directly or indirectly, compete with us for investment or business opportunities.

Our governing documents provide that our stockholders and their affiliates and affiliated funds are not restricted from owning assets or engaging in businesses that compete directly or indirectly with us and will not have any duty to refrain from engaging, directly or indirectly, in the same or similar business activities or lines of business as us, including those business activities or lines of business deemed to be competing with us, or doing business with any of our clients, customers or vendors. In particular, subject to the limitations of applicable law, our certificate of incorporation, among other things:

•
permits stockholders or their affiliates and affiliated funds and our non-employee directors to conduct business that competes with us and to make investments in any kind of property in which we may make investments; and
•
provides that if any of our stockholders or any of its affiliates who is also one of our non-employee directors becomes aware of a potential business opportunity, transaction or other matter, they will have no duty to communicate or offer that opportunity to us.

Our stockholders or their affiliates or affiliated funds may become aware, from time to time, of certain business opportunities (such as acquisition opportunities) and may direct such opportunities to other businesses in which they have invested, in which case we may not become aware of or otherwise have the ability to pursue such opportunity. Further, such businesses may choose to compete with us for these opportunities, possibly causing these opportunities to not be available to us or causing them to be more expensive for us to pursue. In addition, our stockholders or their affiliates and affiliated funds may dispose of their interests in energy infrastructure or other renewable companies or other assets in the future, without any obligation to offer us the opportunity to purchase any of those assets. As a result, our renouncing our interest and expectancy in any business opportunity that may be from time to time presented to any of our stockholders or their affiliates and affiliated funds could adversely impact our business or prospects if attractive business opportunities are procured by such parties for their own benefit rather than for ours.

In any of these matters, the interests of our existing stockholders and their affiliates and affiliated funds may differ or conflict with the interests of our other shareholders. Any actual or perceived conflicts of interest with respect to the foregoing could have an adverse impact on the trading price of our common stock.

Control of our common stock by current stockholders is expected to remain significant.

Currently, our key stockholders directly and indirectly beneficially own a majority of our outstanding common stock. As a result, these affiliates have the ability to exercise significant influence over matters submitted to our stockholders for approval, including the election and removal of directors, amendments to our certificate of incorporation and bylaws and the approval of

49



any business combination. This concentration of ownership may also have the effect of delaying or preventing a change of control of our company or discouraging others from making tender offers for our shares, which could prevent our stockholders from receiving an offer premium for their shares.

So long as the key stockholders continue to control a significant amount of our common stock, they will continue to be able to strongly influence all matters requiring stockholder approval, regardless of whether or not other stockholders believe a potential transaction is in their own best interests. In any of these matters, the interests of the key stockholders may differ or conflict with the interests of our other stockholders. In addition, certain of the keys stockholders may, from time to time, acquire interests in businesses that directly or indirectly compete with our business, as well as businesses that are significant existing or potential customers. Certain of the key stockholders may acquire or seek to acquire assets we seek to acquire and, as a result, those acquisition opportunities may not be available to us or may be more expensive for us to pursue. Moreover, this concentration of stock ownership may also adversely affect the trading price of our common stock to the extent investors perceive a disadvantage in owning stock of a company with controlling stockholders.

Provisions of our charter documents and Delaware law may inhibit a takeover, which could limit the price investors might be willing to pay in the future for our common stock.

Our charter documents authorize our board of directors to issue preferred stock without stockholder approval and, relatedly, may have the effect of delaying or preventing an acquisition of us or a merger in which we are not the surviving company and may otherwise prevent or slow changes in our board of directors and management. In addition, some provisions of our certificate of incorporation, amended and restated bylaws and stockholders' agreement could make it more difficult for a third party to acquire control of us, even if the change of control would be beneficial to our stockholders, including:

•
limitations on changes of control and business combinations;
•
limitations on the removal of directors;
•
limitations on the ability of our stockholders to call special meetings;
•
establishing advance notice provisions for stockholder proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders;
•
providing that the board of directors is expressly authorized to adopt, or to alter or repeal our bylaws; and
•
establishing advance notice and certain information requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

These provisions could discourage an acquisition of us or other change in control transactions and thereby negatively affect the price that investors might be willing to pay in the future for our common stock.

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States of America as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

Our amended and restated certificate of organization provides that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on our or our stockholders' behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, employees, agents and stockholders to us or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws, (d) any action as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware, or (e) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware. Our amended and restated certificate of incorporation also provides that, to the fullest extent permitted by applicable law, the federal district courts of the United States are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, subject to and contingent upon a final adjudication in the State of Delaware of the enforceability of such exclusive forum provision.

Notwithstanding the foregoing, the exclusive forum provision does not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Any person or entity purchasing or otherwise acquiring an interest in any shares of our capital stock shall be deemed to have notice of and to have consented to the forum provisions in our amended and restated certificate of incorporation. These choice-of-forum provisions may limit a stockholder's ability to bring a claim in a judicial forum that he, she or it believes to be favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable or unenforceable with

50



respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors. For example, the Court of Chancery of the State of Delaware recently determined a provision stating that U.S. federal district courts are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act is not enforceable.

Future sales of our common stock in the public market, or the perception that such sales may occur, could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us.

We may raise additional capital through the issuance of equity or debt in the future. In that event, the ownership of our existing stockholders would be diluted and the value of the stockholders' equity in common stock could be reduced. If we raise more equity capital from the sale of common stock, institutional or other investors may negotiate terms more favorable than the current prices of our common stock. If we issue debt securities, the holders of the debt would have a claim to our assets that would be prior to the rights of stockholders until the debt is paid. Interest on these debt securities would increase costs and could negatively impact operating results.

In accordance with Delaware law and the provisions of our charter documents, we may issue preferred stock that ranks senior in right of dividends, liquidation or voting to our common stock. The issuance by us of such preferred stock may (a) reduce or eliminate the amount of cash available for payment of dividends to our holders of common stock, (b) diminish the relative voting strength of the total shares of common stock outstanding as a class, or (c) subordinate the claims of our holders of common stock to our assets in the event of our liquidation. Our amended and restated Certificate of Incorporation does not provide stockholders the pre-emptive right to buy shares from us. As a result, stockholders will not have the automatic ability to avoid dilution in their percentage ownership of us.

We cannot predict the size of future issuances of our common stock or securities convertible into common stock or the effect, if any, that future issuances and sales of shares of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices of our common stock.

Risks Related to Taxation

Our ability to use net operating loss carryforwards ("NOLs") and tax credit carryforwards to offset future income taxes is subject to limitation and the amount of such carryforwards may be subject to challenge or reduction.

As of December 31, 2019, we had approximately $806.6 million of U.S. federal NOLs, a portion of which will begin to expire in 2032 and approximately $246.8 million of U.S. federal tax credit carryforwards, which begin to expire in 2033. Utilization of our NOLs and tax credit carryforwards depends on many factors, including having current or future taxable income, which cannot be assured. In addition, Section 382 of the Code generally imposes an annual limitation on the amount of NOLs that may be used to offset taxable income by a corporation that has undergone an "ownership change" (as determined under Section 382). An ownership change generally occurs if one or more stockholders (or groups of stockholders, including one or more groups of public stockholders) that are each deemed to own at least 5% of our stock increase their ownership percentage by more than 50 percentage points over their lowest ownership percentage during a rolling three-year period. Similar rules under Section 383 of the Code impose an annual limitation on the amount of tax credit carryforwards, including carryforwards of Section 48(a) ITCs, that may be used to offset U.S. federal income taxes.

We experienced an ownership change under Sections 382 and 383 of the Code prior to our initial public offering on July 29, 2019 (our "IPO") that subjected our NOLs and tax credit carryforwards existing at that time to limitations under those sections. Another ownership change could occur as a result of transactions that increase the ownership percentage of any of our 5% stockholders during a rolling three-year period, including redemptions of our stock, sales of our stock by other deemed 5% stockholders or issuances of stock by us, whether in our IPO, additional public offerings or otherwise. If such another ownership change occurs with respect to our stock, our ability to utilize NOLs and tax credit carryforwards may be subject to further limitation under Sections 382 and 383 of the Code. The application of the aforementioned limitations may cause U.S. federal income taxes to be paid by us earlier than they otherwise would be paid if such limitations were not in effect and could cause such NOLs and tax credit carryforwards to expire unused, in each case reducing or eliminating the benefit of such NOLs and tax credit carryforwards. To the extent we are not able to offset our future taxable income with our NOLs or offset future taxes with our tax credit carryforwards, this would adversely affect our operating results and cash flows if we have taxable income in the future. These same risks can arise in the context of state income and franchise tax given many states conform to federal law and rely on federal authority for determining state NOLs.

51




Furthermore, the IRS or other tax authorities could successfully challenge one or more tax positions we take, such as the classification of assets under the income tax depreciation rules or the characterization of expenses for income tax purposes, which could reduce the NOLs we generate and/or are able to use.

Our tax positions are subject to challenge by the relevant tax authority.

Our federal and state tax positions may be challenged by the relevant tax authority. The process and costs, including potential penalties for nonpayment of disputed amounts, of contesting such challenges, administratively or judicially, regardless of the merits, could be material. Future tax audits or challenges by tax authorities to our tax positions may result in a material increase in our estimated future income tax or other tax liabilities, which would negatively impact our financial condition.

For example, many of our solar energy systems are located in states or territories that exempt such assets from state, territorial and local sales and property taxes. We believe these solar energy systems are and should continue to be exempt from certain state, territorial and local sales and property taxes; however, some of our solar energy systems are located in certain jurisdictions where the applicability of these exemptions to solar energy systems is the subject of ongoing litigation and possible legislative change or else the jurisdiction's law is uncertain regarding the effect on property and sales tax exemptions of certain complex business reorganizations undergone by us and our subsidiaries. As such, some tax authorities could challenge the availability of these exemptions. If our solar energy systems are determined to be subject to state, territorial or local sales or property taxes, it could negatively impact our financial condition.

Recent tax legislation and future changes in law could adversely affect our business.

The 2017 Tax Act significantly changed the Code, including the taxation of U.S. corporations, by, among other things, reducing the U.S. corporate income tax rate, accelerating the expensing of certain capital expenditures, adopting elements of a territorial tax system and introducing certain anti-base erosion provisions. Further, the 2017 Tax Act generally (a) limits our annual deductions for interest expense to no more than 30% of our "adjusted taxable income" (plus 100% of our business interest income) for the year and (b) permits us to offset only 80% (rather than 100%) of our taxable income with any NOLs we generate after 2017 with an indefinite carryforward.

The 2017 Tax Act is unclear in certain respects and will require interpretations and implementing regulations by the IRS and the legislation could be subject to potential amendments and technical corrections, any of which could lessen or increase certain adverse impacts of the legislation. As states elect to conform (or else have rolling conformity) to the Code, such interpretations, regulations, amendments and corrections (including those promulgated by state authorities) could likewise affect our state income and franchise tax obligations. Any of the foregoing changes arising from the 2017 Tax Act, as well as other changes in law not mentioned herein, could adversely impact our business. Furthermore, any future changes in law could affect our tax position and adversely impact our business.

If the IRS or the U.S. Treasury Department makes a determination that the fair market value of our solar energy systems is materially lower than what we have reported in our tax equity vehicles' tax returns, we may have to pay significant amounts to our tax equity vehicles, our tax equity investors and/or the U.S. government. Such determinations could have a material adverse effect on our business and financial condition.

The basis of our solar energy systems we report in our tax equity vehicles' tax returns to claim the Section 48(a) ITC is based on the appraised fair market value of our solar energy systems. The IRS continues to scrutinize fair market value determinations industry-wide. We are not aware of any IRS audits or results of audits related to our appraisals or fair market value determinations of any of our tax equity vehicles. If as part of an examination the IRS were to review the fair market value we used to establish our basis for claiming Section 48(a) ITCs and successfully assert the Section 48(a) ITCs previously claimed should be reduced, we would owe certain of our tax equity vehicles or our tax equity investors an amount equal to 30% of each investor's share of the difference between the fair market value used to establish our basis for claiming Section 48(a) ITCs and the adjusted fair market value determined by the IRS, plus any costs and expenses associated with a challenge to that fair market value, plus a gross up to pay for additional taxes. We could also be subject to tax liabilities, including interest and penalties, based on our share of claimed Section 48(a) ITCs. To date, we have not been required to make such payments under any of our tax equity vehicles. We have obtained insurance coverage with respect to certain losses that may be incurred should the Section 48(a) ITCs previously claimed with respect to our tax equity vehicles be reduced. Any such losses could be outside the scope of these insurance policies or exceed insurance policy limits and we could incur unforeseen costs that could harm our business and financial condition.


52



If our solar energy systems either cease to be qualifying property or undergo certain changes in ownership within five years of the applicable placed in service date, we may have to pay significant amounts to our tax equity vehicles, our tax equity investors and/or the U.S. government. Such recapture could have a material adverse effect on our business and financial condition.

The Section 48(a) ITCs are subject to recapture under the Code if a solar energy system either ceases to be qualifying property or undergoes certain changes in ownership within five years of its placed in service date. The amount of Section 48(a) ITCs subject to recapture decreases by 20% of the claimed amount on each anniversary of a solar energy system's placed in service date. If such a recapture event were to occur, we could owe certain of our tax equity vehicles or our tax equity investors an amount equal to such vehicles' or investors' share of the Section 48(a) ITCs that were recaptured. We could also be subject to tax liabilities, including interest and penalties, based on our share of recaptured Section 48(a) ITCs. To date, none of the Section 48(a) ITCs claimed with respect to our solar energy systems have been recaptured. Any such recapture could have a material adverse effect on our business and financial condition.

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties.

Our corporate headquarters is in Houston, Texas, where we occupy approximately 71,700 square feet of office space pursuant to an operating lease that expires in July 2029. We lease additional offices in Guam, New York and Puerto Rico but do not own any real property. We intend to procure additional space in the future as we continue to add employees and expand geographically. We believe our facilities are adequate and suitable for our current needs and, should it be needed, suitable additional or alternative space will be available to accommodate our operations.

Item 3. Legal Proceedings.

Although we may, from time to time, be involved in litigation, claims and government proceedings arising in the ordinary course of business, we are not a party to any litigation or governmental or other proceeding we believe will have a material adverse impact on our financial position, results of operations or liquidity. In the ordinary course of business, we have disputes with dealers and customers. In general, litigation claims or regulatory proceedings can be expensive and time consuming to bring or defend against, may result in the diversion of management attention and resources from our business and business goals and could result in settlement or damages that could significantly affect financial results and the conduct of our business.

Item 4. Mine Safety Disclosures.

Not applicable.


53



PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities

Market Information

Our common stock began trading on the NYSE under the symbol "NOVA" on July 25, 2019.

Holders

As of February 21, 2020, there were approximately 84 holders of record of common stock. Certain shares are held in "street" name and, accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.

Dividends

We have never declared or paid any cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not expect to pay any dividends on our capital stock in the foreseeable future. Any future determination to declare dividends will be made at the discretion of our Board, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions and other factors our Board may deem relevant. In addition, the terms of our credit agreements and indentures contain restrictions on the payment of dividends and we may also enter into other credit agreements, indentures or other borrowing arrangements in the future that will restrict our ability to declare or pay cash dividends on our capital stock.

Performance Graph

The following stock performance graph compares our total stock return with the total return for (a) the NYSE Composite Index and the (b) the Invesco Solar ETF, which represents a peer group of solar companies, for the period from July 25, 2019 (the date our common stock commenced trading on the NYSE) through December 31, 2019. The figures represented below assume an investment of $100 in our common stock at the closing price of $11.25 on July 25, 2019 and in the NYSE Composite Index and the Invesco Solar ETF on July 25, 2019 including the reinvestment of dividends into shares of common stock. The comparisons in the table are required by the SEC and are not intended to forecast or be indicative of possible future performance of our common stock. This graph shall not be deemed "soliciting material" or be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

CHART-AD2F7AD699692993DD7A01.JPG


54



Use of Proceeds from Public Offering of Common Stock

On July 29, 2019, we sold 14,000,000 shares of our common stock in our IPO at a public offering price of $12.00 per share. On August 19, 2019, we issued and sold an additional 865,267 shares of our common stock at a public offering price of $12.00 per share pursuant to the underwriters' exercise of their option to purchase additional shares, resulting in aggregate net proceeds from our IPO of approximately $162.3 million, after deducting underwriting discounts and commissions of approximately $10.7 million and offering expenses of approximately $5.4 million. The offer and sale of the shares in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-232393), which was declared effective by the SEC on July 24, 2019. We used $57.1 million of the net proceeds from our IPO to redeem our senior secured notes. We used the remaining net proceeds from our IPO for general corporate purposes, including working capital, operating expenses, capital expenditures and repayment of indebtedness. The representatives of the underwriters of our IPO were BofA Securities, Inc., J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC. No payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates, other than payments in the ordinary course of business to officers for salaries and to non-employee directors pursuant to our director compensation policy.

Item 6. Selected Financial Data.

The following selected consolidated financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements, related notes and other information included elsewhere in this Annual Report on Form 10-K. The selected consolidated statements of operations data for the years ended December 31, 2019, 2018 and 2017, and the selected consolidated balance sheet data as of December 31, 2019 and 2018 are derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. The selected consolidated balance sheet data as of December 31, 2017 is derived from audited consolidated financial statements not included in this Annual Report on Form 10-K. Our historical results are not necessarily indicative of our future results. The selected consolidated financial data in this section are not intended to replace, and are qualified in their entirety, by the consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K.

 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
 
(in thousands, except per share amounts)
Consolidated Statement of Operations Data:
 
 
 
 
 
Revenue
$
131,556

 
$
104,382

 
$
76,856

Net loss
$
(133,434
)
 
$
(68,409
)
 
$
(90,182
)
Net loss attributable to common stockholders—basic and diluted
$
(169,076
)
 
$
(135,872
)
 
$
(121,288
)
Net loss per share attributable to common stockholders—basic and diluted
$
(4.14
)
 
$
(15.74
)
 
$
(14.05
)
Weighted average common shares outstanding—basic and diluted
40,797,976

 
8,634,477

 
8,632,936


 
As of December 31,
 
2019
 
2018
 
2017
 
(in thousands)
Consolidated Balance Sheet Data:
 
 
 
 
 
Cash and restricted cash
$
150,291

 
$
87,046

 
$
81,778

Property and equipment, net
$
1,745,060

 
$
1,328,457

 
$
1,113,073

Total assets
$
2,487,067

 
$
1,665,085

 
$
1,328,788

Current portion of long-term debt
$
97,464

 
$
26,965

 
$
25,837

Current portion of long-term debt—affiliates
$
—

 
$
16,500

 
$
81,791

Long-term debt, net
$
1,346,419

 
$
872,249

 
$
723,697

Long-term debt, net—affiliates
$
—

 
$
44,181

 
$
—

Total stockholders' equity
$
645,935

 
$
501,118

 
$
371,183



55



Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis contain forward-looking statements that are subject to 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 but not limited to those discussed under "Special Note Regarding Forward-Looking Statements", "Risk Factors" and elsewhere in this Annual Report on Form 10-K. 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 Annual Report on Form 10-K may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Unless the context otherwise requires, the terms "Sunnova," "the Company," "we," "us" and "our" refer to Sunnova Energy International Inc. ("SEI") and its consolidated subsidiaries.

Company Overview

We are a leading residential solar and energy storage service provider, serving more than 80,000 customers in more than 20 U.S. states and territories. Our goal is to be the leading provider of clean, affordable and reliable energy for consumers, and we operate with a simple mission: to power energy independence. We were founded to deliver customers a better energy service at a better price; and, through our solar and solar plus energy storage service offerings, we are disrupting the traditional energy landscape and the way the 21st century customer generates and consumes electricity.

We have a differentiated residential solar dealer model in which we partner with local dealers who originate, design and install our customers' solar energy systems and energy storage systems on our behalf. Our focus on our dealer model enables us to leverage our dealers' specialized knowledge, connections and experience in local markets to drive customer origination while providing our dealers with access to high quality products at competitive prices and technical oversight and expertise. We believe this structure provides operational flexibility, reduced exposure to labor shortages and lower fixed costs relative to our peers, furthering our competitive advantage.

We offer customers products to power their homes with affordable solar energy. We are able to offer savings and storage opportunities to most customers compared to utility-based retail rates with little to no up-front expense to the customer, and we are able to provide energy resiliency and reliability to our solar plus energy storage customers. Our solar service agreements take the form of a lease, PPA or loan. The initial term of our solar service agreements is typically either 10 or 25 years. Service is an integral part of our agreements and includes operations and maintenance, monitoring, repairs and replacements, equipment upgrades, on-site power optimization for the customer (for both supply and demand), the ability to efficiently switch power sources among the solar panel, grid and energy storage system, as appropriate, and diagnostics. During the life of the contract we have the opportunity to integrate related and evolving home servicing and monitoring technologies to upgrade the flexibility and reduce the cost of our customers' energy supply.

In the case of leases and PPAs, we also currently receive tax benefits and other incentives from federal, state and local governments, a portion of which we finance through tax equity, non-recourse debt structures and hedging arrangements in order to fund our upfront costs, overhead and growth investments. We have an established track record of attracting capital from diverse sources. From our inception through December 31, 2019, we have raised more than $4.7 billion in total capital commitments from equity, debt and tax equity investors.

In addition to providing ongoing service as a standard component of our solar service agreements, we also offer ongoing energy services to customers who purchased their solar energy system through unaffiliated third parties. Under these arrangements, we agree to provide such monitoring, maintenance and repair services to these customers for the life of the service contract they sign with us. We believe the quality and scope of our comprehensive energy service offerings, whether to customers that obtained their solar energy system through us or through another party, is a key differentiator between us and our competitors.

We commenced operations in January 2013 and began providing solar energy services under our first solar energy system in April 2013. Since then, we have experienced rapid growth in our market share and in the number of customers on our platform. We operate one of the largest fleets of residential solar energy systems in the U.S., comprising more than 572 megawatts of generation capacity and serving more than 80,000 customers.


56



Recent Developments

In December 2019, we issued and sold an aggregate principal amount of $55.0 million of our 7.75% convertible senior notes (the "convertible senior notes") in a private placement to a total of seven institutional accredited investors at an issue price of 95%, for an aggregate purchase price of $52.3 million. See "—Liquidity and Capital Resources—Financing Arrangements—Convertible Notes" below.

In December 2019, one of our subsidiaries entered into a credit facility with Credit Suisse AG, New York Branch, as administrative agent, and the lenders party thereto. Under the credit facility, the subsidiary may borrow up to an aggregate principal amount of $95.2 million in revolving loans subject to compliance with a borrowing base. The aggregate commitments may be increased up to $137.6 million, subject to lender consent and certain other conditions. See "—Liquidity and Capital Resources—Financing Arrangements—TEPINV Financing" below.

In February 2020, one of our subsidiaries issued $337.1 million in aggregate principal amount of Series 2020-1 Class A solar asset-backed notes and $75.4 million in aggregate principal amount of Series 2020-1 Class B solar asset-backed notes with a maturity date of January 2055. The notes bear interest at an annual rate of 3.35% and 5.54% for the Class A and Class B notes, respectively. See "—Liquidity and Capital Resources—Financing Arrangements—Rule 144A Securitization Financing" below and Note 18, Subsequent Events, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Initial Public Offering and Recapitalization Transactions

On July 29, 2019, we completed our IPO in which we sold 14,000,000 shares of our common stock at a public offering price of $12.00 per share. On August 19, 2019, we issued and sold an additional 865,267 shares of our common stock at a public offering price of $12.00 per share pursuant to the underwriters' exercise of their option to purchase additional shares. We received aggregate net proceeds from our IPO of approximately $162.3 million, after deducting underwriting discounts and commissions of approximately $10.7 million and offering expenses of approximately $5.4 million.

In connection with our IPO, we completed a series of recapitalization transactions as follows:

•
we decreased the total number of outstanding shares with a 1 for 2.333 reverse stock split effective July 29, 2019 (the "Reverse Stock Split"). All current and past period amounts stated herein have given effect to the Reverse Stock Split;

•
we converted 108,138,971 shares (or 46,351,877 shares as adjusted for the Reverse Stock Split) of our Series A convertible preferred stock and 32,958,645 shares (or 14,127,140 shares as adjusted for the Reverse Stock Split) of our Series C convertible preferred stock, which represented all the outstanding shares of our Series A convertible preferred stock and Series C convertible preferred stock, into 60,479,017 shares of our common stock;

•
we converted 23,870 shares of our non-voting Series B common stock, which represented all the outstanding shares of our Series B common stock, into 23,870 shares of our voting Series A common stock.

•
our Series A common stock was redesignated as common stock;

•
we exercised our right to redeem all the senior secured notes for an aggregate principal plus unpaid cash and paid-in-kind interest amount of $57.1 million for cash;

•
holders of the convertible note issued in March 2018 for $15.0 million (the "2018 Note") converted the principal amount plus any accrued and unpaid interest as of the date of conversion into 3,319,312 shares (or 1,422,767 shares as adjusted for the Reverse Stock Split) of Series A convertible preferred stock, which in turn converted into 1,422,767 shares of common stock. In addition, holders of the convertible note issued in June 2019 for $15.0 million (the "2019 Note") converted the principal amount plus any accrued and unpaid interest as of the date of conversion into 2,613,818 shares (or 1,120,360 shares as adjusted for the Reverse Stock Split) of Series C convertible preferred stock, which in turn converted into 1,120,360 shares of common stock;

•
we implemented an internal reorganization that resulted in SEI owning all the outstanding capital stock of Sunnova Energy Corporation (the "Reorganization"). In connection with the Reorganization, a direct, wholly-owned subsidiary of SEI merged with and into Sunnova Energy Corporation, with Sunnova Energy Corporation surviving as a direct, wholly owned subsidiary of SEI. Each share of each class of Sunnova Energy Corporation stock issued

57



and outstanding immediately prior to the Reorganization, by virtue of the Reorganization and without any action on the part of the holders thereof, automatically converted into an equivalent corresponding share of stock of SEI, having the same designations, rights, powers and preferences and the qualifications, limitations and restrictions with respect to SEI as each such corresponding share of Sunnova Energy Corporation stock being converted with respect to Sunnova Energy Corporation. Accordingly, upon consummation of the Reorganization, each of Sunnova Energy Corporation's stockholders immediately prior to the consummation of the Reorganization became a stockholder of SEI;

•
approximately 50% of the non-vested stock options outstanding at that time, or 995,517 stock options, became exercisable and the vesting terms for all remaining stock options were amended so all stock options will be fully vested on the first anniversary of the closing date of our IPO. We recorded an additional $3.2 million of expense in July 2019 related to the accelerated vesting periods; and

•
our Board adopted the 2019 Long-Term Incentive Plan (the "LTIP") to incentivize employees, officers, directors and other service providers of SEI and its affiliates. The LTIP provides for the grant, from time to time, at the discretion of our Board or a committee thereof, of stock options, stock appreciation rights, stock awards, including restricted stock and restricted stock units, performance awards and cash awards. The LTIP provides the aggregate number of shares of common stock that may be issued pursuant to awards shall not exceed 5,229,318 shares. The awards vest over a period of either one year, three years or seven years.

Securitizations

As a source of long-term financing, we securitize qualifying solar energy systems and related solar service agreements into special purpose entities who issue solar asset-backed and solar loan-backed notes to institutional investors. We also securitize the cash flows generated by the membership interests in certain of our indirect, wholly-owned subsidiaries that are the managing member of a tax equity fund that owns a pool of solar energy systems and related solar service agreements that were originated by one of our wholly-owned subsidiaries. We do not securitize the Section 48(a) ITC incentives associated with the solar energy systems as part of these arrangements. We use the cash flows these solar energy systems generate to service the quarterly or semi-annual principal and interest payments on the notes and satisfy the expenses and reserve requirements of the special purpose entities, with any remaining cash distributed to their sole members, who are typically our indirect wholly-owned subsidiaries. In connection with these securitizations, certain of our affiliates receive a fee for managing and servicing the solar energy systems pursuant to management, servicing, facility administration and asset management agreements. The special purpose entities are also typically required to maintain a liquidity reserve account and a reserve account for inverter replacements and, in certain cases, reserve accounts for financing fund purchase option/withdrawal right exercises or storage system replacement for the benefit of the lenders under the applicable series of notes, each of which are funded from initial deposits or cash flows to the levels specified therein. The creditors of these special purpose entities have no recourse to our other assets except as expressly set forth in the terms of the notes. From our inception through December 31, 2019, we have issued $824.6 million in solar asset-backed and solar loan-backed notes.

Tax Equity Funds

Our ability to offer long-term solar service agreements depends in part on our ability to finance the installation of the solar energy systems by co-investing with tax equity investors such as large banks who value the resulting customer receivables and Section 48(a) ITCs, accelerated tax depreciation and other incentives related to the solar energy systems primarily through structured investments known as "tax equity". Tax equity investments are generally structured as non-recourse project financings known as "tax equity funds". In the context of distributed generation solar energy, tax equity investors make contributions upfront or in stages based on milestones in exchange for a share of the tax attributes and cash flows emanating from an underlying portfolio of solar energy systems. In these tax equity funds, the U.S. federal tax attributes offset taxes that otherwise would have been payable on the investors' other operations. The terms and conditions of each tax equity fund vary significantly by investor and by fund. We continue to negotiate with potential investors to create additional tax equity funds.

In general, our tax equity funds are structured using the "partnership flip" structure. Under partnership flip structures, we and our tax equity investors contribute cash into a partnership. The partnership uses this cash to acquire long-term solar service agreements and solar energy systems developed by us and sells energy from such solar energy systems to customers or directly leases the solar energy systems to customers. We assign these solar service agreements, solar energy systems and related incentives to our tax equity funds in accordance with the criteria of the specific funds. Upon such assignment and the satisfaction of certain conditions precedent, we are able to draw down on the tax equity fund commitments. The conditions precedent to funding vary across our tax equity funds but generally require that we have entered into a solar service agreement with the customer, the customer meets certain credit criteria, the solar energy system is expected to be eligible for the Section

58



48(a) ITC, we have a recent appraisal from an independent appraiser establishing the fair market value of the solar energy system and the property is in an approved state or territory. All the capital contributed by our tax equity investors into the tax equity funds is, depending on the tax equity fund structure, either paid to us to acquire solar energy systems or distributed to us following our contribution of solar energy systems to the tax equity fund. Some tax equity investors have additional criteria that are specific to those tax equity funds. Once received by us, these proceeds are generally used for working capital or capital expenditures to develop and deliver solar energy systems. Each tax equity investor agrees to receive a minimum target rate of return, typically on an after-tax basis, which varies by tax equity fund. Prior to receiving a contractual rate of return or a date specified in the contractual arrangements, the tax equity investor receives substantially all of the non-cash value attributable to the solar energy systems, which includes accelerated depreciation and Section 48(a) ITCs, and a significant portion of the value attributable to customer payments; however, we receive a majority of the cash distributions, which are typically paid quarterly. After the tax equity investor receives its contractual rate of return or after the specified date, we receive substantially all of the cash. Under the partnership flip structure, in part owing to the allocation of depreciation benefits to the investor, the investor's pre-tax return is much lower than the investor's after-tax return.

We have determined we are the primary beneficiary in these partnership flip structures for accounting purposes. Accordingly, we consolidate the assets and liabilities and operating results of these partnerships in our consolidated financial statements. We recognize the tax equity investors' share of the net assets of the tax equity funds as redeemable noncontrolling interests in our consolidated balance sheets. These income or loss allocations, reflected in our consolidated statements of operations, may create significant volatility in our reported results of operations, including potentially changing net loss attributable to stockholders to net income attributable to stockholders, or vice versa, from quarter to quarter.

We typically have an option to acquire, and our tax equity investors may have an option to withdraw and require us to purchase, all the equity interests our tax equity investor holds in the tax equity funds approximately six years after the last solar energy system in each tax equity fund is operational. If we or our tax equity investors exercise this option, we are typically required to pay at least the fair market value of the tax equity investor's equity interest. Following such exercise, we would receive 100% of the customer payments for the remainder of the term of the solar service agreements. From our inception through December 31, 2019, we have received commitments of $374.5 million through the use of tax equity funds, of which an aggregate of $308.4 million has been funded.

Key Financial and Operational Metrics

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

Number of Customers. We define number of customers to include each customer that is party to an in-service solar service agreement. For our leases, PPAs and loan agreements, in-service means the related solar energy system and, if applicable, energy storage system, must have met all the requirements to begin operation and be interconnected to the electrical grid. For our Sunnova Protect services, in-service means the customer's solar energy system must have met the requirements to have the service activated. We do not include in our number of customers any customer under a lease, PPA or loan agreement that has reached mechanical completion but has not received permission to operate from the local utility or for whom we have terminated the contract and removed the solar energy system. We also do not include in our number of customers any customer of our Sunnova Protect services that has been in default under his or her solar service agreement in excess of six months. We track the total number of customers as an indicator of our historical growth and our rate of growth from period to period.
 
As of December 31,
 
 
 
2019
 
2018
 
Change
Number of customers
78,600

 
60,300

 
18,300


Weighted Average Number of Customers. We calculate the weighted average number of customers based on the number of months a given customer is in-service during a given measurement period. The weighted average customer count reflects the number of customers at the beginning of a period, plus the total number of new customers added in the period adjusted by a factor that accounts for the partial period nature of those new customers. For purposes of this calculation, we assume all new customers added during a month were added in the middle of that month. We track the weighted average customer count in order to accurately reflect the contribution of the appropriate number of customers to key financial metrics over the measurement period.

59



 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
Weighted average number of customers (excluding loan agreements)
60,100

 
49,200

 
37,000

Weighted average number of customers with loan agreements
8,400

 
4,200

 
1,800

Weighted average number of customers
68,500

 
53,400

 
38,800


Adjusted EBITDA. We define Adjusted EBITDA as net income (loss) plus net interest expense, depreciation and amortization expense, income tax expense, financing deal costs, natural disaster losses and related charges, net, amortization of payments to dealers for exclusivity and other bonus arrangements, legal settlements and excluding the effect of certain non-recurring items we do not consider to be indicative of our ongoing operating performance such as, but not limited to, costs of our IPO, losses on unenforceable contracts, losses on extinguishment of long-term debt, realized and unrealized gains and losses on fair value option instruments and other non-cash items such as non-cash compensation expense and asset retirement obligation ("ARO") accretion expense.

Adjusted EBITDA is a non-GAAP financial measure we use as a performance measure. We believe investors and securities analysts also use Adjusted EBITDA in evaluating our operating performance. This measurement is not recognized in accordance with accounting principles generally accepted in the United States of America ("GAAP") and should not be viewed as an alternative to GAAP measures of performance. The GAAP measure most directly comparable to Adjusted EBITDA is net income (loss). The presentation of Adjusted EBITDA should not be construed to suggest our future results will be unaffected by non-cash or non-recurring items. In addition, our calculation of Adjusted EBITDA is not necessarily comparable to Adjusted EBITDA as calculated by other companies.

We believe Adjusted EBITDA is useful to management, investors and analysts in providing a measure of core financial performance adjusted to allow for comparisons of results of operations across reporting periods on a consistent basis. These adjustments are intended to exclude items that are not indicative of the ongoing operating performance of the business. Adjusted EBITDA is also used by our management for internal planning purposes, including our consolidated operating budget, and by our Board in setting performance-based compensation targets. Adjusted EBITDA should not be considered an alternative to but viewed in conjunction with GAAP results, as we believe it provides a more complete understanding of ongoing business performance and trends than GAAP measures alone. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

We use per customer metrics, including Adjusted Operating Expense per weighted average customer (as described below), as an additional way to evaluate our performance. Specifically, we consider the change in these metrics from period to period as a way to evaluate our performance in the context of changes we experience in the overall customer base. While the Adjusted Operating Expense figure provides a valuable indicator of our overall performance, evaluating this metric on a per unit basis allows for further nuanced understanding by management, investors and analysts of the financial impact of each additional customer.

60



 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
 
(in thousands)
Reconciliation of Net Loss to Adjusted EBITDA:
 
 
 
 
 
Net loss
$
(133,434
)
 
$
(68,409
)
 
$
(90,182
)
Interest expense, net
108,024

 
51,582

 
59,847

Interest expense, net—affiliates
4,098

 
9,548

 
23,177

Interest income
(12,483
)
 
(6,450
)
 
(3,197
)
Depreciation expense
49,340

 
39,290

 
29,482

Amortization expense
29

 
133

 
133

EBITDA
15,574

 
25,694

 
19,260

Non-cash compensation expense (1)
10,512

 
3,410

 
1,495

ARO accretion expense
1,443

 
1,183

 
704

Financing deal costs
1,161

 
1,902

 
336

Natural disaster losses and related charges, net
54

 
8,217

 
1,034

IPO costs
3,804

 
563

 
—

Loss on unenforceable contracts
2,381

 
—

 
—

Loss on extinguishment of long-term debt, net—affiliates
10,645

 
—

 
—

Unrealized loss on fair value option instruments
150

 
—

 
—

Realized loss on fair value option instruments
730

 
—

 
—

Amortization of payments to dealers for exclusivity and other bonus arrangements
583

 
—

 
—

Legal settlements
1,260

 
150

 
575

Adjusted EBITDA
$
48,297

 
$
41,119

 
$
23,404


(1)
Amount includes non-cash effect of equity-based compensation plans of $9.2 million, $3.0 million and $1.5 million for the years ended December 31, 2019, 2018 and 2017, respectively, and partial forgiveness of a loan to an executive officer used to purchase our capital stock of $1.3 million and $0.4 million for the years ended December 31, 2019 and 2018, respectively.

Interest Income and Principal Payments from Customer Notes Receivable. Under our loan agreements, the customer obtains financing for the purchase of a solar energy system from us and we agree to operate and maintain the solar energy system throughout the duration of the agreement. Pursuant to the terms of the loan agreement, the customer makes scheduled principal and interest payments to us and has the option to prepay principal at any time in part or in full. Whereas we typically recognize payments from customers under our leases and PPAs as revenue, we recognize payments received from customers under our loan agreements (a) as interest income, to the extent attributable to earned interest on the contract that financed the customer's purchase of the solar energy system; (b) as a reduction of a note receivable on the balance sheet, to the extent attributable to a return of principal (whether scheduled or prepaid) on the contract that financed the customer's purchase of the solar energy system; and (c) as revenue, to the extent attributable to payments for operations and maintenance services provided by us.

While Adjusted EBITDA effectively captures the operating performance of our leases and PPAs, it only reflects the service portion of the operating performance under our loan agreements. We do not consider our types of solar service agreements differently when evaluating our operating performance. In order to present a measure of operating performance that provides comparability without regard to the different accounting treatment among our three types of solar service agreements, we consider interest income from customer notes receivable and principal proceeds from customer notes receivable, net of related revenue, as key performance metrics. We believe these two metrics provide a more meaningful and uniform method of analyzing our operating performance when viewed in light of our other key performance metrics across the three primary types of solar service agreements.

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Year Ended 
 December 31,
 
2019
 
2018
 
2017
 
(in thousands)
Interest income from customer notes receivable
$
11,588

 
$
6,147

 
$
3,003

Principal proceeds from customer notes receivable, net of related revenue
$
20,044

 
$
6,812

 
$
2,360


Adjusted Operating Cash Flow. We define Adjusted Operating Cash Flow as net cash used in operating activities plus principal proceeds from customer notes receivable and distributions to redeemable noncontrolling interests less payments to dealers for exclusivity and other bonus arrangements, inventory and prepaid inventory purchases and payments of non-capitalized costs related to our IPO. Adjusted Operating Cash Flow is a non-GAAP financial measure we use as a liquidity measure. This measurement is not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of liquidity. The GAAP measure most directly comparable to Adjusted Operating Cash Flow is net cash used in operating activities. We believe Adjusted Operating Cash Flow is a supplemental financial measure useful to management, analysts, investors, lenders and rating agencies as an indicator of our ability to internally fund origination activities, service or incur additional debt and service our contractual obligations. We believe investors and analysts will use Adjusted Operating Cash Flow to evaluate our liquidity and ability to service our contractual obligations. However, Adjusted Operating Cash Flow has limitations as an analytical tool because it does not account for all future expenditures and financial obligations of the business or reflect unforeseen circumstances that may impact our future cash flows, all of which could have a material effect on our financial condition and results from operations. In addition, our calculations of Adjusted Operating Cash Flow are not necessarily comparable to liquidity measures presented by other companies. Investors should not rely on these measures as a substitute for any GAAP measure, including net cash used in operating activities.
 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
 
(in thousands)
Reconciliation of Net Cash Used in Operating Activities to Adjusted Operating Cash Flow:
 
 
 
 
 
Net cash used in operating activities
$
(170,262
)
 
$
(11,570
)
 
$
(48,967
)
Principal proceeds from customer notes receivable
21,604

 
7,715

 
2,816

Distributions to redeemable noncontrolling interests
(7,559
)
 
(2,017
)
 
(294
)
Payments to dealers for exclusivity and other bonus arrangements
31,733

 
—

 
—

Inventory and prepaid inventory purchases
127,818

 
14,288

 
1,902

Payments of non-capitalized costs related to IPO
4,944

 
—

 
—

Adjusted Operating Cash Flow
$
8,278

 
$
8,416

 
$
(44,543
)

Adjusted Operating Expense. We define Adjusted Operating Expense as total operating expense less depreciation and amortization expense, financing deal costs, natural disaster losses and related charges, net, amortization of payments to dealers for exclusivity and other bonus arrangements, legal settlements and excluding the effect of certain non-recurring items we do not consider to be indicative of our ongoing operating performance such as, but not limited to, costs of our IPO, losses on unenforceable contracts and other non-cash items such as non-cash compensation expense and ARO accretion expense. Adjusted Operating Expense is a non-GAAP financial measure we use as a performance measure. We believe investors and securities analysts will also use Adjusted Operating Expense in evaluating our performance. This measurement is not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. The GAAP measure most directly comparable to Adjusted Operating Expense is total operating expense. We believe Adjusted Operating Expense is a supplemental financial measure useful to management, analysts, investors, lenders and rating agencies as an indicator of the efficiency of our operations between reporting periods. Adjusted Operating Expense should not be considered an alternative to but viewed in conjunction with GAAP total operating expense, as we believe it provides a more complete understanding of our performance than GAAP measures alone. Adjusted Operating Expense has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP, including total operating expense.

We use Adjusted Operating Expense per weighted average customer as an additional way to evaluate our performance. Specifically, we consider the change in this metric from period to period as a way to evaluate our performance in the context of changes we experience in the overall customer base. While the Adjusted Operating Expense figure provides a valuable indicator

62



of our overall performance, evaluating this metric on a per customer basis provides a more contextualized understanding of our performance to us, investors and analysts of the financial impact of each additional customer.
 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
 
(in thousands, except per customer data)
Reconciliation of Total Operating Expense, Net to Adjusted Operating Expense:
 
 
 
 
 
Total operating expense, net
$
153,826

 
$
118,112

 
$
87,211

Depreciation expense
(49,340
)
 
(39,290
)
 
(29,482
)
Amortization expense
(29
)
 
(133
)
 
(133
)
Non-cash compensation expense
(10,512
)
 
(3,410
)
 
(1,495
)
ARO accretion expense
(1,443
)
 
(1,183
)
 
(704
)
Financing deal costs
(1,161
)
 
(1,902
)
 
(336
)
Natural disaster losses and related charges, net
(54
)
 
(8,217
)
 
(1,034
)
IPO costs
(3,804
)
 
(563
)
 
—

Loss on unenforceable contracts
(2,381
)
 
—

 
—

Amortization of payments to dealers for exclusivity and other bonus arrangements
(583
)
 
—

 
—

Legal settlements
(1,260
)
 
(150
)
 
(575
)
Adjusted Operating Expense
$
83,259

 
$
63,264

 
$
53,452

Adjusted Operating Expense per weighted average customer
$
1,215

 
$
1,185

 
$
1,378


Estimated Gross Contracted Customer Value. We calculate estimated gross contracted customer value as defined below. We believe estimated gross contracted customer value can serve as a useful tool for investors and analysts in comparing the remaining value of our customer contracts to that of our peers.

Estimated gross contracted customer value as of a specific measurement date represents the sum of the present value of the remaining estimated future net cash flows we expect to receive from existing customers during the initial contract term of our leases and PPAs, which are typically 25 years in length, plus the present value of future net cash flows we expect to receive from the sale of related SRECs, either under existing contracts or in future sales, plus the carrying value of outstanding customer loans on our balance sheet. From these aggregate estimated initial cash flows, we subtract the present value of estimated net cash distributions to redeemable noncontrolling interests and estimated operating, maintenance and administrative expenses associated with the solar service agreements. These estimated future cash flows reflect the projected monthly customer payments over the life of our solar service agreements and depend on various factors including but not limited to solar service agreement type, contracted rates, expected sun hours and the projected production capacity of the solar equipment installed. For the purpose of calculating this metric, we discount all future cash flows at 6%.

The anticipated operating, maintenance and administrative expenses included in the calculation of estimated gross contracted customer value include, among other things, expenses related to accounting, reporting, audit, insurance, maintenance and repairs. In the aggregate, we estimate these expenses are $20 per kilowatt per year initially, with 2% annual increases for inflation. We do not include maintenance and repair costs for inverters and similar equipment as those are largely covered by the applicable product and dealer warranties for the life of the product, but we do include additional cost for energy storage systems, which are only covered by a 10-year warranty. Expected distributions to tax equity investors vary among the different tax equity funds and are based on individual tax equity fund contract provisions.

Estimated gross contracted customer value is forecasted as of a specific date. It is forward-looking and we use judgment in developing the assumptions used to calculate it. Factors that could impact estimated gross contracted customer value include, but are not limited to, customer payment defaults, or declines in utility rates or early termination of a contract in certain circumstances, including prior to installation. The following table presents the calculation of estimated gross contracted customer value as of December 31, 2019 and 2018, calculated using a 6% discount rate.
 
As of December 31,
 
2019
 
2018
 
(in millions)
Estimated gross contracted customer value
$
1,879

 
$
1,476


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Sensitivity Analysis. The calculation of estimated gross contracted customer value and associated operational metrics requires us to make a number of assumptions regarding future revenues and costs which may not prove accurate. Accordingly, we present below a sensitivity analysis with a range of assumptions. We consider a discount rate of 6% to be appropriate based on industry practice and recent transactions that demonstrate a portfolio of residential solar service agreements is an asset class that can be securitized successfully on a long-term basis, with a coupon of less than 6%. The appropriate discount rate for these estimates may change in the future due to the level of inflation, rising interest rates, our cost of capital and consumer demand for solar energy systems. In addition, the table below provides a range of estimated gross contracted customer value amounts if different cumulative customer loss rate assumptions were used. We are presenting this information for illustrative purposes only and as a comparison to information published by our peers.
Estimated Gross Contracted Customer Value
 
As of December 31, 2019
 
Discount rate
Cumulative customer loss rate
4%
 
6%
 
8%
 
(in millions)
5%
$
2,138

 
$
1,850

 
$
1,629

0%
$
2,175

 
$
1,879

 
$
1,652


Significant Factors and Trends Affecting Our Business

Our results of operations and our ability to grow our business over time could be impacted by a number of factors and trends that affect our industry generally, as well as new offerings of services and products we may acquire or seek to acquire in the future. Additionally, our business is concentrated in certain markets, putting us at risk of region-specific disruptions such as adverse economic, regulatory, political, weather and other conditions. See "Item 1A. Risk Factors" for further discussion of risks affecting our business.

Financing Availability. Our future growth depends, in significant part, on our ability to raise capital from third-party investors on competitive terms to help finance the origination of our solar energy systems under our solar service agreements. We have historically used debt, such as asset-backed and loan-backed securitizations and warehouse facilities, tax equity, preferred equity and other financing strategies to help fund our operations. From our inception through December 31, 2019, we have raised more than $4.7 billion in total capital commitments from equity, debt and tax equity investors. With respect to tax equity, there are a limited number of potential tax equity investors and the competition for this investment capital is intense. The principal tax credit on which tax equity investors in our industry rely is the Section 48(a) ITC. The amount for the Section 48(a) ITC is equal to 30% of the basis of eligible solar property that began construction before 2020. By statute, the Section 48(a) ITC percentage decreases to 26% for eligible solar property that begins construction during 2020, 22% for 2021 and 10% if construction begins after 2021 or if the property is placed into service after 2023. This reduction in the Section 48(a) ITC will likely reduce our use of tax equity financing in the future unless the Section 48(a) ITC is increased or replaced. IRS guidance includes a 5% ITC Safe Harbor that may apply when a taxpayer (or in certain cases, a contractor) pays or incurs 5% or more of the costs of a solar energy system before the end of the applicable year, even though the solar energy system is not placed in service until after the end of that year. For 2020, we have purchased substantially all the inverters that will be deployed under our lease and PPA agreements that we expect will allow the related solar energy systems to qualify for the 30% Section 48(a) ITC by satisfying the 5% ITC Safe Harbor. We may make further inventory purchases in future periods to extend the availability of each period's Section 48(a) ITC. Our ability to raise capital from third-party investors is affected by general economic conditions, the state of the capital markets, inflation levels and concerns about our industry or business.

Cost of Solar Energy Systems. Although the solar panel market has seen an increase in supply, upward pressure on prices may occur due to growth in the solar industry, regulatory policy changes, tariffs and duties and an increase in demand. As a result of these developments, we may pay higher prices on imported solar modules, which may make it less economical for us to serve certain markets. Attachment rates for energy storage systems have trended higher while the price to acquire has trended downward making the addition of energy storage systems a potential area of growth for us.

Energy Storage Systems. Our energy storage systems increase our customers' independence from the centralized utility and provide on-site backup power when there is a grid outage due to storms, wildfires, other natural disasters and general power failures caused by supply or transmission issues. In addition, at times it can be more economic to consume less energy from the grid or, alternatively, to export solar energy back to the grid. Recent technological advancements for energy storage systems allow the energy storage system to adapt to pricing and utility rate shifts by controlling the inflows and outflows of power, allowing customers to increase the value of their solar energy system plus energy storage system. The energy storage system

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charges during the day, making the energy it stores available to the home when needed. It also features software that can customize power usage for the individual customer, providing backup power, optimizing solar energy consumption versus grid consumption or preventing export to the grid as appropriate. The software is tailored based on utility regulation, economic indicators and grid conditions. The combination of energy control, increased energy resilience and independence from the grid is strong incentive for customers to adopt solar and energy storage. As energy storage systems and their related software features become more advanced, we expect to see increased adoption of energy storage systems.

Government Regulations, Policies and Incentives. Our growth strategy depends in significant part on government policies and incentives that promote and support solar energy and enhance the economic viability of distributed residential solar. These incentives come in various forms, including net metering, eligibility for accelerated depreciation such as MACRS, SRECs, tax abatements, rebates, renewable targets, incentive programs and tax credits, particularly the Section 48(a) ITC and the Section 25D Credit. Policies requiring solar on new homes or new roofs, such as those enacted in California and New York City, also support the growth of distributed solar. The sale of SRECs has constituted a significant portion of our revenue historically. A change in the value of SRECs or changes in other policies or a loss or reduction in such incentives could decrease the attractiveness of distributed residential solar to us, our dealers and our customers in applicable markets, which could reduce our customer acquisition opportunities. Such a loss or reduction could also reduce our willingness to pursue certain customer acquisitions due to decreased revenue or income under our solar service agreements. Additionally, such a loss or reduction may also impact the terms of and availability of third-party financing. If any of these government regulations, policies or incentives are adversely amended, delayed, eliminated, reduced, retroactively changed or not extended beyond their current expiration dates or there is a negative impact from the recent federal law changes or proposals, our operating results and the demand for, and the economics of, distributed residential solar energy may decline, which could harm our business.

Components of Results of Operations

Revenue. We recognize revenue from contracts with customers as we satisfy our performance obligations at a transaction price reflecting an amount of consideration based upon an estimated rate of return. We express this rate of return as the solar rate per kWh in the customer contract. The amount of revenue we recognize does not equal customer cash payments because we satisfy performance obligations ahead of cash receipt or evenly as we provide continuous access on a stand-ready basis to the solar energy system. We reflect the differences between revenue recognition and cash payments received in accounts receivable, other assets or deferred revenue, as appropriate.

PPAs. We have determined solar service agreements under which customers purchase electricity from us should be accounted for as revenue from contracts with customers. We recognize revenue based upon the amount of electricity delivered as determined by remote monitoring equipment at solar rates specified under the contracts. The PPAs generally have a term of 25 years with an opportunity for customers to renew for up to an additional 10 years, via two five-year renewal options.

Lease Agreements. We are the lessor under lease agreements for solar energy systems and energy storage systems, which we account for as revenue from contracts with customers. We recognize revenue on a straight-line basis over the contract term as we satisfy our obligation to provide continuous access to the solar energy system. The lease agreements generally have a term of 25 years with an opportunity for customers to renew for up to an additional 10 years, via two five-year renewal options.

We provide customers under our lease agreements a performance guarantee that each solar energy system will achieve a certain specified minimum solar energy production output. The specified minimum solar energy production output may not be achieved due to natural fluctuations in the weather or equipment failures from exposure and wear and tear outside of our control, among other factors. We determine the amount of guaranteed output based on a number of different factors, including (a) the specific site information relating to the tilt of the panels, azimuth (a horizontal angle measured clockwise in degrees from a reference direction) of the panels, size of the solar energy system and shading on site; (b) the calculated amount of available irradiance (amount of energy for a given flat surface facing a specific direction) based on historical average weather data and (c) the calculated amount of energy output of the solar energy system.

If the solar energy system does not produce the guaranteed production amount, we are required to provide a bill credit or refund a portion of the previously remitted customer payments, where the bill credit or repayment is calculated as the product of (a) the shortfall production amount and (b) the dollar amount (guaranteed rate) per kWh that is fixed throughout the term of the contract. These bill credits or remittances of a customer's payments, if needed, are payable in January following the end of the first three years of the solar energy system's placed in service date and then every annual period thereafter. See Note 17, Commitments and Contingencies, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Loan Agreements. We recognize payments received from customers under loan agreements (a) as interest income, to the

65

extent attributable to earned interest on the contract that financed the customer's purchase of the solar energy system; (b) as a reduction of a note receivable on the balance sheet, to the extent attributable to a return of principal (whether scheduled or prepaid) on the contract that financed the customer's purchase of the solar energy system; and (c) as revenue, to the extent attributable to payments for operations and maintenance services provided by us. Similar to our lease agreements, we provide customers under our loan agreements a performance guarantee that each solar energy system will achieve a certain specified minimum solar energy production output, which is a significant proportion of its expected output.

Solar Renewable Energy Certificates. Each SREC represents one megawatt hour (1,000 kWh) generated by a solar energy system. We measure and issue SRECs to the owner of the solar energy system based on meter readings of actual production. We sell SRECs to utilities and other third parties who use the SRECs to meet renewable portfolio standards and can do so with or without the actual electricity associated with the renewable-based generation source. We account for SRECs generated from solar energy systems owned by us, as opposed to those owned by our customers, as governmental incentives with no costs incurred to obtain them and do not consider those SRECs output of the underlying solar energy systems. We classify SRECs as inventory held until sold and delivered to third parties. We enter into economic hedges with major financial institutions related to expected production of SRECs through forward contracts to partially mitigate the risk of decreases in SREC market rates. The contracts require us to physically deliver the SRECs upon settlement. We recognize the related revenue upon the transfer of the SRECs to the counterparty. The costs related to the sales of SRECs are limited to fees for brokered transactions. Accordingly, the sale of SRECs in a period favorably impacts our operating results for that period.

Other Revenue. Other revenue includes certain state incentives, revenue from the direct sale of energy storage systems to customers and sales of service plans. We recognize revenue from state incentives in the periods in which they are incurred. We recognize revenue from the direct sale of energy storage systems in the period in which the storage components are placed in service. Service plans are available to customers whose solar energy system was not originally sold by Sunnova. We recognize revenue from service plan contracts over the life of the contract, which is typically five years.

Cost of Revenue—Depreciation. Cost of revenue—depreciation represents depreciation on solar energy systems under lease agreements and PPAs that have been placed in service.

Cost of Revenue—Other. Cost of revenue—other represents other items deemed to be a cost of providing the service of selling power to customers or potential customers, such as certain costs to service loan agreements, and costs for filing under the Uniform Commercial Code to maintain title, title searches, credit checks on potential customers at the time of initial contract and other similar costs, typically directly related to the volume of customers and potential customers.

Operations and Maintenance Expense. Operations and maintenance expense represents costs paid to third parties for maintaining and servicing the solar energy systems, property insurance and property taxes. In addition, operations and maintenance expense includes impairments due to natural disaster losses, losses on disposals and other impairments net of insurance proceeds recovered under our business interruption and property damage insurance coverage for natural disasters, such as Hurricane Maria, which occurred in Puerto Rico in September 2017 and for which we incurred charges through the fourth quarter of 2018.

General and Administrative Expense. General and administrative expense represents costs for our employees, such as salaries, bonuses, benefits and all other employee-related costs, including stock-based compensation, professional fees related to legal, accounting, human resources, finance and training, information technology and software services, marketing and communications, travel and rent and other office-related expenses. General and administrative expense also includes depreciation on assets not classified as solar energy systems, including vehicles, furniture, fixtures, computer equipment and leasehold improvements and accretion expense on AROs. We capitalize a portion of general and administrative expense, such as payroll-related costs, that is related to employees who are directly involved in the design, construction, installation and testing of the solar energy systems but not directly associated with a particular asset. We also capitalize a portion of general and administrative expense, such as payroll-related costs, that is related to employees who are directly associated with and devote time to internal information technology software projects, to the extent of the time spent directly on the application and development stage of such software project.

Interest Expense, Net. Interest expense, net represents interest, net of capitalized interest, on our borrowings under our various debt facilities and amortization of debt discounts and deferred financing costs.

Interest Expense, Net—Affiliates. Interest expense, net—affiliates represents interest expense on our debt facilities, including the amortization of the debt discounts, held by our affiliates.

Interest Income. Interest income represents interest income from the notes receivable under our loan program and income

66

on short term investments with financial institutions.

Loss on Extinguishment of Long-Term Debt, Net—Affiliates. Loss on extinguishment of long-term debt, net—affiliates resulted from the GAAP treatment of the amendment to the senior secured notes in April 2019 and represents the difference between the net carrying value of the senior secured notes prior to the amendment and the fair value of the notes after the amendment as discussed in Note 8, Long-Term Debt, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Other (Income) Expense. Other (income) expense primarily represents changes in the fair value of certain financial instruments, including the senior secured notes that were redeemed in July 2019.

Income Tax. We account for income taxes under Accounting Standards Codification 740, Income Taxes. As such, we determine deferred tax assets and liabilities based on temporary differences resulting from the different treatment of items for tax and financial reporting purposes. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. Additionally, we must assess the likelihood that deferred tax assets will be recovered as deductions from future taxable income. We have a full valuation allowance on our deferred tax assets because we believe it is more likely than not that our deferred tax assets will not be realized. We evaluate the recoverability of our deferred tax assets on a quarterly basis. Currently, there is no provision or benefit for income taxes as we have incurred losses to date.

Net Income Attributable to Redeemable Noncontrolling Interests. Net income attributable to redeemable noncontrolling interests represents third-party interests in the net assets of certain consolidated subsidiaries.


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Results of Operations—Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

The following table sets forth our consolidated statements of operations data for the periods indicated.
 
Year Ended 
 December 31,
 
 
 
2019
 
2018
 
Change
 
(in thousands)
Revenue
$
131,556

 
$
104,382

 
$
27,174

 
 
 
 
 
 
Operating expense:
 
 
 
 
 
Cost of revenue—depreciation
43,536

 
34,710

 
8,826

Cost of revenue—other
3,877

 
2,007

 
1,870

Operations and maintenance
8,588

 
14,035

 
(5,447
)
General and administrative
97,986

 
67,430

 
30,556

Other operating income
(161
)
 
(70
)
 
(91
)
Total operating expense, net
153,826

 
118,112

 
35,714

 
 
 
 
 
 
Operating loss
(22,270
)
 
(13,730
)
 
(8,540
)
 
 
 
 
 
 
Interest expense, net
108,024

 
51,582

 
56,442

Interest expense, net—affiliates
4,098

 
9,548

 
(5,450
)
Interest income
(12,483
)
 
(6,450
)
 
(6,033
)
Loss on extinguishment of long-term debt, net—affiliates
10,645

 
—

 
10,645

Other (income) expense
880

 
(1
)
 
881

Loss before income tax
(133,434
)
 
(68,409
)
 
(65,025
)
 
 
 
 
 
 
Income tax
—

 
—

 
—

Net loss
(133,434
)
 
(68,409
)
 
(65,025
)
Net income attributable to redeemable noncontrolling interests
10,917

 
5,837

 
5,080

Net loss attributable to stockholders
$
(144,351
)
 
$
(74,246
)
 
$
(70,105
)

Revenue
 
Year Ended 
 December 31,
 
 
 
2019
 
2018
 
Change
 
(in thousands)
PPA revenue
$
48,041

 
$
38,950

 
$
9,091

Lease revenue
40,191

 
33,079

 
7,112

SREC revenue
38,453

 
30,630

 
7,823

Loan revenue
1,645

 
933

 
712

Other revenue
3,226

 
790

 
2,436

Total
$
131,556

 
$
104,382

 
$
27,174


Revenue increased by $27.2 million in the year ended December 31, 2019 compared to the year ended December 31, 2018 primarily as a result of an increased number of solar energy systems in service. The weighted average number of customers (excluding customers with loan agreements) increased from approximately 49,200 for the year ended December 31, 2018 to approximately 60,100 for the year ended December 31, 2019. Excluding SREC revenue and revenue under our loan agreements, on a weighted average number of customers basis, revenue increased from $1,480 per customer for the year ended December 31, 2018 to $1,522 per customer for the same period in 2019 (3% increase). The year over year difference in revenue per customer was affected by (a) the market mix of portfolio and relative yields in those markets, (b) weather variability and (c)

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the impact of Hurricane Maria on Puerto Rico revenues (for which billing was largely curtailed for approximately two months beginning in September 2017 and then gradually increased over time until billing was materially resumed by August 2018). SREC revenue increased by $7.8 million in the year ended December 31, 2019 compared to the year ended December 31, 2018 primarily as a result of an increase in the number of solar energy systems in service, which resulted in additional SREC production, and $3.0 million related to certain forward sales of SRECs. The fluctuations in SREC revenue from period to period are affected by the total number of solar energy systems, weather seasonality and hedge and spot prices associated with the timing of the sale of SRECs. On a weighted average number of customers basis, revenues under our loan agreements decreased from $222 per customer for the year ended December 31, 2018 to $196 per customer for the same period in 2019 (12% decrease) primarily due to market changes.

Cost of Revenue—Depreciation
 
Year Ended 
 December 31,
 
 
 
2019
 
2018
 
Change
 
(in thousands)
Cost of revenue—depreciation
$
43,536

 
$
34,710

 
$
8,826


Cost of revenue—depreciation increased by $8.8 million in the year ended December 31, 2019 compared to the year ended December 31, 2018. This increase was primarily driven by an increase in the weighted average number of customers (excluding customers with loan agreements) from approximately 49,200 for the year ended December 31, 2018 to approximately 60,100 for the year ended December 31, 2019. On a weighted average number of customers basis, cost of revenue—depreciation remained relatively flat at $705 per customer for the year ended December 31, 2018 compared to $724 per customer for the same period in 2019.

Cost of Revenue—Other
 
Year Ended 
 December 31,
 
 
 
2019
 
2018
 
Change
 
(in thousands)
Cost of revenue—other
$
3,877

 
$
2,007

 
$
1,870


Cost of revenue—other increased by $1.9 million in the year ended December 31, 2019 compared to the year ended December 31, 2018. This increase was primarily driven by increases in costs related to energy storage systems of $1.2 million as a result of the introduction of energy storage systems as a new product offering in late 2018.

Operations and Maintenance Expense
 
Year Ended 
 December 31,
 
 
 
2019
 
2018
 
Change
 
(in thousands)
Operations and maintenance
$
8,588

 
$
14,035

 
$
(5,447
)

Operations and maintenance expense decreased by $5.4 million for the year ended December 31, 2019 compared to the year ended December 31, 2018. The decrease was primarily due to a decrease in impairments and other related charges due to natural disaster losses of $4.7 million related primarily to Hurricane Maria, which occurred in September 2017 and for which $2.7 million of business interruptions proceeds were received in October 2018. A significant portion of Hurricane Maria charges occurred during the fourth quarter of 2018 as the completion of the repairs for solar energy systems damaged by the hurricane and the completion of the analysis regarding whether a solar energy system damaged by the hurricane was recoverable took an extensive amount of time for many of the assets and customers. Operations and maintenance expense per customer, excluding net natural disaster losses, decreased to $142 per customer for the year ended December 31, 2019 compared to $188 per customer for the year ended December 31, 2018 as a result of operational efficiencies.


69

General and Administrative Expense
 
Year Ended 
 December 31,
 
 
 
2019
 
2018
 
Change
 
(in thousands)
General and administrative
$
97,986

 
$
67,430

 
$
30,556


General and administrative expense increased by $30.6 million in the year ended December 31, 2019 compared to the year ended December 31, 2018 primarily due to increases in payroll and employee related expenses of $14.0 million due to the hiring of personnel to support growth and additional non-cash compensation expense in connection with our IPO, consultants, contractors and professional fees of $4.0 million, insurance expenses of $3.2 million, IPO costs of $3.2 million, loss on unenforceable contracts of $2.4 million relating to certain loans originated in 2019 that did not meet certain applicable regulatory requirements, marketing and communications expenses of $1.6 million, depreciation expense not related to solar energy systems of $1.2 million, travel and related business expenses of $0.9 million and bad debt expense of $0.7 million.

Interest Expense, Net
 
Year Ended 
 December 31,
 
 
 
2019
 
2018
 
Change
 
(in thousands)
Interest expense, net
$
108,024

 
$
51,582

 
$
56,442


Interest expense, net increased by $56.4 million in the year ended December 31, 2019 compared to the year ended December 31, 2018. This increase was primarily driven by increases in realized loss on interest rate swaps of $30.2 million, unrealized loss on interest rate swaps of $13.1 million and interest expense of $10.8 million due to an increase in the principal debt balance after entering into new financing arrangements.

Interest Expense, Net—Affiliates
 
Year Ended 
 December 31,
 
 
 
2019
 
2018
 
Change
 
(in thousands)
Interest expense, net—affiliates
$
4,098

 
$
9,548

 
$
(5,450
)

Interest expense, net—affiliates decreased by $5.5 million in the year ended December 31, 2019 compared to the year ended December 31, 2018 primarily due to a decrease in interest expense due to a decrease in the principal debt balance between the periods and due to the redemption of the senior secured notes and conversion of the convertible notes in July 2019.

Interest Income
 
Year Ended 
 December 31,
 
 
 
2019
 
2018
 
Change
 
(in thousands)
Interest income
$
12,483

 
$
6,450

 
$
6,033


Interest income increased by $6.0 million in the year ended December 31, 2019 compared to the year ended December 31, 2018. This increase was primarily driven by the increase in the weighted average number of customers with loan agreements from approximately 4,200 for the year ended December 31, 2018 to approximately 8,400 for the year ended December 31, 2019. On a weighted average number of customers basis, loan interest income decreased from $1,464 per customer for the year ended December 31, 2018 to $1,380 per customer for the year ended December 31, 2019 (6% decrease) due to the fact that interest for the first 18 months on solar energy systems placed in service starting in July 2017 are based on 70% of the total amount financed under the loan, as the other 30% is interest free prior to the due date of the 30% prepayment typically due on the 18th month; while interest on solar energy systems placed in service in prior periods was based on the entire financed amount.


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Loss on Extinguishment of Long-Term Debt, Net—Affiliates

Loss on extinguishment of long-term debt, net—affiliates increased by $10.6 million in the year ended December 31, 2019 compared to the year ended December 31, 2018 due to the amendment of the senior secured notes in April 2019 that met the criteria for extinguishment accounting under GAAP.

Income Tax

We do not have income tax expense or benefit due to pre-tax losses and a full valuation allowance recorded for the years ended December 31, 2019 and 2018. See "—Components of Results of Operations—Income Tax".

Net Income Attributable to Redeemable Noncontrolling Interests

Net income attributable to redeemable noncontrolling interests increased by $5.1 million for the year ended December 31, 2019 compared to the year ended December 31, 2018 primarily due to an increase in income attributable to redeemable noncontrolling interests due to tax equity funds added in 2018 and 2019.

Results of Operations—Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

The following table sets forth our consolidated statements of operations data for the periods indicated.
 
Year Ended 
 December 31,
 
 
 
2018
 
2017
 
Change
 
(in thousands)
Revenue
$
104,382

 
$
76,856

 
$
27,526

 
 
 
 
 
 
Operating expense:
 
 
 
 
 
Cost of revenue—depreciation
34,710

 
25,896

 
8,814

Cost of revenue—other
2,007

 
1,444

 
563

Operations and maintenance
14,035

 
4,994

 
9,041

General and administrative
67,430

 
54,863

 
12,567

Other operating expense (income)
(70
)
 
14

 
(84
)
Total operating expense, net
118,112

 
87,211

 
30,901

 
 
 
 
 
 
Operating loss
(13,730
)
 
(10,355
)
 
(3,375
)
 
 
 
 
 
 
Interest expense, net
51,582

 
59,847

 
(8,265
)
Interest expense, net—affiliates
9,548

 
23,177

 
(13,629
)
Interest income
(6,450
)
 
(3,197
)
 
(3,253
)
Other (income) expense
(1
)
 
—

 
(1
)
Loss before income tax
(68,409
)
 
(90,182
)
 
21,773

 
 
 
 
 
 
Income tax
—

 
—

 
—

Net loss
(68,409
)
 
(90,182
)
 
21,773

Net income attributable to redeemable noncontrolling interests
5,837

 
903

 
4,934

Net loss attributable to stockholders
$
(74,246
)
 
$
(91,085
)
 
$
16,839



71

Revenue
 
Year Ended 
 December 31,
 
 
 
2018
 
2017
 
Change
 
(in thousands)
PPA revenue
$
38,950

 
$
29,171

 
$
9,779

Lease revenue
33,079

 
21,866

 
11,213

SREC revenue
30,630

 
24,833

 
5,797

Loan revenue
933

 
479

 
454

Other revenue
790

 
507

 
283

Total
$
104,382

 
$
76,856

 
$
27,526


Revenue increased by $27.5 million in the year ended December 31, 2018 compared to the year ended December 31, 2017 primarily as a result of an increased number of solar energy systems in service. The weighted average number of customers (excluding customers with loan agreements) increased from approximately 37,000 for the year ended December 31, 2017 to approximately 49,200 for the year ended December 31, 2018. Excluding SREC revenue and revenue under our loan agreements, on a weighted average number of customers basis, revenue increased from $1,393 per customer for the year ended December 31, 2017 to $1,480 per customer for the same period in 2018 (6% increase). The year over year difference in revenue per customer was affected by (a) the market mix of portfolio and relative yields in those markets, (b) weather variability and (c) the impact of Hurricane Maria on Puerto Rico revenues (for which billing was largely curtailed for approximately two months beginning in September 2017 and then gradually increased over time until billing was materially resumed by August 2018). SREC revenue increased by $5.8 million in the year ended December 31, 2018 compared to the year ended December 31, 2017 primarily as a result of an increase in the number of solar energy systems in service, which resulted in additional SREC production. The fluctuations in SREC revenue from period to period are affected by the total number of solar energy systems, weather seasonality and hedge and spot prices associated with the timing of the sale of SRECs. On a weighted average number of customers basis, revenues under our loan agreements decreased from $266 per customer for the year ended December 31, 2017 to $222 per customer for the same period in 2018 (17% decrease) primarily due to market changes.

Cost of Revenue—Depreciation
 
Year Ended 
 December 31,
 
 
 
2018
 
2017
 
Change
 
(in thousands)
Cost of revenue—depreciation
$
34,710

 
$
25,896

 
$
8,814


Cost of revenue—depreciation increased by $8.8 million in the year ended December 31, 2018 compared to the year ended December 31, 2017. This increase was primarily driven by an increase in the weighted average number of customers (excluding customers with loan agreements) from approximately 37,000 for the year ended December 31, 2017 to approximately 49,200 for the year ended December 31, 2018. On a weighted average number of customers basis, cost of revenue—depreciation remained relatively flat at $700 per customer for the year ended December 31, 2017 compared to $705 per customer for the same period in 2018.

Cost of Revenue—Other
 
Year Ended 
 December 31,
 
 
 
2018
 
2017
 
Change
 
(in thousands)
Cost of revenue—other
$
2,007

 
$
1,444

 
$
563


Cost of revenue—other increased by $0.6 million in the year ended December 31, 2018 compared to the year ended December 31, 2017. This increase was primarily driven by an increase in costs related to repairs and maintenance, production guarantees and parts and supplies as a result of the increase in the weighted average number of customers with loan agreements from approximately 1,800 for the year ended December 31, 2017 to approximately 4,200 for the year ended December 31, 2018.


72


Operations and Maintenance Expense
 
Year Ended 
 December 31,
 
 
 
2018
 
2017
 
Change
 
(in thousands)
Operations and maintenance
$
14,035

 
$
4,994

 
$
9,041


Operations and maintenance expense increased by $9.0 million for the year ended December 31, 2018 compared to the year ended December 31, 2017. The increase was primarily driven by an increase in the monthly average cost per customer for operations and maintenance expense, excluding net natural disaster losses, from $146 per customer for the year ended December 31, 2017 to $188 per customer for the same period in 2018 (29% increase). The increase in operations and maintenance expense was also due to an increase in the weighted average number of customers (excluding customers with loan agreements) from approximately 37,000 for the year ended December 31, 2017 to approximately 49,200 for the year ended December 31, 2018, resulting in more service orders in 2018. The operations and maintenance expense per customer increased primarily due to higher repairs and maintenance expense, impairments and loss on disposals, meter replacement costs, higher equipment costs and higher percentage of cases completed with third-party labor in 2018 (thus increasing the average cost per closed case). In addition, operations and maintenance expense includes impairments of $5.8 million and $0.8 million for the years ended December 31, 2018 and 2017, respectively, due to natural disaster losses related primarily to Hurricane Maria, which occurred in September 2017, and other natural disasters, such as California wildfires in October 2017 and November 2018 and a typhoon in Saipan in October 2018. Operations and maintenance expense is net of both the insurance proceeds related to property damage, as estimated or completed in the periods, and the insurance proceeds related to business interruption. A significant portion of Hurricane Maria charges occurred during the fourth quarter of 2018 as the completion of the repairs for solar energy systems damaged by the hurricane and the completion of the analysis regarding whether a solar energy system damaged by the hurricane was recoverable and not recoverable took an extensive amount of time for many of the assets and customers. For further discussion of operations and maintenance expense related to natural disasters, see Note 4, Natural Disaster Losses, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

General and Administrative Expense
 
Year Ended 
 December 31,
 
 
 
2018
 
2017
 
Change
 
(in thousands)
General and administrative
$
67,430

 
$
54,863

 
$
12,567


General and administrative expense increased by $12.6 million in the year ended December 31, 2018 compared to the year ended December 31, 2017 primarily due to increases in payroll and employee related expenses of $3.5 million due to the hiring of personnel to support growth, legal and settlements expense of $1.3 million due to dealer litigation and various other general legal matters, financing deal costs of $1.6 million primarily related to $1.5 million of costs written off in March 2018 for a financing facility as it did not materialize, depreciation expense not related to solar energy systems of $1.0 million, IPO costs of $0.6 million and natural disaster losses and related charges of $0.6 million due to Hurricane Maria in Puerto Rico in September 2017.

Interest Expense, Net
 
Year Ended 
 December 31,
 
 
 
2018
 
2017
 
Change
 
(in thousands)
Interest expense, net
$
51,582

 
$
59,847

 
$
(8,265
)

Interest expense, net decreased by $8.3 million in the year ended December 31, 2018 compared to the year ended December 31, 2017. This decrease was primarily driven by an increase in realized gain on interest rate swaps of $20.3 million primarily due to the settlement of interest rate swaps related to repayments on subsidiary debt in November 2018 and a decrease in amortization of deferred financing costs of $5.5 million due to accelerated amortization from early pay-offs and retirement of debt in April 2017. This decrease was offset by an increase in interest expense of $17.5 million due to higher levels of outstanding debt in 2018.

73


Interest Expense, Net—Affiliates
 
Year Ended 
 December 31,
 
 
 
2018
 
2017
 
Change
 
(in thousands)
Interest expense, net—affiliates
$
9,548

 
$
23,177

 
$
(13,629
)

Interest expense, net—affiliates decreased by $13.6 million in the year ended December 31, 2018 compared to the year ended December 31, 2017 primarily due to a decrease of $9.0 million in amortization of debt discounts as Sunnova Asset Portfolio 5 Holdings, LLC's debt was paid down in April 2017 and a decrease in interest expense of $4.8 million due to a decrease in the principal debt balance between the periods.

Interest Income
 
Year Ended 
 December 31,
 
 
 
2018
 
2017
 
Change
 
(in thousands)
Interest income
$
6,450

 
$
3,197

 
$
3,253


Interest income increased by $3.3 million in the year ended December 31, 2018 compared to the year ended December 31, 2017. This increase was primarily driven by the increase in the weighted average number of customers with loan agreements from approximately 1,800 for the year ended December 31, 2017 to approximately 4,200 for the year ended December 31, 2018. On a weighted average number of customers basis, loan interest income decreased from $1,668 per customer for the year ended December 31, 2017 to $1,464 per customer for the year ended December 31, 2018 (12% decrease) due to the fact that interest for the first 18 months on solar energy systems placed in service starting in July 2017 are based on 70% of the total amount financed under the loan, as the other 30% is interest free prior to the due date of the 30% prepayment typically due on the 18th month; while interest on solar energy systems placed in service in prior periods was based on the entire financed amount.

Income Tax

We do not have income tax expense or benefit due to pre-tax losses and a full valuation allowance recorded for the years ended December 31, 2018 and 2017. See "—Components of Results of Operations—Income Tax".

Net Income Attributable to Redeemable Noncontrolling Interests

Net income attributable to redeemable noncontrolling interests increased by $4.9 million for the year ended December 31, 2018 compared to the year ended December 31, 2017 primarily due to the addition of two tax equity funds in December 2017 and a full year of income on assets placed in service in 2017.

Liquidity and Capital Resources

As of December 31, 2019, we had total cash of $150.3 million, of which $83.5 million was unrestricted, and $88.3 million of available borrowing capacity under our various financing arrangements. On July 29, 2019, we completed our IPO in which we sold 14,000,000 shares of our common stock at a public offering price of $12.00 per share. On August 19, 2019, we issued and sold an additional 865,267 shares of our common stock at a public offering price of $12.00 per share pursuant to the underwriters' exercise of their option to purchase additional shares. We received aggregate net proceeds from our IPO of approximately $162.3 million, after deducting underwriting discounts and commissions of approximately $10.7 million and offering expenses of approximately $5.4 million. We used a portion of the net proceeds from our IPO to redeem our senior secured notes due March 2021, of which $56.2 million aggregate principal amount was outstanding. The aggregate redemption price for all our senior secured notes was approximately $57.1 million, which included accrued and unpaid cash interest and pay-in-kind interest to the date of redemption. We used the remaining net proceeds from our IPO for general corporate purposes, including working capital, operating expenses, capital expenditures and repayment of indebtedness. We seek to maintain diversified and cost-effective funding sources to finance and maintain our operations, fund capital expenditures, including customer acquisitions, and satisfy obligations arising from our indebtedness. Historically, our primary sources of liquidity included non-recourse and recourse debt, investor asset-backed and loan-backed securitizations and cash generated

74

from operations. Our business model requires substantial outside financing arrangements to grow the business and facilitate the deployment of additional solar energy systems. We will seek to raise additional required capital, including from new and existing tax equity investors, additional borrowings, securitizations and other potential debt and equity financing sources. As of December 31, 2019, we were in compliance with all debt covenants under our financing arrangements.

Additionally, from time-to-time we evaluate the potential acquisition of solar energy systems, energy storage systems and related businesses and joint ventures. As a part of these efforts, we may engage in discussions with potential sellers or other parties regarding the possible purchase of or investment in assets and operations that are strategic and complementary to our existing operations. In addition, we have in the past evaluated and pursued, and may in the future evaluate and pursue, the acquisition of or investment in other energy-related assets that have characteristics and opportunities similar to our existing business lines and enable us to leverage our assets, knowledge and skill sets. Such efforts may involve participation by us in processes that have been made public and involve a number of potential buyers or investors, commonly referred to as "auction" processes, as well as situations in which we believe we are the only party or one of a limited number of parties who are in negotiations with the potential seller or other party. These acquisition and investment efforts may involve assets which, if acquired or constructed, could have a material effect on our financial condition and results of operations.

We expect our solar energy systems in service to generate a positive return rate over the customer agreement, typically 25 years. Typically, once residential solar energy systems commence operations, they do not require significant additional capital expenditures to maintain operating performance. However, in order to grow, we are currently dependent on financing from outside parties. We believe we will have sufficient cash, investment fund commitments and securitization commitments described below and cash flows from operations to meet our working capital, debt service obligations, contingencies and anticipated required capital expenditures, including customer acquisitions, for at least the next 12 months. However, we are subject to business and operational risks that could adversely affect our ability to raise additional financing. If financing is not available to us on acceptable terms if and when needed, we may be unable to finance installation of our new customers' solar energy systems in a manner consistent with our past performance, our cost of capital could increase, or we may be required to significantly reduce the scope of our operations, any of which would have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, our tax equity funds and debt instruments impose restrictions on our ability to draw on financing commitments. If we are unable to satisfy such conditions, we may incur penalties for non-performance under certain tax equity funds, experience installation delays, or be unable to make installations in accordance with our plans or at all. Any of these factors could also impact customer satisfaction, our business, operating results, prospects and financial condition.

Financing Arrangements

The following is a description of our various financing arrangements. For a complete description of the facilities in place as of December 31, 2019 see Note 8, Long-Term Debt, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Tax Equity Fund Commitments

As of December 31, 2019, we had undrawn committed capital of approximately $50.7 million under our tax equity funds, which may only be used to purchase and install solar energy systems. We intend to establish new tax equity funds in the future depending on their attractiveness, including the availability and size of Section 48(a) ITCs and related safe harbors, and on the investor demand for such funding. The terms of the tax equity funds' operating agreements contain allocations of income (loss) and Section 48(a) ITCs that vary over time and adjust between the members after either the tax equity investor receives its contractual rate of return or after a specified date. For additional information regarding our tax equity fund commitments see Note 13, Redeemable Noncontrolling Interests, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Warehouse and Other Debt Financings

We from time to time enter into warehouse credit facilities as a source of funding. Under the warehouse credit facilities, revolving or term financing is provided to special purpose entities, which are typically our wholly-owned subsidiaries, and secured by qualifying solar energy systems and related solar service agreements. The cash flows generated by these solar energy systems are used to cover required debt service payments under the related credit facility and satisfy the expenses and reserve requirements of the special purpose entities. The warehouse credit facilities allow for the pooling and transfer of eligible solar energy systems and related solar service agreements on a non-recourse basis to the subsidiary or us, subject to certain limited exceptions. In connection with these warehouse credit facilities, certain of our affiliates receive a fee for managing and servicing the solar energy systems pursuant to management and servicing agreements. The special purpose entities are also

75

typically required to maintain reserve accounts, including a liquidity reserve account and a reserve account for equipment replacements, each of which are funded from initial deposits or cash flows to the levels specified therein.

The warehouse credit facility structures include certain features designed to protect lenders. One of the common primary features relates to certain events, such as the insufficiency of cash flows in the collateral pool of assets to meet contractual requirements, the occurrence of which triggers an early repayment of the loans and limits the relevant borrower's ability to obtain additional advances or distribute funds to us. We refer to this as an "amortization event", which may be based on, among other things, a debt service coverage ratio falling or remaining below certain levels, default levels of solar assets exceeding certain thresholds or excess spread falling below certain levels over a multiple month period. In the event of an amortization event, the availability period under a revolving warehouse credit facility may terminate and the borrower may be required to repay the affected outstanding borrowings using available collections received from the asset pool. However, the period of ultimate repayment would be determined by the amount and timing of collections received. An amortization event would impair our liquidity and may require us to utilize our other available contingent liquidity or rely on alternative funding sources, which may or may not be available at the time. The debt agreements of our warehouse credit facilities also typically contain customary events of default for solar warehouse financings that entitle the lenders to take various actions, including the acceleration of amounts due under the related debt agreement and foreclosure on the borrower's assets.

In April 2017, one of our subsidiaries entered into a secured revolving credit facility with Credit Suisse AG, New York Branch, as administrative agent, and the lenders party thereto. The credit facility was amended and restated in March 2019 and further amended in September 2019 and December 2019. Under the amended credit facility, the subsidiary may borrow up to $200.0 million, subject to a borrowing base calculated based on a specified advance rate applied to the net outstanding principal balance of the solar loans securing the credit facility. The proceeds of the loans under the credit facility are available for funding the purchase of solar loans, making deposits in the subsidiary's reserve accounts and paying fees in connection with the credit facility. The credit facility bears interest at an annual rate of adjusted LIBOR plus an applicable margin. The credit facility has a maturity date occurring in November 2022. As of December 31, 2019, we had $78.6 million of available borrowing capacity under the credit facility. Sunnova Energy Corporation guarantees the performance obligations of certain affiliates under agreements entered into in connection with the credit facility as well as certain indemnity and refund obligations.

In April 2017, three of our subsidiaries entered into a secured term loan credit facility with Credit Suisse AG, New York Branch, as administrative agent, and the lenders party thereto. The credit facility was amended and restated in November 2018. Outstanding advances under the credit facility bear interest at LIBOR plus an applicable margin. The credit facility has a maturity date occurring in November 2022. As of December 31, 2019, we had no available borrowing capacity under the credit facility. Sunnova Energy Corporation guarantees the performance obligations of certain affiliates under agreements entered into in connection with the credit facility as well as certain indemnity obligations.

In July 2014, one of our subsidiaries entered into a collateral-based financing agreement with Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto. In April 2019, we contributed approximately $0.1 million to our subsidiary as an equity cure of an event of default under the credit facility caused by a failure of the subsidiary to comply with a debt covenant regarding the ratio of consolidated EBITDA to debt service for the four quarters ending on March 31, 2019. We were only permitted to exercise our equity cure right for the credit facility three times over the course of the credit facility and once in any rolling four-quarter period. Outstanding advances under the credit facility bore interest at LIBOR plus an applicable margin. The credit facility had a maturity date occurring in January 2021. As of December 31, 2019, there was no available borrowing capacity under the credit facility. In February 2020, we fully repaid the aggregate outstanding principal amount of $92.0 million and terminated the credit facility.

In August 2018, one of our subsidiaries entered into a secured revolving credit facility with Credit Suisse AG, New York Branch, as administrative agent, and the lenders party thereto. The credit facility was amended and restated in March 2019 and further amended in September 2019. Under the credit facility, the subsidiary could borrow up to an initial $150.0 million with a maximum commitment amount of $250.0 million based on the aggregate value of solar assets owned by the borrower's subsidiaries, which are primarily tax equity funds, subject to certain concentration limitations. The proceeds of the loan after fees and expenses were available for funding certain reserve accounts required by the credit facility, making distributions to us and paying fees incurred in connection with closing the credit facility. The credit facility bore interest at an annual rate of adjusted LIBOR or, if such rate was not available, a base rate, plus an applicable margin. The credit facility had a maturity date occurring in November 2022. Sunnova Energy Corporation had guaranteed the performance obligations of certain affiliates under agreements entered into in connection with the credit facility as well as certain indemnity and repurchase obligations. As of December 31, 2019, we had no available borrowing capacity under the credit facility. In February 2020, we fully repaid the aggregate outstanding principal amount of $226.6 million and terminated the credit facility.


76

In September 2019, one of our subsidiaries entered into a secured revolving credit facility with Credit Suisse AG, New York Branch, as administrative agent, and the lenders party thereto. The credit facility was amended in December 2019. Under the credit facility, the subsidiary may borrow up to an initial $100.0 million with a maximum commitment amount of $150.0 million based on the aggregate value of solar assets owned by the borrower's subsidiaries, which are primarily tax equity funds, subject to certain concentration limitations. The proceeds from the credit facility are available for funding certain reserve accounts required by the credit facility, making distributions to us and paying fees incurred in connection with closing the credit facility. The credit facility bears interest at an annual rate of either LIBOR divided by a percentage equal to 100% minus a reserve percentage or a base rate, plus an applicable margin. The credit facility has a maturity date occurring in November 2022. Sunnova Energy Corporation guarantees the performance obligations of certain affiliates under agreements entered into in connection with the credit facility as well as certain indemnity and repurchase obligations. As of December 31, 2019, we had $9.7 million of available borrowing capacity under the credit facility.

In December 2019, one of our subsidiaries entered into a secured revolving credit facility with Credit Suisse AG, New York Branch, as administrative agent, and the lenders party thereto. Under the credit facility, the subsidiary may borrow up to an initial $95.2 million with a maximum commitment amount of $137.6 million, subject to lender consent and certain other conditions. The proceeds from the credit facility are available for purchasing certain eligible equipment the borrower intends will allow the related solar energy systems to qualify for the 30% Section 48(a) ITC by satisfying the 5% ITC Safe Harbor outlined in IRS Notice 2018-59, funding a reserve account required by the credit facility and paying fees incurred in connection with closing the credit facility. The credit facility bears interest at an annual rate of either LIBOR divided by a percentage equal to 100% minus a reserve percentage or a base rate, plus an applicable margin. The credit facility has a maturity date occurring in December 2022. Sunnova Energy Corporation guarantees the performance obligations of certain affiliates under agreements entered into in connection with the credit facility and also provides a limited payment guarantee in respect of the borrower's obligations under the credit facility that is subject to a cap of $9.5 million, which equates to 10% of the initial commitments. As of December 31, 2019, we had no available borrowing capacity under the credit facility.

Rule 144A Securitization Financing

We from time to time securitize some solar service agreements and related assets as a source of funding. We access the Rule 144A asset-backed securitization market using wholly-owned special purpose entities to securitize pools of assets, which historically have been solar energy systems and the related lease agreements and PPAs and ancillary rights and agreements both directly or indirectly through interests in the managing member of our tax equity funds. We also securitize our loan agreements and ancillary rights and agreements.

In April 2017, one of our subsidiaries issued $191.8 million in aggregate principal amount of Series 2017-1 Class A solar asset-backed notes, $18.0 million in aggregate principal amount of Series 2017-1 Class B solar asset-backed notes, and $45.0 million in aggregate principal amount of 2017-1 Class C solar asset-backed notes with a maturity date of September 2049. The notes bear interest at an annual rate of 4.94%, 6.00% and 8.00% for the Class A, Class B and Class C notes, respectively.

In November 2018, one of our subsidiaries issued $202.0 million in aggregate principal amount of Series 2018-1 Class A solar asset-backed notes and $60.7 million in aggregate principal amount of Series 2018-1 Class B solar asset-backed notes with a maturity date of July 2048. The notes bear interest at an annual rate of 4.87% and 7.71% for the Class A and Class B notes, respectively.

In June 2019, one of our subsidiaries issued $139.7 million in aggregate principal amount of Series 2019-A Class A solar loan-backed notes, $14.9 million in aggregate principal amount of Series 2019-A Class B solar loan-backed notes and $13.0 million in aggregate principal amount of Series 2019-A Class C solar loan-backed notes with a maturity date of June 2046. The notes bear interest at an annual rate of 3.75%, 4.49% and 5.32% for the Class A, Class B and Class C notes, respectively.

In February 2020, one of our subsidiaries issued $337.1 million in aggregate principal amount of Series 2020-1 Class A solar asset-backed notes and $75.4 million in aggregate principal amount of Series 2020-1 Class B solar asset-backed notes with a maturity date of January 2055. The notes bear interest at an annual rate of 3.35% and 5.54% for the Class A and Class B notes, respectively.

The securitization structures include certain features designed to protect investors. The primary feature relates to the availability and adequacy of cash flows in the securitized pool of assets to meet contractual requirements, the insufficiency of which triggers an early repayment of the asset-backed notes. We refer to this as "early amortization", which may be based on, among other things, a debt service coverage ratio falling or remaining below certain levels. As of December 31, 2019, we have not had any early amortizations under any of our securitizations. In the event of an early amortization, the notes issuer would be required to repay the affected outstanding securitized borrowings using available collections received from the asset pool.

77

However, the period of ultimate repayment would be determined by cause of the early amortization and the amount and timing of collections received. An early amortization event would impair our liquidity and may require us to utilize our available non-securitization related contingent liquidity or rely on alternative funding sources, which may or may not be available at the time. The indentures of our securitizations also typically contain customary events of default for solar securitizations that may entitle the noteholders to take various actions, including the acceleration of amounts due under the related indenture and foreclosure on the issuer's assets.

Private Placement Securitization Financing

We have access to additional debt issuance capacity through a privately-placed asset-backed securitization. In March 2019, one of our subsidiaries entered into a note purchase agreement pursuant to which certain institutional investors committed to purchase up to $358.0 million principal amount of notes ("RAYSI Notes") in one or more asset-backed private placement securitizations. In March 2019, our subsidiary, the RAYSI Notes issuer, issued an aggregate $133.1 million principal amount of RAYSI Notes pursuant to this note purchase agreement. In June 2019, the RAYSI Notes issuer issued an aggregate $6.4 million in principal amount of RAYSI Notes pursuant to a supplemental note purchase agreement. The remaining commitments to purchase RAYSI Notes expire in March 2020 and are subject to a variety of closing conditions set forth in the related purchase agreement and indenture, including a collateral test. We may elect to add assets to the securitized pool, subject to certain requirements.

The RAYSI Notes issuer owns a pool of solar energy systems and related lease agreements and PPAs and ancillary rights and agreements both directly and through its interests in the managing member of one of our existing tax equity funds. The managing member of the tax equity fund guarantees the RAYSI Notes issuer's obligations under the RAYSI Notes. In addition, the RAYSI Notes issuer has pledged its interests in the managing member and the managing member has pledged its interests in the tax equity fund as security for the issuer's obligations under the RAYSI Notes and for the guarantee, respectively. We expect the engineering, procurement and construction cost related to the securitized pool of assets would be financed approximately evenly between tax equity and non-recourse debt in the form of asset-backed notes, assuming a 30% Section 48(a) ITC.

Convertible Notes

In April 2017, we issued and sold an aggregate principal amount of $80.0 million of our 12.00% senior secured notes in a private placement to a total of three institutional accredited investors at an issue price of 98%, for an aggregate purchase price of $78.4 million. In January 2019, the terms of these senior secured notes were amended to extend the maturity date from January 2019 to July 2019. In connection with our IPO, we redeemed all the senior secured notes for an aggregate redemption price of $57.1 million in cash, which includes accrued and unpaid cash interest and pay-in-kind interest to the date of redemption.

In March 2018, we issued the 2018 Note for $15.0 million to certain of our existing investors, which was subordinated to the senior secured notes. In connection with our IPO, holders of the 2018 Note converted the principal amount plus any accrued and unpaid interest as of the date of conversion into 3,319,312 shares (or 1,422,767 shares as adjusted for the Reverse Stock Split) of Series A convertible preferred stock, which in turn converted into 1,422,767 shares of common stock. See "Preferred Stock Conversion" below.

In June 2019, we issued the 2019 Note for $15.0 million to certain of our existing investors with a maturity date of September 2021. In connection with our IPO, holders of the 2019 Note converted the principal amount plus any accrued and unpaid interest as of the date of conversion into 2,613,818 shares (or 1,120,360 shares as adjusted for the Reverse Stock Split) of Series C convertible preferred stock, which in turn converted into 1,120,360 shares of common stock. See "Preferred Stock Conversion" below.

In December 2019, we issued and sold an aggregate principal amount of $55.0 million of our 7.75% convertible senior notes in a private placement to a total of seven institutional accredited investors at an issue price of 95%, for an aggregate purchase price of $52.3 million. The convertible senior notes mature in January 2027 unless earlier redeemed, repurchased or converted. We granted the investors of the convertible senior notes an option, subject to our consent, to purchase up to an additional $20.0 million aggregate principal amount of convertible senior notes on the same terms and conditions, which such option will expire in March 2020. The convertible senior notes bear interest at a rate of 7.75% per annum.

The convertible senior notes are convertible into our common stock at the option of the holders at any time prior to the close of business on the business day immediately preceding December 23, 2021 upon a change of control event. On or after December 23, 2021 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may, at their option, convert all or any portion of their convertible senior notes, in multiples of $1,000 principal amount.

78

Upon conversion, we may satisfy our conversion obligation by paying and/or delivering, as the case may be, cash, shares of common stock, or a combination of cash and shares of common stock, at our option, subject to certain terms and conditions. The conversion rate for the convertible senior notes is 76.9231 shares of common stock per $1,000 principal amount of convertible senior notes, plus accrued and unpaid interest, which is equivalent to an initial conversion price (excluding interest) of approximately $13.00 per share of common stock. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the convertible senior notes. On and after December 23, 2022, we have the right to cause the conversion of the convertible senior notes if certain specified common stock price and volume conditions are met. If we fail to use commercially reasonable efforts to prepare and file a shelf registration statement registering the offer and sale of the number of shares of common stock issuable upon conversion of the convertible senior notes and to cause such shelf registration statement to become effective on or prior to December 23, 2021, the convertible senior notes will bear additional interest at a rate of 0.25% per annum for each 90-day period such requirements are not met, up to a maximum of 2.00% per annum.

We may, at our option, redeem for cash all or any portion of the convertible senior notes plus any accrued and unpaid interest to, but excluding, the redemption date at a redemption price equal to the following percentage of aggregate principal amount of convertible senior notes so redeemed:
Period
 
Percentage
At any time prior to December 23, 2021
 
120%
At any time on and after December 23, 2021 but prior to December 23, 2023
 
115%
At any time on and after December 23, 2023
 
110%

On and after September 23, 2024, the holders of the convertible senior notes have the option to require us to repurchase their convertible senior notes for cash at a purchase price of 110% of the aggregate principal amount repurchased, plus accrued and unpaid interest to the date of repurchase. The convertible senior notes include customary covenants and set forth certain events of default after which the convertible senior notes may be declared immediately due and payable.

Preferred Stock Conversion

In connection with our IPO, 108,138,971 shares (or 46,351,877 shares as adjusted for the Reverse Stock Split) of our Series A convertible preferred stock and 32,958,645 shares (or 14,127,140 shares as adjusted for the Reverse Stock Split) of our Series C convertible preferred stock, which represent all the outstanding shares of our Series A convertible preferred stock and Series C convertible preferred stock, were converted into 60,479,017 shares of our common stock.

Contractual Obligations

The following unaudited table summarizes our contractual obligations as of December 31, 2019:
 
 
 
Payments Due by Period (1)
 
Total
 
2020
 
2021-2022
 
2023-2024
 
Beyond 2024
 
(in thousands)
Debt obligations (including future interest) (2)
$
1,913,596

 
$
170,280

 
$
806,763

 
$
185,476

 
$
751,077

AROs
31,053

 
—

 
—

 
—

 
31,053

Operating lease payments (3)
12,548

 
(1,374
)
 
3,095

 
3,210

 
7,617

Guaranteed performance obligations
6,468

 
4,067

 
2,286

 
115

 
—

Inventory purchase obligations
124,509

 
22,702

 
54,602

 
47,205

 
—

Other obligations (4)
10,153

 
6,873

 
3,280

 
—

 
—

Total
$
2,098,327

 
$
202,548

 
$
870,026

 
$
236,006

 
$
789,747


(1)
Does not include amounts related to the contingent obligation to purchase all of a tax equity investor's units upon exercise of their right to withdraw rights. The withdrawal price for the tax equity investors' interest in the respective fund is equal to the sum of: (a) any unpaid, accrued priority return and (b) the greater of: (i) a fixed price and (ii) the fair market value of such interest at the date the option is exercised. Due to uncertainties associated with estimating the timing and amount of the withdrawal price, we cannot determine the potential future payments that we could have to make under these withdrawal rights. For additional information regarding the withdrawal rights see Note 13,

79

Redeemable Noncontrolling Interests, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
(2)
Interest payments related to long-term debt and interest rate swaps are calculated and estimated for the periods presented based on the amount of debt outstanding and the interest rates as of December 31, 2019.
(3)
Negative amount relates to reimbursements of $2.4 million for leasehold improvements.
(4)
Other obligations relate to information technology services and licenses and distributions payable to redeemable noncontrolling interests.

Historical Cash Flows—Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

The following table summarizes our cash flows for the periods indicated:
 
Year Ended 
 December 31,
 
 
 
2019
 
2018
 
Change
 
(in thousands)
Net cash used in operating activities
$
(170,262
)
 
$
(11,570
)
 
$
(158,692
)
Net cash used in investing activities
(568,316
)
 
(348,849
)
 
(219,467
)
Net cash provided by financing activities
801,823

 
365,687

 
436,136

Net increase in cash and restricted cash
$
63,245

 
$
5,268

 
$
57,977


Operating Activities

Net cash used in operating activities increased by $158.7 million in the year ended December 31, 2019 compared to the year ended December 31, 2018. The increase is primarily a result of increased payments made to dealers for exclusivity and other bonus arrangements and increased purchases of inventory and prepaid inventory with net outflows of $31.7 million and $127.8 million, respectively, in 2019 compared to an insignificant amount and $14.3 million, respectively, in 2018. The increase is also due to net outflows of $19.1 million in 2019 compared to net inflows of $8.0 million in 2018 based on: (a) our net loss of $133.4 million in 2019 excluding non-cash operating items of $114.4 million, primarily from depreciation, impairments and losses on disposals, amortization of deferred financing costs and debt discounts, unrealized net losses on derivatives, payment-in-kind interest on debt, unrealized net losses on fair value option instruments, loss on extinguishment of debt and equity-based compensation charges, results in net outflows of $19.1 million and (b) our net loss of $68.4 million in 2018 excluding non-cash operating items of $76.4 million, primarily from depreciation, impairments and losses on disposals, amortization of deferred financing costs and debt discounts, unrealized net losses on derivatives, payment-in-kind interest on debt and equity-based compensation charges, results in net inflows of $8.0 million. These net differences between the two periods result in a net change in operating cash flows of $27.1 million in 2019 compared to 2018.

Investing Activities

Net cash used in investing activities increased by $219.5 million in the year ended December 31, 2019 compared to the year ended December 31, 2018. The increase is largely due to an increase in purchases of property and equipment, primarily solar energy systems, of $430.8 million in 2019 compared to $252.6 million in 2018 and payments for investments and customer notes receivable of $159.3 million in 2019 compared to $108.4 million in 2018. The increase is partially offset by proceeds from customer notes receivable of $21.6 million (of which $18.2 million was prepaid) in 2019 compared to $7.7 million (of which $6.4 million was prepaid) in 2018.

Financing Activities

Net cash provided by financing activities increased by $436.1 million in the year ended December 31, 2019 compared to the year ended December 31, 2018. The increase is primarily a result of net borrowings under our debt facilities of $494.9 million in 2019 compared to $128.5 million in 2018, net proceeds related to the issuance of common stock of $164.5 million in 2019 compared to an insignificant amount in 2018, net contributions from our redeemable noncontrolling interests of $149.6 million in 2019 compared to $77.0 million in 2018 and net proceeds from the equity component of a debt instrument of $14.0 million in 2019 compared to an insignificant amount in 2018. This increase is partially offset by net payments related to the issuance of convertible preferred stock of $2.5 million in 2019 compared to net proceeds of $172.8 million in 2018 and payments of deferred financing costs and debt discounts of $13.2 million in 2019 compared to $11.1 million in 2018.


80

Historical Cash Flows—Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

The following table summarizes our cash flows for the periods indicated:
 
Year Ended 
 December 31,
 
 
 
2018
 
2017
 
Change
 
(in thousands)
Net cash used in operating activities
$
(11,570
)
 
$
(48,967
)
 
$
37,397

Net cash used in investing activities
(348,849
)
 
(289,133
)
 
(59,716
)
Net cash provided by financing activities
365,687

 
369,893

 
(4,206
)
Net increase in cash and restricted cash
$
5,268

 
$
31,793

 
$
(26,525
)

Operating Activities

Net cash used in operating activities decreased by $37.4 million in the year ended December 31, 2018 compared to the year ended December 31, 2017. The decrease is primarily a result of a decrease in payments to certain dealers for advances on work to be performed relating to solar energy systems in the amount of $10.4 million. The decrease is also due to net inflows of $8.0 million in 2018 compared to net outflows of $20.5 million in 2017 based on: (a) our net loss of $68.4 million in 2018 excluding non-cash operating items of $76.4 million, primarily from depreciation, impairments and losses on disposals, amortization of deferred financing costs and debt discounts, unrealized net losses on derivatives, payment-in-kind interest on debt and equity-based compensation charges, results in net inflows of $8.0 million and (b) our net loss of $90.2 million in 2017 excluding non-cash operating items of $69.7 million, primarily from depreciation, impairments and losses on disposals, amortization of deferred financing costs and debt discounts, unrealized net losses on derivatives, payment-in-kind interest on debt and equity-based compensation charges, results in net outflows of $20.5 million. These net differences between the two periods result in a net change in operating cash flows of $28.5 million in 2018 compared to 2017.

Investing Activities

Net cash used in investing activities increased by $59.7 million in the year ended December 31, 2018 compared to the year ended December 31, 2017. The increase is largely due to an increase in purchases of property and equipment, primarily solar energy systems, of $252.6 million in 2018 compared to $240.6 million in 2017 and payments for investments and customer notes receivable of $108.4 million in 2018 compared to $52.4 million in 2017. The increase is partially offset by proceeds from customer notes receivable of $7.7 million (of which $6.4 million was prepaid) in 2018 compared to $2.8 million (of which $2.3 million was prepaid) in 2017.

Financing Activities

Net cash provided by financing activities decreased by $4.2 million in the year ended December 31, 2018 compared to the year ended December 31, 2017. The decrease is primarily a result of net borrowings under our debt facilities of $128.5 million in 2018 compared to $238.9 million in 2017. The decrease is partially offset by net proceeds related to the issuance of convertible preferred stock of $172.8 million in 2018 compared to $89.9 million in 2017, payments of deferred financing costs and debt discounts of $11.1 million in 2018 compared to $28.0 million in 2017 and net contributions from our redeemable noncontrolling interests of $77.0 million in 2018 compared to $71.9 million in 2017.

Seasonality

See "Business—Seasonality".

Off-Balance Sheet Arrangements

As of December 31, 2019 and 2018, we did not have any off-balance-sheet arrangements. We consolidate all our securitization vehicles and tax equity funds.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated annual financial statements, which have been prepared in accordance with GAAP which requires us to make estimates and judgments

81

that affect the reported amounts of assets, liabilities, revenue and expenses, cash flows and related disclosures. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. In many instances, we could have reasonably used different accounting estimates, and in other instances, changes in the accounting estimates are reasonably likely to occur from period-to-period. Actual results may differ from these estimates. Our future consolidated financial statements will be affected to the extent our actual results materially differ from these estimates.

We identify our most critical accounting policies as those that are the most pervasive and important to the portrayal of our financial position and results of operations, and that require the most difficult, subjective, and/or complex judgments by management regarding estimates about matters that are inherently uncertain. We believe the assumptions and estimates associated with the estimated useful life of our solar energy systems, the valuation of the assumptions regarding AROs and the valuation of redeemable noncontrolling interests have the greatest subjectivity and impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates and these items are discussed below. See Note 2, Significant Accounting Policies, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further discussion of our accounting policies.

Useful Life of Solar Energy Systems

Our solar energy systems have an estimated useful life of 35 years. We considered both (a) available information related to the technology currently being employed in the solar energy systems and (b) the terms of the solar leases that have a 25 year term with two five-year renewal options to conclude a 35 year useful life is appropriate. In addition, we reviewed numerous published and online sources from academia, government institutions and private industry and held discussions with certain manufacturers of our solar energy systems to support our estimated useful life of 35 years for the crystalline silicone solar modules we use. We define the useful life of a solar module as the duration for which a solar module operates at or above 80% of its initial power output, which we understand to be the generally accepted standard used by government, academia and the solar industry.

Depreciation and amortization of solar energy systems are calculated using the straight-line method over the estimated useful lives of the solar energy systems and are included in cost of revenue—depreciation. Depreciation begins when a solar energy system is placed in service. Costs associated with improvements to a solar energy system, which extend the life, increase the capacity or improve the efficiency of the solar energy systems, are capitalized and depreciated over the remaining life of the asset.

AROs

We have AROs arising from contractual or regulatory requirements to perform certain asset retirement activities at the time the solar energy systems are disposed. We recognize an ARO at the point an obligating event takes place, typically when the solar energy system is placed in service. An asset is considered retired when it is permanently taken out of service, such as through a sale or disposal.

The liability is initially measured at fair value based on the present value of estimated removal costs and subsequently adjusted for changes in the underlying assumptions and for accretion expense. We estimate approximately half of our solar energy systems will require removal at our expense in the future. The corresponding asset retirement costs are capitalized as part of the carrying amount of the solar energy system and depreciated over the solar energy system's remaining useful life. We may revise our estimated future liabilities based on recent actual experiences, changes in certain customer-specific estimates and other cost estimate changes. If there are changes in estimated future costs, those changes will be recorded as either a reduction or addition in the carrying amount of the remaining unamortized asset and the ARO and either decrease or increase depreciation and accretion expense amounts prospectively. Inherent in the calculation of the fair value of our AROs are numerous assumptions and judgments, including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. Due to the intrinsic uncertainties present when estimating asset retirement costs as well as asset retirement dates, our ARO estimates are subject to ongoing volatility.

Redeemable Noncontrolling Interests

Redeemable noncontrolling interests represent third-party interests in the net assets of certain consolidated subsidiaries, which were created to finance the cost of solar energy systems under long-term solar service agreements. The contractual provisions of the financing arrangements represent substantive profit sharing arrangements. We determined the appropriate methodology for attributing income and loss to the redeemable noncontrolling interests is a balance sheet approach referred to as the hypothetical liquidation at book value ("HLBV") method. We, therefore, determine the amount of the redeemable

82

noncontrolling interests in the net assets of the subsidiaries at each balance sheet date using the HLBV method, which is presented in the consolidated balance sheets as redeemable noncontrolling interests. Under the HLBV method, the amounts reported as redeemable noncontrolling interests in the consolidated balance sheets represent the amounts the third parties would hypothetically receive at each balance sheet date under the liquidation provisions of the financing arrangements, assuming the net assets of the subsidiaries were liquidated at the recorded amounts determined in accordance with GAAP and distributed to the third parties. The third parties' interests in the results of operations of the subsidiaries are determined as the difference in the redeemable noncontrolling interests balances in the consolidated balance sheets between the start and end of each reporting period, after taking into account any capital transactions, such as contributions and distributions, between the subsidiaries and the third parties. However, the redeemable noncontrolling interests balance is at least equal to the redemption amount. The estimated redemption value is calculated using the discounted cash flows attributable to the third parties subsequent to the reporting date. We classify redeemable noncontrolling interests with redemption features that are not solely within our control outside of permanent equity in our consolidated balance sheets.

Recent Accounting Pronouncements

See Note 2, Significant Accounting Policies, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to various market risks in the ordinary course of our business. Market risk is the potential loss that may result from market changes associated with our business or with an existing or forecasted financial or commodity transaction. Our primary exposure includes changes in interest rates because certain borrowings bear interest at floating rates based on LIBOR plus a specified margin. We sometimes manage our interest rate exposure on floating-rate debt by entering into derivative instruments to hedge all or a portion of our interest rate exposure on certain debt facilities. We do not enter into any derivative instruments for trading or speculative purposes. Changes in economic conditions could result in higher interest rates, thereby increasing our interest expense and operating expenses and reducing funds available to capital investments, operations and other purposes. A hypothetical 10% increase in our interest rates on our variable debt facilities would have increased our interest expense by $2.7 million and $3.7 million for the years ended December 31, 2019 and 2018, respectively.


83



Item 8. Financial Statements and Supplementary Data.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



84



Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Sunnova Energy International Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Sunnova Energy International Inc. and its subsidiaries (the "Company") as of December 31, 2019 and 2018, and the related consolidated statements of operations, of redeemable noncontrolling interests and stockholders' equity, and of cash flows for each of the three years in the period ended December 31, 2019, including the related notes and schedule of parent company condensed financial statements as of December 31, 2019 and 2018 and for each of the three years in the period ended December 31, 2019 appearing on page 134 (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.


/s/ PricewaterhouseCoopers LLP

Houston, Texas
February 25, 2020

We have served as the Company's auditor since 2014, which includes periods before the Company became subject to SEC reporting requirements.

85

SUNNOVA ENERGY INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts and share par values)
 
As of December 31,
 
2019
 
2018
Assets
 
 
 
Current assets:
 
 
 
Cash
$
83,485

 
$
52,706

Accounts receivable—trade, net
10,672

 
6,312

Accounts receivable—other
6,147

 
3,721

Other current assets
174,016

 
26,794

Total current assets
274,320

 
89,533

 
 
 
 
Property and equipment, net
1,745,060

 
1,328,457

Customer notes receivable, net
297,975

 
172,031

Other assets
169,712

 
75,064

Total assets (1)
$
2,487,067

 
$
1,665,085

 
 
 
 
Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
36,190

 
$
20,075

Accrued expenses
39,544

 
18,650

Current portion of long-term debt
97,464

 
26,965

Current portion of long-term debt—affiliates
—

 
16,500

Other current liabilities
21,804

 
13,214

Total current liabilities
195,002

 
95,404

 
 
 
 
Long-term debt, net
1,346,419

 
872,249

Long-term debt, net—affiliates
—

 
44,181

Other long-term liabilities
127,406

 
66,453

Total liabilities (1)
1,668,827

 
1,078,287

 
 
 
 
Commitments and contingencies (Note 17)

 

 
 
 
 
Redeemable noncontrolling interests
172,305

 
85,680

 
 
 
 
Stockholders' equity:
 
 
 
Series A convertible preferred stock, 0 and 44,942,594 shares issued as of December 31, 2019 and 2018, respectively, at $0.01 par value
—

 
449

Series C convertible preferred stock, 0 and 13,006,780 shares issued as of December 31, 2019 and 2018, respectively, at $0.01 par value
—

 
130

Series A common stock, 0 and 8,612,728 shares issued as of December 31, 2019 and 2018, respectively, at $0.01 par value
—

 
86

Series B common stock, 0 and 21,727 shares issued as of December 31, 2019 and 2018, respectively, at $0.01 par value
—

 
—

Common stock, 83,980,885 and 0 shares issued as of December 31, 2019 and 2018, respectively, at $0.0001 par value
8

 
—

Additional paid-in capital—convertible preferred stock
—

 
701,326

Additional paid-in capital—common stock
1,007,751

 
85,439

Accumulated deficit
(361,824
)
 
(286,312
)
Total stockholders' equity
645,935

 
501,118

Total liabilities, redeemable noncontrolling interests and stockholders' equity
$
2,487,067

 
$
1,665,085


(1) The consolidated assets as of December 31, 2019 and 2018 include $790,211 and $411,325, respectively, of assets of variable interest entities ("VIEs") that can only be used to settle obligations of the VIEs. These assets include cash of $7,347 and $3,674 as of December 31, 2019 and 2018, respectively; accounts receivable—trade, net of $1,460 and $884 as of December 31, 2019 and 2018, respectively; accounts receivable—other of $4 and $109 as of December 31, 2019 and 2018, respectively; other current assets of $47,606 and $4,821 as of December 31, 2019 and 2018, respectively; property and equipment, net of $726,415 and $398,693 as of December 31, 2019 and 2018, respectively; and other assets of $7,379 and $3,144 as of December 31, 2019 and 2018, respectively. The consolidated liabilities as of December 31, 2019 and 2018 include $13,440 and $9,260, respectively, of liabilities of VIEs whose creditors have no recourse to Sunnova Energy International Inc. These liabilities include accounts payable of $1,926 and $4,278 as of December 31, 2019 and 2018, respectively; accrued expenses of $35 and $14 as of December 31, 2019 and 2018, respectively; other current liabilities of $612 and $296 as of December 31, 2019 and 2018, respectively; and other long-term liabilities of $10,867 and $4,672 as of December 31, 2019 and 2018, respectively.

See accompanying notes to Sunnova Energy International Inc. consolidated financial statements.

86



SUNNOVA ENERGY INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)

 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
Revenue
$
131,556

 
$
104,382

 
$
76,856

 
 
 
 
 
 
Operating expense:
 
 
 
 
 
Cost of revenue—depreciation
43,536

 
34,710

 
25,896

Cost of revenue—other
3,877

 
2,007

 
1,444

Operations and maintenance
8,588

 
14,035

 
4,994

General and administrative
97,986

 
67,430

 
54,863

Other operating expense (income)
(161
)
 
(70
)
 
14

Total operating expense, net
153,826

 
118,112

 
87,211

 
 
 
 
 
 
Operating loss
(22,270
)
 
(13,730
)
 
(10,355
)
 
 
 
 
 
 
Interest expense, net
108,024

 
51,582

 
59,847

Interest expense, net—affiliates
4,098

 
9,548

 
23,177

Interest income
(12,483
)
 
(6,450
)
 
(3,197
)
Loss on extinguishment of long-term debt, net—affiliates
10,645

 
—

 
—

Other (income) expense
880

 
(1
)
 
—

Loss before income tax
(133,434
)
 
(68,409
)
 
(90,182
)
 
 
 
 
 
 
Income tax
—

 
—

 
—

Net loss
(133,434
)
 
(68,409
)
 
(90,182
)
Net income attributable to redeemable noncontrolling interests
10,917

 
5,837

 
903

Net loss attributable to stockholders
(144,351
)
 
(74,246
)
 
(91,085
)
Dividends earned on Series A convertible preferred stock
(19,271
)
 
(36,346
)
 
(29,623
)
Dividends earned on Series B convertible preferred stock
—

 
—

 
(580
)
Dividends earned on Series C convertible preferred stock
(5,454
)
 
(5,948
)
 
—

Deemed dividends on convertible preferred stock exchange
—

 
(19,332
)
 
—

Net loss attributable to common stockholders—basic and diluted
$
(169,076
)
 
$
(135,872
)
 
$
(121,288
)
 
 
 
 
 
 
Net loss per share attributable to common stockholders—basic and diluted
$
(4.14
)
 
$
(15.74
)
 
$
(14.05
)
Weighted average common shares outstanding—basic and diluted
40,797,976

 
8,634,477

 
8,632,936


See accompanying notes to Sunnova Energy International Inc. consolidated financial statements.


87



SUNNOVA ENERGY INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net loss
$
(133,434
)
 
$
(68,409
)
 
$
(90,182
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
 
Depreciation
49,340

 
39,290

 
29,482

Impairment and loss on disposals, net
1,772

 
7,565

 
1,780

Amortization of deferred financing costs
9,822

 
9,074

 
14,568

Amortization of debt discount
3,018

 
1,083

 
759

Amortization of debt discount—affiliates
—

 
—

 
9,002

Non-cash effect of equity-based compensation plans
9,235

 
2,984

 
1,495

Non-cash payment-in-kind interest on loan—affiliates
2,716

 
5,524

 
3,569

Unrealized loss on derivatives
19,237

 
6,100

 
5,944

Unrealized loss on fair value option instruments
150

 
—

 
—

Loss on extinguishment of long-term debt, net—affiliates
10,645

 
—

 
—

Other non-cash items
8,442

 
4,818

 
3,080

Changes in components of operating assets and liabilities:
 
 
 
 
 
Accounts receivable
(9,349
)
 
(4,983
)
 
(841
)
Dealer advances
—

 
(237
)
 
(10,678
)
Other current assets
(131,741
)
 
(11,331
)
 
(2,992
)
Other assets
(40,118
)
 
(8,529
)
 
(4,473
)
Accounts payable
5,292

 
(996
)
 
(1,220
)
Accrued expenses
15,099

 
4,234

 
1,381

Other current liabilities
8,452

 
4,938

 
5,876

Long-term debt—paid-in-kind—affiliates
(719
)
 
(3,184
)
 
(17,277
)
Other long-term liabilities
1,879

 
489

 
1,760

Net cash used in operating activities
(170,262
)
 
(11,570
)
 
(48,967
)
 
 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Purchases of property and equipment
(430,822
)
 
(252,618
)
 
(240,578
)
Payments for investments and customer notes receivable
(159,303
)
 
(108,354
)
 
(52,405
)
Proceeds from customer notes receivable
21,604

 
7,715

 
2,816

State utility rebates and tax credits
668

 
853

 
621

Other, net
(463
)
 
3,555

 
413

Net cash used in investing activities
(568,316
)
 
(348,849
)
 
(289,133
)
 
 
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Proceeds from long-term debt
883,360

 
445,586

 
734,494

Payments of long-term debt
(342,540
)
 
(292,091
)
 
(374,550
)
Proceeds of long-term debt from affiliates
15,000

 
15,000

 
95,000

Payments of long-term debt to affiliates
(56,236
)
 
(40,000
)
 
(215,840
)
Payments on notes payable
(4,672
)
 
—

 
(247
)
Payments of deferred financing costs
(12,110
)
 
(8,598
)
 
(27,627
)
Payments of debt discounts
(1,084
)
 
(2,465
)
 
(375
)
Proceeds from issuance of common stock, net
164,452

 
—

 
23

Proceeds from equity component of debt instrument, net
13,984

 
—

 
—

Proceeds from issuance of convertible preferred stock, net
(2,510
)
 
172,771

 
89,890

Contributions from redeemable noncontrolling interests
157,149

 
79,017

 
72,223

Distributions to redeemable noncontrolling interests
(7,559
)
 
(2,017
)
 
(294
)
Payments of costs related to redeemable noncontrolling interests
(5,395
)
 
(1,510
)
 
(2,714
)
Other, net
(16
)
 
(6
)
 
(90
)
Net cash provided by financing activities
801,823

 
365,687

 
369,893

Net increase in cash and restricted cash
63,245

 
5,268

 
31,793

Cash and restricted cash at beginning of period
87,046

 
81,778

 
49,985

Cash and restricted cash at end of period
150,291

 
87,046

 
81,778

Restricted cash included in other current assets
(10,474
)
 
(5,190
)
 
(4,555
)
Restricted cash included in other assets
(56,332
)
 
(29,150
)
 
(20,905
)
Cash at end of period
$
83,485

 
$
52,706

 
$
56,318


88



 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
Non-cash investing and financing activities:
 
 
 
 
 
Change in accounts payable and accrued expenses related to purchases of property and equipment
$
26,952

 
$
3,191

 
$
23,156

Change in accounts payable and accrued expenses related to payments for investments and customer notes receivable
$
(10,557
)
 
$
(10,461
)
 
$
(6,178
)
Non-cash issuance of convertible preferred stock relating to the reduction of debt
$
—

 
$
—

 
$
15,190

 
 
 
 
 
 
Supplemental cash flow information:
 
 
 
 
 
Cash paid for interest
$
58,060

 
$
57,887

 
$
59,896

Cash paid for income taxes
$
—

 
$
—

 
$
—


See accompanying notes to Sunnova Energy International Inc. consolidated financial statements.

89



SUNNOVA ENERGY INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY
(in thousands, except share amounts)
 
Redeemable
Noncontrolling
Interests
 
 
Series A
Convertible
Preferred Stock
 
Series B
Convertible
Preferred Stock
 
Series C
Convertible
Preferred Stock
 
Series A
Common Stock
 
Series B
Common Stock
 
Common Stock
 
Series A
Treasury
Stock
 
Series B
Treasury
Stock
 
Additional
Paid-in
Capital -
Convertible
Preferred
Stock
 
Additional
Paid-in
Capital -
Common
Stock
 
Accumulated
Deficit
 
Total
Stockholders'
Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
 
December 31, 2016
$
—

 
 
34,923,648

 
$
349

 
—

 
$
—

 
—

 
$
—

 
8,618,156

 
$
86

 
11,501

 
$
—

 
—

 
$
—

 
$
—

 
$
(1
)
 
$
426,060

 
$
80,975

 
$
(182,003
)
 
$
325,466

Net income (loss)
903

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(91,085
)
 
(91,085
)
Issuance of common stock, net
—

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
12,712

 
—

 
—

 
—

 
—

 
—

 
—

 
16

 
—

 
16

Issuance of convertible preferred stock, net
—

 
 
4,033,061

 
40

 
4,583,576

 
46

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
89,714

 
—

 
—

 
89,800

Non-cash issuance of convertible preferred stock relating to the reduction of debt
—

 
 
1,222,799

 
12

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
15,178

 
—

 
—

 
15,190

Contributions from redeemable noncontrolling interests
72,223

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Distributions to redeemable noncontrolling interests
(294
)
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Costs related to redeemable noncontrolling interests
(3,575
)
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Equity in subsidiaries attributable to parent
(30,385
)
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
30,385

 
30,385

Equity-based compensation expense
—

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
1,495

 
—

 
1,495

Acquisition of treasury stock
—

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(52
)
 
(32
)
 
—

 
—

 
—

 
(84
)
Retirement of treasury stock
—

 
 
—

 
—

 
—

 
—

 
—

 
—

 
(5,428
)
 
—

 
(2,486
)
 
—

 
—

 
—

 
52

 
33

 
—

 
(30
)
 
(55
)
 
—

Other, net
(282
)
 
 
—

 
1

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(1
)
 
(1
)
 
1

 
—

December 31, 2017
38,590

 
 
40,179,508

 
402

 
4,583,576

 
46

 
—

 
—

 
8,612,728

 
86

 
21,727

 
—

 
—

 
—

 
—

 
—

 
530,951

 
82,455

 
(242,757
)
 
371,183

Net income (loss)
5,837

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(74,246
)
 
(74,246
)
Issuance of common stock, net
—

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
644

 
—

 
—

 
—

 
—

 
—

 
—

 
(2
)
 
—

 
(2
)
Issuance of convertible preferred stock, net
—

 
 
—

 
—

 
13,013

 
—

 
13,006,780

 
130

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
170,376

 
—

 
—

 
170,506

Non-cash exchange of Series B convertible preferred stock for Series A convertible preferred stock
—

 
 
4,763,086

 
48

 
(4,596,589
)
 
(46
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(2
)
 
—

 
—

 
—

Contributions from redeemable noncontrolling interests
79,017

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Distributions to redeemable noncontrolling interests
(2,017
)
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Distributions payable to redeemable noncontrolling interests
(3,988
)
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Costs related to redeemable noncontrolling interests
(1,062
)
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Equity in subsidiaries attributable to parent
(30,697
)
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
30,697

 
30,697

Equity-based compensation expense
—

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
2,984

 
—

 
2,984

Acquisition of treasury stock
—

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(4
)
 
—

 
—

 
—

 
(4
)
Retirement of treasury stock
—

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(644
)
 
—

 
—

 
—

 
—

 
4

 
—

 
2

 
(6
)
 
—

Other, net
—

 
 
—

 
(1
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
1

 
—

 
—

 
—

December 31, 2018
85,680

 
 
44,942,594

 
449

 
—

 
—

 
13,006,780

 
130

 
8,612,728

 
86

 
21,727

 
—

 
—

 
—

 
—

 
—

 
701,326

 
85,439

 
(286,312
)
 
501,118

Net income (loss)
10,917

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(144,351
)
 
(144,351
)
Issuance of common stock, net
—

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
2,143

 
—

 
14,865,267

 
1

 
—

 
—

 
—

 
163,965

 
—

 
163,966

Repurchase of convertible preferred stock
—

 
 
(13,484
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(183
)
 
—

 
(8
)
 
(191
)
Non-cash conversion of convertible notes for Series A and Series C convertible preferred stock
—

 
 
1,422,767

 
14

 
—

 
—

 
1,120,360

 
11

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
32,809

 
—

 
—

 
32,834

Non-cash exchange of Series A and Series C convertible preferred stock and Series A and Series B common stock for common stock
—

 
 
(46,351,877
)
 
(464
)
 
—

 
—

 
(14,127,140
)
 
(141
)
 
(8,612,731
)
 
(86
)
 
(23,870
)
 
—

 
69,115,618

 
7

 
—

 
—

 
(734,444
)
 
735,128

 
—

 
—

Equity component of debt instrument, net
—

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
13,984

 
—

 
13,984

Contributions from redeemable noncontrolling interests
157,149

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Distributions to redeemable noncontrolling interests
(7,559
)
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Distributions payable to redeemable noncontrolling interests
2,358

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Costs related to redeemable noncontrolling interests
(7,392
)
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Equity in subsidiaries attributable to parent
(68,848
)
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
68,848

 
68,848

Equity-based compensation expense
—

 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
9,235

 
—

 
9,235

Other, net
—

 
 
—

 
1

 
—

 
—

 
—

 
—

 
3

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
492

 
—

 
(1
)
 
492

December 31, 2019
$
172,305

 
 
—

 
$
—

 
—

 
$
—

 
—

 
$
—

 
—

 
$
—

 
—

 
$
—

 
83,980,885

 
$
8

 
$
—

 
$
—

 
$
—

 
$
1,007,751

 
$
(361,824
)
 
$
645,935



See accompanying notes to Sunnova Energy International Inc. consolidated financial statements.

90


 
(1) Description of Business and Basis of Presentation

We are a leading residential solar and energy storage service provider, serving more than 80,000 customers in more than 20 United States ("U.S.") states and territories. Sunnova Energy Corporation was incorporated in Delaware on October 22, 2012 and formed Sunnova Energy International Inc. ("SEI") as a Delaware corporation on April 1, 2019. We completed our initial public offering on July 29, 2019 (our "IPO"); and in connection with our IPO, all of Sunnova Energy Corporation's ownership interests were contributed to SEI. Unless the context otherwise requires, references in this report to "Sunnova," the "Company," "we," "our," "us," or like terms, refer to SEI and its subsidiaries.

We have a differentiated residential solar dealer model in which we partner with local dealers who originate, design and install our customers' solar energy systems and energy storage systems on our behalf. Our focus on our dealer model enables us to leverage our dealers' specialized knowledge, connections and experience in local markets to drive customer origination while providing our dealers with access to high quality products at competitive prices and technical oversight and expertise. We believe this structure provides operational flexibility, reduced exposure to labor shortages and lower fixed costs relative to our peers, furthering our competitive advantage.

We provide our services through long-term residential solar service agreements with a diversified pool of high credit quality customers. Our solar service agreements typically are structured as either a legal-form lease (a "lease") of a solar energy system to the customer, the sale of the solar energy system's output to the customer under a power purchase agreement ("PPA") or the purchase of a solar energy system with financing provided by us (a "loan"). The initial term of our solar service agreements is typically either 10 or 25 years, during which time we provide or arrange for ongoing services to customers, including monitoring, maintenance and warranty services. Our lease and PPA agreements typically include an opportunity for customers to renew for up to an additional 10 years, via two five-year renewal options. Customer payments and rates can be fixed for the duration of the solar service agreement or escalated at a pre-determined percentage annually. We also receive tax benefits and other incentives from leases and PPAs, a portion of which we finance through tax equity, non-recourse debt structures and hedging arrangements in order to fund our upfront costs, overhead and growth investments.

Basis of Presentation

The accompanying annual audited consolidated financial statements ("consolidated financial statements") include our consolidated balance sheets, statements of operations, statements of redeemable noncontrolling interests and stockholders' equity and statements of cash flows and have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") from records maintained by us. Our consolidated financial statements reflect our accounts and operations and those of our subsidiaries in which we have a controlling financial interest. In accordance with the provisions of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 810, Consolidation, we consolidate any VIE of which we are the primary beneficiary. We form VIEs with our investors in the ordinary course of business to facilitate the funding and monetization of certain attributes associated with our solar energy systems. 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 (a) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. We do not consolidate a VIE in which we have a majority ownership interest when we are not considered the primary beneficiary. We have considered the provisions within the contractual arrangements that grant us power to manage and make decisions that affect the operation of our VIEs, including determining the solar energy systems contributed to the VIEs, and the installation, operation and maintenance of the solar energy systems. We consider the rights granted to the other investors under the contractual arrangements to be more protective in nature rather than participating rights. As such, we have determined we are the primary beneficiary of our VIEs and evaluate our relationships with our VIEs on an ongoing basis to ensure we continue to be the primary beneficiary. We have eliminated all intercompany accounts and transactions in consolidation.

Corporate Reorganization

In connection with our IPO, we implemented an internal reorganization that resulted in SEI owning all the outstanding capital stock of Sunnova Energy Corporation (the "Reorganization"). In connection with the Reorganization, a direct, wholly-owned subsidiary of SEI merged with and into Sunnova Energy Corporation, with Sunnova Energy Corporation surviving as a direct, wholly owned subsidiary of SEI. Each share of each class of Sunnova Energy Corporation stock issued and outstanding immediately prior to the Reorganization, by virtue of the Reorganization and without any action on the part of the holders thereof, automatically converted into an equivalent corresponding share of stock of SEI, having the same designations, rights,

91


powers and preferences and the qualifications, limitations and restrictions with respect to SEI as each such corresponding share of Sunnova Energy Corporation stock being converted had with respect to Sunnova Energy Corporation. Accordingly, upon consummation of the Reorganization, each of Sunnova Energy Corporation's stockholders immediately prior to the consummation of the Reorganization became a stockholder of SEI.

Reverse Stock Split

In connection with our IPO, we decreased the total number of outstanding shares with a 1 for 2.333 reverse stock split effective July 29, 2019 (the "Reverse Stock Split"). All current and past period amounts stated herein have given effect to the Reverse Stock Split.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not have a significant impact on our consolidated financial statements.

(2) Significant Accounting Policies

Use of Estimates

The application of GAAP in the preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our 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.

Cash

We maintain cash, which consists principally of demand deposits, with investment-grade financial institutions. We are exposed to credit risk to the extent cash balances exceed amounts covered by the Federal Deposit Insurance Corporation ("FDIC"). As of December 31, 2019 and 2018, we had cash deposits of $72.4 million and $46.3 million, respectively, in excess of the FDIC's current insured limit of $250,000. We have not experienced any losses on our deposits of cash.


92


Restricted Cash

We record cash that is restricted as to withdrawal or use under the terms of certain contractual agreements as restricted cash. Our restricted cash primarily represents cash held to service certain payments under the Sunnova AP 6 Warehouse II, LLC ("AP6WII"), Helios Issuer, LLC ("HELI"), Sunnova LAP Holdings, LLC ("LAPH"), Sunnova EZ-Own Portfolio, LLC ("EZOP"), Sunnova TEP I, LLC ("TEPI"), Sunnova TEP I Holdings, LLC ("TEPIH"), Sunnova TEP II, LLC ("TEPII"), Sunnova TEP II-B, LLC ("TEPIIB"), Sunnova TEP III, LLC ("TEPIII"), Sunnova TEP IV-A, LLC ("TEPIVA"), Sunnova TEP IV-B, LLC ("TEPIVB"), Sunnova TEP Holdings, LLC ("TEPH"), Sunnova TEP II Holdings, LLC ("TEPIIH"), Helios II Issuer, LLC ("HELII"), Helios III Issuer, LLC ("HELIII"), Sunnova RAYS I Issuer, LLC ("RAYSI") and Sunnova TEP Inventory, LLC ("TEPINV") financing arrangements (see Note 8, Long-Term Debt and Note 13, Redeemable Noncontrolling Interests) and balances collateralizing outstanding letters of credit related to one of our operating leases for office space (see Note 17, Commitments and Contingencies). The following table presents the detail of restricted cash as recorded in other current assets and other assets in the consolidated balance sheets:
 
As of December 31,
 
2019
 
2018
 
(in thousands)
Debt and inverter reserves
$
55,407

 
$
28,225

Tax equity reserves
9,904

 
4,796

Letters of credit for office lease
725

 
725

Other
770

 
594

Total (1)
$
66,806

 
$
34,340


(1) Of this amount, $10.5 million and $5.2 million is recorded in other current assets as of December 31, 2019 and 2018, respectively.

We are exposed to credit risk to the extent restricted cash balances exceed amounts covered by the FDIC. As of December 31, 2019 and 2018, we had restricted cash deposits of $63.6 million and $31.8 million, respectively, in excess of the FDIC's current insured limit of $250,000. We have not experienced any losses on our deposits of restricted cash.

Accounts Receivable

Accounts Receivable—Trade.    Accounts receivable—trade primarily represents trade receivables from residential customers under PPAs and leases that are generally collected in the subsequent month and recorded at net realizable value. We maintain an allowance for doubtful accounts to reserve for potentially uncollectible accounts receivable. We review our accounts receivable by aging category to identify customers with known disputes or collection issues. We write off accounts receivable when we deem them uncollectible. The following table presents the changes in the allowance for doubtful accounts recorded against accounts receivable—trade, net in the consolidated balance sheets:
 
As of December 31,
 
2019
 
2018
 
(in thousands)
Balance at beginning of period
$
723

 
$
427

Bad debt expense
1,645

 
1,119

Write off of uncollectible accounts
(1,498
)
 
(861
)
Recoveries
90

 
50

Other, net
—

 
(12
)
Balance at end of period
$
960

 
$
723



Accounts Receivable—Other.    Accounts receivable—other primarily represents amounts owed from dealers in a net receivable position primarily as a result of customer contract cancelations or settlement agreements and receivables related to the sale of inventory.


93


Inventory

Inventory primarily represents energy storage systems, photovoltaic modules, inverters, meters and other associated equipment purchased and held for use as original parts on new solar energy systems or replacement parts on existing solar energy systems. We record inventory in other current assets in the consolidated balance sheets at the lower of cost and net realizable value. We remove these items from inventory using the weighted-average method and (a) expense to operations and maintenance expense when installed as a replacement part for a solar energy system or (b) capitalize to property and equipment when installed as an original part on a solar energy system. We evaluate our inventory reserves and write down the estimated value of excess and obsolete inventory based upon assumptions about future demand and market conditions. The following table presents the detail of inventory as recorded in other current assets in the consolidated balance sheets:
 
As of December 31,
 
2019
 
2018
 
(in thousands)
Energy storage systems and components
$
33,443

 
$
8,394

Modules and inverters
10,137

 
433

Meters
169

 
360

Total
$
43,749

 
$
9,187



As of December 31, 2019, we recorded accrued expenses of $15.2 million for inventory purchases.

Concentrations of Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash, restricted cash, accounts receivable and notes receivable. The concentrated risk associated with cash and restricted cash is mitigated by our policy of banking with creditworthy institutions. Typically, amounts on deposit with certain banking institutions exceed FDIC insurance limits. We do not generally require collateral or other security to support accounts receivable. To reduce credit risk related to our relationship with our dealers, management performs periodic credit evaluations and ongoing assessments of our dealers' financial condition.

Concentration of Services and Equipment from Dealers

We utilize a network of approximately 100 dealers as of December 31, 2019. During the year ended December 31, 2019, two dealers accounted for approximately 49% and 10% of our total expenditures to dealers relating to costs incurred for solar energy systems. During the year ended December 31, 2018, one dealer accounted for approximately 58% of our total expenditures to dealers. During the year ended December 31, 2017, three dealers accounted for approximately 32%, 27% and 13%, respectively, of our total expenditures to dealers. No other dealer accounted for more than 10% of our expenditures for solar energy systems during the years ended December 31, 2019, 2018 and 2017.

Dealer Commitments

Throughout 2019, we entered into exclusivity and other similar agreements with certain key dealers pursuant to which we have agreed to pay an incentive if such dealers install a certain minimum number of solar energy systems within specified periods. These incentives are recorded in other assets in the consolidated balance sheets and are amortized to general and administrative expense in the consolidated statements of operations generally over the term of the customer agreements, which is estimated at an average of 23 years. See Note 17, Commitments and Contingencies.

Fair Value of Financial Instruments

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 at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions market participants would use in pricing an asset or a liability. 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 unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.

94


•
Level 2—Observable inputs other than Level 1 prices, such as quoted market prices for similar assets or liabilities in active markets, quoted market 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.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy must be determined based on the lowest level input that is significant to the fair value measurement. An assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the asset or liability. Our financial instruments include accounts receivable, notes receivable, accounts payable, accrued expenses, long-term debt and interest rate swaps and swaptions. The carrying values of accounts receivable, accounts payable and accrued expenses approximate the fair values due to the fact that they are short-term in nature (Level 1). We estimate the fair value of our customer notes receivable based on interest rates currently offered under the loan program with similar maturities and terms (Level 3). We estimate the fair value of our fixed-rate long-term debt, excluding the senior secured notes for which we selected the fair value option and the convertible senior notes, based on interest rates currently offered for debt with similar maturities and terms (Level 3). We estimate the fair value of the senior secured notes and convertible senior notes based on a market approach model using Level 3 inputs that incorporates a binomial tree model and a discounted future cash flow model. We determine the fair values of the interest rate derivative transactions based on a discounted cash flow method using contractual terms of the transactions. The floating interest rate is based on observable rates consistent with the frequency of the interest cash flows (Level 2). See Note 7, Customer Notes Receivable, Note 8, Long-Term Debt and Note 9, Derivative Instruments.

Changes in fair value of the senior secured notes are included in other (income) expense in the consolidated statements of operations. The following table summarizes the change in fair value of our financial liabilities accounted for at fair value on a recurring basis using Level 3 inputs as recorded in long-term debt, net—affiliates in the consolidated balance sheets:
 
As of December 31,
 
2019
 
2018
 
(in thousands)
Balance at beginning of period
$
—

 
$
—

Additions
55,506

 
—

Change in fair value
730

 
—

Extinguishment
(56,236
)
 
—

Balance at end of period
$
—

 
$
—



Derivative Instruments

Our derivative instruments consist of interest rate swaps and swaptions that are not designated as cash flow hedges or fair value hedges under accounting guidance. We use interest rate swaps and swaptions to manage our net exposure to interest rate changes. We record the derivatives in other current assets, other assets, other current liabilities and other long-term liabilities, as appropriate, in the consolidated balance sheets and the changes in fair value are recorded in interest expense, net in the consolidated statements of operations. We include unrealized gains and losses on derivatives as a non-cash reconciling item in operating activities in the consolidated statements of cash flows. We include realized gains and losses on derivatives as a change in components of operating assets and liabilities in operating activities in the consolidated statements of cash flows. See Note 9, Derivative Instruments.


95


Revenue

The following table presents the detail of revenue as recorded in the consolidated statements of operations:
 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
 
(in thousands)
PPA revenue
$
48,041

 
$
38,950

 
$
29,171

Lease revenue
40,191

 
33,079

 
21,866

Solar renewable energy certificate revenue
38,453

 
30,630

 
24,833

Loan revenue
1,645

 
933

 
479

Other revenue
3,226

 
790

 
507

Total
$
131,556

 
$
104,382

 
$
76,856



We recognize revenue from contracts with customers as we satisfy our performance obligations at a transaction price reflecting an amount of consideration based upon an estimated rate of return. We express this rate of return as the solar rate per kilowatt hour ("kWh") in the customer contract. The amount of revenue we recognize does not equal customer cash payments because we satisfy performance obligations ahead of cash receipt or evenly as we provide continuous access on a stand-ready basis to the solar energy system. We reflect the differences between revenue recognition and cash payments received in accounts receivable, other assets or deferred revenue, as appropriate. Revenue allocated to remaining performance obligations represents contracted revenue we have not yet recognized and includes deferred revenue as well as amounts that will be invoiced and recognized as revenue in future periods. Contracted but not yet recognized revenue was approximately $1.1 billion as of December 31, 2019, of which we expect to recognize approximately 4% over the next 12 months. We do not expect the annual recognition to vary significantly over approximately the next 20 years as the vast majority of existing solar service agreements have at least 20 years remaining, given the average age of the fleet of solar energy systems under contract is less than three years.

PPAs.    Customers purchase electricity from us under PPAs. Pursuant to ASC 606, we recognize revenue based upon the amount of electricity delivered as determined by remote monitoring equipment at solar rates specified under the PPAs. All customers must pass our credit evaluation process. The PPAs generally have a term of 25 years with an opportunity for customers to renew for up to an additional 10 years, via two five-year renewal options.

Leases.    We are the lessor under lease agreements for solar energy systems and energy storage systems, which do not meet the definition of a lease under ASC 842 and are accounted for as contracts with customers under ASC 606. We recognize revenue on a straight-line basis over the contract term as we satisfy our obligation to provide continuous access to the solar energy system. All customers must pass our credit evaluation process. The lease agreements generally have a term of 25 years with an opportunity for customers to renew for up to an additional 10 years, via two five-year renewal options.

We provide customers under our lease agreements a performance guarantee that each solar energy system will achieve a certain specified minimum solar energy production output, which is a significant proportion of its expected output. The specified minimum solar energy production output may not be achieved due to natural fluctuations in the weather or equipment failures from exposure and wear and tear outside of our control, among other factors. We determine the amount of the guaranteed output based on a number of different factors, including: (a) the specific site information relating to the tilt of the panels, azimuth (a horizontal angle measured clockwise in degrees from a reference direction) of the panels, size of the system, and shading on site; (b) the calculated amount of available irradiance (amount of energy for a given flat surface facing a specific direction) based on historical average weather data and (c) the calculated amount of energy output of the solar energy system. While actual irradiance levels can significantly change year over year due to natural fluctuations in the weather, we expect the levels to average out over the term of a 25-year lease and to approximate the levels used in determining the amount of the performance guarantee. Generally, weather fluctuations are the most likely reason a solar energy system may not achieve a certain specified minimum solar energy production output.

If the solar energy system does not produce the guaranteed production amount, we are required to refund a portion of the previously remitted customer payments, where the repayment is calculated as the product of (a) the shortfall production amount and (b) the dollar amount (guaranteed rate) per kWh that is fixed throughout the term of the contract. These remittances of a customer's payments, if needed, are payable in January following the end of the first three years of the solar energy system's placed in service date and then every annual period thereafter. See Note 17, Commitments and Contingencies.

96



Solar Renewable Energy Certificates.    Each solar renewable energy certificate ("SREC") represents one megawatt hour (1,000 kWh) generated by a solar energy system. SRECs can be sold with or without the actual electricity associated with the renewable-based generation source. We account for the SRECs we generate from our solar energy systems as governmental incentives with no costs incurred to obtain them and do not consider those SRECs output of the underlying solar energy systems. We classify these SRECs as inventory held until sold and delivered to third parties. As we did not incur costs to obtain these governmental incentives, the inventory carrying value for the SRECs was $0 as of December 31, 2019 and 2018. We enter into economic hedges related to expected production of SRECs through forward contracts. The contracts require us to physically deliver the SRECs upon settlement. We recognize the related revenue under ASC 606 upon satisfaction of the performance obligation to transfer the SRECs to the stated counterparty. Payments are typically received within one month of transferring the SREC to the counterparty. The costs related to the sales of SRECs are limited to broker fees (included in cost of revenue—other), which are only paid in connection with certain transactions.

Loans.    See discussion of loan revenue in the "Loans" section below.

Other Revenue.    Other revenue includes certain state incentives, revenue from the direct sale of energy storage systems to customers and sales of service plans. We recognize revenue from state incentives in the periods in which they are incurred. We recognize revenue from the direct sale of energy storage systems in the period in which the storage components are placed in service. Service plans are available to customers whose solar energy system was not originally sold by Sunnova. We recognize revenue from service plan contracts over the life of the contract, which is typically five years.

Loans

We offer a loan program, under which the customer finances the purchase of a solar energy system or energy storage system through a solar service agreement, typically for a term of 10 or 25 years. We recognize cash payments received from customers on a monthly basis under our loan program (a) as interest income, to the extent attributable to earned interest on the contract that financed the customer's purchase of the solar energy system or energy storage system; (b) as a reduction of a note receivable on the balance sheet, to the extent attributable to a return of principal (whether scheduled or prepaid) on the contract that financed the customer's purchase of the solar energy system or energy storage system; and (c) as revenue, to the extent attributable to payments for operations and maintenance services provided by us.

To qualify for the loan program, a customer must pass our credit evaluation process, which requires the customer to have a minimum FICO® score of 650 to 720 depending on certain circumstances, and we secure the loans with the solar energy systems or energy storage systems financed. In determining the allowance for uncollectible notes receivable, we identify customers with known disputes or collection issues and consider our historical level of credit losses and current economic trends that might impact the level of future credit losses. We write off customer notes receivable when they are deemed uncollectible. In addition, there were no customer notes receivable not accruing interest and $151,000 and $81,000 of past due customer notes receivable as of December 31, 2019 and 2018, respectively. See Note 7, Customer Notes Receivable.

The following table presents the changes in the allowance for losses recorded against customer notes receivable in the consolidated balance sheets:
 
As of December 31,
 
2019
 
2018
 
(in thousands)
Balance at beginning of period
$
710

 
$
602

Bad debt expense
419

 
238

Write off of uncollectible accounts
(38
)
 
(130
)
Balance at end of period
$
1,091

 
$
710




97


Deferred Revenue

Deferred revenue consists of amounts for which the criteria for revenue recognition have not yet been met and includes (a) down payments and partial or full prepayments from customers, (b) differences due to the timing of energy production versus billing for certain types of PPAs and (c) payments for unfulfilled performance obligations from the loan program which will be recognized over the remaining term of the respective solar service agreements. Deferred revenue was $19.0 million as of December 31, 2017. The following table presents the detail of deferred revenue as recorded in other current liabilities and other long-term liabilities in the consolidated balance sheets:
 
As of December 31,
 
2019
 
2018
 
(in thousands)
Loans
$
46,958

 
$
27,793

PPAs and leases
8,895

 
6,255

SRECs
3,000

 
—

Total (1)
$
58,853

 
$
34,048


(1) Of this amount, $2.1 million and $1.6 million is recorded in other current liabilities as of December 31, 2019 and 2018, respectively.

During the years ended December 31, 2019 and 2018, we recognized revenue of $3.0 million and $2.0 million, respectively, from amounts included in deferred revenue at the beginning of the respective periods.

Performance Guarantee Obligations

We guarantee certain specified minimum solar energy production output under our leases and loan agreements, generally over a term of 25 years. The amounts are generally measured and credited to the customer's account in January following the end of the first three years of the solar energy system's placed in service date and then every annual period thereafter. We monitor the solar energy systems to ensure these outputs are achieved. We evaluate if any amounts are due to our customers based upon not meeting the guaranteed solar energy production outputs at each reporting period end. For leases, these estimated amounts are recorded as a reduction to revenues from customers and a current or long-term liability, as applicable. For loans, these estimated amounts are recorded as an increase to cost of revenue—other and a current or long-term liability, as applicable. See Note 17, Commitments and Contingencies.

Property and Equipment

Solar Energy Systems.    Depreciation and amortization of solar energy systems are calculated using the straight-line method over the estimated useful lives of the solar energy systems and are included in cost of revenue—depreciation.
While solar energy systems are in the design, construction and installation stages prior to being placed in service, the development of the systems is accounted for through construction in progress. The components of the design, construction and installation of the solar energy systems, which are installed on or near residential rooftops, are as follows:

•Dealer's costs (engineering, procurement and construction)
•Direct costs (costs directly related to a solar energy system)
•Indirect costs (costs incurred in the design, construction and installation of the solar energy system but not directly
associated with a particular asset)

Solar energy systems are carried at the cost of acquisition or construction (including design and installation) less certain utility rebates and federal and state tax incentives (including federal investment tax credits, known as "Section 48(a) ITCs") and are depreciated over the useful lives of the assets. We account for the Section 48(a) ITCs in accordance with the deferral gross up method, thus reducing the cost basis of the qualifying solar energy systems by the rate applicable to Section 48(a) ITCs, currently 30% for qualifying solar energy systems that began construction before 2020. However, as discussed in Note 10, Income Taxes, we have a full valuation allowance, which is recorded against deferred income taxes and requires the gross up of the basis of the qualifying solar energy systems back to the full value. Depreciation begins when a solar energy system is placed in service. Costs associated with repair and maintenance of a solar energy system are expensed as incurred. Costs associated with improvements to a solar energy system, which extend the life, increase the capacity or improve the efficiency of the systems, are capitalized and depreciated over the remaining life of the asset.


98


Property and Equipment, Excluding Solar Energy Systems.    Property and equipment, including information technology system projects, computers and equipment, leasehold improvements, furniture and fixtures, vehicles and other property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the respective assets and are included in general and administrative expense. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives. Upon disposition, the cost and related accumulated depreciation of the assets are removed from property and equipment and the resulting gain or loss is reflected in the consolidated statements of operations. Repair and maintenance costs are expensed as incurred.

Capitalization of Interest Costs.    We capitalize interest on solar energy systems during the development, design, installation and test phase (construction), generally over a period of four months. We determine which debt instruments represent a reasonable measure of the cost of financing construction in terms of interest costs incurred that otherwise could have been avoided. Interest can only be capitalized for debt instruments related to financing the construction of solar energy systems; interest cannot be capitalized for debt instruments related to the acquisition of solar energy systems already constructed and/or in service. These debt instruments and associated interest costs are included in the calculation of the weighted average interest rate used for determining the capitalization rate. Once a solar energy system is placed in service, capitalized interest, as a component of the total cost of the construction, is depreciated over the estimated useful life of the solar energy system.

Intangibles

Our intangible assets primarily consist of a software license and a trademark related to the design process of solar energy systems and are stated at cost less accumulated amortization. We amortize intangible assets to general and administrative expense over a useful life of three years using the straight-line method. The following table presents the detail of intangible assets as recorded in other assets in the consolidated balance sheets:
 
As of December 31,
 
2019
 
2018
 
(in thousands)
Software license
$
331

 
$
331

Trademark
68

 
68

Other
88

 
—

Intangibles, gross
487

 
399

Less: accumulated amortization
(420
)
 
(399
)
Intangibles, net
$
67

 
$
—



As of December 31, 2019, amortization expense related to intangible assets to be recognized is $29,000 per year for 2020 and 2021, $9,000 for 2022 and $0 thereafter.

Deferred Financing Costs

Deferred financing costs are capitalized and amortized to interest expense, net over the term of the related debt using the effective interest method for term loans or the straight-line method for revolving credit facilities. The unamortized balance of deferred financing costs is included in current portion of long-term debt, current portion of long-term debt—affiliates, long-term debt, net and long-term debt, net—affiliates (see Note 8, Long-Term Debt) for term loans or in other current assets and other assets for revolving credit facilities and debt and equity transactions not yet completed, in the consolidated balance sheets. The following table presents the changes in net deferred financing costs:
 
As of December 31,
 
2019
 
2018
 
(in thousands)
Balance at beginning of period
$
22,712

 
$
25,188

Capitalized
12,731

 
6,598

Amortized
(9,822
)
 
(9,074
)
Balance at end of period
$
25,621

 
$
22,712




99


AROs

We have AROs arising from contractual requirements to perform certain asset retirement activities at the time the solar energy systems are disposed. We recognize an ARO at the point an obligating event takes place, typically when the solar energy system is placed in service. An asset is considered retired when it is permanently taken out of service, such as through a sale or disposal.

The liability is initially measured at fair value (as a Level 3 measurement) based on the present value of estimated removal and restoration costs and subsequently adjusted for changes in the underlying assumptions and for accretion expense. The accretion expense is recognized in general and administrative expense in the consolidated statements of operations. The corresponding asset retirement costs are capitalized as part of the carrying amount of the solar energy system and depreciated (for which the expense is included in cost of revenue—depreciation) over the solar energy system's remaining useful life. See Note 6, AROs.

Warranty Obligations

In connection with our solar service agreements, we warrant the solar energy systems against defects in workmanship, against component or materials breakdowns and against any damages to rooftops during the installation process. The dealers' warranties on the workmanship, including work during the installation process, and the manufacturers' warranties over component parts have a range of warranty periods which are generally 10 to 25 years. As of December 31, 2019 and 2018, we recorded a warranty reserve of an insignificant amount.

Advertising Costs

We expense advertising costs as they are incurred to general and administrative expense in the consolidated statements of operations. We recognized advertising expense of $1.0 million, $191,000 and $52,000 during the years ended December 31, 2019, 2018 and 2017, respectively.

Defined Contribution Plan

In April 2015, we established the Sunnova Energy Corporation 401(k) Profit Sharing Plan ("401(k) plan") available to employees who meet the 401(k) plan's eligibility requirements. The 401(k) plan allows participants to contribute a percentage of their compensation to the 401(k) plan up to the limits set forth in the Internal Revenue Code. We may make additional discretionary contributions to the 401(k) plan as a percentage of total participant contributions, subject to established limits. Participants are fully vested in their contributions and any safe harbor matching contributions we make. We made safe harbor matching contributions of $736,000, $551,000 and $458,000 during the years ended December 31, 2019, 2018 and 2017, respectively, which are included in general and administrative expense in the consolidated statements of operations.

Income Taxes

We account for income taxes under an asset and liability approach. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax reporting purposes, net operating loss, carryforwards, and other tax credits measured by applying currently enacted tax laws. A valuation allowance is provided when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized.

We determine whether a tax position taken in a filed tax return, planned to be taken in a future tax return or claim, or otherwise subject to interpretation, is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position, or prospectively approved when such approval may be sought in advance. We use a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates it is more likely than not the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit or obligation as the largest amount that is more than 50% likely of being realized upon ultimate settlement. See Note 10, Income Taxes.


100


Comprehensive Income (Loss)

We are required to report comprehensive income (loss), which includes net income (loss) as well as other comprehensive income (loss). There were no differences between comprehensive loss and net loss as reported in the consolidated statements of operations for the periods presented.

Impairment of Long-Lived Assets

Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, we first compare undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals as considered necessary. Impairment charges are included in operations and maintenance expense for solar energy systems that relate to revenue from contracts with customers and general and administrative expense for all other property and equipment and other long-lived assets. During the years ended December 31, 2019, 2018 and 2017, we recognized net losses on disposals and impairment expense of $1.8 million, $7.6 million and $1.8 million, respectively, of which $1.8 million, $7.4 million and $1.8 million, respectively, is recorded in operations and maintenance expense and an insignificant amount is recorded in general and administrative expense. Of the total amount of net losses on disposals and impairment expense for the years ended December 31, 2019, 2018 and 2017, $54,000, $5.8 million and $823,000, respectively, is related to natural disaster losses. See Note 4, Natural Disaster Losses.

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. Our chief operating decision maker is the chief executive officer. Based on the financial information presented to and reviewed by our chief operating decision maker in deciding how to allocate resources and in assessing performance, we have determined we have a single reportable segment: solar energy products and services. Our principal operations, revenue and decision-making functions are located in the U.S.

Basic and Diluted Net Income (Loss) Per Share

Our basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to the common stockholders by the weighted-average number of shares of common stock outstanding for the period. Cumulative dividends owed to convertible preferred stockholders (as defined in Note 14, Stockholders' Equity) decrease (increase) the income (loss) available to common stockholders.

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. During periods in which we incur a net loss attributable to common stockholders, stock options are considered to be common stock equivalents but are excluded from the calculation of diluted net loss per share attributable to common stockholders as the effect is antidilutive. See Note 16, Basic and Diluted Net Loss Per Share.

Equity-Based Compensation

We account for equity-based compensation, which requires the measurement and recognition of compensation expense related to the fair value of equity-based compensation awards. Equity-based compensation expense includes the compensation cost for all share-based awards granted to employees, consultants and members of our board of directors (our "Board") based on the grant date fair value estimate. This also applies to awards modified, repurchased or canceled during the periods reported. We use the Black-Scholes option-pricing model to measure the fair value of stock options at the measurement date. We use the closing price of our common stock on the grant date to measure the fair value of restricted stock units at the measurement date. We account for forfeitures as they occur. Equity-based compensation expense is included in general and administrative expense in the consolidated statements of operations. See Note 15, Equity-Based Compensation.


101


Redeemable Noncontrolling Interests

Redeemable noncontrolling interests represent third-party interests in the net assets of certain consolidated subsidiaries (the "tax equity entities"), which were created to finance the cost of solar energy systems under long-term solar service agreements. The contractual provisions of the financing arrangements represent substantive profit sharing arrangements. We determined the appropriate methodology for attributing income and loss to the redeemable noncontrolling interests is a balance sheet approach referred to as the hypothetical liquidation at book value ("HLBV") method. We, therefore, determine the amount of the redeemable noncontrolling interests in the net assets of the subsidiaries at each balance sheet date using the HLBV method, which is presented in the consolidated balance sheets as redeemable noncontrolling interests. Under the HLBV method, the amounts reported as redeemable noncontrolling interests in the consolidated balance sheets represent the amounts the third parties would hypothetically receive at each balance sheet date under the liquidation provisions of the financing arrangements, assuming the net assets of the subsidiaries were liquidated at the recorded amounts determined in accordance with GAAP and distributed to the third parties. The third parties' interests in the results of operations of the subsidiaries are determined as the difference in the redeemable noncontrolling interests balances in the consolidated balance sheets between the start and end of each reporting period, after taking into account any capital transactions, such as contributions and distributions, between the subsidiaries and the third parties. However, the redeemable noncontrolling interests balance is at least equal to the redemption amount. The estimated redemption value is calculated using the discounted cash flows attributable to the third parties subsequent to the reporting date. We classify redeemable noncontrolling interests with redemption features that are not solely within our control outside of permanent equity in our consolidated balance sheets.

New Accounting Guidance

New accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted as of the specified effective date.

In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments—Credit Losses, which will require entities to use a forward-looking expected loss approach instead of the incurred loss approach in effect today when estimating the allowance for credit losses. This ASU is effective for annual and interim reporting periods in 2020. In 2018 and 2019, the FASB issued the following ASUs related to ASU 2016-13: ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, ASU 2019-05, Financial Instruments—Credit Losses: Targeted Transition Relief and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. The supplemental ASUs must be adopted simultaneously with ASU 2016-13. We are currently evaluating the impact of this ASU on our consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement: Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements. This ASU is effective for annual and interim reporting periods in 2020. We adopted this ASU in January 2020 and determined it did not have a significant impact on our consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which requires certain implementation costs to be capitalized. This ASU is effective for annual and interim reporting periods in 2020. We adopted this ASU in January 2020 and determined it did not have a significant impact on our consolidated financial statements and related disclosures.

In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, to clarify and address implementation issues around the new standards related to credit losses, hedging and recognizing and measuring financial instruments. Amendments in this ASU related to credit losses and hedging have the same effective dates as the respective standards unless an entity has already adopted the standards, in which case the amendments are effective for annual and interim reporting periods in 2020. Amendments in this ASU related to recognizing and measuring financial instruments are effective for annual and interim reporting periods in 2020 (see ASU No. 2016-13 above). We adopted this ASU in January 2020 and determined it did not have a significant impact on our consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes, to remove certain exceptions and clarify and amend the existing guidance. This ASU is effective for annual and interim reporting periods in 2021. We have not yet determined the potential impact of this ASU on our consolidated financial statements and related disclosures.


102


(3) Property and Equipment

The following table presents the detail of property and equipment, net as recorded in the consolidated balance sheets:
 
 
 
As of December 31,
 
Useful Lives
 
2019
 
2018
 
(in years)
 
(in thousands)
Solar energy systems
35
 
$
1,689,457

 
$
1,311,458

Construction in progress
 
 
143,449

 
77,847

AROs
30
 
26,967

 
17,381

Information technology systems
3
 
28,320

 
17,380

Computers and equipment
3-5
 
1,499

 
1,251

Leasehold improvements
3-6
 
1,014

 
883

Furniture and fixtures
7
 
735

 
735

Vehicles
4
 
1,632

 
548

Other
5-6
 
146

 
52

Property and equipment, gross
 
 
1,893,219

 
1,427,535

Less: accumulated depreciation
 
 
(148,159
)
 
(99,078
)
Property and equipment, net
 
 
$
1,745,060

 
$
1,328,457



Solar Energy Systems.    The amounts included in the above table for solar energy systems and substantially all the construction in progress relate to our customer contracts (including PPAs and leases). These assets had accumulated depreciation of $130.9 million and $87.6 million as of December 31, 2019 and 2018, respectively.

Capitalization of Interest Costs.    We capitalized interest costs of $216,000 during the year ended December 31, 2017, which were included in property and equipment. Due to the structure of our financing arrangements, interest no longer qualified for capitalization after March 2017.

(4) Natural Disaster Losses

We have insurance coverage related to property damage and business interruption. When a solar energy system is damaged by a natural disaster, we impair all or a portion of the net book value to operations and maintenance expense in the period for which the amount is probable and can be reasonably estimated. Insurance proceeds for property damage, up to the amount of impairment expense recorded for property damage, are estimated and recorded as a receivable (included in accounts receivable—other in the consolidated balance sheet) and a reduction to operations and maintenance expense when the receipt of the proceeds is deemed probable. Insurance proceeds for property damage that exceed the amount of impairment expense recorded and insurance proceeds related to business interruption are recorded when received, as a reduction to operations and maintenance expense. Costs incurred to repair or replace a solar energy system are capitalized (included in property and equipment, net in the consolidated balance sheet) and are classified as an investing cash outflow in the consolidated statement of cash flows. Insurance proceeds received for property damage are classified as an investing cash inflow in the consolidated statement of cash flows. Insurance proceeds received for business interruption are classified as an operating cash inflow in the consolidated statement of cash flows.

Hurricane Harvey in Texas.    In August 2017, Hurricane Harvey made landfall on the coast of Texas causing unprecedented flooding and significant damage to residences and businesses. During 2017, we incurred an insignificant amount of costs for Hurricane Harvey related to maintaining business continuity and assisting employees displaced from their homes. These costs were included in general and administrative expense in the consolidated statement of operations.

Hurricane Maria in Puerto Rico.    In September 2017, Hurricane Maria made landfall in Puerto Rico causing catastrophic wind and water damage to the island's infrastructure, residences and businesses. A majority of Puerto Rico was left without electrical power. In addition, other basic utility and infrastructure services (such as water, communications, ports and other transportation networks) were severely curtailed and the government imposed a mandatory curfew. Prior to the hurricane, we implemented certain business continuity measures. Although our critical business systems experienced minimal outages from the hurricane, our physical operations in Puerto Rico were significantly disrupted primarily due to the lack of electricity and communications and limited accessibility.


103


Throughout 2017 and 2018, we completed assessments of solar energy systems in Puerto Rico and submitted requests to the insurance company for recoveries for damage to solar energy systems and business interruption. However, we did not complete all reasonable estimates until December 2018 due to the overall impact of the hurricane on Puerto Rico. Although our solar energy systems are distributed energy sources, most are dependent upon complementary grid power to operate and all are dependent upon cellular communication services for operations and monitoring and evaluation. The outage was the largest and longest in U.S. history. As such, many repairs and estimates of damages and lost customers lagged the restoration of these services. Given the loss of grid power and cellular communication and the fact that much of Puerto Rico was not navigable, assessment of our solar energy systems and status of our customers continued through the fourth quarter of 2018. We recorded adjustments based on the estimated amount of property damage as of December 31, 2017. The final settlement with the insurance company was completed and those funds were received in the fourth quarter of 2018.

As of December 31, 2018, we received $9.8 million of insurance proceeds, of which $5.8 million represented recoveries for damage to solar energy systems and $4.0 million represented recoveries for business interruption. During 2017 and 2018, we reassessed the collectability of the receivables related to the solar energy systems in Puerto Rico and determined there were no significant write-offs or allowances needed.

Wildfires in California.    In October 2017 and November 2018, major wildfires burned throughout California and damaged several customers' homes and solar energy systems. These wildfires did not have a significant impact on our results of operations or financial position. The related impairments and insurance recoveries are included in the table below.

Typhoon Yutu in Saipan.    In October 2018, typhoon Yutu impacted Saipan causing massive wind and water damage to the island's infrastructure, residences and businesses. Several customer homes and solar energy systems were damaged; however, typhoon Yutu did not have a significant impact on our results of operations or financial position. The related impairments and insurance recoveries are included in the table below.

As of December 31, 2019, substantially all solar energy systems damaged by a natural disaster that were deemed economical to repair have been repaired. The impact of the natural disaster losses as recorded in the consolidated statements of operations for the years ended December 31, 2019, 2018 and 2017 is as follows:
 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
 
(in thousands)
Operations and maintenance expense:
 
 
 
 
 
Impairment of solar energy systems due to natural disaster losses
$
—

 
$
5,840

 
$
6,745

Insurance proceeds received/expected to be received—property damage
54

 
(53
)
 
(5,922
)
Insurance proceeds received—business interruption
—

 
(2,693
)
 
(1,307
)
Other natural disaster-related charges
—

 
1,679

 
65

General and administrative expense:
 
 
 
 
 
Other natural disaster-related charges
—

 
750

 
146

Total
$
54

 
$
5,523

 
$
(273
)



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(5) Detail of Certain Balance Sheet Captions

The following table presents the detail of other current assets as recorded in the consolidated balance sheets:
 
As of December 31,
 
2019
 
2018
 
(in thousands)
Prepaid inventory
$
96,167

 
$
—

Inventory
43,749

 
9,187

Current portion of customer notes receivable
13,758

 
7,601

Other prepaid assets
7,380

 
2,739

Current portion of other notes receivable
982

 
1,522

Deferred receivables
1,506

 
555

Restricted cash
10,474

 
5,190

Total
$
174,016

 
$
26,794



The following table presents the detail of other current liabilities as recorded in the consolidated balance sheets:
 
As of December 31,
 
2019
 
2018
 
(in thousands)
Interest payable
$
14,680

 
$
8,150

Current portion of performance guarantee obligations
4,067

 
2,580

Current portion of lease liability
561

 
871

Deferred revenue
2,086

 
1,593

Other
410

 
20

Total
$
21,804

 
$
13,214



(6) AROs

AROs consist primarily of costs to remove solar energy system assets and costs to restore the solar energy system sites to the original condition, which we estimate based on current market rates. For each solar energy system, we recognize the fair value of the ARO as a liability and capitalize that cost as part of the cost basis of the related solar energy system. The related assets are depreciated on a straight-line basis over 30 years, which is the estimated average time a solar energy system will be installed in a location before being removed, and the related liabilities are accreted to the full value over the same period of time. We revise our estimated future liabilities based on recent actual experiences, including third party cost estimates, average size of solar energy systems and inflation rates, which we evaluate at least annually. Changes in our estimated future liabilities are recorded as either a reduction or addition in the carrying amount of the remaining unamortized asset and the ARO and either decrease or increase our depreciation and accretion expense amounts prospectively. The following table presents the changes in AROs as recorded in other long-term liabilities in the consolidated balance sheets:
 
As of December 31,
 
2019
 
2018
 
(in thousands)
Balance at beginning of period
$
20,033

 
$
15,347

Additional obligations incurred
4,641

 
3,607

Accretion expense
1,443

 
1,183

Change in estimate
4,983

 
—

Other
(47
)
 
(104
)
Balance at end of period
$
31,053

 
$
20,033




105


(7) Customer Notes Receivable

We offer a loan program, under which the customer finances the purchase of a solar energy system or energy storage system through a solar service agreement, typically for a term of 10 or 25 years. As of December 31, 2019, we recorded $311.7 million of notes receivable under the loan program, of which $13.8 million is included in other current assets and $298.0 million is included in customer notes receivable, net in the consolidated balance sheet. As of December 31, 2018, we recorded $179.6 million of notes receivable under the loan program, of which $7.6 million is included in other current assets and $172.0 million is included in customer notes receivable, net in the consolidated balance sheet. As of December 31, 2019 and 2018, we invested $37.1 million and $20.4 million, respectively, in loan solar energy systems and energy storage systems not yet placed in service, which is included in other assets in the consolidated balance sheets. The fair values of our customer notes receivable and the corresponding carrying amounts are as follows:
 
As of December 31, 2019
 
As of December 31, 2018
 
Carrying
Value
 
Estimated
Fair Value
 
Carrying
Value
 
Estimated
Fair Value
 
(in thousands)
Customer notes receivable
$
311,732

 
$
314,222

 
$
179,632

 
$
179,990


Interest income from customer notes receivable is recorded in interest income in the consolidated statements of operations. For the years ended December 31, 2019, 2018 and 2017, interest income related to our customer notes receivable was $11.6 million, $6.1 million and $3.0 million, respectively.


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(8) Long-Term Debt

Our subsidiaries with long-term debt include SEI, Sunnova Energy Corporation, Sunnova Asset Portfolio 4, LLC ("AP4"), AP6WII, HELI, LAPH, EZOP, TEPIH, TEPIIH, HELII, RAYSI, HELIII, TEPH and TEPINV. The following table presents the detail of long-term debt, net and long-term debt, net—affiliates as recorded in the consolidated balance sheets:
 
Year Ended
December 31, 2019
Weighted Average
Effective Interest
Rates
 
As of December 31, 2019
 
Year Ended
December 31, 2018
Weighted Average
Effective Interest
Rates
 
As of December 31, 2018
 
Long-term
 
Current
 
Long-term
 
Current
 
(in thousands, except interest rates)
SEI
 
 
 
 
 
 
 
 
 
 
 
Convertible senior notes
7.75
%
 
$
55,000

 
$
—

 
 
 
$
—

 
$
—

Debt discount, net
 
 
(16,913
)
 
—

 
 
 
—

 
—

Deferred financing costs, net
 
 
(480
)
 
—

 
 
 
—

 
—

Sunnova Energy Corporation
 
 
 
 
 
 
 
 
 
 
 
Senior secured notes
10.02
%
 
—

 
—

 
14.89
%
 
40,000

 
—

Convertible notes
13.34
%
 
—

 
—

 
12.20
%
 
—

 
15,000

Notes payable
3.22
%
 
—

 
2,428

 
 
 
—

 
—

Paid-in-kind
 
 
—

 
—

 
 
 
4,219

 
1,500

Deferred financing costs, net
 
 
—

 
—

 
 
 
(38
)
 
—

AP4
 
 
 
 
 
 
 
 
 
 
 
Secured term loan
5.61
%
 
86,369

 
6,109

 
5.25
%
 
101,026

 
3,036

Debt discount, net
 
 
(452
)
 
—

 
 
 
(202
)
 
—

Deferred financing costs, net
 
 
(196
)
 
—

 
 
 
(418
)
 
—

AP6WII
 
 
 
 
 
 
 
 
 
 
 
Warehouse credit facility
10.01
%
 
—

 
—

 
8.47
%
 
54,603

 
—

Deferred financing costs, net
 
 
—

 
—

 
 
 
(309
)
 
—

HELI
 
 
 
 
 
 
 
 
 
 
 
Solar asset-backed notes
6.56
%
 
213,632

 
8,673

 
6.47
%
 
224,835

 
10,522

Debt discount, net
 
 
(3,169
)
 
—

 
 
 
(4,124
)
 
—

Deferred financing costs, net
 
 
(5,586
)
 
—

 
 
 
(7,217
)
 
—

LAPH
 
 
 
 
 
 
 
 
 
 
 
Secured term loan
7.71
%
 
41,484

 
1,392

 
8.36
%
 
43,167

 
1,038

Debt discount, net
 
 
(401
)
 
—

 
 
 
(552
)
 
—

Deferred financing costs, net
 
 
(356
)
 
—

 
 
 
(482
)
 
—

EZOP
 
 
 
 
 
 
 
 
 
 
 
Warehouse credit facility
6.60
%
 
121,400

 
—

 
9.68
%
 
58,200

 
—

Debt discount, net
 
 
(2,178
)
 
—

 
 
 
—

 
—

TEPIH
 
 
 
 
 
 
 
 
 
 
 
Secured term loan
25.17
%
 
—

 
—

 
6.55
%
 
107,239

 
3,356

Debt discount, net
 
 
—

 
—

 
 
 
(62
)
 
—

Deferred financing costs, net
 
 
—

 
—

 
 
 
(4,892
)
 
—

TEPIIH
 
 
 
 
 
 
 
 
 
 
 
Revolving credit facility
6.36
%
 
234,650

 
—

 
8.41
%
 
57,552

 
—

Debt discount, net
 
 
(2,219
)
 
—

 
 
 
(1,710
)
 
—

Deferred financing costs, net
 
 
—

 
—

 
 
 
(1,612
)
 
—

HELII
 
 
 
 
 
 
 
 
 
 
 
Solar asset-backed notes
5.77
%
 
241,309

 
13,005

 
5.60
%
 
253,687

 
9,013

Debt discount, net
 
 
(49
)
 
—

 
 
 
(55
)
 
—

Deferred financing costs, net
 
 
(5,873
)
 
—

 
 
 
(6,425
)
 
—

RAYSI
 
 
 
 
 
 
 
 
 
 
 
Solar asset-backed notes
5.47
%
 
126,828

 
6,327

 
 
 
—

 
—

Debt discount, net
 
 
(1,547
)
 
—

 
 
 
—

 
—

Deferred financing costs, net
 
 
(4,759
)
 
—

 
 
 
—

 
—

HELIII
 
 
 
 
 
 
 
 
 
 
 
Solar loan-backed notes
4.03
%
 
135,543

 
19,030

 
 
 
—

 
—

Debt discount, net
 
 
(2,532
)
 
—

 
 
 
—

 
—

Deferred financing costs, net
 
 
(2,410
)
 
—

 
 
 
—

 
—



107


TEPH
 
 
 
 
 
 
 
 
 
 
 
Revolving credit facility
6.70
%
 
90,325

 
—

 
 
 
—

 
—

Debt discount, net
 
 
(645
)
 
—

 
 
 
—

 
—

TEPINV
 
 
 
 
 
 
 
 
 
 
 
Revolving credit facility
7.95
%
 
54,707

 
40,500

 
 
 
—

 
—

Debt discount, net
 
 
(2,856
)
 
—

 
 
 
—

 
—

Deferred financing costs, net
 
 
(2,207
)
 
—

 
 
 
—

 
—

Total
 
 
$
1,346,419

 
$
97,464

 
 
 
$
916,430

 
$
43,465



Availability.    As of December 31, 2019, we had $88.3 million of available borrowing capacity under our various financing arrangements, consisting of $78.6 million under the EZOP warehouse credit facility and $9.7 million under the TEPH revolving credit facility. There was no available borrowing capacity under any of our other financing arrangements. As of December 31, 2019, we were in compliance with all debt covenants under our financing arrangements.

Weighted Average Effective Interest Rates.    The weighted average effective interest rates disclosed in the table above are the weighted average stated interest rates for each debt instrument plus the effect on interest expense for other items classified as interest expense, such as the amortization of deferred financing costs, amortization of debt discounts and commitment fees on unused balances for the period of time the debt was outstanding during the indicated periods.

SEI Convertible Senior Notes.    In December 2019, we issued convertible senior notes due January 2027 in an aggregate principal amount of $55.0 million to certain existing investors in a private placement. In addition, we granted the investors of the convertible senior notes an option, subject to our consent, to purchase up to an additional $20.0 million aggregate principal amount of convertible senior notes on the same terms and conditions, which such option will expire in March 2020. The convertible senior notes bear interest at a rate of 7.75% per annum and is due quarterly. If we fail to satisfy certain registration requirements the convertible senior notes will bear additional interest at a rate of 0.25% per annum for each 90-day period such requirements are not met, up to a maximum of 2.00% per annum.

The convertible senior notes are convertible into our common stock at the option of the holders at any time prior to the close of business on the business day immediately preceding December 23, 2021 upon a change of control event. On or after December 23, 2021 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may, at their option, convert all or any portion of their convertible senior notes, in multiples of $1,000 principal amount. Upon conversion, we may satisfy our conversion obligation by paying and/or delivering, as the case may be, cash, shares of common stock, or a combination of cash and shares of common stock, at our option, subject to certain terms and conditions. The conversion rate for the convertible senior notes is 76.9231 shares of common stock per $1,000 principal amount of convertible senior notes, plus accrued and unpaid interest, which is equivalent to an initial conversion price (excluding interest) of approximately $13.00 per share of common stock. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the convertible senior notes. On and after December 23, 2022, we have the right to cause the conversion of the convertible senior notes if certain specified common stock price and volume conditions are met.

We may, at our option, redeem for cash all or any portion of the convertible senior notes plus any accrued and unpaid interest to, but excluding, the redemption date at a redemption price equal to the following percentage of aggregate principal amount of convertible senior notes so redeemed:
Period
 
Percentage
At any time prior to December 23, 2021
 
120%
At any time on and after December 23, 2021 but prior to December 23, 2023
 
115%
At any time on and after December 23, 2023
 
110%


On and after September 23, 2024, the holders of the convertible senior notes have the option to require us to repurchase their convertible senior notes for cash at a purchase price of 110% of the aggregate principal amount repurchased, plus accrued and unpaid interest to the date of repurchase. The convertible senior notes include customary covenants and set forth certain events of default after which the convertible senior notes may be declared immediately due and payable.

For accounting purposes we separated the convertible senior notes into liability and equity components. As of December 31, 2019, the carrying amount of the liability component for the convertible senior notes of approximately $37.6 million (net of an unamortized debt discount of $16.9 million and unamortized issuance costs of $480,000) was determined based on a

108


discounted cash flow analysis and a binomial lattice model. The valuation required the use of Level 3 unobservable inputs and subjective assumptions, including but not limited to, the stock price volatility and bond yield. The use of alternative market assumptions and estimation methodologies could have had an effect on these estimates of fair value. As of December 31, 2019, the carrying amount of the equity component for the convertible senior notes of approximately $14.0 million (net of unamortized issuance costs of $179,000), representing the conversion option, was determined by deducting the carrying amount of the liability components from the principal amount of the convertible senior notes. This difference between the principal amount of the convertible senior notes and the liability component represents the debt discount, presented as a reduction to the convertible senior notes in the consolidated balance sheet and is amortized to interest expense, net using the effective interest method over the remaining term of the convertible senior notes. The equity component of the convertible senior notes is included in additional paid-in-capital in the consolidated balance sheet and is not remeasured as long as it continues to meet the conditions for equity classification.

Sunnova Energy Corporation Senior Secured Notes.    In April 2017, we issued senior secured notes due October 2018 in an aggregate principal amount of $80.0 million to certain existing investors. As part of the transaction, certain existing investors were required to commit to fund an additional $40.0 million to us by December 2017 in exchange for shares of Series A convertible preferred stock ("Preferred Stock Commitment"). As discussed below, we received funding for the Preferred Stock Commitment in October 2017. In addition, we were required to evidence the funding of additional subscriptions from existing or new investors for equity interests totaling $80.0 million, including the Preferred Stock Commitment that was already funded, by October 2018. The senior secured notes bore interest at an annual rate of 12.00%, of which 6.00% was payable in cash quarterly and the remaining 6.00% was payable in additional debt securities having the same terms, including maturity dates and interest rates, as the original debt securities, subject to certain conditions. This feature is commonly known as payment-in-kind and utilizing it effectively increases the principal note balance. The lenders of the senior secured notes were related parties and the related transactions have been classified as such in the consolidated balance sheets as of December 31, 2019 and 2018 and in the consolidated statements of operations and consolidated statements of cash flows for the years ended December 31, 2019, 2018 and 2017 (see Note 12, Related-Party Transactions).

The terms under the senior secured notes contained certain covenants and restrictions, including the requirement that we maintain a minimum liquidity of $8.0 million at the end of each month and on a 30-day average for each month prior to the date certain affiliates of Energy Capital Partners ("ECP") had funded its portion of the Preferred Stock Commitment of $28.2 million, which ECP funded. In November 2017, the terms of the senior secured notes were amended to, among other things, allow for the issuance of Series B convertible preferred stock to certain of Sunnova Energy Corporation's affiliates. In May 2018, the terms of the senior secured notes were amended to extend the maturity date from October 2018 to January 2019. In January 2019, we amended the terms of the senior secured notes to, among other things, extend the maturity date from January 2019 to July 2019. In April 2019, we further amended the terms of the senior secured notes to, among other things, (a) further extend the maturity date from July 2019 to March 2021, (b) decrease the interest rate from 12.00% per annum to 9.50% per annum, of which 4.75% was payable in cash quarterly and the remaining 4.75% was payable in additional debt securities (i.e. payment-in-kind) and (c) include a conversion feature. The April 2019 amendment resulted in a loss on extinguishment under GAAP of $10.6 million related to the difference between the net carrying value of the senior secured notes prior to the amendment and the fair value of the notes after the amendment. In connection with our IPO, we exercised our right to redeem all the senior secured notes for an aggregate amount of $57.1 million for cash. The aggregate redemption price included the principal amount outstanding of $56.2 million plus accrued and unpaid cash interest and pay-in-kind interest to the date of redemption.

For accounting purposes, only the conversion feature was required to be bifurcated and measured at fair value; however, we elected to make a one-time, irrevocable election to utilize the fair value option allowed under ASC 825, Financial Instruments. Under the fair value option election, we recorded the entire hybrid instrument at fair value with changes in fair value recognized in other (income) expense in the consolidated statements of operations. The fair value election resulted in an additional loss of $730,000 due to the change in fair value from April 2019 to July 2019.

Sunnova Energy Corporation Convertible Notes.    In March 2018, we issued a convertible note for $15.0 million to certain of our existing investors, which was subordinated to the senior secured notes, with a maturity date of the earlier of (a) the repayment of the Sunnova senior secured notes or (b) May 2019 (the "2018 Note"). In January 2019, we amended the terms of the 2018 Note to, among other things, extend the maturity date to the earlier of (a) the repayment of the senior secured notes or (b) December 2019. The 2018 Note bore interest at an annual rate of 12.00%, which was only payable by increasing the outstanding principal balance of the 2018 Note quarterly until maturity. Under the terms of the 2018 Note, we could not make cash payments for interest or principal on the 2018 Note until the senior secured notes had been repaid in full. The 2018 Note allowed for the holders to convert the outstanding principal balance (including accrued paid-in-kind interest) into Series A convertible preferred stock at a rate equal to the lesser of $5.3246735 per share (adjusted for subsequent stock splits,

109


combinations, recapitalizations or the like affecting the Series A convertible preferred stock) or the lowest purchase price per share of Series A convertible preferred stock issued after the date of the 2018 Note.

In June 2019, we issued a convertible note for $15.0 million to certain of our existing investors, which was subordinated to the senior secured notes, with a maturity date of the earlier of (a) the repayment of our senior secured notes or (b) September 2021 (the "2019 Note"). The 2019 Note bore interest at an annual rate of 12.00%, which was only payable by increasing the outstanding principal balance of the 2019 Note quarterly until maturity. Under the terms of the 2019 Note, we were not permitted to make cash payments for interest or principal on the 2019 Note until the senior secured notes had been repaid in full. The 2019 Note allowed, if a majority of holders had elected, the conversion of the outstanding principal balance (including accrued paid-in-kind interest) into Series C convertible preferred stock at a rate equal to the lesser of $5.80 per share (adjusted for subsequent stock splits, combinations, recapitalizations or the like affecting convertible preferred stock) or the lowest purchase price per share of Series C convertible preferred stock issued after the date of the 2019 Note. In connection with our IPO, holders of the 2018 Note converted the principal amount of the 2018 Note plus any accrued and unpaid interest as of the date of conversion into 3,319,312 shares (or 1,422,767 shares as adjusted for the Reverse Stock Split) of Series A convertible preferred stock, which in turn converted into 1,422,767 shares of common stock. In addition, holders of the 2019 Note converted the principal amount of the 2019 Note plus any accrued and unpaid interest as of the date of conversion into 2,613,818 shares (or 1,120,360 shares as adjusted for the Reverse Stock Split) of Series C convertible preferred stock, which in turn converted into 1,120,360 shares of common stock.

Sunnova Energy Corporation Notes Payable.    In May 2019, we entered into an arrangement to finance $1.9 million in property insurance premiums at an annual interest rate of 5.50% over ten months. In July 2019, we entered into an arrangement to finance $4.7 million in directors and officers insurance premiums at an annual interest rate of 4.94% over eight months.

AP4 Debt.    In July 2014, we entered into a collateral-based financing agreement with Texas Capital Bank, as administrative agent, and the lenders party thereto, to obtain funding for solar energy systems, working capital and general and administrative expenses of Sunnova Energy Corporation and AP4. The initial aggregate principal amount of the commitments under the AP4 financing agreement was $90.0 million, which was increased to $110.0 million in October 2015 and then reduced to $107.1 million in December 2017. Borrowings under the AP4 financing agreement are secured by the assets of AP4, which include certain solar energy systems and the related solar service agreements, accounts receivable and note receivable.

The loans under the AP4 financing agreement bear interest at an annual rate of either LIBOR plus 3.00% or a base rate (defined as, for any day, a rate of interest per annum equal to the highest of (a) the prime rate for such day; (b) the sum of the federal funds rate for such day plus 0.50%; and (c) adjusted LIBOR for such day plus 1.00%) plus 2.00%. In addition, through December 2016, the AP4 debt accrued a commitment fee at a rate equal to 0.50% per year of the daily unused amount of the commitment. In December 2016, the loans converted to an amortizing term loan and began amortizing quarterly based on a modified mortgage style amortization schedule. The terms under the AP4 financing agreement contain certain covenants and restrictions, including a ratio of consolidated EBITDA (as defined in the AP4 financing agreement) to debt service (as defined in the AP4 financing agreement) that may not be less than 1.25 to 1.00 for any four-quarter period ending as of the end of any fiscal quarter. Furthermore, the borrowers are permitted to pay distributions so long as after giving effect thereto, the debt service coverage ratio is at least 1.0 to 1.0.

In March 2017, the AP4 financing agreement was amended to, among other things, extend the maturity date from July 2019 to July 2020. In December 2017, the AP4 financing agreement was amended to, among other things, admit into the collateral pool and borrow against certain assets previously financed under another subsidiary's financing agreement, the proceeds of which were used to repay a substantial portion of the aggregate outstanding principal amount under the subsidiary's financing agreement. In December 2018, the AP4 financing agreement was amended to, among other things, extend the start date of required excess cash flow payments from January 2019 to June 2019 and add a minimum net worth requirement.

As of March 31, 2019, AP4 was not in compliance with the debt covenant regarding the ratio of consolidated EBITDA to debt service, which is an event of default. In April 2019, AP4 exercised its right to an equity cure, which allowed Sunnova Energy Corporation to contribute approximately $106,000 to AP4 and allowed AP4 to add such amount to consolidated EBITDA for purposes of recalculating the ratio as of March 31, 2019. Subsequent to the equity cure, AP4 is in compliance with the debt covenants under the AP4 financing agreement. In June 2019, we amended the AP4 financing agreement to, among other things, (a) extend the maturity date from July 2020 to January 2021, (b) decrease the applicable margin for LIBOR loans to 2.50% and (c) change the debt covenant regarding the ratio of consolidated EBITDA to debt service to be calculated based on collections from customers and other cash receipts and disbursements (instead of consolidated EBITDA). In connection with this amendment we repaid $5.0 million of outstanding borrowings under this facility. In August 2019, AP4 conveyed its ownership interest in Sunnova Lease Vehicle 3-HI, LLC to Sunnova Energy Corporation and the security interest on the assets

110


of Sunnova Lease Vehicle 3-HI, LLC that were previously collateral securing the borrowings under the AP4 financing agreement was released. See Note 18, Subsequent Events.

AP6WII Debt.    In April 2016, AP6WII, a special purpose entity, entered into a secured revolving warehouse credit facility with Goldman Sachs Bank USA. The warehouse credit facility allowed for the pooling and transfer of eligible solar energy systems and related asset receivables on a non-recourse basis subject to certain limited exceptions. The assets and cash flows of AP6WII were not available to satisfy our obligations or any other affiliate of AP6WII and AP6WII was not liable for any of our obligations or any other affiliate of AP6WII. The creditors of AP6WII had no recourse to our other assets except as expressly set forth in the credit agreement.

The aggregate principal amount of commitments under the AP6WII warehouse credit facility was $175.0 million, which could be increased at AP6WII's request and the committed lender's discretion. The proceeds of the loans under the warehouse credit facility were available to purchase or otherwise acquire solar energy systems and certain related solar energy system assets (which we originated) directly from Sunnova Asset Portfolio 6, LLC ("AP6"), a wholly-owned subsidiary of Sunnova Asset Portfolio 6 Holdings, LLC ("AP6H") and sole member of AP6WII, pursuant to a sale and contribution agreement, fund certain reserve accounts that were required to be maintained by AP6WII in accordance with the credit agreement governing the warehouse credit facility, purchase interest rate swaps and swaptions in connection with borrowings and pay fees and expenses incurred in connection with the warehouse credit facility. The amount available for borrowings at any one time under the warehouse credit facility was limited to a borrowing base amount determined at each borrowing and calculated based on the aggregate discounted present value of remaining payments owed to AP6WII in respect of the solar energy systems transferred to AP6WII. The AP6WII credit facility had a maturity date of April 2020.

Interest on the borrowings under the warehouse credit facility was due monthly. During the commitment availability period, borrowings under the AP6WII warehouse credit facility bore interest at an annual rate equal to LIBOR or, if such rate was unavailable, a base rate, plus (a) the ratio of discounted cash flows for all eligible solar energy systems other than those subject to the loan program to the discounted cash flows for all eligible solar energy systems multiplied by 5.00% per year plus (b) the ratio of discounted cash flows for eligible solar energy systems subject to the loan program to the discounted cash flows for all eligible solar energy systems multiplied by 4.25% per year. After the availability period, interest accrued at an annual rate equal to LIBOR or, if such rate was unavailable, a base rate, plus (a) the ratio of discounted cash flows for all eligible solar energy systems other than those subject to the loan program to the discounted cash flows for all eligible solar energy systems multiplied by 5.50% per year plus (b) the ratio of discounted cash flows for eligible solar energy systems subject to the loan program to the discounted cash flows for all eligible solar energy systems multiplied by 4.75% per year. The warehouse credit facility required AP6WII to pay a fee based on the daily unused portion of the commitments under the warehouse credit facility. Since May 2018, the warehouse credit facility required AP6WII to pay an underutilization fee based on the prior twelve month's commitments meeting certain thresholds under the warehouse credit facility. The credit agreement was secured by a first priority security interest in all of AP6WII's assets. Revenues from the solar energy systems were deposited into accounts established pursuant to the warehouse credit facility and applied in accordance with a cash waterfall in the manner specified in the warehouse credit facility. AP6WII was also required to maintain a liquidity reserve account and an inverter replacement reserve account for the benefit of the lenders under the warehouse credit facility, each of which must remain funded at all times to the levels specified in the credit agreement (see Note 2, Significant Accounting Policies).

In connection with the AP6WII warehouse credit facility, certain of our affiliates received a fee for managing and servicing the solar energy systems pursuant to management and servicing agreements. In addition, Sunnova Energy Corporation had guaranteed (a) the manager's obligations to manage the solar energy systems pursuant to the management agreement, (b) the servicer's obligations to service the solar energy systems pursuant to the servicing agreement, (c) Sunnova Intermediate Holdings, LLC's, AP6H's and AP6's obligations to repurchase or substitute certain ineligible solar energy systems eventually sold to AP6WII pursuant to the sale and contribution agreement and (d) certain indemnification obligations related to our affiliates in connection with the AP6WII warehouse credit facility, but did not provide a general guarantee of the creditworthiness of the assets of AP6WII pledged as the collateral for the warehouse credit facility. Under the limited guarantee, Sunnova Energy Corporation was subject to certain financial covenants regarding tangible net worth and unrestricted liquidity (including unrestricted cash and availability under other debt and equity financing arrangements).

In April 2017, the AP6WII warehouse credit facility was amended to, among other things, extend the availability period from April 2017 to April 2019, extend the maturity date from April 2018 to April 2020 and change the borrowing base and interest amounts to be calculated separately for PPAs and leases versus solar energy systems subject to the loan program. In June 2019, we fully repaid the aggregate outstanding principal amount and terminated the AP6WII warehouse credit facility.

HELI Debt and Securitization.    In April 2017, we pooled and transferred eligible solar energy systems and the related asset receivables into HELI, a special purpose entity, that issued $191.8 million in aggregate principal amount of Series 2017-1

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Class A solar asset-backed notes, $18.0 million in aggregate principal amount of Series 2017-1 Class B solar asset-backed notes and $45.0 million in aggregate principal amount of Series 2017-1 Class C solar asset-backed notes (collectively, the "Notes") with a maturity date of September 2049. The Notes were issued at a discount of 0.05% for Class A, 9.28% for Class B and 8.65% for Class C and bear interest at an annual rate equal to 4.94%, 6.00% and 8.00%, respectively. As of December 31, 2019, these solar energy systems had a carrying value of $296.8 million and are included in property and equipment, net in the consolidated balance sheet. The cash flows generated by these solar energy systems are used to service the semi-annual principal and interest payments on the Notes and satisfy HELI's expenses, and any remaining cash can be distributed to Helios Depositor, LLC, HELI's sole member. In connection with the Notes, certain of our affiliates receive a fee for managing and servicing the solar energy systems pursuant to management and servicing agreements. In addition, Sunnova Energy Corporation has guaranteed (a) the manager's obligations to manage the solar energy systems pursuant to the management agreement, (b) the servicer's obligations to service the solar energy systems pursuant to the servicing agreement and (c) Sunnova Asset Portfolio 5, LLC's obligations to repurchase or substitute certain ineligible solar energy systems eventually sold to HELI pursuant to the sale and contribution agreement. HELI is also required to maintain a liquidity reserve account and an inverter replacement reserve account for the benefit of the lenders under the Notes, each of which must remain funded at all times to the levels specified in the Notes (see Note 2, Significant Accounting Policies). The creditors of HELI have no recourse to our other assets except as expressly set forth in the Notes.

LAPH Debt and Securitization.    In April 2017, LAPH and its wholly-owned subsidiaries Sunnova LAP I, LLC and Sunnova LAP II, LLC, entered into a term loan agreement with Credit Suisse AG, New York Branch, as administrative agent, and the lenders party thereto, for an initial aggregate committed principal amount of $260.0 million with a maturity date of December 2018, which was amended (see below). The proceeds of the loans were available to purchase or otherwise acquire solar energy systems (which we originated) directly from Sunnova Asset Portfolio 7 Holdings, LLC ("AP7H"), the sole member of LAPH, pursuant to a sale and contribution agreement, fund certain reserve accounts that are required to be maintained by the borrowers in accordance with the loan agreement and pay fees and expenses incurred in connection with the loan agreement. The amount available for borrowings at any one time under the loan agreement was limited to a borrowing base amount determined at each borrowing and calculated based on the aggregate discounted present value of remaining payments owed to LAPH and its wholly-owned subsidiaries in respect of the solar energy systems transferred to LAPH and its wholly-owned subsidiaries.

Interest on the borrowings under the LAPH loan agreement was due monthly; however, it was amended to be due quarterly in November 2018 (see below). Class A advances under the LAPH loan agreement initially bore interest at an annual rate equal to the weighted-average cost to the lender of any commercial paper (to the extent the lender funds an advance by issuing commercial paper) plus 3.30%. Class B advances bore interest at an annual rate equal to 11.00%. The loan agreement requires the borrowers to pay a fee based on the daily unused portion of the commitments under the loan agreement. Revenues from the solar energy systems will be deposited into accounts established pursuant to the loan agreement and applied in accordance with a cash waterfall in the manner specified in the loan agreement. The borrowers are also required to maintain a liquidity reserve account and an inverter replacement reserve account for the benefit of the lenders under the loan agreement, each of which must remain funded at all times to the levels specified in the loan agreement (see Note 2, Significant Accounting Policies).

In connection with the LAPH loan agreement, certain of our affiliates receive a fee for managing and servicing the solar energy systems pursuant to management and servicing agreements. In addition, Sunnova Energy Corporation has guaranteed (a) the manager's obligations to manage the solar energy systems pursuant to the management agreement, (b) the servicer's obligations to service the solar energy systems pursuant to the servicing agreement, (c) AP7H's obligations to repurchase or substitute certain ineligible solar energy systems sold to LAPH and its wholly-owned subsidiaries pursuant to certain sale and contribution agreements and (d) certain indemnification obligations related to its affiliates in connection with the LAPH loan agreement, but does not provide a general guarantee of the creditworthiness of the assets of LAPH and its wholly-owned subsidiaries pledged as the collateral for the loan agreement. Under the limited guarantee, Sunnova Energy Corporation is subject to certain financial covenants regarding tangible net worth, working capital and restrictions on the use of proceeds from the loan agreement.

In April 2018, the LAPH loan agreement was amended to, among other things, extend the maturity date from December 2018 to May 2019. In November 2018, the LAPH loan agreement was amended to, among other things, decrease the maximum commitment amount of Class A advances to $44.2 million and of Class B advances to $0, extend the maturity date to November 2022, change the interest on Class A advances to an annual rate equal to LIBOR plus 4.50% and change the interest collection period from monthly to quarterly.

EZOP Debt and Securitization.    In April 2017, EZOP, a special purpose entity, entered into a secured revolving warehouse credit facility with Credit Suisse AG, New York Branch, as administrative agent, and the lenders party thereto, for

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an aggregate committed amount of $100.0 million with a maturity date of April 2019. The aggregate committed amount was reduced to $70.0 million in August 2017 and in March 2019 we further amended the EZOP warehouse credit facility to, among other things, extend the maturity date from April 2019 to November 2022 and increase the aggregate committed amount to $200.0 million. The warehouse credit facility allows for the pooling and transfer of eligible loans on a non-recourse basis subject to certain limited exceptions. The proceeds of the loans under the warehouse credit facility are available to purchase or otherwise acquire loans (which we originated) directly from AP7H pursuant to a sale and contribution agreement, fund certain reserve accounts that are required to be maintained by EZOP in accordance with the credit agreement and pay fees and expenses incurred in connection with the warehouse credit facility. The amount available for borrowings at any one time under the warehouse credit facility is limited to a borrowing base amount determined at each borrowing and calculated based on the aggregate discounted present value of remaining payments owed to EZOP in respect of the loans transferred to EZOP.

Interest on the borrowings under the warehouse credit facility is due monthly. Borrowings under the EZOP warehouse credit facility bear interest at an annual rate equal to the weighted-average cost to the lender of any commercial paper (to the extent the lender funds an advance by issuing commercial paper) plus 3.50% during the commitment availability period and 4.50% after the commitment availability period. In March 2019, we amended the EZOP warehouse credit facility to, among other things, adjust the interest rate on borrowings to an annual rate of adjusted LIBOR plus either 2.15% or 3.15% per annum depending on the date of the most recent takeout transaction in respect of assets securing the credit facility. In December 2019, we further amended the EZOP warehouse credit facility to, among other things, adjust the interest rate on borrowings to an annual rate of adjusted LIBOR plus either 2.35% or 3.35% per annum depending on the date of the most recent takeout transaction in respect of assets securing the credit facility. The warehouse credit facility requires EZOP to pay a fee based on the daily unused portion of the commitments under the warehouse credit facility. Revenues from the solar energy systems will be deposited into accounts established pursuant to the warehouse credit facility and applied in accordance with a cash waterfall in the manner specified in the warehouse credit facility. EZOP is also required to maintain a liquidity reserve account and an inverter replacement reserve account for the benefit of the lenders under the warehouse credit facility, each of which must remain funded at all times to the levels specified in the credit agreement (see Note 2, Significant Accounting Policies).

In connection with the EZOP warehouse credit facility, certain of our affiliates receive a fee for managing and servicing the solar energy systems pursuant to management and servicing agreements. In addition, Sunnova Energy Corporation has guaranteed (a) the manager's obligations to manage the solar energy systems pursuant to the management agreement, (b) the servicer's obligations to service the solar energy systems pursuant to the servicing agreement, (c) AP7H's obligations to repurchase or substitute certain ineligible solar energy systems sold to EZOP pursuant to certain sale and contribution agreements and (d) certain indemnification obligations related to its affiliates in connection with the EZOP warehouse credit facility, but does not provide a general guarantee of the creditworthiness of the assets of EZOP pledged as the collateral for the warehouse credit facility. Under the limited guarantee, Sunnova Energy Corporation is subject to certain financial covenants regarding tangible net worth, working capital and restrictions on the use of proceeds from the warehouse credit facility.

TEPIH Debt.    In June 2017, TEPIH entered into a loan agreement with CIT Bank, N.A., as administrative agent, and the lenders party thereto. The TEPIH loan agreement allowed for borrowings based on the present value of certain estimated cash flows from subsidiaries of TEPIH. Under the TEPIH loan agreement, TEPIH could borrow up to an aggregate committed amount of $140.0 million with a required initial borrowing of $15.0 million. The proceeds of the loans under the TEPIH loan agreement were available to purchase or reimburse Sunnova TEP I Developer, LLC ("TEPID"), the sole member of TEPIH, for a portion of the financing of acquired solar energy systems (which we originated) directly from TEPID pursuant to a contribution agreement or purchase and sale agreement, fund certain reserve accounts that were required to be maintained by TEPIH in accordance with the loan agreement and pay fees and expenses incurred in connection with the TEPIH loan agreement. The amount available for borrowings at any one time under the TEPIH loan agreement was limited to a borrowing base amount determined at each borrowing and calculated based on the aggregate discounted present value of remaining payments owed to TEPIH in respect of the solar energy systems owned by certain subsidiaries of TEPIH. The TEPIH loan agreement had a maturity date of five years from the last day of the availability period, which was defined as the earlier of (a) June 2018, (b) the date the aggregate committed amount had been fully utilized or (c) the date an event of default had occurred. In June 2018, the TEPIH loan agreement was amended to extend the availability period from June 2018 to December 2018. In March 2019, we fully repaid the aggregate outstanding principal amount under the TEPIH loan agreement, which was terminated at that time.

Interest on the borrowings under the TEPIH loan agreement was due quarterly. Borrowings under the TEPIH loan agreement bore interest at an annual rate of either LIBOR plus the applicable margin or a base rate (defined as, for any day, a rate of interest per annum equal to the highest of (a) the prime rate for such day, (b) the sum of the federal funds effective rate for such day plus 0.50% and (c) LIBOR for one month plus 1.00%) plus the applicable margin. The applicable margin increased during the life of the facility and was (a) 3.00% for LIBOR loans and 2.00% for base rate loans from loan inception through the last day of the availability period, (b) 3.25% for LIBOR loans and 2.25% for base rate loans from the last day of the

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availability period through the three year anniversary of the last day of the availability period and (c) 3.50% for LIBOR loans and 2.50% for base rate loans from the three year anniversary of the last day of the availability period through the maturity date.

TEPIIH Debt.    In August 2018, TEPIIH entered into a revolving credit facility with Credit Suisse AG, New York Branch, as administrative agent, and the lenders party thereto. The TEPIIH revolving credit facility allows for borrowings based on the aggregate value of solar assets owned by subsidiaries of TEPIIH subject to certain excess concentration limitations. Under the TEPIIH revolving credit facility, TEPIIH may borrow up to an initial aggregate committed amount of $125.0 million with a maximum commitment amount of $175.0 million. The proceeds from the revolving credit facility are available for funding certain reserve accounts required by the revolving credit facility, making distributions to the parent of TEPIIH and paying fees incurred in connection with closing the revolving credit facility. The TEPIIH revolving credit facility had a maturity date of August 2022. In March 2019, we amended the TEPIIH revolving credit facility to, among other things, extend the maturity date from August 2022 to November 2022, increase the aggregate committed amount to $150.0 million and increase the maximum commitment amount to $250.0 million. In September 2019, we further amended the TEPIIH revolving credit facility to, among other things, cross-collateralize the TEPIIH revolving credit facility with the TEPH revolving credit facility and implement corresponding cross-default provisions.

Interest on the borrowings under the TEPIIH revolving credit facility is due quarterly. Borrowings under the TEPIIH revolving credit facility bear interest at an annual rate of either LIBOR divided by a percentage equal to 100% minus a reserve percentage or a base rate (defined as, for any day, a rate of interest per annum equal to the highest of (a) the prime rate for such day and (b) the sum of the weighted average of the rates on overnight federal funds transactions with members of the federal reserve system arranged by federal funds brokers as published for such day plus 0.50%) plus an applicable margin. See Note 18, Subsequent Events.

HELII Debt and Securitization.    In November 2018, we pooled and transferred eligible solar energy systems and the related asset receivables into HELII, a special purpose entity, that issued $202.0 million in aggregate principal amount of Series 2018-1 Class A solar asset-backed notes and $60.7 million in aggregate principal amount of Series 2018-1 Class B solar asset-backed notes (collectively, the "Notes II") with a maturity date of July 2048. The Notes II were issued at a discount of 0.02% for Class A and 0.02% for Class B and bear interest at an annual rate equal to 4.87% and 7.71%, respectively. As of December 31, 2019, these solar energy systems had a carrying value of $330.9 million and are included in property and equipment, net in the consolidated balance sheet. The cash flows generated by these solar energy systems are used to service the semi-annual principal and interest payments on the Notes II and satisfy HELII's expenses, and any remaining cash can be distributed to Helios Depositor II, LLC, HELII's sole member. In connection with the Notes II, certain of our affiliates receive a fee for managing and servicing the solar energy systems pursuant to management and servicing agreements. In addition, Sunnova Energy Corporation has guaranteed (a) the manager's obligations to manage the solar energy systems pursuant to the management agreement, (b) the servicer's obligations to service the solar energy systems pursuant to the servicing agreement and (c) Sunnova ABS Holdings, LLC's obligations to repurchase or substitute certain ineligible solar energy systems eventually sold to HELII pursuant to the sale and contribution agreement. HELII is also required to maintain a liquidity reserve account, an inverter replacement reserve account and a cash trap reserve account for the benefit of the lenders under the Notes II, each of which must remain funded at all times to the levels specified in the Notes II (see Note 2, Significant Accounting Policies). The creditors of HELII have no recourse to our other assets except as expressly set forth in the Notes II.

RAYSI Debt and Securitization.    In March 2019, we pooled and transferred eligible solar energy systems and the related asset receivables into RAYSI, a special purpose entity, that issued $118.1 million in aggregate principal amount of Series 2019-1 Class A solar asset-backed notes with a maturity date of April 2044 and $15.0 million in aggregate principal amount of Series 2019-1 Class B solar asset-backed notes with a maturity date of April 2034. The notes were issued with no discount for Class A and at a discount of 6.50% for Class B and bear interest at an annual rate equal to 4.95% and 6.35%, respectively. In June 2019, RAYSI issued $6.4 million in aggregate principal amount of 2019-2 Class B solar asset-backed notes with a maturity date of April 2034 pursuant to a supplemental note purchase agreement at a discount rate of 10.50% and bear interest at an annual rate equal to 6.35%. The notes issued by RAYSI are referred to as the "RAYSI Notes". The cash flows generated by these solar energy systems are used to service the semi-annual principal and interest payments on the RAYSI Notes and satisfy RAYSI's expenses, and any remaining cash can be distributed to Sunnova RAYS Depositor II, LLC, RAYSI's sole member. In connection with the RAYSI Notes, certain of our affiliates receive a fee for managing and servicing the solar energy systems pursuant to management, servicing, facility administration and asset management agreements. In addition, Sunnova Energy Corporation has guaranteed, among other things, (a) the obligations of certain of our subsidiaries to manage and service the solar energy systems pursuant to management, servicing, facility administration and asset management agreements, (b) the managing member's obligations, in such capacity, under the related financing fund's limited liability company agreement and (c) certain of our subsidiaries' obligations to repurchase or substitute certain ineligible solar energy systems eventually sold to RAYSI pursuant to the related sale and contribution agreement. RAYSI is also required to maintain a liquidity reserve account,

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a supplemental reserve account for inverter replacement and financing fund purchase option exercises, a storage system reserve account and a cash trap reserve account for the benefit of the lenders under the RAYSI Notes, each of which must remain funded at all times to the levels specified in the RAYSI Notes. The creditors of RAYSI have no recourse to our other assets except as expressly set forth in the RAYSI Notes.

HELIII Debt.    In June 2019, we pooled and transferred eligible solar loans and the related receivables into HELIII, a special purpose entity, that issued $139.7 million in aggregate principal amount of Series 2019-A Class A solar loan-backed notes, $14.9 million in aggregate principal amount of Series 2019-A Class B solar loan-backed notes and $13.0 million in aggregate principal amount of Series 2019-A Class C solar loan-backed notes (collectively, the "HELIII Notes") with a maturity date of June 2046. The HELIII Notes were issued at a discount of 0.03% for Class A, 0.01% for Class B and 0.03% for Class C and bear interest at an annual rate of 3.75%, 4.49% and 5.32%, respectively. The cash flows generated by these solar loans are used to service the semi-annual principal and interest payments on the HELIII Notes and satisfy HELIII's expenses, and any remaining cash can be distributed to Sunnova Helios III Depositor, LLC, HELIII's sole member. In connection with the HELIII Notes, certain of our affiliates receive a fee for managing and servicing the solar energy systems pursuant to management and servicing agreements. In addition, Sunnova Energy Corporation has guaranteed, among other things, (a) the obligations of certain of our subsidiaries to manage and service the solar energy systems pursuant to management and servicing agreements, (b) the managing member's obligations, in such capacity, under the related financing fund's limited liability company agreement and (c) certain of our subsidiaries' obligations to repurchase or substitute certain ineligible solar loans eventually sold to HELIII pursuant to the related sale and contribution agreement. HELIII is also required to maintain a reserve account, a supplemental reserve account for inverter replacement and a capitalized interest reserve account for the benefit of the holders of the HELIII Notes, each of which must remain funded at all times to the levels specified in the HELIII Notes. The creditors of HELIII have no recourse to our other assets except as expressly set forth in the HELIII Notes.

TEPH Debt.    In September 2019, TEPH, a wholly owned subsidiary of SEI, entered into a revolving credit facility with Credit Suisse AG, New York Branch, as administrative agent, and the lenders party thereto. The TEPH revolving credit facility allows for borrowings based on the aggregate value of solar assets owned by subsidiaries of TEPH subject to certain excess concentration limitations. Under the TEPH revolving credit facility, TEPH may borrow up to an initial aggregate committed amount of $100.0 million with a maximum commitment amount of $150.0 million and a maturity date of November 2022. The proceeds from the revolving credit facility are available for funding certain reserve accounts required by the revolving credit facility, making distributions to the parent of TEPH and paying fees incurred in connection with closing the revolving credit facility. The revolving credit facility is non-recourse to SEI and is secured by net cash flows from PPAs and leases available to the borrower after distributions to tax equity investors and payment of certain operating, maintenance and other expenses. This facility is cross-collateralized with the TEPIIH revolving credit facility and contains corresponding cross-default provisions. Sunnova Energy Corporation guarantees the performance of certain affiliates who manage the collateral related to the credit facility as well as certain indemnity and repurchase obligations. Under the limited guarantee, Sunnova Energy Corporation is subject to certain financial covenants regarding tangible net worth, working capital and restrictions on the use of proceeds from the facility. In December 2019, we amended the TEPH revolving credit facility to, among other things, (a) modify the borrowing base eligibility criteria for certain solar assets relating to the timing of the expected first payments from such solar assets, (b) modify the calculation of the amount required to be deposited into the liquidity reserve account, (c) delay the application of concentration limits for an additional 90 days, (d) temporarily increase the borrowing base applied to certain solar assets and (e) include additional provisions regarding qualified financial contract rules.

Borrowings under the TEPH revolving credit facility are made in Class A loans and Class B loans. The TEPH revolving credit facility has an advance rate equal to approximately 60% of the value of the solar projects in the portfolio that have not yet begun construction and 80% of the value of the solar projects that have reached substantial completion. Interest on the borrowings under the TEPH revolving credit facility is due quarterly. Borrowings under the TEPH revolving credit facility bear interest at an annual rate of either LIBOR divided by a percentage equal to 100% minus a reserve percentage or a base rate (defined as, for any day, a rate of interest per annum equal to the highest of (a) the prime rate for such day and (b) the sum of the weighted average of the rates on overnight federal funds transactions with members of the federal reserve system arranged by federal funds brokers as published for such day plus 0.50%), plus a margin of between 2.90% and 4.30%, which varies based on criteria including (a) whether the availability period has expired (which is expected to occur in May 2022), (b) whether a takeout transaction has occurred in the last 18 months and (c) the ratio of Class A loans to Class B loans outstanding at such time.

TEPINV Debt.    In December 2019, TEPINV, a special purpose wholly owned subsidiary of SEI, entered into a secured revolving credit facility with Credit Suisse AG, New York Branch, as administrative agent, and the lenders party thereto. Under the TEPINV revolving credit facility, TEPINV may borrow up to an initial aggregate committed amount of $95.2 million with a maximum commitment amount of $137.6 million and a maturity date of the earlier of (a) 27 months from the initial purchase date of eligible equipment, (b) December 2022, (c) the date on which there is no eligible equipment in the facility and (d) such

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earlier date as when the obligations under the TEPINV revolving credit facility become due and payable, upon an acceleration or otherwise. The proceeds from the TEPINV revolving credit facility are available for purchasing certain eligible equipment the borrower intends will allow the related solar energy systems to qualify for the 30% Section 48(a) ITC by satisfying the 5% ITC Safe Harbor outlined in Internal Revenue Service ("IRS") notice 2018-59 (the "5% ITC Safe Harbor"), funding a reserve account required by the TEPINV revolving credit facility and paying fees incurred in connection with closing the TEPINV revolving credit facility.

Borrowings under the TEPINV revolving credit facility are made in Class A loans and Class B loans. The TEPINV revolving credit facility has an advance rate equal to approximately 85% of the value of certain eligible equipment. Interest on the borrowings under the TEPINV revolving credit facility is due monthly. Borrowings under the TEPINV revolving credit facility bear interest at an annual rate of either LIBOR divided by a percentage equal to 100% minus a reserve percentage or a base rate (defined as, for any day, a rate of interest per annum equal to the highest of (a) the prime rate for such day, (b) the sum of the weighted average of the rates on overnight federal funds transactions with members of the federal reserve system arranged by federal funds brokers as published for such day plus 0.50% and (c) 0%), plus a margin equal to 5.99% on a blended basis. In connection with the TEPINV revolving credit facility, certain of our affiliates receive a fee for managing the equipment pursuant to a management services agreement. In addition, Sunnova Energy Corporation has guaranteed (a) the performance obligations of certain affiliates to perform under affiliate transaction documents entered into in connection with the TEPINV revolving credit facility, (b) certain indemnification obligations related to our affiliates in connection with the TEPINV revolving credit facility, (c) the borrower's obligations under the TEPINV revolving credit facility, subject to a cap of $9.5 million, which equates to 10% of the initial commitments and (d) expenses incurred by the borrower or the administrative agent in enforcing rights under certain affiliate transaction documents or the guarantee. Under the limited guarantee, Sunnova Energy Corporation is subject to certain financial covenants regarding tangible net worth, working capital and restrictions on the use of proceeds from the TEPINV revolving credit facility.

Fair Values of Long-Term Debt.    The fair values of our long-term debt and the corresponding carrying amounts are as follows:
 
As of December 31,
 
2019
 
2018
 
Carrying
Value
 
Estimated
Fair Value
 
Carrying
Value
 
Estimated
Fair Value
 
(in thousands)
SEI convertible senior notes
$
55,000

 
$
37,964

 
$
—

 
$
—

Sunnova Energy Corporation senior secured notes
—

 
—

 
44,219

 
43,781

Sunnova Energy Corporation convertible notes
—

 
—

 
16,500

 
16,442

Sunnova Energy Corporation notes payable
2,428

 
2,428

 
—

 
—

AP4 secured term loan
92,478

 
92,478

 
104,062

 
104,062

AP6WII warehouse credit facility
—

 
—

 
54,603

 
54,603

HELI solar asset-backed notes
222,305

 
223,895

 
235,357

 
229,766

LAPH secured term loan
42,876

 
42,876

 
44,205

 
44,205

EZOP warehouse credit facility
121,400

 
121,400

 
58,200

 
58,200

TEPIH secured term loan
—

 
—

 
110,595

 
110,595

TEPIIH revolving credit facility
234,650

 
234,650

 
57,552

 
57,552

HELII solar asset-backed notes
254,314

 
281,850

 
262,700

 
274,857

RAYSI solar asset-backed notes
133,155

 
139,004

 
—

 
—

HELIII solar loan-backed notes
154,573

 
155,701

 
—

 
—

TEPH revolving credit facility
90,325

 
90,325

 
—

 
—

TEPINV revolving credit facility
95,207

 
95,207

 
—

 
—

Total (1)
$
1,498,711

 
$
1,517,778

 
$
987,993

 
$
994,063



(1) Amounts exclude the net deferred financing costs and net debt discounts of $54.8 million and $28.1 million as of December 31, 2019 and 2018, respectively.

For the AP4, AP6WII, LAPH, EZOP, TEPIH, TEPIIH, TEPH and TEPINV debt, the estimated fair values as of December 31, 2019 and 2018 approximate the carrying amounts due primarily to the variable nature of the interest rates of the

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underlying instruments. For the notes payable, the estimated fair value as of December 31, 2019 approximates the carrying amount due primarily to the short-term nature of the instruments. For the convertible senior notes as of December 31, 2019, the senior secured notes and convertible notes as of December 31, 2018 and for the HELI, HELII, RAYSI and HELIII debt as of December 31, 2019 and 2018, we determined the estimated fair values based on a yield analysis of similar type debt.

Principal Maturities of Long-Term Debt.    As of December 31, 2019, the principal maturities of our long-term debt were as follows:
 
Principal Maturities
of Long-Term Debt
 
(in thousands)
2020
$
97,464

2021
154,285

2022
504,434

2023
74,649

2024
32,949

2025 and thereafter
634,930

Total
$
1,498,711



(9) Derivative Instruments

Interest Rate Swaps on AP4 Debt.    During the year ended December 31, 2018, AP4 unwound all outstanding interest rate swaps with an aggregate notional amount of $105.2 million and received cash of $666,000. AP4 subsequently entered into an interest rate swap with a notional amount of $105.2 million. In April 2018, the notional amount of the interest rate swap began decreasing to match AP4's estimated quarterly principal payments on the debt. See Note 18, Subsequent Events.

Interest Rate Swaps on AP6WII Debt.    During the years ended December 31, 2019 and 2018, AP6WII entered into interest rate swaps for an aggregate notional amount of $103.5 million and $63.6 million, respectively, to economically hedge its exposure to the variable interest rates on a portion of the outstanding AP6WII debt. During the year ended December 31, 2019, the aggregate outstanding principal amount under the AP6WII warehouse credit facility was fully repaid, AP6WII unwound interest rate swaps with an aggregate notional amount of $84.1 million and recorded a realized loss of $8.7 million. During the year ended December 31, 2018, AP6WII unwound interest rate swaps with an aggregate notional amount of $101.4 million and recorded a realized gain of $5.7 million. No collateral was posted for the interest rate swaps as they are secured under the AP6WII warehouse credit facility.

Interest Rate Swaps on LAPH Debt.    During the year ended December 31, 2018, LAPH entered into interest rate swaps for an aggregate notional amount of $44.2 million to economically hedge its exposure to the variable interest rates on a portion of the outstanding LAPH debt. In January 2019, the notional amount of the interest rate swaps began decreasing to match LAPH's estimated quarterly principal payments on the debt. During the year ended December 31, 2018, LAPH unwound an interest rate swap with a notional amount of $224.2 million and recorded a realized gain of $11.5 million. No collateral was posted for the interest rate swap as it is secured under the LAPH loan agreement.

Interest Rate Swaps on EZOP Debt.    During the years ended December 31, 2019 and 2018, EZOP entered into interest rate swaps for an aggregate notional amount of $255.8 million and $102.6 million, respectively, to economically hedge its exposure to the variable interest rates on a portion of the outstanding EZOP debt. In March 2018, the notional amount of the interest rate swaps began decreasing to match EZOP's estimated monthly principal payments on the debt. During the year ended December 31, 2019, EZOP unwound interest rate swaps with a notional amount of $264.6 million and recorded a realized gain of $81,000. No collateral was posted for the interest rate swap as it is secured under the EZOP warehouse credit facility.

Interest Rate Swaps on TEPIH Debt.    During the year ended December 31, 2018, TEPIH entered into interest rate swaps for an aggregate notional amount of $41.7 million to economically hedge its exposure to the variable interest rates on a portion of the outstanding TEPIH debt. In January 2018, the notional amount of the interest rate swaps began decreasing to match TEPIH's estimated quarterly principal payments on the debt. No collateral was posted for the interest rate swaps as they are secured under the TEPIH loan agreement. During the year ended December 31, 2019, the aggregate outstanding principal amount under the TEPIH loan agreement was fully repaid, TEPIH unwound interest rate swaps with an aggregate notional amount of $102.9 million and recorded a realized loss of $3.5 million.

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Interest Rate Swaps on TEPIIH Debt.    During the years ended December 31, 2019 and 2018, TEPIIH entered into interest rate swaps for an aggregate notional amount of $171.2 million and $54.7 million, respectively, to economically hedge its exposure to the variable interest rates on a portion of the outstanding TEPIIH debt. Beginning in October 2020, the notional amount of the interest rate swaps decreases to match TEPIIH's estimated quarterly principal payments on the debt. No collateral was posted for the interest rate swaps as they are secured under the TEPIIH revolving credit facility. See Note 18, Subsequent Events.

Interest Rate Swaps on TEPH Debt.    During the year ended December 31, 2019, TEPH entered into interest rate swaps for an aggregate notional amount of $103.1 million to economically hedge its exposure to the variable interest rates on a portion of the outstanding TEPH debt. Beginning in July 2022, the notional amount of the interest rate swap decreases to match TEPH's estimated quarterly principal payments on the debt. No collateral was posted for the interest rate swaps as they are secured under the TEPH revolving credit facility.

The following table presents a summary of the outstanding derivative instruments:
 
As of December 31,
 
2019
 
2018
 
Effective
Date
 
Termination
Date
 
Fixed
Interest
Rate
 
Aggregate
Notional
Amount
 
Effective
Date
 
Termination
Date
 
Fixed
Interest
Rate
 
Aggregate
Notional
Amount
 
(in thousands, except interest rates)
AP4
March 2018
 
July 2020
 
2.338%
 
$
99,762

 
March 2018
 
July 2020
 
2.338%
 
$
102,921

AP6WII

 

 
—%
 
—

 
April 2019
 
April 2019 -
April 2029
 
2.402% -
3.254%
 
72,025

LAPH
November 2018
 
October 2036
 
3.409%
 
43,298

 
November 2018
 
October 2036
 
3.409%
 
44,205

EZOP
June 2019 -
November 2019
 
July 2029 -
March 2030
 
1.631% -
2.620%
 
100,083

 
March 2018
- April 2019
 
April 2019 -
March 2027
 
1.900% -
3.014%
 
55,290

TEPIH

 

 
—%
 
—

 
June 2017 -
December 2018
 
April 2033 -
January 2035
 
2.350% -
3.104%
 
99,536

TEPIIH
September 2018
- November 2019
 
July 2031 -
October 2041
 
1.909% -
3.383%
 
225,845

 
September 2018 -
December 2018
 
July 2031 -
October 2041
 
2.995% -
3.383%
 
54,675

TEPH
September 2019
- January 2023
 
January 2023
- July 2034
 
1.620% -
1.928%
 
55,115

 
 
 
 
 
—%
 
—

Total
 
 
 
 
 
 
$
524,103

 
 
 
 
 
 
 
$
428,652


The following table presents the fair value of the interest rate swaps as recorded in the consolidated balance sheets:
 
As of December 31,
 
2019
 
2018
 
(in thousands)
Other assets
$
360

 
$
270

Other current liabilities
(397
)
 
—

Other long-term liabilities
(27,092
)
 
(8,161
)
Total, net
$
(27,129
)
 
$
(7,891
)


We did not designate the interest rate swaps and swaptions as hedging instruments for accounting purposes. As a result, we recognize changes in fair value immediately in interest expense, net. The following table presents the impact of the interest rate swaps and swaptions as recorded in the consolidated statements of operations:
 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
 
(in thousands)
Realized (gain) loss
$
13,195

 
$
(17,004
)
 
$
3,295

Unrealized loss
19,237

 
6,100

 
5,944

Total
$
32,432

 
$
(10,904
)
 
$
9,239



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(10) Income Taxes

Our effective income tax rate is 0% for the years ended December 31, 2019, 2018 and 2017. Total income tax differs from the amounts computed by applying the statutory income tax rate to loss before income tax primarily as a result of our valuation allowance. The sources of these differences are as follows:
 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
 
(in thousands)
Loss before income tax
$
(133,434
)
 
$
(68,409
)
 
$
(90,182
)
Statutory federal tax rate
21
%
 
21
%
 
35
%
Tax benefit computed at statutory rate
(28,021
)
 
(14,366
)
 
(31,564
)
 
 
 
 
 
 
State income tax, net of federal benefit
(8,344
)
 
(4,308
)
 
(3,406
)
 
 
 
 
 
 
Adjustments from permanent differences:
 
 
 
 
 
Enactment of the Tax Cuts and Jobs Act
—

 
—

 
6,118

Redeemable noncontrolling interests
(2,293
)
 
(1,226
)
 
—

ITC recapture
296

 
989

 
—

Other
852

 
234

 
1,185

Increase in valuation allowance, net
37,510

 
18,677

 
27,667

Total income tax
$
—

 
$
—

 
$
—



State, federal and foreign income taxes are $0 for the years ended December 31, 2019, 2018 and 2017. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) are as follows:
 
As of December 31,
 
2019
 
2018
 
(tax effected, in thousands)
Federal net operating loss carryforward
$
169,379

 
$
137,810

State net operating loss carryforward
49,565

 
38,659

ITC carryforward
246,828

 
226,378

Federal unused interest deduction carryforward
22,559

 
10,202

Investment in certain financing arrangements
36,999

 
16,374

Other deferred tax assets
20,801

 
11,531

Deferred tax assets
546,131

 
440,954

 
 
 
 
Fixed asset basis difference
(235,510
)
 
(188,087
)
Investment in certain financing arrangements
(22,826
)
 
(5,391
)
Other deferred tax liabilities
(2,819
)
 
(874
)
Deferred tax liabilities
(261,155
)
 
(194,352
)
 
 
 
 
Valuation allowance
(284,976
)
 
(246,602
)
Net deferred tax asset
$
—

 
$
—



Enactment of the Tax Cuts and Jobs Act.    In December 2017, the U.S. enacted tax legislation commonly known as the Tax Cuts and Jobs Act. This law significantly changed U.S. corporate income tax laws by, among other things, reducing the U.S. federal corporate income tax rate from a highest marginal rate of 35% to a flat rate of 21% beginning in 2018. During the year ended December 31, 2017, we recognized income tax expense of $6.1 million for the revaluation of the net deferred tax

119


asset based on a U.S. federal corporate income tax rate of 21%, which was fully offset by a reduction in the net deferred tax asset valuation allowance.

A full valuation allowance of $285.0 million and $246.6 million was recorded against our net deferred tax assets as of December 31, 2019 and 2018, respectively. We believe it is not more likely than not that future taxable income and the reversal of deferred tax liabilities will be sufficient to realize our net deferred tax assets. Our estimated federal tax net operating loss carryforward as of December 31, 2019 is approximately $806.6 million, which will begin to expire in 2032 if not utilized. We also generated $20.5 million of Section 48(a) ITCs in 2019 for a net $246.8 million through December 31, 2019, which will begin to expire in 2033 if not utilized.

We assessed whether we had any significant uncertain tax positions taken in a filed tax return, planned to be taken in a future tax return or claim, or otherwise subject to interpretation and determined there were none not more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position, or prospectively approved when such approval may be sought in advance. Accordingly, we recorded no reserve for uncertain tax positions. Should a provision for any interest or penalties relative to unrecognized tax benefits be necessary, it is our policy to accrue for such in our income tax accounts. There were no such accruals as of December 31, 2019 and 2018 and we do not expect a significant change in gross unrecognized tax benefits in the next twelve months. Our tax years 2012 through 2018 remain subject to examination by the IRS and the states and territories in which we operate.


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(11) Detail of Certain Subsidiary Assets and Liabilities

As discussed in Note 8, Long-Term Debt, in April 2017, LAPH and EZOP entered into a loan agreement and warehouse credit facility, respectively, that allows for the pooling and transfer of eligible solar energy systems and related asset receivables on a basis that is generally non-recourse. Under the agreements, the loan proceeds of LAPH and EZOP are available to purchase or otherwise acquire solar energy systems and certain related assets directly from AP7H pursuant to a sale and contribution agreement. In September 2019, TEPH entered into a loan agreement that allows TEPH to borrow on the aggregate value of solar assets owned by subsidiaries of TEPH pursuant to a pledge agreement. The following table presents the detail of assets and liabilities of certain subsidiaries as recorded in the consolidated balance sheet:
 
As of December 31, 2019
 
Sunnova
Energy
Corporation
Consolidated
 
LAPH
Consolidated
 
EZOP
 
TEPH
Consolidated
 
(in thousands)
Assets
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash
$
82,788

 
$
1,323

 
$
2,143

 
$
14,672

Accounts receivable—trade, net
10,672

 
497

 
367

 
295

Accounts receivable, net—affiliates
—

 
—

 
78

 
—

Accounts receivable—other
6,147

 
—

 
—

 
4

Other current assets
174,016

 
172

 
5,314

 
47,388

Total current assets
273,623

 
1,992

 
7,902

 
62,359

 
 
 
 
 
 
 
 
Property and equipment, net
1,745,060

 
54,558

 
—

 
168,348

Customer notes receivable, net
297,975

 
—

 
125,950

 
—

Other assets
169,712

 
1,815

 
6,629

 
5,564

Total assets
$
2,486,370

 
$
58,365

 
$
140,481

 
$
236,271

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
Accounts payable
$
36,190

 
$
14

 
$
16

 
$
247

Accounts payable, net—affiliates
—

 
1,220

 
—

 
80,298

Accrued expenses
39,544

 
87

 
44

 
282

Current portion of long-term debt
97,464

 
1,392

 
—

 
—

Other current liabilities
21,720

 
818

 
165

 
697

Total current liabilities
194,918

 
3,531

 
225

 
81,524

 
 
 
 
 
 
 
 
Long-term debt, net
1,308,812

 
40,727

 
119,222

 
89,680

Other long-term liabilities
127,406

 
7,606

 
27,796

 
1,442

Total liabilities
$
1,631,136

 
$
51,864

 
$
147,243

 
$
172,646



(12) Related-Party Transactions

Sunnova Debt.    Certain of our affiliates who have representatives on our Board were holders of the senior secured notes and the convertible notes. In connection with our IPO, we redeemed the senior secured notes for cash and the holders of the convertible notes converted the principal amount plus accrued and unpaid interest into shares of common stock. See Note 8, Long-Term Debt. We have classified these related transactions as such in the consolidated balance sheet as of December 31, 2018 and in the consolidated statements of operations and consolidated statements of cash flows for the years ended December 31, 2019, 2018 and 2017.


121


Promissory Notes.    In March 2018, we entered into a bonus agreement with an executive officer providing that each year beginning in January 2019, one-fourth of the outstanding loan balance (and related accrued and unpaid interest) under the promissory notes executed by that officer and an entity controlled by that officer, in favor of Sunnova Energy Corporation, in combined aggregate principal amounts totaling $1.7 million (the "Officer Notes"), was to be forgiven provided that officer remained employed through the applicable forgiveness date, such that the full amount of the Officer Notes would be forgiven as of January 2022. In January 2019, one-fourth of the balance of the Officer Notes was forgiven. In June 2019, as additional bonus compensation, the remaining principal and interest in the amount of $1.4 million associated with the Officer Notes was forgiven and Sunnova Energy Corporation agreed to pay the officer a bonus to reimburse the officer for the expected tax liability associated with such forgiveness of $892,000, which was paid in August 2019.

(13) Redeemable Noncontrolling Interests

In February 2017, we formed TEPI, a subsidiary of Sunnova TEP I Manager, LLC, which is the Class B member of TEPI. In March 2017, we admitted a tax equity investor as the Class A member of TEPI. The Class A member of TEPI made an initial capital commitment of $80.0 million and increased this commitment to $91.1 million in November 2017 and to $97.5 million in December 2017. In October 2017, we formed TEPII and in December 2017, we formed TEPIIB, each a subsidiary of Sunnova TEP II Manager, LLC, which is the Class B member of TEPII and TEPIIB. In December 2017, we admitted a tax equity investor as the Class A member of TEPII and TEPIIB. The Class A member of TEPII and TEPIIB made an initial capital commitment of $30.0 million and $40.0 million to TEPII and TEPIIB, respectively, and increased this commitment to $57.0 million for TEPIIB in May 2018. In January 2019, we admitted tax equity investors as the Class A members of TEPIII, a subsidiary of Sunnova TEP III Manager, LLC which is the Class B member of TEPIII. The Class A members of TEPIII made a total capital commitment of $50.0 million. In June 2019, the Class A member of TEPII increased its commitment from $30.0 million to $45.0 million. In August 2019, we admitted a tax equity investor as the Class A member of TEPIVA, a subsidiary of Sunnova TEP IV-A Manager, LLC, which is the Class B member of TEPIVA. The Class A member of TEPIVA made a total capital commitment of $75.0 million. In December 2019, we admitted a tax equity investor as the Class A member of TEPIVB, a subsidiary of Sunnova TEP IV-B Manager, LLC, which is the Class B member of TEPIVB. The Class A member of TEPIVB made a total capital commitment of $50.0 million.

The purpose of the tax equity entities is to own and operate a portfolio of residential solar energy systems and energy storage systems. The terms of the tax equity entities' operating agreements contain allocations of income (loss), Section 48(a) ITCs and cash distributions that vary over time and adjust between the members on an agreed date (referred to as the flip date). The operating agreements specify either a calendar flip date or an internal rate of return ("IRR") flip date. The calendar flip date is based on the passage of a fixed period of time that generally corresponds to the expiration of the recapture period associated with Section 48(a) ITCs or a year thereafter. The IRR flip date is the date on which the tax equity investor has achieved a contractual rate of return. From inception through the flip date, the Class A members' allocation of income (loss) and Section 48(a) ITCs is generally 93% to 99% and the Class B members' allocation of income (loss) and Section 48(a) ITCs is generally 1% to 7%. After the related flip date, the Class A members' allocation of income (loss) will decrease to a range of 1% to 7% and the Class B members' allocation of income (loss) will increase to a range of 93% to 99%.

The redeemable noncontrolling interests are comprised of Class A units, which represent the tax equity investors' interest in the tax equity entities, and are classified between liabilities and equity in the consolidated balance sheets. Both the Class A members and Class B members have written call options to allow either member to redeem the other member's interest in the tax equity entities upon the occurrence of certain contingent events, such as bankruptcy, dissolution/liquidation and forced divestitures of the tax equity entities. Additionally, the Class B members have the option to purchase all Class A units, which is typically exercisable at any time during the nine-month period commencing upon the applicable flip date, and also have the contingent obligation to purchase all Class A units if the Class A members exercise their right to withdraw, which is typically exercisable at any time during the nine-month period commencing upon the applicable flip date. The carrying values of the redeemable noncontrolling interests were equal to the redemption values as of December 31, 2019 and 2018, with the exception of TEPIVA and TEPIVB, for which we are not required to carry a redemption value.

Guarantees.    We are contractually obligated to make certain Class A members whole for losses they may suffer in certain limited circumstances resulting from the disallowance or recapture of Section 48(a) ITCs. We have concluded the likelihood of a significant recapture event is remote and consequently have not recorded a liability for any potential recapture exposure. The maximum potential future payments we could be required to make under this obligation would depend on the IRS successfully asserting upon audit the fair market values of the solar energy systems sold or transferred to the tax equity entities as determined by us exceed the allowable basis for the systems for purposes of claiming Section 48(a) ITCs. The fair market values of the solar energy systems and related Section 48(a) ITCs are determined and the Section 48(a) ITCs are allocated to the Class A members in accordance with the tax equity entities' operating agreements. Due to uncertainties associated with estimating the timing and amounts of distributions, the likelihood of an event that may trigger repayment,

122


forfeiture or recapture of Section 48(a) ITCs to such Class A members, and the fact that we cannot determine how the IRS will evaluate system values used in claiming Section 48(a) ITCs, we cannot determine the potential maximum future payments that are required under these guarantees.

From time to time, we incur non-performance fees, which may include, but is not limited to, delays in the installation process and interconnection to the power grid of solar energy systems and other factors. The non-performance fees are settled by either a reimbursement of a portion of the Class A members' capital or an additional payment to the Class A members. During the year ended December 31, 2019, we paid $1.3 million related to non-performance fees. During the years ended December 31, 2018 and 2017, we did not make any reimbursements or payments related to non-performance fees. As of December 31, 2019 and 2018, we recorded a liability of $566,000 and $1.3 million, respectively, related to non-performance fees.


123


(14) Stockholders' Equity

Series A and Series C Convertible Preferred Stock

The Series A and Series C convertible preferred stock was convertible into our Series A common stock at an initial conversion ratio of 1:1, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to any of our common stock and to broad-based weighted average anti-dilution protection. The Series A and Series C convertible preferred stock was mandatorily convertible into our Series A common stock upon either (a) the closing of a public offering of shares of our common stock with aggregate gross proceeds, net of underwriting discounts and commissions, of not less than $175.0 million at a per share offering price of at least 1.25 times the original purchase price of our Series A convertible preferred stock or (b) the affirmative vote of at least 80% of the shares of Series A and Series C convertible preferred stock voting as a single class and on an "as converted basis". The holders of Series A and Series C convertible preferred stock were entitled to cast the number of votes equal to the number of whole shares of Series A common stock into which the Series A and Series C convertible preferred stock held by such holders is convertible as of the record date for determining stockholders entitled to vote on such matter.

In April 2017, we increased the number of authorized voting shares of our Series A convertible preferred stock from 90,000,000 shares (or 38,576,939 shares as adjusted for the Reverse Stock Split) to 105,000,000 shares (or 45,006,429 shares as adjusted for the Reverse Stock Split). During the year ended December 31, 2017, we issued 9,409,174 shares (or 4,033,061 shares as adjusted for the Reverse Stock Split) of our Series A convertible preferred stock at $5.3246735 per share in exchange for $50.1 million in cash. Additionally, in October 2017, we retired approximately $15.2 million principal and related paid-in-kind amounts of convertible notes in exchange for 2,852,790 shares (or 1,222,799 shares as adjusted for the Reverse Stock Split) of our Series A convertible preferred stock (see Note 8, Long-Term Debt).

In March 2018, we further increased the number of authorized voting shares of our convertible preferred stock to 150,000,000 shares (or 64,294,899 shares as adjusted for the Reverse Stock Split), of which 110,000,000 shares (or 47,149,592 shares as adjusted for the Reverse Stock Split) were designated as Series A convertible preferred stock and 40,000,000 shares (or 17,145,306 shares as adjusted for the Reverse Stock Split) were designated as Series C convertible preferred stock. During the year ended December 31, 2018, we issued 30,344,827 shares (or 13,006,780 shares as adjusted for the Reverse Stock Split) of Series C convertible preferred stock at $5.80 per share in exchange for $176.0 million in cash. See below for non-cash issuance of our Series A convertible preferred stock.

In connection with our IPO, we converted 108,138,971 shares (or 46,351,877 shares as adjusted for the Reverse Stock Split) of our Series A convertible preferred stock and 32,958,645 shares (or 14,127,140 shares as adjusted for the Reverse Stock Split) of our Series C convertible preferred stock, which represented all the outstanding shares of our Series A convertible preferred stock and Series C convertible preferred stock, into 60,479,017 shares of our common stock.

Series B Convertible Preferred Stock

The Series B convertible preferred stock was convertible into our Series A common stock at a rate determined by dividing the original issue price by the conversion price of $3.73 at or after the earlier of (a) November 9, 2018 or (b) immediately prior to the consummation of a sale of Sunnova, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to any of our common stock and to broad-based weighted average anti-dilution protection. The Series B convertible preferred stock was mandatorily convertible into our Series A common stock upon either (a) the closing of the sale of shares of any of our common stock to the public at a price of at least approximately $6.6558 per share (subject to appropriate adjustments) or (b) the affirmative vote of at least 75% of the shares of Series A and Series B convertible preferred stock. Each holder of Series B convertible preferred stock was entitled to cast the number of votes equal to the number of whole shares of Series A common stock into which the Series B convertible preferred stock held by such holder were convertible as of the record date for determining stockholders entitled to vote on such matter.

In November 2017, we authorized 11,000,000 voting shares (or 4,714,959 shares as adjusted for the Reverse Stock Split) of Series B convertible preferred stock. During the year ended December 31, 2017, we issued 10,693,501 shares (or 4,583,576 shares as adjusted for the Reverse Stock Split) at $3.73 per share in exchange for $39.9 million in cash. In January 2018, we issued 30,360 shares (or 13,013 shares as adjusted for the Reverse Stock Split) of Series B convertible preferred stock at $3.73 per share in exchange for $113,000 in cash. In March 2018, we exchanged all outstanding shares of Series B convertible preferred stock, plus accrued paid-in-kind interest thereon, for 11,112,285 shares (or 4,763,086 shares as adjusted for the Reverse Stock Split) of Series A convertible preferred stock. Immediately following the exchange, we canceled all shares of Series B convertible preferred stock. As of December 31, 2018, there was no Series B convertible preferred stock outstanding.


124


Series A Common Stock

In November 2017, we increased the number of authorized voting shares of Series A common stock from 150,000,000 shares (or 64,294,899 shares as adjusted for the Reverse Stock Split) to 160,000,000 shares (or 68,581,225 shares as adjusted for the Reverse Stock Split). In March 2018, we increased the number of authorized voting shares of Series A common stock to 180,000,000 shares (or 77,153,879 shares as adjusted for the Reverse Stock Split), of which 150,000,000 shares (or 64,294,899 shares as adjusted for the Reverse Stock Split) have been reserved for the issuance of Series A common stock upon the conversion of Series A or Series C convertible preferred stock. In connection with our IPO, our Series A common stock was redesignated as common stock.

Series B Common Stock

Our Series B non-voting common stock related to our equity-based compensation plans (see Note 15, Equity-Based Compensation). As of December 31, 2018, the number of shares of common stock authorized was 20,000,000 shares (or 9,544,300 shares as adjusted for the Reverse Stock Split). In connection with our IPO, we converted 23,870 shares of our non-voting Series B common stock, which represented all the outstanding shares of our Series B common stock, into 23,870 shares of our voting Series A common stock, which was subsequently redesignated as common stock.

Common Stock

On July 24, 2019, we priced 14,000,000 shares of common stock in our IPO at a public offering price of $12.00 per share and on July 25, 2019 our common stock began trading on the New York Stock Exchange under the symbol "NOVA". On August 19, 2019, we issued and sold an additional 865,267 shares of our common stock at a public offering price of $12.00 per share pursuant to the underwriters' exercise of their option to purchase additional shares. We received aggregate net proceeds from our IPO of approximately $162.3 million, after deducting underwriting discounts and commissions of approximately $10.7 million and offering expenses of approximately $5.4 million. We recorded the offering costs in other assets in our consolidated balance sheets until closing, at which time the costs were reclassified to additional paid-in capital—common stock.

We used a portion of the net proceeds from our IPO to redeem our senior secured notes. See Note 8, Long-Term Debt. We plan to use the remaining net proceeds from our IPO for general corporate purposes, including working capital, operating expenses, capital expenditures and repayment of indebtedness.

(15) Equity-Based Compensation

Effective December 2013 and January 2015, we established and adopted two stock option plans (collectively, the "Prior Plans") after approval by our Board. The Prior Plans provided the aggregate number of shares of common stock that may be issued pursuant to stock options shall not exceed 26,032 shares. No further awards may be made under the Prior Plans.

Effective March 2016, we established and adopted a new stock option plan (the "2016 Plan") after approval by our Board. The 2016 Plan allowed for the issuance of non-qualified and incentive stock options. The 2016 Plan provided the aggregate number of shares of common stock that may be issued pursuant to stock options shall not exceed 4,288,950 shares. No further awards may be made under the 2016 Plan.

In connection with our IPO, approximately 50% of the non-vested stock options outstanding at that time, or 995,517 stock options, became exercisable and the vesting terms for all remaining stock options were amended so all stock options will be fully vested on the first anniversary of the closing date of our IPO. We recorded an additional $3.2 million of expense in July 2019 related to the accelerated vesting periods. In addition, the stock options awarded under the Prior Plans and the 2016 Plan were adjusted for the Reorganization. The adjusted awards are subject to the same vesting conditions applicable to the awards immediately prior to the Reorganization.

In connection with our IPO, our Board adopted the 2019 Long-Term Incentive Plan (the "LTIP") to incentivize employees, officers, directors and other service providers of SEI and its affiliates. The LTIP provides for the grant, from time to time, at the discretion of our Board or a committee thereof, of stock options, stock appreciation rights, stock awards, including restricted stock and restricted stock units, performance awards and cash awards. The LTIP provides the aggregate number of shares of common stock that may be issued pursuant to awards shall not exceed 5,229,318 shares. The number of shares available for issuance under the LTIP will be increased on the first day of each fiscal year beginning in 2020, in an amount equal to the lesser of (a) a number of shares such that the total number of shares that remain available for additional grants under the LTIP equals five percent of the outstanding shares of our common stock on the last day of the immediately preceding

125


fiscal year or (b) such number of shares determined by our Board. Awards granted under the LTIP contain a service condition and cease vesting for employees, consultants and directors upon termination of employment or service. During the year ended December 31, 2019, we granted 1,431,555 restricted stock units to certain employees and a director with a grant date fair value of $17.1 million, which will be recognized ratably over the applicable vesting period of each award (either one year, three years or seven years).

The Prior Plans and the 2016 Plan will only allow for settlement of stock options by the issuance of common stock and restricted stock units issued under the LTIP can generally only be settled by the issuance of common stock. Therefore, we classify the stock options and restricted stock units as equity awards. We recognize the fair value of equity-based compensation awards as compensation cost in the financial statements, beginning on the grant date. We base compensation cost on the fair value of the awards we expect to vest, recognized over the service period, and adjusted for actual forfeitures that occur before vesting. During the years ended December 31, 2019, 2018 and 2017, we recognized $9.2 million, $3.0 million and $1.5 million, respectively, of compensation expense relating to equity-based compensation awards.

Stock Options

During 2017, we, with approval of our Board, granted 950,047 stock options (or 407,204 stock options as adjusted for the Reverse Stock Split) to employees. In April 2017, we, with approval of our Board, granted 20,000 stock options (or 8,572 stock options as adjusted for the Reverse Stock Split) to a non-employee consultant. During 2017, 27,000 stock options (or 11,571 stock options as adjusted for the Reverse Stock Split) were exercised resulting in the issuance of 27,000 shares (or 11,571 shares as adjusted for the Reverse Stock Split) of common stock in exchange for an insignificant amount of cash and 4,750 stock options (or 2,034 stock options as adjusted for the Reverse Stock Split) were net exercised (and thus, no cash was received) resulting in the issuance of 2,663 shares (or 1,141 shares as adjusted for the Reverse Stock Split) of common stock. In May 2017, we modified a stock option agreement with a former employee to require a future expense of $653,000 to be recognized at the earlier of (a) a company liquidity event, as defined, or (b) April 2026, which was recognized in July 2019 in connection with our IPO.

During 2018, we, with approval of our Board, granted 4,222,850 stock options (or 1,810,016 stock options as adjusted for the Reverse Stock Split) to employees. In April 2018, we, with approval of our Board, granted 58,000 stock options (or 24,860 stock options as adjusted for the Reverse Stock Split) to non-employee consultants. During 2018, 3,250 stock options (or 1,393 stock options as adjusted for the Reverse Stock Split) were net exercised (and thus, no cash was received) resulting in the issuance of 1,505 shares (or 644 shares as adjusted for the Reverse Stock Split) of common stock.

During 2019, we, with approval of our Board, granted 94,295 stock options to employees. During 2019, 2,143 stock options were exercised resulting in the issuance of 2,143 shares of common stock in exchange for an insignificant amount of cash.

We used the following assumptions to apply the Black-Scholes option-pricing model to stock options granted during the years ended December 31, 2019, 2018 and 2017:
 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
Expected dividend yield
0.00%
 
0.00%
 
0.00%
Risk-free interest rate
2.62%
 
2.62%
 
2.11%
Expected term (in years)
7.94
 
7.94
 
8.01
Volatility
81%
 
81%
 
68%



126


The expected volatility was calculated based on the average historical volatilities of publicly traded peer companies determined by us. The risk-free interest rate used was based on the U.S. treasury yield curve in effect at the time of grant for the expected term of the stock options to be valued. The expected dividend yield is zero as we do not anticipate paying common stock dividends within the relevant time frame. The expected term has been estimated using the average of the contractual term and weighted average life of the stock options. The following table summarizes stock option activity:
 
Number
of Stock
Options
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term (Years)
 
Weighted
Average
Grant Date
Fair Value
 
Aggregate
Intrinsic
Value
 
 
 
 
 
 
 
 
 
(in thousands)
Outstanding, December 31, 2017
3,166,008

 
$
15.65

 
8.36
 
 
 
$
124

Granted
1,834,876

 
$
16.26

 
9.28
 
$
3.52

 
 
Exercised
(1,393
)
 
$
1.85

 
 
 
 
 
$
6

Forfeited
(191,101
)
 
$
15.23

 
 
 
$
3.33

 
 
Outstanding, December 31, 2018
4,808,390

 
$
15.90

 
8.09
 
 
 
$
129

Granted
94,295

 
$
13.58

 
9.07
 
$
3.11

 
 
Exercised
(2,143
)
 
$
1.85

 
 
 
 
 
$
20

Forfeited
(596,233
)
 
$
15.85

 
 
 
$
3.48

 
 
Outstanding, December 31, 2019
4,304,309

 
$
15.86

 
7.08
 
 
 
$
242

Exercisable, December 31, 2019
3,339,913

 
$
15.86

 
6.89
 
 
 
$
242

Vested and expected to vest, December 31, 2019
4,304,309

 
$
15.86

 
7.08
 
 
 
$
242

Non-vested, December 31, 2018
3,124,367

 
 
 
 
 
$
3.48

 
 
Non-vested, December 31, 2019
964,396

 
 
 
 
 
$
3.52

 
 

The number of stock options that vested during the years ended December 31, 2019 and 2018 was 1,765,410 and 577,594, respectively. The grant date fair value of stock options that vested during the years ended December 31, 2019 and 2018 was $6.0 million and $1.8 million, respectively. As of December 31, 2019, there was $1.5 million of total unrecognized compensation expense related to stock options, which is expected to be recognized over the weighted average period of 0.28 years.

Restricted Stock Units

The following table summarizes restricted stock unit activity:
 
Number of
Restricted
Stock Units
 
Weighted
Average
Grant Date
Fair Value
 
 
 
 
Outstanding, December 31, 2018
—

 


Granted
1,431,555

 
$
11.93

Forfeited
(5,416
)
 
$
12.00

Outstanding, December 31, 2019
1,426,139

 
$
11.93



No restricted stock units vested during the year ended December 31, 2019. As of December 31, 2019, there was $14.3 million of total unrecognized compensation expense related to restricted stock units, which is expected to be recognized over the weighted average period of 2.50 years.


127


(16) Basic and Diluted Net Loss Per Share

The following table sets forth the computation of our basic and diluted net loss per share:
 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
 
(in thousands, except share and per share amounts)
Net loss attributable to stockholders
$
(144,351
)
 
$
(74,246
)
 
$
(91,085
)
Dividends earned on Series A convertible preferred stock
(19,271
)
 
(36,346
)
 
(29,623
)
Dividends earned on Series B convertible preferred stock
—

 
—

 
(580
)
Dividends earned on Series C convertible preferred stock
(5,454
)
 
(5,948
)
 
—

Deemed dividends on convertible preferred stock exchange
—

 
(19,332
)
 
—

Net loss attributable to common stockholders—basic and diluted
$
(169,076
)
 
$
(135,872
)
 
$
(121,288
)
 
 
 
 
 
 
Net loss per share attributable to common stockholders—basic and diluted
$
(4.14
)
 
$
(15.74
)
 
$
(14.05
)
Weighted average common shares outstanding—basic and diluted
40,797,976

 
8,634,477

 
8,632,936



The following table presents the weighted average shares of common stock equivalents that were excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive:
 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
Equity-based compensation awards
4,954,286

 
4,307,614

 
3,408,202

Convertible preferred stock
33,960,624

 
53,112,246

 
37,977,786

Convertible senior notes
104,320

 
—

 
—



(17) Commitments and Contingencies

Legal.    We are a party to a number of lawsuits, claims and governmental proceedings which are ordinary, routine matters incidental to our business. In addition, in the ordinary course of business, we periodically have disputes with dealers and customers. We do not expect the outcomes of these matters to have, either individually or in the aggregate, a material adverse effect on our financial position or results of operations.

Performance Guarantee Obligations.    As of December 31, 2019, we recorded $6.5 million relating to our guarantee of certain specified minimum solar energy production output under our leases and loans, of which we include $4.1 million in other current liabilities and $2.4 million in other long-term liabilities in the consolidated balance sheet. As of December 31, 2018, we recorded $6.0 million relating to these guarantees, of which $2.6 million is included in other current liabilities and $3.5 million is included in other long-term liabilities in the consolidated balance sheet. The changes in our aggregate performance guarantee obligations are as follows:
 
As of December 31,
 
2019
 
2018
 
(in thousands)
Balance at beginning of period
$
6,044

 
$
4,173

Accruals for obligations issued
3,101

 
3,033

Settlements made in cash
(2,677
)
 
(1,162
)
Balance at end of period
$
6,468

 
$
6,044




128


Operating and Finance Leases.    We lease real estate and certain office equipment under operating leases and certain other office equipment under finance leases. The following table presents the detail of lease expense and lease income as recorded in general and administrative expense and other operating expense (income), respectively, in the consolidated statements of operations:
 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
 
(in thousands)
Operating lease expense
$
1,248

 
$
972

 
$
972

Finance lease amortization expense
8

 
—

 
—

Short-term lease expense
48

 
50

 
21

Variable lease expense
1,037

 
704

 
661

Sublease income
(73
)
 
(70
)
 
(41
)
Total
$
2,268

 
$
1,656

 
$
1,613



The following table presents the detail of right-of-use assets and lease liabilities as recorded in other assets and other current liabilities/other long-term liabilities, respectively, in the consolidated balance sheets:
 
As of December 31,
 
2019
 
2018
 
(in thousands)
Right-of-use assets:
 
 
 
Operating leases
$
9,668

 
$
2,586

Finance leases
5

 
—

Total right-of-use assets
$
9,673

 
$
2,586

 
 
 
 
Current lease liabilities:
 
 
 
Operating leases
$
556

 
$
871

Finance leases
5

 
—

Long-term leases liabilities
 
 
 
Operating leases
9,389

 
2,083

Total lease liabilities
$
9,950

 
$
2,954



Other information related to leases was as follows:
 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
 
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
 
 
 
 
 
Operating cash flows from operating leases
$
1,254

 
$
875

 
$
814

Financing cash flows from finance leases
8

 
—

 
—

Right-of-use assets obtained in exchange for lease obligations:
 
 
 
 
 
Operating leases
8,087

 
—

 
4,175

Finance leases
13

 
—

 
—



129


 
As of December 31,
 
2019
 
2018
Weighted average remaining lease term (years):
 
 
 
Operating leases
9.41

 
3.42

Finance leases
0.68

 
—

Weighted average discount rate:
 
 
 
Operating leases
3.94
%
 
4.63
%
Finance leases
4.26
%
 
—
%


Future minimum lease payments under our non-cancelable leases as of December 31, 2019 were as follows:
 
Operating
Leases
 
Finance
Leases
 
(in thousands)
2020
$
1,037

 
$
5

2021
1,536

 
—

2022
1,559

 
—

2023
1,594

 
—

2024
1,616

 
—

2025 and thereafter
7,617

 
—

Total
14,959

 
5

Amount representing interest
(2,603
)
 
—

Amount representing leasehold incentives
(2,411
)
 
—

Present value of future payments
9,945

 
5

Current portion of lease liability
(556
)
 
(5
)
Long-term portion of lease liability
$
9,389

 
$
—



Future minimum lease payments under our non-cancelable leases as of December 31, 2018 were as follows:
 
Operating
Leases
 
(in thousands)
2019
$
989

2020
842

2021
863

2022
512

2023
—

2024 and thereafter
—

Total
3,206

Amount representing interest
(252
)
Present value of future payments
2,954

Current portion of lease liability
(871
)
Long-term portion of lease liability
$
2,083



Letters of Credit.    In connection with various security arrangements for an office lease and merchant banking activities, we have letters of credit outstanding of $725,000 as of December 31, 2019 and 2018. The letters of credit are cash collateralized for the same amount or a lesser amount and this cash is classified as restricted cash.

Guarantees or Indemnifications.    We enter into contracts that include indemnifications and guarantee provisions. In general, we enter into contracts with indemnities for matters such as breaches of representations and warranties and covenants contained in the contract and/or against certain specified liabilities. Examples of these contracts include dealer agreements, debt

130


agreements, asset purchases and sales agreements, service agreements and procurement agreements. We are unable to estimate our maximum potential exposure under these agreements until an event triggering payment occurs. We do not expect to make any material payments under these agreements.

Dealer Commitments.    As of December 31, 2019, the net unamortized balance of payments to dealers for exclusivity and other similar arrangements was $32.8 million. Under these agreements, we paid $31.7 million during the year ended December 31, 2019 and could be obligated to make maximum payments, excluding additional amounts payable on a per watt basis if even higher thresholds are met, as follows:
 
Dealer
Commitments
 
(in thousands)
2020
$
24,184

2021
24,200

2022
25,240

2023
1,000

2024
—

2025 and thereafter
—

Total
$
74,624



Purchase Commitments.    In August 2019, we amended an agreement with a supplier in which we agreed to purchase a minimum amount of energy storage systems for five years. These purchases are recorded to inventory within other current assets in the consolidated balance sheets. Under this agreement, we could be obligated to make minimum purchases as follows:
 
Purchase
Commitments
 
(in thousands)
2020
$
22,702

2021
27,359

2022
27,243

2023
27,053

2024
20,152

2025 and thereafter
—

Total
$
124,509



Information Technology Commitments.    We have certain long-term contractual commitments related to information technology software services and licenses. Future commitments as of December 31, 2019 were as follows:
 
Information
Technology
Commitments
 
(in thousands)
2020
$
4,962

2021
3,269

2022
10

2023
—

2024
—

2025 and thereafter
—

Total
$
8,241



Restricted Net Assets.    Our various financing agreements contain provisions that restrict the ability of certain of our consolidated subsidiaries to transfer their net assets to SEI. Such restricted net assets amounted to approximately $548.1 million as of December 31, 2019.


131


(18) Subsequent Events

SOLI Debt.    In February 2020, we pooled and transferred eligible solar energy systems and the related asset receivables into Sunnova Sol Issuer, LLC ("SOLI"), a special purpose entity, that issued $337.1 million in aggregate principal amount of Series 2020-1 Class A solar asset-backed notes and $75.4 million in aggregate principal amount of Series 2020-1 Class B solar asset-backed notes (collectively, the "SOLI Notes") with a maturity date of January 2055. The SOLI Notes were issued at a discount of 0.89% for Class A and 0.85% for Class B and bear interest at an annual rate equal to 3.35% and 5.54%, respectively. The cash flows generated by these solar energy systems are used to service the quarterly principal and interest payments on the SOLI Notes and satisfy SOLI's expenses, and any remaining cash can be distributed to Sunnova Sol Depositor, LLC, SOLI's sole member. In connection with the SOLI Notes, certain of our affiliates receive a fee for managing and servicing the solar energy systems pursuant to a transaction management agreement and managing and servicing agreements. In addition, Sunnova Energy Corporation has guaranteed (a) the obligations of certain of our subsidiaries to manage and service the solar energy systems pursuant to management, servicing and transaction management agreements, (b) the managing members' obligations, in such capacity, under the related financing fund's limited liability company agreement and (c) certain of our subsidiaries' obligations to repurchase or substitute certain ineligible solar energy systems eventually sold to SOLI pursuant to the sale and contribution agreement. SOLI is also required to maintain a liquidity reserve account, a tax loss insurance proceeds account and a supplemental reserve account for the benefit of the lenders under the SOLI Notes, each of which must remain funded at all times to the levels specified in the SOLI Notes. The creditors of SOLI have no recourse to our other assets except as expressly set forth in the SOLI Notes.

AP4 Debt, TEPIIH Debt and LAPH Debt.    In February 2020, the aggregate outstanding principal amounts under the AP4 financing agreement and TEPIIH revolving credit facility of $92.0 million and $226.6 million, respectively, were fully repaid using proceeds from the SOLI Notes, all related interest rate swaps were unwound and the debt facilities were terminated. In addition, proceeds from the SOLI Notes were used to repay $32.0 million of LAPH debt.

132


(19) Selected Quarterly Financial Data (Unaudited)

The following tables present the selected quarterly financial data for the years ended December 31, 2019 and 2018.
 
Three Months Ended
 
December 31, 2019
 
September 30, 2019
 
June 30, 2019
 
March 31, 2019
 
(in thousands, except per share amounts)
Revenue (1)
$
33,614

 
$
36,615

 
$
34,612

 
$
26,715

Total operating expenses, net (1)
$
42,769

 
$
42,513

 
$
37,322

 
$
31,222

Operating loss (1)
$
(9,155
)
 
$
(5,898
)
 
$
(2,710
)
 
$
(4,507
)
Net loss (1)(2)
$
(13,762
)
 
$
(34,369
)
 
$
(49,807
)
 
$
(35,496
)
Net loss attributable to common stockholders—basic and diluted (1)(2)
$
(17,509
)
 
$
(37,590
)
 
$
(63,260
)
 
$
(50,717
)
Net loss per share attributable to common stockholders—basic and diluted (1)(2)
$
(0.21
)
 
$
(0.62
)
 
$
(7.32
)
 
$
(5.87
)

 
Three Months Ended
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
(in thousands, except per share amounts)
Revenue (1)
$
25,206

 
$
30,429

 
$
28,963

 
$
19,784

Total operating expenses, net (1)(3)
$
37,623

 
$
27,025

 
$
26,528

 
$
26,936

Operating income (loss) (1)(3)
$
(12,417
)
 
$
3,404

 
$
2,435

 
$
(7,152
)
Net loss (1)(2)
$
(39,102
)
 
$
(6,647
)
 
$
(9,224
)
 
$
(13,436
)
Net loss attributable to common stockholders—basic and diluted (1)(2)
$
(53,017
)
 
$
(17,865
)
 
$
(23,269
)
 
$
(41,721
)
Net loss per share attributable to common stockholders—basic and diluted (1)(2)
$
(6.14
)
 
$
(2.07
)
 
$
(2.69
)
 
$
(4.83
)

(1)
Fluctuations are primarily due to seasonality.
(2)
Fluctuations are primarily due to unrealized gains and losses on derivative instruments.
(3)
Fluctuations are primarily due to timing of estimates of losses from natural disasters and recoveries of business interruption insurance proceeds related to 2018.

133
SCHEDULE I PARENT COMPANY CONDENSED FINANCIAL STATEMENTS


SUNNOVA ENERGY INTERNATIONAL INC.
CONDENSED BALANCE SHEETS
(in thousands, except share amounts and share par values)

 
As of December 31,
 
2019
 
2018
Assets
 
 
 
Current assets:
 
 
 
Cash
$
696

 
$
—

Total current assets
696

 
—

 
 
 
 
Investments in subsidiaries
891,330

 
—

Total assets
$
892,026

 
$
—

 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
Current liabilities:
 
 
 
Accrued expenses
$
83

 
$
—

Total current liabilities
83

 
—

 
 
 
 
Long-term debt, net
37,607

 
—

Total liabilities
37,690

 
—

 
 
 
 
Stockholders' equity:
 
 
 
Common stock, 83,980,885 and 0 shares issued as of December 31, 2019 and 2018, respectively, at $0.0001 par value
8

 
—

Additional paid-in capital—common stock
987,760

 
—

Accumulated deficit
(133,432
)
 
—

Total stockholders' equity
854,336

 
—

Total liabilities and stockholders' equity
$
892,026

 
$
—


See accompanying notes to parent company condensed financial statements.


134
SCHEDULE I PARENT COMPANY CONDENSED FINANCIAL STATEMENTS

SUNNOVA ENERGY INTERNATIONAL INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands)

 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
Revenue
$
—

 
$
—

 
$
—

General and administrative expense
418

 
—

 
—

Operating loss
(418
)
 
—

 
—

 
 
 
 
 
 
Interest expense
83

 
—

 
—

Equity in losses of subsidiaries
132,933

 
—

 
—

Loss before income tax
(133,434
)
 
—

 
—

 
 
 
 
 
 
Income tax
—

 
—

 
—

Net loss
$
(133,434
)
 
$
—

 
$
—


See accompanying notes to parent company condensed financial statements.

135
SCHEDULE I PARENT COMPANY CONDENSED FINANCIAL STATEMENTS

SUNNOVA ENERGY INTERNATIONAL INC.
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)

 
Year Ended 
 December 31,
 
2019
 
2018
 
2017
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net cash used in operating activities
$
—

 
$
—

 
$
—

 
 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Investments in subsidiaries
(219,206
)
 
—

 
—

Distributions from subsidiaries
2

 
—

 
—

Net cash used in investing activities
(219,204
)
 
—

 
—

 
 
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Proceeds from long-term debt
38,087

 
—

 
—

Payments of deferred financing costs
(377
)
 
—

 
—

Proceeds from issuance of common stock, net
168,204

 
—

 
—

Proceeds from equity component of debt instrument, net
13,984

 
—

 
—

Other, net
2

 
—

 
—

Net cash provided by financing activities
219,900

 
—

 
—

Net increase (decrease) in cash and restricted cash
696

 
—

 
—

Cash at beginning of period
—

 
—

 
—

Cash at end of period
$
696

 
$
—

 
$
—

 
 
 
 
 
 
Supplemental cash flow information:
 
 
 
 
 
Cash paid for interest
$
—

 
$
—

 
$
—

Cash paid for income taxes
$
—

 
$
—

 
$
—


See accompanying notes to parent company condensed financial statements.

136
SCHEDULE I NOTES TO PARENT COMPANY CONDENSED FINANCIAL STATEMENTS


(1) Basis of Presentation

On July 24, 2019 Sunnova Energy International Inc. ("SEI") priced 14,000,000 shares of its common stock at a public offering price of $12.00 per share and on July 25, 2019 SEI's common stock began trading on the New York Stock Exchange under the symbol "NOVA". Upon the closing of our initial public offering on July 29, 2019 (our "IPO"), Sunnova Energy Corporation was contributed to SEI and SEI became the holding company of Sunnova Energy Corporation through a reverse merger. In addition, the historical financial statements of Sunnova Energy Corporation became the historical financial statements of SEI. These condensed financial statements include the condensed balance sheets, condensed statements of operations and condensed statements of cash flows and have been prepared on a parent-only basis. These parent-only financial statements do not include all of the information and notes required by accounting principles generally accepted in the United States of America for annual financial statements and therefore, these parent-only financial statements and other information included should be read in conjunction with SEI's consolidated financial statements and related notes contained within this Annual Report on Form 10-K.

(2) Guarantees

As of December 31, 2019 and 2018, our parent company has not issued any guarantees on behalf of its wholly-owned subsidiaries.


137

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Internal Control Over Financial Reporting

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our CEO and our Chief Financial Officer ("CFO"), of the effectiveness of our "disclosure controls and procedures" as of the end of the period covered by this Annual Report on Form 10-K, pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act. In connection with that evaluation, our CEO and our CFO concluded our disclosure controls and procedures were effective and designed to provide reasonable assurance the information required to be disclosed is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms as of December 31, 2019. The term "disclosure controls and procedures", as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure information required to be disclosed by a company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure information required to be disclosed by a company in the reports it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fourth quarter of 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as specified above. However, our management, including our principal executive and principal financial officers, does not expect that our disclosure controls and procedures will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company have been detected.

Management's Report on Internal Control over Financial Reporting

This Annual Report on Form 10-K does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by the rules of the SEC for newly public companies.

Item 9B. Other Information.

None.


138



PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this Item 10 of Form 10-K will be set forth in our proxy statement to be filed with the SEC in connection with the solicitation of proxies for our 2019 Annual Meeting of Stockholders ("Proxy Statement") or an amendment to this Form 10-K and is incorporated herein by reference. The Proxy Statement will be filed with the SEC within 120 days after the year-end of the fiscal year which this report relates.

Item 11. Executive Compensation.

The information required by this Item 11 will be set forth in the Proxy Statement or an amendment to this Form 10-K and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item 12 will be set forth in the Proxy Statement or an amendment to this Form 10-K and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item 13 will be set forth in the Proxy Statement or an amendment to this Form 10-K and is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services.

The information required by this Item 14 will be set forth in the Proxy Statement or an amendment to this Form 10-K and is incorporated herein by reference.


139



PART IV

Item 15. Exhibits, Financial Statement Schedules.

Documents filed as part of this report are as follows:

(1)Consolidated Financial Statements

Our consolidated financial statements are listed in the "Index to Consolidated Financial Statements" under Item 8 of Part II of this Annual Report.

(2)Financial Statement Schedules

The required information is included elsewhere in the Annual Report, not applicable or not material.

(3)Exhibits

The exhibits listed in the accompanying "Exhibit Index" are filed or incorporated by reference as part of this Annual Report.

EXHIBIT INDEX
Exhibit No.
 
Description
2.1
 
3.1
 
3.2
 
4.1
 
4.2∞
 
4.3∞
 
4.4∞
 
4.5∞
 
4.6
 
4.7
 
4.8
 
4.9
 
4.10
 
10.1∞
 

140
Table of Contents



Exhibit No.
 
Description
10.2∞
 
10.3
 
10.4
 
10.5
 
10.6∞
 
10.7∞
 
10.8∞
 
10.9∞
 
10.10
 
10.11
 
10.12
 
10.13
 
10.14∞
 
10.15+
 
10.16+
 
10.17+
 
10.18+
 
10.19+
 
10.20+
 
10.21+
 

141
Table of Contents



Exhibit No.
 
Description
10.22+
 
10.23+
 
10.24+
 
10.25+
 
10.26+
 
10.27+
 
10.28+
 
10.29+
 
10.30
 
10.31
 
10.32∞
 
10.33∞
 
10.34∞
 
10.35∞
 
10.36
 
10.37
 
10.38∞
 
21.1
 
23.1
 
31.1
 
31.2
 
32.1
 
32.2
 
101.INS
 
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its tags are embedded within the inline XBRL document.
101.SCH
 
XBRL Taxonomy Extension Schema Linkbase Document.
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB
 
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document.

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Table of Contents



Exhibit No.
 
Description
104
 
Cover Page Interactive Data File (embedded within the inline XBRL document).
__________________
+
Indicates management contract or compensatory plan.
∞
Portions of this exhibit have been omitted.


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Table of Contents



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
SUNNOVA ENERGY INTERNATIONAL INC.
 
 
 
Date: February 25, 2020
By:
/s/ William J. Berger
 
 
William J. Berger
 
 
Chief Executive Officer and Director
 
 
(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature
 
Title
 
Date
 
 
 
 
 
/s/ William J. Berger
 
Chief Executive Officer and Director
 
February 25, 2020
William J. Berger
 
(Principal Executive Officer)
 
 
 
 
 
 
 
/s/ Robert L. Lane
 
Chief Financial Officer
 
February 25, 2020
Robert L. Lane
 
(Principal Financial and Accounting Officer)
 
 
 
 
 
 
 
/s/ Anne Slaughter Andrew
 
Director
 
February 25, 2020
Anne Slaughter Andrew
 
 
 
 
 
 
 
 
 
/s/ Rahman D'Argenio
 
Director
 
February 25, 2020
Rahman D'Argenio
 
 
 
 
 
 
 
 
 
/s/ Matt DeNichilo
 
Director
 
February 25, 2020
Matt DeNichilo
 
 
 
 
 
 
 
 
 
/s/ Doug Kimmelman
 
Director
 
February 25, 2020
Doug Kimmelman
 
 
 
 
 
 
 
 
 
/s/ Michael C. Morgan
 
Director
 
February 25, 2020
Michael C. Morgan
 
 
 
 
 
 
 
 
 
/s/ C. Park Shaper
 
Director
 
February 25, 2020
C. Park Shaper
 
 
 
 
 
 
 
 
 
/s/ Mark Longstreth
 
Director
 
February 25, 2020
Mark Longstreth
 
 
 
 
 
 
 
 
 
/s/ Scott Steimer
 
Director
 
February 25, 2020
Scott Steimer
 
 
 
 

144
Exhibit 4.1


Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

As of February 21, 2020, Sunnova Energy International Inc., a Delaware corporation (“Sunnova”), had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: common stock, par value $0.0001 per share (“common stock”). The following contains a description of our common stock, as well as certain related additional information. This description is a summary only and does not purport to be complete. We encourage you to read the complete text of Sunnova’s Second Amended and Restated Certificate of Incorporation (the “certificate of incorporation”) and Sunnova’s Second Amended and Restated Bylaws (the “bylaws”), which we have filed or incorporated by reference as exhibits to Sunnova’s Annual Report on Form 10-K. References to “we,” “our” and “us” refer to Sunnova, unless the context otherwise requires. References to “stockholders” refer to holders of our common stock, unless the context otherwise requires.

General

Pursuant to our certificate of incorporation, we have the authority to issue 1,010,000,000 shares of capital stock, consisting of 1,000,000,000 shares of our common stock, par value $0.0001 per share; and 10,000,000 shares of preferred stock, par value $0.0001 per share (“preferred stock”). As of February 21, 2020, there were no issued and outstanding shares of preferred stock.

Common Stock

As of February 21, 2020, 84,001,062 shares of our common stock were outstanding.

Dividend Rights

Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of our common stock are entitled to receive dividends out of funds legally available if our board of directors, in its discretion, determines to issue dividends and then only at the times and in the amounts that our board of directors may determine.

Voting Rights

Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders. Stockholders do not have the ability to cumulate votes for the election of directors.

No Preemptive or Similar Rights

Our common stock is not entitled to preemptive rights and is not subject to conversion, redemption or sinking fund provisions.

Right to Receive Liquidation Distributions

If we become subject to a liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of our common stock and any participating preferred stock outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights and payment of liquidation preferences, if any, on any outstanding shares of preferred stock.

Fully Paid and Non-Assessable

All of the shares of our common stock are fully paid and non-assessable.


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Preferred Stock

As of February 21, 2020, no shares of our preferred stock were outstanding. Pursuant to our certificate of incorporation, our board of directors has the authority, without further vote or action by our stockholders, to issue from time to time shares of preferred stock in one or more series and to establish from time to time the number of shares to be included in each series. Our board of directors may designate the powers, rights, preferences, and privileges of the shares of each series of preferred stock and any of its qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, redemption rights, liquidation preference, and sinking fund terms, in each case without further vote or action by our stockholders. Our board of directors may also increase or decrease the number of shares of any series of preferred stock, but not below the number of shares of that series then outstanding, without any further vote or action by our stockholders. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions an other corporate purposes, could, among other things, have the effect of delaying, deterring, or preventing a change in control, restricting dividends on our common stock, diluting the voting power and other rights of our common stock, and impairing the liquidation rights of our common stock. Such issuance could have the effect of decreasing the market price of our common stock. We currently have no plans to issue any shares of preferred stock.

Listing

Our common stock is traded on the New York Stock Exchange under the symbol “NOVA.”

Anti-Takeover Provisions

Certain provisions of Delaware law, our certificate of incorporation, and our bylaws, which are summarized below, may have the effect of delaying, deferring, or discouraging another person from acquiring control of us. They are also designed, in part, to encourage persons seeking to acquire control of us to negotiate first with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a proposal to acquire us because negotiation of these proposals could result in an improvement of their terms.

Delaware Law

A corporation may elect not to be subject to Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”). We have elected to not be subject to the provisions of Section 203 of the DGCL. However, our certificate of incorporation contains provisions that are similar to Section 203. In general, our certificate of incorporation prohibits us from engaging in a “business combination” while our common stock is registered under Section 12(b) or 12(g) under the Securities and Exchange Act of 1934, as amended, with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless:

•
The business combination or the transaction was approved by our board of directors prior to the time that the stockholder became an interested stockholder;

•
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares owned by directors who are also officers of the corporation and shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

•
at or subsequent to the time the stockholder became an interested stockholder, the business combination was approved by our board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

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Generally, a business combination includes a merger of us or any of our subsidiaries with the interested stockholder or any sale or disposition (except proportionately as our stockholder) of assets representing more than 10% of our consolidated assets or the aggregate market value of our capital stock. Subject to certain exceptions, an interested stockholder is a person who, together with affiliates and associates, owns 15% or more of our voting stock or is an affiliate of us and, within the previous three years owned, 15% or more of our voting stock. In our case, however, the ECP Stockholders (meaning, for purposes of our certificate of incorporation, Energy Capital Partners III, LP, Energy Capital Partners III-A, LP, Energy Capital Partners III-B, LP, Energy Capital Partners III-C, LP, Energy Capital Partners III-D, LP, Energy Capital Partners III (Sunnova Co-Invest), LP and each of their respective affiliates that owns any shares of our common stock or preferred stock) and their affiliates or associates and any of their direct transferees (excluding any person who acquires voting stock through a broker's transaction on an exchange or pursuant to an underwritten public offering) will not be deemed to be interested stockholders regardless of the percentage of our voting stock owned by them, and accordingly will not be subject to such restrictions, subject to certain exceptions for the acquisition of additional shares of common stock. This provision could delay mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us.

Amended and Restated Certificate of Incorporation and Amended and Restated Bylaw Provisions

Our certificate of incorporation and our bylaws will include a number of provisions that could delay or discourage an unsolicited takeover or a change in control or changes in our board of directors or management team, including the following:

•
establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures provide that notice of stockholder proposals must be timely given in writing to our corporate secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. Our bylaws will specify the requirements as to form and content of all stockholders’ notices. These requirements may preclude stockholders from bringing matters before the stockholders at an annual or special meeting;

•
provide our board of directors the ability to authorize undesignated preferred stock. This ability makes it possible for our board of directors to issue, without stockholder approval, preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of us. These and other provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of us;

•
provide that the authorized number of directors on our board of directors may be changed only by resolution of our board of directors;

•
provide that all vacancies, including newly created directorships, may, except as otherwise required by law or, if applicable, the rights of holders of a series of preferred stock or the stockholders agreement, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;

•
provide that, after the date on which the ECP Stockholders beneficially own, in the aggregate, less than 30% of our outstanding common stock, any action required or permitted to be taken by the stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing in lieu of a meeting of such stockholders, subject to the rights of the holders of any series of preferred stock with respect to such series;

•
provide that, after the date on which the ECP Stockholders beneficially own, in the aggregate, less than 30% of our outstanding common stock, our certificate of incorporation and bylaws may only be

3


amended by the affirmative vote of the holders of at least two-thirds of our then outstanding common stock;

•
provide that, after the date on which the ECP Stockholders beneficially own, in the aggregate, less than 30% of our outstanding common stock, special meetings of our stockholders may only be called by our board of directors, the chief executive officer or the chairman of our board of directors; and

•
provide that our bylaws can be amended by our board of directors.

Choice of Forum

Our certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (1) any derivative action or proceeding brought on our or our stockholders’ behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, employees, agents and stockholders to us or our stockholders, (3) any action asserting a claim arising pursuant to any provision of the DGCL, our certificate of incorporation or bylaws, (4) any action as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware, or (5) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware. Our certificate of incorporation will also provide that, to the fullest extent permitted by applicable law, the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, subject to and contingent upon a final adjudication in the State of Delaware of the enforceability of such exclusive forum provision.

Notwithstanding the foregoing, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction. Any person or entity purchasing or otherwise acquiring an interest in any shares of our capital stock shall be deemed to have notice of and to have consented to the forum provisions in our certificate of incorporation. These choice-of-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that he, she or it believes to be favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits. Alternatively, if a court were to find these provisions of our certificate of incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Computershare Trust Company, N.A.

Limitation of Liability and Indemnification

Our certificate of incorporation and bylaws contain provisions that limit the liability of our directors and officers for monetary damages to the fullest extent permitted by the DGCL. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except liability:

•
for any breach of the director’s duty of loyalty to our company or our stockholders;

•
for any act or omission not in good faith or that involve intentional misconduct or knowing violation of law;

•
under Section 174 of the DGCL regarding unlawful dividends and stock purchases; or

•
for any transaction from which the director derived an improper personal benefit.

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Any amendment to, or repeal of, these provisions will not eliminate or reduce the effect of these provisions in respect of any act, omission or claim that occurred or arose prior to that amendment or repeal. If the DGCL is amended to provide for further limitations on the personal liability of directors of corporations, then the personal liability of our directors will be further limited to the greatest extent permitted by the DGCL. We have entered into and intend to continue to enter into separate indemnification agreements with each of our directors and officers that provide the maximum indemnity allowed to directors and executive officers by Section 145 of the Delaware General Corporation Law and also to provide for certain additional procedural protections. We believe that these agreements and insurance policies are necessary to attract and retain qualified individuals to serve as directors and executive officers.

5
Exhibit 4.9

REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is made as of December 23, 2019, by and among Sunnova Energy International Inc., a Delaware corporation (the “Company”), and each of the parties listed on Schedule A hereto.
RECITALS
WHEREAS, this Agreement is made in connection with the closing of the issuance and sale of the Company’s 7.75% Convertible Senior Notes due 2027 (the “Notes”), upon the terms set forth in the Indenture by and among the Company and Wilmington Trust, National Association, as trustee, dated as of December 23, 2019 (the “Indenture”); and
WHEREAS, in certain circumstances, the Notes will be convertible for (i) cash, (ii) shares of Common Stock (as defined below) or (iii) a combination thereof in accordance with the terms of the Notes and the Indenture;
NOW, THEREFORE, the parties hereby agree as follows:
1.Definitions. For purposes of this Agreement:
1.1    “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including, without limitation, any general partner, managing member, officer or director of such Person or any venture capital or private equity fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person. For purposes of this Agreement, “Affiliates” of a Holder shall (a) include any funds managed, advised or sub-advised by a Holder or any of its Affiliates and (b) exclude any portfolio companies in which any funds managed, advised or sub-advised by a Holder or any of its Affiliates have invested.
1.2    “Automatic Shelf Registration Statement” shall mean a Registration Statement filed by a WKSI on Form S-3ASR.
1.3    “Board of Directors” means the board of directors of the Company.
1.4    “Business Day” means any day other than a Saturday, Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.
1.5    “Common Stock” means the common stock, par value $0.01 per share, of the Company.

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1.6    “Company” shall have the meaning specified in the first paragraph of this Agreement and shall include its successors.
1.7    “Damages” means any loss, damage, claim or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon: (a) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement of the Company, including any preliminary Prospectus or final Prospectus contained therein or any amendments or supplements thereto; (b) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (c) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.
1.8    “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
1.9    “Excluded Registration” means (a) a registration relating to the sale of securities to employees or directors of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; (b) a registration relating to an SEC Rule 145 transaction; (c) a registration on any form that does not include substantially the same information as would be required to be included in a Registration Statement covering the sale of the Registrable Securities; (d) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered; or (e) in connection with any dividend or distribution reinvestment or similar plan.
1.10    “Existing Registration Rights Agreement” means that certain Second Amended and Restated Registration Rights Agreement, dated as of July 29, 2019, by and among the Company and the shareholders party thereto, as amended or supplemented from time to time.
1.11    “FINRA” means the Financial Industry Regulatory Authority, Inc.
1.12    “Form S-1” means such form under the Securities Act as in effect on the date hereof, Form F-1 or any successor registration form thereto under the Securities Act subsequently adopted by the SEC.
1.13    “Form S-3” means such form under the Securities Act as in effect on the date hereof, Form F-3 or any registration form thereto under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC.

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1.14    “Free Writing Prospectus” shall mean any “free writing prospectus” as defined in Rule 405 promulgated under the Securities Act.
1.15    “Holder” or “Holders” means, as applicable, (i) a holder from time to time of the Notes, or (ii) a person who is a beneficial owner of Registrable Securities or would become a beneficial owner of Registrable Securities if the Notes were convertible within 60 days.
1.16    “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including, adoptive relationships, of a natural person referred to herein.
1.17    “Indenture” means the Indenture relating to the Notes, dated the date hereof, by and among the Issuer and Wilmington Trust, National Association, as trustee, as the same may be amended from time to time in accordance with the terms thereof.
1.18    “Initial Holder” means a purchaser of the Notes pursuant to the Purchase Agreement, or any Affiliate of such purchaser, that is a Holder.
1.19    “Notice Holder” shall mean, on any date, any Holder that has delivered a properly completed stockholder questionnaire to the Company on or prior to such date.
1.20    “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.
1.21    “Prospectus” means the prospectus included in any Registration Statement, all amendments and supplements to such prospectus, including pre- and post-effective amendments to such Registration Statement, and all other material incorporated by reference in such prospectus.
1.22    “Registrable Securities” means shares of Common Stock issuable upon conversion of the Notes held by the Holders or, with respect to Subsection 2.2, the Initial Holders, other than those that have (i) been registered under a Shelf Registration Statement and disposed of in accordance therewith, (ii) ceased to be outstanding, whether as a result of redemption, repurchase, cancellation, exchange or otherwise, (iii) been sold or disposed of pursuant to Rule 144 under the Act, or (iv) with respect to Registrable Securities which the Holders are entitled to registration rights upon pursuant to Subsection 2.1(a) hereof, are eligible to be sold or disposed of pursuant to Rule 144 under the Act without limitation as to volume.
1.23    “Registrable Securities then outstanding” means the number of shares determined by adding the number of shares or units (as applicable) of outstanding Common Stock that are Registrable Securities and the number of shares or units (as applicable) of Common Stock issuable (directly or indirectly) upon conversion of the Notes that are Registrable Securities.

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1.24    “Registration Statement” means any registration statement of the Company filed with, or to be filed with, the SEC under the rules and regulations promulgated under the Securities Act, including the related Prospectus, amendments and supplements to such registration statement, including pre- and post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement.
1.25    “SEC” means the U. S. Securities and Exchange Commission.
1.26    “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.
1.27    “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.
1.28    “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.29    “Selling Expenses” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Subsection 2.6.
1.30    “Shelf Registration Statement” shall mean a “shelf” Registration Statement of the Company filed pursuant to the provisions of Subsection 2.1 hereof which covers some or all of the Registrable Securities on an appropriate form under Rule 415 under the Act, or any similar rule that may be adopted by the SEC, amendments and supplements to such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.
1.31    “Underwritten Offering” means a sale of securities of the Company to an underwriter or underwriters for reoffering to the public.
1.32    “WKSI” means a “well known seasoned issuer” as defined in Rule 405 promulgated under the Securities Act.
2.    Registration Rights. The Company covenants and agrees as follows:
2.1    Shelf Registration.
(a)    The Company shall use its commercially reasonable efforts to (i) file a Shelf Registration Statement (which shall be, if the Company is then a WKSI, an Automatic Shelf Registration Statement) with the SEC and to cause such Shelf Registration Statement to become effective on or prior to the two year anniversary of the original issuance date of the Notes, covering resales of the Registrable Securities; and (ii) keep such Shelf Registration Statement effective until the date on which there are no longer any Notes or Registrable Securities outstanding (such period, the “Shelf Registration Period”).

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(b)    The Company shall be deemed not to have used its commercially reasonable efforts to keep the Shelf Registration Statement effective during the Shelf Registration Period if it voluntarily takes any action that would result in Holders of Registrable Securities not being able to offer and sell such Registrable Security at any time during the applicable Shelf Registration Period, unless such action is (x) required by applicable law or otherwise undertaken by the Company in good faith and for valid business reasons (not including avoidance of the Company’s obligations hereunder), including, without limitation, the acquisition or divestiture of assets, or (y) permitted by Subsection 2.4(r) hereof.
(c)    The Company shall use commercially reasonable efforts to notify the Holders of the anticipated effective date of the Shelf Registration Statement and deliver to the Holders a stockholder questionnaire at least 15 Business Days prior to the anticipated effective date thereof. Each Holder agrees that if such Holder wishes to sell Registrable Securities pursuant to a Shelf Registration Statement, it will do so only in accordance with this Section 2(c). Each Holder seeking to sell Registrable Securities pursuant to a Shelf Registration Statement agrees that it shall:
(i)    (A) complete and deliver a stockholder questionnaire and such other information as the Company may reasonably request in writing, if any, to the Company at least 10 Business Days prior to the anticipated effective date of the Shelf Registration Statement as set forth in the notice to Holders or (B) in the event such Holder acquires Notes following the effective date of a Shelf Registration Statement, complete and deliver a stockholder questionnaire and such other information as the Company may reasonably request in writing, if any, to the Company no later than 10 Business Days following the effective date of any transfer of Notes. If a Holder does not timely complete and deliver a stockholder questionnaire or provide the other information the Company may reasonably request in writing, that Holder will not be named as a selling securityholder in the Prospectus and will not be permitted to sell its Registrable Securities under the Shelf Registration Statement. From and after the effective date of the Shelf Registration Statement, the Company shall use reasonable best efforts, as promptly as is practicable after the date a stockholder questionnaire is delivered, and in any event within 20 Business Days after such date, (x) if required by applicable law, to file with the SEC a post-effective amendment to the Shelf Registration Statement or to prepare and, if permitted or required by applicable law, to file a supplement to the related Prospectus or an amendment or supplement to any document incorporated therein by reference or file any other required document so that the Holder delivering such stockholder questionnaire is named as a selling securityholder in the Shelf Registration Statement, and so that such Holder is permitted to deliver the related Prospectus to purchasers of the Registrable Securities in accordance with applicable law and, if the Company shall file a post-effective amendment to the Shelf Registration Statement, use its reasonable best efforts to cause such post-effective amendment to be declared

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effective under the Securities Act as promptly as is practicable; provided, that the Company shall not be required to file more than one post-effective amendment or supplement to the related Prospectus in any 90-day period in accordance with this Subsection 2.1(c)(i); (y) provide such Holder, upon request, one copy of any documents filed pursuant to this Subsection 2.1(c)(i); and (z) notify such Holder as promptly as practicable after the effectiveness under the Securities Act of any post-effective amendment filed or the filing of any supplement to the related Prospectus, pursuant to this Subsection 2.1(c)(i); provided, that if such stockholder questionnaire is delivered during a Deferral Period (as defined below), the Company shall so inform the Holder delivering such stockholder questionnaire and shall take the actions set forth in clauses (x), (y) and (z) of this Subsection 2.1(c)(i) upon expiration of the Deferral Period in accordance with Subsection 2.4(r) hereof. Notwithstanding anything contained herein to the contrary, the Company shall be under no obligation to name any Holder that is not a Notice Holder as a selling securityholder in the Shelf Registration Statement or related Prospectus; provided, however, that any Holder that becomes a Notice Holder pursuant to the provisions of this Subsection 2.1(c) and who has complied with subsection (i)(B) above (whether or not such Holder was a Notice Holder at the effective date of the Shelf Registration Statement) shall be named as a selling securityholder in the Shelf Registration Statement or related Prospectus in accordance with the requirements and subject to the limitations of this Subsection 2.1(c);
(ii)    to the extent required by applicable law, deliver a Prospectus to the purchaser of such Common Stock; and
(iii)    promptly notify the Company in the event that any information supplied by such Holder in writing for inclusion in the Registration Statement or related Prospectus is untrue or omits to state a material fact required to be stated therein or necessary to make such information not misleading in the light of the circumstances then existing; immediately discontinue any sale or other disposition of Registrable Securities pursuant to the Registration Statement until the filing of an amendment or supplement to such Prospectus as may be necessary so that such Prospectus does not contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; and use reasonable best efforts to assist the Company as may be appropriate to make such amendment or supplement effective for such purpose.
2.2    Company Offering.
(a)    If the Company proposes to offer (including, for this purpose, a registration effected by the Company for shareholders other than the Holders) any of its shares of

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Common Stock under the Securities Act in connection with the public offering of such securities (including an “at-the market offering,” a “bought deal” or a “registered direct offering”) solely for cash (other than in an Excluded Registration), the Company shall, at such time, promptly give each Initial Holder notice of such offering (a “Company Offering”). Such notice shall specify, as applicable, the amount of Common Stock to be registered, the proposed filing date of the registration statement or applicable prospectus supplement and the proposed minimum offering price of the Common Stock, in each case to the extent then known. In the case of an offering under a shelf registration statement previously filed or to be filed by the Company pursuant to Rule 415 under the Securities Act, including where the Company qualifies as a WKSI, such notice shall be sent as promptly as reasonably practicable and in any event no later than ten (10) days prior to the expected date of filing of such registration statement or commencement of marketing efforts for such offering (and no later than five (5) days prior in the case of a “bought deal,” a “registered direct offering” or an “overnight transaction” where no preliminary prospectus is used). In the case of a Company Offering under a registration statement to be filed that is not a shelf registration statement, such notice shall be sent as promptly as reasonably practicable, and in any event no later than ten (10) days prior to the expected date of filing of such registration statement. Upon the written request of each Initial Holder given within five (5) Business Days after such notice is given by the Company (except that each Initial Holder shall have two (2) Business Days after the Company gives such notice to request inclusion of Registrable Securities in the Company Offering in the case of a “bought deal,” a “registered direct offering” or an “overnight transaction” where no preliminary prospectus is used), the Company shall, subject to the provisions of Subsection 2.3, as promptly as reasonably practicable cause to be registered or include in the prospectus supplement, as applicable, all of the Registrable Securities that each such Initial Holder has requested to be included in such registration. The Company shall have the right to terminate or withdraw any offering initiated by it under this Subsection 2.2 before the effective date of such offering, whether or not any Initial Holder has elected to include Registrable Securities in such offering. The expenses (other than Selling Expenses) of such withdrawn offering shall be borne by the Company in accordance with Subsection 2.6.
(b)    Each Initial Holder shall be permitted to withdraw all or part of its Registrable Securities in an offering under this Subsection 2.2 by giving written notice to the Company of its request to withdraw; provided, that (i) such request must be made in writing prior to the effectiveness of such Registration Statement or, in the case of a public offering, at least five (5) Business Days prior to the earlier of the anticipated filing of the “red herring” Prospectus, if applicable, and the anticipated pricing or trade date and (ii) such withdrawal shall be irrevocable and, after making such withdrawal, the Initial Holder shall no longer have any right to include Registrable Securities in such offering as to which such withdrawal was made.

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(c)    Any Initial Holder may deliver written notice (a “Piggyback Opt-Out Notice”) to the Company requesting that such Initial Holder not receive notice from the Partnership of any proposed Company Offering; provided, however, that such Initial Holder may later revoke any such Piggyback Opt-Out Notice in writing. Following receipt of a Piggyback Opt-Out Notice (unless subsequently revoked), the Company shall not be required to deliver any notice of a proposed Company Offering to such Initial Holder, and such Initial Holder shall no longer be entitled to participate in Company Offerings pursuant to this Section 2.2 unless such Piggyback Opt-Out Notice is subsequently revoked by such Initial Holder.
2.3    Underwriting Requirements.
(a)    If the Company Offering under which the Initial Holders are entitled to registration rights pursuant to Subsection 2.2(a) hereof is a registration effected by the Company for shareholders pursuant to Subsection 2.1 of the Existing Registration Rights Agreement and the Initiating Holders (as defined in the Existing Registration Rights Agreement) intend to distribute the securities covered by their request by means of an underwriting, the Company shall include such information in its notice to the shareholders under Subsection 2.2(a). In such event, the right of any Initial Holder to include such Initial Holder’s Registrable Securities in such registration pursuant to Subsection 2.2(a) shall be conditioned upon such Initial Holder’s participation in such underwriting and the inclusion of such Initial Holder’s Registrable Securities in the underwriting to the extent provided herein. All Initial Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Subsection 2.4(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting and any other participating shareholders, as appropriate. Notwithstanding any other provision of this Subsection 2.3, if the managing underwriter(s) advise(s) the Initiating Holders in writing that marketing factors require a limitation on the number of shares or units (as applicable) to be underwritten, then the number of securities or Registrable Securities that may be included in the underwriting shall be allocated (a) first to the holders of securities that have registration rights under the Existing Registration Rights Agreement and the Company and (b) thereafter among the Initial Holders and the holders of Common Stock other than Registrable Securities, in proportion (as nearly as practicable) to the number of Registrable Securities and the number of shares of Common Stock other than Registrable Securities (on a fully-diluted, as converted basis) owned by such holders or in such other proportion as shall mutually be agreed to by all such selling holders.
(b)    In connection with any offering involving an underwriting of shares or units (as applicable) of the Company’s capital stock pursuant to Subsection 2.2(a), the Company shall not be required to include any of the Initial Holders’ Registrable Securities in such underwriting unless the Initial Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters

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in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities, including Registrable Securities, requested by holders to be included in such offering pursuant to Subsection 2.2(a) exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the securities requested to be registered can be included in such offering, then the securities that are included in such offering shall be allocated (i) first to holders of securities that have registration rights under the Existing Registration Rights Agreement and the Company and (ii) thereafter among the Initial Holders and the holders of Common Stock other than Registrable Securities in proportion (as nearly as practicable to) the number of Registrable Securities and the number of shares of Common Stock other than Registrable Securities (on a fully diluted, as converted basis) owned by such holders or in such other proportions as shall mutually be agreed to by all such selling holders. For purposes of the provision in this Subsection 2.3 concerning apportionment, for any selling Initial Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, stockholders, and Affiliates of such Initial Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence.
(c)    [Reserved].
(d)    In the case of any underwritten offering under Subsection 2.2, each of the Initial Holders may, subject to any limitations on withdrawal contained herein, withdraw all or part of their request to participate in the registration pursuant Subsection 2.2 after being advised of such price, discount and other terms and shall not be required to enter into any agreements or documentation that would require otherwise.
2.4    Obligations of the Company. Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:
(a)    prepare and file a Registration Statement, including information regarding the Holders and the methods of distribution they have elected for their Registrable Securities provided to the Company in any stockholder questionnaire as necessary to permit such distribution by the methods specified therein, with respect to such Registrable Securities and use its commercially reasonable efforts to cause such Registration Statement to become

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effective, and, to keep such Registration Statement effective for (i) in the case of registrations required under Subsection 2.1, for the Shelf Registration Period, or (ii) in the case of registrations required under Subsection 2.2, a period of up to one hundred eighty (180) days or, if earlier, until the distribution contemplated in the Registration Statement has been completed; provided, that, for registrations under clause (ii) above, (A) such one hundred eighty (180) day period shall be extended for a period of time equal to the period the Holders refrain, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration and (B) in the case of an Automatic Registration Statement, the Company shall use its commercially reasonable efforts to keep such Automatic Registration Statement effective for three years from the date of initial effectiveness;
(b)    ensure that (i) any Registration Statement, any amendment thereto forming part thereof and any amendment or supplement thereto complies in all material respects with the Securities Act and (ii) any Registration Statement and any amendment thereto does not, when it becomes effective, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading;
(c)     (i) prepare and file with the SEC such amendments, including post-effective amendments, and supplements to such Registration Statement, and the Prospectus used in connection with such Registration Statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such Registration Statement through the applicable periods during which the Company is obligated to maintain the effectiveness of such Registration Statement, (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424 promulgated by the SEC under the Securities Act; and (iii) respond to any comments received from the SEC with respect to each Registration Statement or any amendment thereto;
(d)    to the extent practicable, at least five (5) Business Days prior to filing any Registration Statement or Prospectus or any amendments or supplements thereto, furnish to the holders of the Registrable Securities covered by such registration statement and their counsel, copies of all such documents proposed to be filed;
(e)    furnish to the selling Holders, without charge, such numbers of copies of the signed Registration Statement, any post-effective amendment thereto, a Prospectus, including a preliminary Prospectus, as required by the Securities Act, any amendments or supplements thereto, any Free Writing Prospectus, and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;
(f)    use its commercially reasonable efforts to register and qualify the securities covered by such Registration Statement under such other securities or blue-sky laws of such

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jurisdictions as shall be reasonably requested by the selling Holders; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;
(g)    in the event of any underwritten public offering, (i) enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering and (ii) cooperate with the holders of Registrable Securities to be included in such registration and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends other than as may be required by applicable law, by the stock transfer agent, depositary or their nominee, if applicable) representing securities to be sold under such registration, and enable such securities to be in such denominations and registered in such names as the managing underwriter or underwriters, if any, or such holders may request;
(h)    cooperate with each Holder and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA;
(i)    to the extent the Company is eligible under the relevant provisions of Rule 430B under the Securities Act, if the Company files any shelf Registration Statement, include in such shelf Registration Statement such disclosures as may be required by Rule 430B under the Securities Act (referring to the unnamed selling security holders in a generic manner by identifying the initial offering of the securities to the Holders) in order to ensure that the Holders may be added to such shelf Registration Statement at a later time through the filing of a Prospectus supplement rather than a post-effective amendment;
(j)    use its commercially reasonable efforts to cause all such Registrable Securities covered by such Registration Statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;
(k)    (i) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case, not later than the effective date of such registration and (ii) cooperate with any selling Holders to facilitate the timely preparation and delivery of book-entry interests representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which book-entry interests shall be free of all restrictive legends indicating that the Registrable Securities are unregistered or unqualified for resale under the Securities Act, Exchange Act or other applicable securities laws, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holder may request in writing.

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(l)    (i) promptly make available for inspection by the selling Initial Holders, any managing underwriter(s) participating in any disposition pursuant to such Registration Statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Initial Holders, all financial and other records, pertinent corporate documents, and properties of the Company, (ii) cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such Registration Statement and to conduct appropriate due diligence in connection therewith (as shall be necessary, in the opinion of such seller or underwriter’s legal counsel, to conduct a reasonable investigation with the meaning of Section 11(b)(3) of the Securities Act), and (iii) cause appropriate officers and employees to be available, on a customary basis and upon reasonable notice, to meet with prospective investors in presentations, meetings and road shows.
(m)    notify each selling Holder, promptly after the Company receives notice thereof, of the time when such Registration Statement has been declared effective or a supplement to any Prospectus forming a part of such Registration Statement has been filed;
(n)    after such Registration Statement becomes effective, promptly notify each selling Holder of any (i) request by the SEC that the Company amend or supplement such Registration Statement or Prospectus or (ii) stop order or other order suspending the effectiveness of any Registration Statement, issued or threatened in writing by the SEC in connection therewith, and use its commercially reasonable efforts to amend or supplement such Registration Statement or Prospectus as requested by the SEC and to prevent the entry of such stop order or to remove it or obtain withdrawal of it as soon as practicable if entered;
(o)    use its commercially reasonable efforts to obtain:
(i)    at the time of pricing of any underwritten offering (including an “at-the-market offering,” a “bought deal” or a “registered direct offering”) a “cold comfort letter” from the Company’s independent registered public accounting firm covering such matters of the type customarily covered by “cold comfort letters” as the Holders and the underwriters reasonably request; and
(ii)    at the time of any sale in an underwritten offering pursuant to the Registration Statement, a “bring-down comfort letter,” dated as of the date of such sale, from the Company’s independent registered public accountants covering such matters of the type customarily covered by “bring-down comfort letters” as the Holders and the underwriters reasonably request;
(p)    use its commercially reasonable efforts to obtain, at the time of effectiveness of each registration or, in the case of a shelf registration, at the time of pricing, and at the time of any sale pursuant to each registration, an opinion or opinions addressed to the Holders

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to be included in such registration and the underwriter or underwriters, if any, in customary form and scope from legal counsel for the Company (who may be its internal legal counsel);
(q)    promptly notify each seller of Registrable Securities covered by such registration, upon discovery by an executive officer of the Company that the prospectus included in such registration, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and promptly thereafter prepare and file with the SEC and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers or prospective purchasers of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they are made;
(r)    upon the occurrence or existence of any pending corporate development, public filing with the SEC or any other business reason that, in the reasonable judgment of the Company, makes it appropriate to suspend the availability of the Shelf Registration Statement, the Company shall give notice (without notice of the nature or details of such events) to the Notice Holders that the availability of the Shelf Registration Statement is suspended and, upon actual receipt of any such notice, each Notice Holder agrees not to sell any Registrable Securities pursuant to the Shelf Registration Statement until such Notice Holder’s receipt of copies of the supplemented or amended Prospectus, or until it is advised in writing by the Company that the Prospectus may be used, and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus; provided, that the period during which the availability of the Shelf Registration Statement is suspended pursuant to this Subsection 2.4(r) (the “Deferral Period”) shall not exceed 60 days, provided that the Company may not invoke this right more than twice in any 12 month period, and at least 30 days must elapse between each Deferral Period; and
(s)    enter into such agreements (including underwriting agreements in customary form) and take such other actions as the Holders shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities, including customary holdback / lock-up provisions.
In addition, the Company shall ensure that, at all times after any Registration Statement covering a public offering of securities of the Company under the Securities Act shall have become effective, its insider trading policy shall provide that the directors of the Company may implement a trading program under Rule 10b5-1 of the Exchange Act.
2.5    Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of

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any selling Holder that such Holder shall furnish to the Company such information regarding itself and the Registrable Securities held by it as is reasonably required to effect the registration of such Holder’s Registrable Securities.
2.6    Expenses of Registration.
(a)    The Company shall bear all expenses incurred in connection with the performance of its obligations under Subsections 2.1 and 2.4 hereof and shall reimburse the Initial Holders for the reasonable fees and disbursements of one firm or counsel (which shall be a nationally recognized law firm experienced in securities matters designated by the Initial Holders) to act as counsel for the Initial Holders in connection therewith; provided, however, that such expenses shall not include, and the Company shall not have any obligation to pay, any underwriting fees, discounts or commissions attributable to the sale of such Registrable Securities, or any fees and expenses of any Broker-Dealer or other financial intermediary engaged by any Initial Holder.
(b)    All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Subsection 2.2, including all registration, filing, and qualification fees (including fees and expenses (a) with respect to filings required to be made with the trading market and (b) in compliance with applicable state securities or “Blue Sky” laws); printers’ and accounting fees; all reasonable out-of-pocket expenses relating to marketing the sale of the Registrable Securities, including expenses related to conducting a “road show”; fees and disbursements of counsel, auditors and accountants for the Company; and the reasonable fees and disbursements of no more than one counsel for all selling Holders and other selling shareholders together (“Selling Holder Counsel”), shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Subsection 2.1 of the Existing Registration Rights Agreement if the registration request is subsequently withdrawn at the request of the Initiating Holder(s) (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Initiating Holder(s) agree to forfeit their right to one registration; provided, further, that if, at the time of such withdrawal, the Holders shall have learned of a material adverse change in the condition, business, or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information then the Holders shall not be required to pay any of such expenses. All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.

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2.7    Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.
2.8    Indemnification. If any Registrable Securities are included in a Registration Statement under this Section 2:
(a)    To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers, directors, and stockholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 2.8(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.
(b)    To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the Registration Statement, each Person (if any) who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other Holder selling securities in such Registration Statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such registration; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 2.8(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided, further, that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Subsections 2.8(b) and 2.8(d) exceed the proceeds from the offering received by such Holder

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(net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.
(c)    Promptly after receipt by an indemnified party under this Subsection 2.8 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Subsection 2.8, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Subsection 2.8, to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Subsection 2.8.
(d)    To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Subsection 2.8 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Subsection 2.8 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Subsection 2.8, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge,

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access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such Registration Statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided, further, that in no event shall a Holder’s liability pursuant to this Subsection 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Subsection 2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.
(e)    Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with an underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.
(f)    Unless otherwise superseded by an underwriting agreement entered into in connection with an underwritten public offering, the obligations of the Company and Holders under this Subsection 2.8 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2, and otherwise shall survive the termination of this Agreement.
2.9    Reports Under Exchange Act. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company shall:
(a)    for so long as any Registrable Securities remain outstanding, (i) use its commercially reasonable efforts to file the reports required to be filed by it under Rule 144A(d)(4) under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the written request of any Holder, make publicly available other information so long as necessary to permit sales of such Holder’s Registrable Securities pursuant to Rules 144 and 144A of the Act and (ii) take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Act within the limitation of the exemptions provided by Rules 144 and 144A (including, without limitation, the requirements of Rule 144A(d)(4)); provided, that nothing in this Subsection 2.9(a) shall be deemed to require the company to register any of its securities pursuant to the Exchange Act;
(b)    use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the

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Exchange Act (at any time after the Company has become subject to such reporting requirements); and
(c)    furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144, the Securities Act, and the Exchange Act (at any time after the Company has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S‑3 (at any time after the Company so qualifies); and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration (at any time after the Company has become subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time after the Company so qualifies to use such form).
2.10    Limitations on Registration Rights. Notwithstanding anything to the contrary, the Holders have no right to, and shall not, (a) include any Registrable Securities in any registration except to the extent that the inclusion of such Registrable Securities will not reduce the number of securities of the parties to the Existing Registration Rights Agreement that are included; or (b) initiate a demand for registration of any Registrable Securities held by such Holder.
2.11    Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Subsection 2.2 shall terminate at such time as SEC Rule 144(b)(1) under the Securities Act (or any successor provision) is available for the sale of all of such Holder’s shares without any need to comply with the public information requirements of SEC Rule 144(b)(1) (or any successor provision) or any such shares are sold pursuant to SEC Rule 144.
3.    Registration Default Damages.
3.1    Registration Defaults. If any of the following events shall occur (each, a “Registration Default”), then the Company shall pay liquidated damages (the “Registration Default Damages”) to the applicable Holders as follows:
(a)    if the Shelf Registration Statement (which shall be, if the Company is then a WKSI, an Automatic Shelf Registration Statement) is not filed with the Commission and effective as required under Subsection 2.1(a) hereof, then commencing on the day after the two year anniversary of the issuance of the Notes, Registration Default Damages shall accrue on the outstanding principal amount of the Notes, a rate per year equal to 0.25% of the outstanding principal amount of the Notes to, and including, the 90th day following such Registration Default, increasing by 0.25% per annum every 90 days thereafter to a maximum of 2.00% per annum; or

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(b)    if the Shelf Registration Statement has been declared or becomes effective but ceases to be effective for the offer and sale of the Registrable Securities, other than (i) in connection with a Deferral Period or (ii) as a result of a requirement to file a post-effective amendment or supplement to the Prospectus to make changes to the information regarding selling securityholders or the plan of distribution provided for therein, at any time during the Shelf Registration Period and the Company does not cure the lapse of effectiveness or usability within 30 days (or, if a Deferral Period is then in effect and subject to the ten Business Day filing requirement and the proviso regarding the filing of post-effective amendments in Subsection 2.1(c) with respect to any stockholder questionnaire received during such period, within 30 days following the expiration of such Deferral Period or period permitted pursuant to Subsection 2.1(c)), then commencing on the day following such thirtieth day, Registration Default Damages shall accrue on the outstanding principal amount of the Notes at a rate per year equal to 0.25% of the outstanding principal amount of the Notes to, and including, the 90th day following such Registration Default, increasing by 0.25% per annum every 90 days thereafter to a maximum of 2.00% per annum; or
(c)    if the Company through its omission fails to name as a selling securityholder any Holder that had complied timely with its obligations hereunder in a manner to entitle such Holder to be so named in (i) the Shelf Registration Statement at the time it first became effective or (ii) any Prospectus at the later of the time of filing thereof or the time the Shelf Registration Statement of which the Prospectus forms a part becomes effective, then commencing on the day following the effective date of such Shelf Registration Statement or the time of filing of such Prospectus, Registration Default Damages shall accrue on the outstanding principal amount of the Notes held by such Holder at a rate per year equal to 0.25% of the outstanding principal amount of the Notes to, and including, the 90th day following such Registration Default, increasing by 0.25% per annum every 90 days thereafter to a maximum of 2.00% per annum; or
(d)    if the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period pursuant to Subsection 2.4(r) hereof, then commencing on the day the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period, Registration Default Damages shall accrue on the aggregate outstanding principal amount of the Notes at a rate per year equal to 0.25% of the outstanding principal amount of the Notes to, and including, the 90th day following such Registration Default, increasing by 0.25% per annum every 90 days thereafter to a maximum of 2.00% per annum;
provided, that the Registration Default Damages rate on the Notes shall not exceed in the aggregate 2.00% per annum and shall not be payable under more than one clause above for any given period of time, except that if Registration Default Damages would be payable because of more than one Registration Default at separate rates per annum, then the Registration Default Damages rate shall be the highest rate per annum of the applicable Registration Defaults. Other than the obligation of

    19

the Company to pay Registration Default Damages in accordance with this Section 3, the Company will not have any liability for damages with respect to a Registration Default. If a Registration Default occurs after a Holder has converted its Notes into, Common Stock, such Holder shall not be entitled to any compensation with respect to such Common Stock.
3.2    Cure of Registration Defaults. Upon (1) in the case of Subsection 3.1(a), the effectiveness of the Shelf Registration Statement, (2) in the case of Subsection 3.1(b), such time as the Shelf Registration Statement which had ceased to remain effective or usable for resales again becomes effective for resales, (3) in the case of Subsection 3.1(c), the time such Holder is permitted to sell its Registrable Securities pursuant to any Shelf Registration Statement in accordance with applicable law or (4) in the case of Subsection 3.1(d), the termination of the Deferral Period that caused the limit on the aggregate duration of Deferral Periods in a period set forth in Subsection 2.4(r) to be exceeded, the Registration Default Damages shall cease to accrue.
3.3    Payment of Registration Default Damages. Any amounts of Registration Default Damages due pursuant to this Section 3 will be payable in cash on the next succeeding interest payment date to Holders entitled to receive such Registration Default Damages on the relevant record dates for the payment of interest. If a Note ceases to be outstanding during any period for which Registration Default Damages are accruing (as a result of the holder exercising its exchange or conversion rights or otherwise), the Company will pay the liquidated damages with respect to such Note only for the period of time that such Note remained outstanding during which such Registration Default Damages were accruing.
4.    Miscellaneous.
4.1    Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their respective successors and assigns, including, without the need for an express assignment or any consent by the Company thereto, subsequent Holders of Registrable Securities, and the indemnified persons referred to in Subsection 2.8 hereof. The Company hereby agrees to extend the benefits of this Agreement to any Holder, and any such Holder may specifically enforce the provisions of this Agreement as if an original party hereto.
4.2    Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
4.3    Titles and Subtitles. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement.

    20

4.4    Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or (a) personal delivery to the party to be notified; (b) when sent, if sent by electronic mail or facsimile during the recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s next Business Day; (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one (1) Business Day after the Business Day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their addresses as set forth on Schedule A hereto, or to the principal office of the Company and to the attention of the Chief Executive Officer, in the case of the Company, or to such email address, facsimile number, or address as subsequently modified by written notice given in accordance with this Subsection 4.4.
4.5    Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and the Holders of seventy-five percent (75%) of the Registrable Securities then outstanding; provided, that, with respect to any matter that directly or indirectly affects the rights of any Initial Holder, the Company shall obtain the written consent of each such Initial Holder against which such amendment, qualification, supplement, waiver or consent is to be effective; provided, further, that no amendment, qualification, supplement, waiver or consent with respect to Section 3 hereof shall be effective as against any Holder unless consented to in writing by such Holder; provided, further, that the provisions of this Subsection 4.5 may not be amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of the Initial Holders and each Holder.
4.6    Severability. In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law.
4.7    Entire Agreement. This Agreement (including any Schedules and Exhibits hereto) constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof (other than any lock-up or similar agreement between any Holder and any underwriter), and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled. This Agreement hereby amends, restates and supersedes the Original Piggy-back Registration Rights Agreement in all respects.
4.8    Governing Law; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of New York or any other jurisdiction)

    21

to the extent such rules or provisions would cause the application of the laws of any jurisdiction other than the State of New York. Each of the parties to this Agreement consents and agrees that any action to enforce this Agreement or any dispute, whether such dispute arises in law or equity, arising out of or relating to this Agreement shall be brought exclusively in the United States District Court for the Southern District of New York or any New York State Court sitting in New York City. The parties hereto consent and agree to submit to the exclusive jurisdiction of such courts. Each of the parties to this Agreement waives and agrees not to assert in any such dispute, to the fullest extent permitted by applicable law, any claim that (i) such party and such party’s property is immune from any legal process issued by such courts or (ii) any litigation or other proceeding commenced in such courts is brought in an inconvenient forum.
4.9    WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
4.10    Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such non-breaching or non-defaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.
4.11    Other Interpretive Matters. For purposes of this Agreement, (a) when calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period is excluded, and if the last day of such period is a non-Business Day, the period in question ends on the next succeeding Business Day, (b) unless the context otherwise requires, all references in this Agreement to any “Section,” “Subsection” or “Exhibit” are to the corresponding Section, Subsection or Exhibit

    22

of this Agreement, (c) the word “including,” or any variation thereof, means “including, without limitation” and does not limit any general statement that it follows to the specific or similar items or matters immediately following it, and (d) all references to dollar amounts are expressed in United States Dollars. As used herein, the singular shall include the plural, the plural shall include the singular and any use of the male or female gender shall include the other gender, all wherever the same shall be applicable and when the context shall admit or require.
4.12    No Recourse. Notwithstanding anything to the contrary that may be expressed or implied in this Agreement, and notwithstanding the fact that the Holders or their Affiliates or any of their or their successors or permitted assignees may be a partnership or a limited liability company, the Company, by its acceptance of the benefits hereof, covenants, agrees and acknowledges that no Person other than the Holders and their respective successors and permitted assignees shall have any obligation hereunder, and that it has no rights of recovery against, and no recourse hereunder against, any former, current or future director, officer, agent, advisor, attorney, representative, Affiliate, manager or employee of any Holder (or any of its successors or assignees), against any former, current or future general or limited partner, manager, member or stockholder of any Holder or any Affiliate thereof or against any former, current or future director, officer, agent, advisor, attorney, representative, employee, Affiliate, assignee, general or limited partner, stockholder, manager or member of any of the foregoing, whether by or through attempted piercing of the corporate veil, by the enforcement of any judgment or assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law.
4.13    Specific Performance. The rights of each party to consummate the transactions contemplated hereby are agreed to be unique, and recognizing that the remedy at law for any breach or threatened breach by a party hereto of the agreements and conditions set forth herein would be inadequate, and further recognizing that any such breach or threatened breach would cause immediate, irreparable and permanent damage to the parties, the extent of which would be impossible or difficult to ascertain, the parties hereto agree that in the event of any such breach or threatened breach, and in addition to any and all remedies at law or otherwise provided herein, any party hereto may specifically enforce the terms of this Agreement and may obtain temporary and/or permanent injunctive relief (including a mandatory injunction) without the necessity of proving actual damage or the lack of an adequate remedy at law and, to the extent permissible under applicable rules, provision and statutes, a temporary injunction may be granted immediately upon the commencement of any suit hereunder regardless of whether the breaching party or parties have actually received notice thereof. Such remedy shall be cumulative and not exclusive, and shall be in addition to any other remedy or remedies available to the parties.
[Remainder of Page Intentionally Left Blank]


    23



COMPANY:
SUNNOVA ENERGY INTERNATIONAL INC.

By:
/s/ Robert L. Lane
Name:
Robert L. Lane
Title:
Executive Vice President and Chief Financial Officer



[Signature Page to Registration Rights Agreement]



HOLDERS:
MTP ENERGY MASTER FUND LLC
By MTP Energy Management LLC, its managing member
By Magnetar Financial LLC, its sole member

By:
/s/ Karl Wachter
Name:
Karl Wachter
Title:
General Counsel


[Signature Page to Registration Rights Agreement]



TORTOISE ENERGY INFRASTRUCTURE CORP.
By Tortoise Capital Advisors, L.L.C. as Investment Adviser

By:
/s/ Stephen Pang
Name:
Stephen Pang
Title:
Managing Director

TORTOISE MIDSTREAM ENERGY FUND, INC.
By Tortoise Capital Advisors, L.L.C. as Investment Adviser

By:
/s/ Stephen Pang
Name:
Stephen Pang
Title:
Managing Director

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC
By Tortoise Capital Advisors, L.L.C. as Investment Adviser

By:
/s/ Stephen Pang
Name:
Stephen Pang
Title:
Managing Director


[Signature Page to Registration Rights Agreement]


TORTOISE DIRECT OPPORTUNITIES FUND II, LP
By Tortoise Capital Advisors, L.L.C. as Investment Adviser
By:
/s/ Stephen Pang
Name:
Stephen Pang
Title:
Managing Director


TORTOISE ESSENTIAL ASSETS INCOME TERM FUND
By Tortoise Capital Advisors, L.L.C. as Investment Adviser
By:
/s/ Stephen Pang
Name:
Stephen Pang
Title:
Managing Director

PRINCIPAL DIVERSIFIED SELECT REAL ASSET FUND
By Tortoise Capital Advisors, L.L.C. as Investment Adviser

By:
/s/ Stephen Pang
Name:
Stephen Pang
Title:
Managing Director




[Signature Page to Registration Rights Agreement]


SCHEDULE A
Holders
Name
Address
MTP Energy Master Fund LLC
1603 Orrington Ave., 13th Floor
Evanston, IL 60201
Tortoise Energy Infrastructure Corp.
5100 W. 115th Place
Leawood, KS 66211
Tortoise Midstream Energy Fund, Inc.
5100 W. 115th Place
Leawood, KS 66211
Tortoise Power and Energy Infrastructure Fund, Inc.
5100 W. 115th Place
Leawood, KS 66211
Tortoise Direct Opportunities Fund II, LP
5100 W. 115th Place
Leawood, KS 66211
Tortoise Essential Assets Income Term Fund
5100 W. 115th Place
Leawood, KS 66211
Principal Diversified Select Real Asset Fund
5100 W. 115th Place
Leawood, KS 66211



Exhibit 4.10

    
SUNNOVA ENERGY INTERNATIONAL INC.
AND
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
INDENTURE
Dated as of December 23, 2019
7.75% Convertible Senior Notes due 2027
    



1

TABLE OF CONTENTS
Page
Article 1
Definitions

Section 1.01. Definitions and Rules of Construction    1
Section 1.02. References to Interest    13

Article 2
Issue, Description, Execution, Registration and Exchange of Notes

Section 2.01. Designation and Amount    13
Section 2.02. Form of Notes    13
Section 2.03. Date and Denomination of Notes; Payments of Interest and Defaulted Amounts    14
Section 2.04. Execution, Authentication and Delivery of Notes    15
Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary    15
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes    21
Section 2.07. Temporary Notes    21
Section 2.08. Cancellation of Notes Paid, Converted, Etc    22
Section 2.09. CUSIP Numbers    22
Section 2.10. Additional Notes; Repurchases    22

Article 3
Satisfaction and Discharge

Section 3.01. Satisfaction and Discharge    22

Article 4
Particular Covenants of the Company

Section 4.01. Payment of Principal and Interest    23
Section 4.02. Maintenance of Office or Agency    23
Section 4.03. Appointments to Fill Vacancies in Trustee’s Office    23
Section 4.04. Provisions as to Paying Agent    23
Section 4.05. Existence    24
Section 4.06. Rule 144A Information Requirement and Annual Reports    24
Section 4.07. Stay, Extension and Usury Laws    25
Section 4.08. Compliance Certificate; Statements as to Defaults    25
Section 4.09. Limitation on Restricted Payments.    25
Section 4.10. Limitation on Incurrence of Indebtedness.    26

Article 5
Lists of Holders and Reports by the Company and the Trustee

Section 5.01. Lists of Holders    27
Section 5.02. Preservation and Disclosure of Lists    28

Article 6
Defaults and Remedies

Section 6.01. Events of Default    28
Section 6.02. Acceleration; Rescission and Annulment    29

i


Section 6.03. Additional Interest; Registration Default Damages    29
Section 6.04. Payments of Notes on Default; Suit Therefor    30
Section 6.05. Application of Monies Collected by Trustee    31
Section 6.06. Proceedings by Holders    32
Section 6.07. Proceedings by Trustee    32
Section 6.08. Remedies Cumulative and Continuing    33
Section 6.09. Direction of Proceedings and Waiver of Defaults by Majority of Holders    33
Section 6.10. Notice of Defaults    33
Section 6.11. Undertaking to Pay Costs    33

Article 7
Concerning the Trustee

Section 7.01. Duties and Responsibilities of Trustee    34
Section 7.02. Reliance on Documents, Opinions, Etc    35
Section 7.03. No Responsibility for Recitals, Etc    36
Section 7.04. Trustee, Paying Agents, Conversion Agents or Note Registrar May Own Notes    36
Section 7.05. Monies to Be Held in Trust    36
Section 7.06. Compensation and Expenses of Trustee    37
Section 7.07. Officer’s Certificate as Evidence    37
Section 7.08. Eligibility of Trustee    37
Section 7.09. Resignation or Removal of Trustee    38
Section 7.10. Acceptance by Successor Trustee    38
Section 7.11. Succession by Merger, Etc    39
Section 7.12. Trustee’s Application for Instructions from the Company    39

Article 8
Concerning the Holders

Section 8.01. Action by Holders    39
Section 8.02. Proof of Execution by Holders    40
Section 8.03. Who Are Deemed Absolute Owners    40
Section 8.04. Company-Owned Notes Disregarded    40
Section 8.05. Revocation of Consents; Future Holders Bound    40

Article 9
Holders’ Meetings

Section 9.01. Purpose of Meetings    40
Section 9.02. Call of Meetings by Trustee    41
Section 9.03. Call of Meetings by Company or Holders    41
Section 9.04. Qualifications for Voting    41
Section 9.05. Regulations    41
Section 9.06. Voting    42
Section 9.07. No Delay of Rights by Meeting    42

Article 10
Supplemental Indentures

Section 10.01. Supplemental Indentures Without Consent of Holders    42
Section 10.02. Supplemental Indentures with Consent of Holders    43
Section 10.03. Effect of Supplemental Indentures    44
Section 10.04. Notation on Notes    44
Section 10.05. Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee    44

ii



Article 11
Consolidation, Merger, Sale, Conveyance and Lease

Section 11.01. Company May Consolidate, Etc. on Certain Terms    44
Section 11.02. Successor Entity to Be Substituted    44

Article 12
Immunity of Incorporators, Stockholders, Officers and Directors

Section 12.01. Indenture and Notes Solely Corporate Obligations    45

Article 13
[Intentionally Omitted]

Article 14
Conversion of Notes

Section 14.01. Conversion Privilege    45
Section 14.02. Conversion Procedure; Settlement Upon Conversion    46
Section 14.03. Company Conversion    49
Section 14.04. Adjustment of Conversion Rate    50
Section 14.05. Adjustments of Prices    57
Section 14.06. Shares to Be Fully Paid    57
Section 14.07. Effect of Recapitalizations, Reclassifications and Changes of the Common Stock    57
Section 14.08. Certain Covenants    59
Section 14.09. Responsibility of Trustee    59
Section 14.10. Notice to Holders Prior to Certain Actions    59
Section 14.11. Stockholder Rights Plans    60
Section 14.12. Exchange In Lieu Of Conversion    60

Article 15
Repurchase of Notes at Option of Holders

Section 15.01. Repurchase at Option of Holders    60
Section 15.02. Repurchase at Option of Holders Upon a Change of Control    61
Section 15.03. Withdrawal of Change of Control Repurchase or Optional Repurchase Notice    63
Section 15.04. Deposit of Change of Control Repurchase Price or Optional Repurchase Price    63
Section 15.05. Covenant to Comply with Applicable Laws Upon Repurchase of Notes    64

Article 16
Optional Redemption

Section 16.01. Optional Redemption    64
Section 16.02. Notice of Optional Redemption; Selection of Notes    65
Section 16.03. Payment of Notes Called for Redemption    66
Section 16.04. Restrictions on Redemption    66

Article 17
Miscellaneous Provisions

Section 17.01. Provisions Binding on Company’s Successors    66
Section 17.02. Official Acts by Successor Corporation    66
Section 17.03. Addresses for Notices, Etc    66

iii


Section 17.04. Governing Law; Jurisdiction    67
Section 17.05. Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee    67
Section 17.06. Legal Holidays    68
Section 17.07. Reserved    68
Section 17.08. Benefits of Indenture    68
Section 17.09. Table of Contents, Headings, Etc    68
Section 17.10. Authenticating Agent    68
Section 17.11. Execution in Counterparts    69
Section 17.12. Severability    69
Section 17.13. Waiver of Jury Trial    69
Section 17.14. Force Majeure    69
Section 17.15. Calculations    69
Section 17.16. USA PATRIOT Act    69
Section 17.17. Designation of Majority Holder Designee    69
Section 17.18. Trustee Reliance     70

EXHIBIT
Exhibit A    Form of Note    A-1



iv



INDENTURE dated as of December 23, 2019 (the “Issue Date”) between SUNNOVA ENERGY INTERNATIONAL INC., a Delaware corporation, as issuer (the “Company,” as more fully set forth in Section 1.01) and WILMINGTON TRUST, NATIONAL ASSOCIATION, as trustee (the “Trustee,” as more fully set forth in Section 1.01) and as conversion agent (the “Conversion Agent”).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issuance of its 7.75% Convertible Senior Notes due 2027, initially in an aggregate principal amount not to exceed $55,000,000 (the “Initial Notes”) or up to $75,000,000 subject to the satisfaction of the conditions precedent set forth in the Note Purchase Agreement (as herein defined) and Section 2.10 hereof (the Additional Notes (as defined in Section 2.10 hereof), together with the Initial Notes, the “Notes”), and in order to provide the terms and conditions upon which the Notes are to be authenticated, issued and delivered, the Company has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Form of Note, the certificate of authentication to be borne by each Note, the Form of Notice of Conversion, the Form of Optional Repurchase Notice, the Form of Change of Control Repurchase Notice and the Form of Assignment and Transfer to be borne by the Notes are to be substantially in the forms hereinafter provided; and
WHEREAS, all acts and things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee or a duly authorized authenticating agent, as in this Indenture provided, the valid, binding and legal obligations of the Company, and this Indenture a valid agreement according to its terms, have been done and performed, and the execution of this Indenture and the issuance hereunder of the Notes have in all respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes are, and are to be, authenticated, issued and delivered, and in consideration of the premises and of the purchase and acceptance of the Notes by the Holders thereof, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective Holders from time to time of the Notes (except as otherwise provided below), as follows:
ARTICLE 1
DEFINITIONS
Section 1.01.    Definitions and Rules of Construction. The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. The words “herein,” “hereof,” “hereunder” and words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. The terms defined in this Article include the plural as well as the singular. An accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP. “Or” is not exclusive. The meanings of the words “will” and “shall” are the same when used to express an obligation. References to sections of or rules under the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the Commission from time to time. The word “including” means “including without limitation.” Any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified.
“Additional Interest” means all amounts, if any, payable pursuant to Section 6.03 and any Registration Default Damages payable pursuant to the Registration Rights Agreement, as applicable.
“Additional Notes” has the meaning specified in Section 2.10.

1



“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control,” when used with respect to any specified Person means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. Notwithstanding anything to the contrary herein, the determination of whether one Person is an “Affiliate” of another Person for purposes of this Indenture shall be made based on the facts at the time such determination is made or required to be made, as the case may be, hereunder.
“Automatic Exchange” has the meaning specified in Section 2.05(c).
“Automatic Exchange Date” has the meaning specified in Section 2.05(c).
“Automatic Exchange Notice” has the meaning specified in Section 2.05(c).
“Automatic Exchange Notice Date” has the meaning specified in Section 2.05(c).
“Bank Facility” means one or more credit facilities (including any facility relating to or secured by, as applicable, net operating losses, tax equity or solar renewable energy certificates), the loans or commitments under which are provided and held only by one or more U.S. commercial banks or any branches or agencies of one or more non-U.S. banks licensed to conduct business in the United States, in each case, as amended, restated, modified, renewed, extended, refunded, replaced or refinanced, in whole or in part, from time to time with credit facilities that satisfy the above requirements (including with respect to the lenders thereunder).
“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially Owns” and “Beneficially Owned” have correlative meanings.
“Board of Directors” means the board of directors of the Company or a committee of such board duly authorized to act for it hereunder.
“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors, and to be in full force and effect on the date of such certification, and delivered to the Trustee.
“Business Day” means, with respect to any Note, any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.
“Capitalized Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) prepared in accordance with GAAP; provided that any obligations that are classified as an operating lease under GAAP shall not constitute Capitalized Lease Obligations.
“Capital Stock” means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity, but shall not include any debt securities convertible into or exchangeable for any securities otherwise constituting Capital Stock pursuant to this definition.
“Cash Settlement” shall have the meaning specified in Section 14.02(a).
“Change of Control” means the occurrence of any of the following:

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(a)    the direct or indirect sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Subsidiaries, taken as a whole, to any Person other than a Permitted Holder,
(b)    the Common Stock (or other common stock underlying the Notes) ceases to be listed or quoted on any of the NASDAQ Global Select Market, NASDAQ Global Market or the NYSE (or any of their respective successors);
(c)    any recapitalization or change of the Common Stock as a result of which the Common Stock would be converted into stock, other securities, other property or assets, any share exchange, or any consolidation or merger or other transaction of the Company pursuant to which the Common Stock will be converted into cash, securities or other property or assets, unless the Beneficial Owners of the Common Stock immediately prior to such transaction Beneficially Own more than 50% of all classes of common stock of the continuing or surviving company; or
(d)    the consummation of any transaction or series of transactions (including, without limitation, pursuant to a merger or consolidation), the result of which any “person” or “group” within the meaning of Section 13(d) of the Exchange Act (other than a Permitted Holder) becomes the Beneficial Owner, directly or indirectly, of more than 50% of the voting power of the Voting Stock of the Company;
provided, however, that with respect to clauses (a) and (d) above, a transaction or series of transactions in which the Company becomes a direct or indirect Wholly Owned Subsidiary of another Person or directly or indirectly sells, transfers, conveys or otherwise disposes of all or substantially all of the properties or assets of the Company and its subsidiaries, to such Person or a direct or indirect Wholly Owned Subsidiary thereof shall not constitute a Change of Control if:
(A) the holders of the Voting Stock of the Company immediately prior to such transaction or series of transactions Beneficially Own, directly or indirectly through one or more intermediaries, at least a majority of the voting power of and economic interest in the outstanding Voting Stock of such Person immediately following the consummation of such transaction or series of transactions; and
(B) immediately following the consummation of such transaction or series of transactions, no Person, other than such other Person (but including the holders of the Equity Interests of such other Person), Beneficially Owns, directly or indirectly through one or more intermediaries, more than 50% of the voting power of and economic interest in the outstanding Voting Stock of the Company.
“Change of Control Repurchase” shall have the meaning specified in Section 15.02(a).
“Change of Control Company Notice” shall have the meaning specified in Section 15.02(c).
“Change of Control Repurchase Date” shall have the meaning specified in Section 15.02(a).
“Change of Control Repurchase Notice” shall have the meaning specified in Section 15.02(b)(i).
“Change of Control Repurchase Price” shall have the meaning specified in Section 15.02(a).
“Clause A Distribution” shall have the meaning specified in Section 14.04(c).
“Clause B Distribution” shall have the meaning specified in Section 14.04(c).
“Clause C Distribution” shall have the meaning specified in Section 14.04(c).
“close of business” means 5:00 p.m. (New York City time).
“Combination Settlement” shall have the meaning specified in Section 14.02(a).

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“Combination Settlement Amount” shall consist of:
(a) cash in an amount equal to the lesser of (i) the Specified Dollar Amount and (ii) the Conversion Value on the applicable Conversion Date or, in the case of a Company Conversion, the Company Conversion Notice Date; and
(b) if the Conversion Value on such Conversion Date or Mandatory Conversion Notice Date exceeds the Specified Dollar Amount, a number of shares of Common Stock equal to (i) the difference between such Conversion Value and the Specified Dollar Amount, divided by (ii) the greater of (A) the average of the Daily VWAPs of the Common Stock over the Observation Period and (B) the closing price of the Common Stock on the Trading Day immediately prior to such Conversion Date or Mandatory Conversion Notice Date.
“Commission” means the U.S. Securities and Exchange Commission.
“Common Equity” of any Person means Capital Stock of such Person that is generally entitled (a) to vote in the election of directors of such Person or (b) if such Person is not a corporation, to vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.
“Common Stock” means the common stock of the Company, par value $0.0001 per share, subject to Section 14.07.
“Company” shall have the meaning specified in the first paragraph of this Indenture, and subject to the provisions of Article 11, shall include its successors.
“Company Conversion” shall have the meaning specified in Section 14.03(a).
“Company Conversion Date” shall have the meaning specified in Section 14.03(c).
“Company Conversion Notice” shall have the meaning specified in Section 14.03(c).
“Company Conversion Notice Date” means the date on which a Company Conversion Notice is delivered pursuant to Section 14.03(c).
“Company Conversion Right” shall have the meaning specified in Section 14.03(a).
“Company Order” means a written order of the Company signed by any of its Officers and delivered to the Trustee.
“Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:
(1)    to purchase any such primary obligation or any property constituting direct or indirect security therefor;
(2)    to advance or supply funds:
(a)    for the purchase or payment of any such primary obligation; or
(b)    to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

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(3)    to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.
“Conversion Agent” shall have the meaning specified in Section 4.02.
“Conversion Consideration” shall have the meaning specified in Section 14.12(a).
“Conversion Date” shall have the meaning specified in Section 14.02(c).
“Conversion Obligation” shall have the meaning specified in Section 14.01(a).
“Conversion Price” means as of any time, $1,000, divided by the Conversion Rate as of such time.
“Conversion Rate” shall have the meaning specified in Section 14.01(a).
“Conversion Value” means the product of (a) the Conversion Rate on the applicable Conversion Date or, in the case of a Company Conversion, the Company Conversion Notice Date, and (b) the greater of (i) the average of the Daily VWAPs of the Common Stock over the Observation Period and (ii) the closing price of the Common Stock on the Trading Day immediately prior to the Conversion Date or, in the case of a Company Conversion, the Company Conversion Notice Date.
“Corporate Trust Office” means the designated office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at Wilmington Trust, National Association, 15950 North Dallas Parkway, Suite 550, Dallas, TX 75248, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the designated corporate trust office of any successor trustee (or such other address as such successor trustee may designate from time to time by notice to the Holders and the Company).
“Custodian” means the Trustee, as custodian for The Depository Trust Company, with respect to the Global Notes, or any successor entity thereto.
“Daily VWAP” means, on any Trading Day, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “NOVA <EQUITY> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of the Common Stock on such Trading Day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company). The “Daily VWAP” shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
“Default” means any event that is, or after notice or passage of time, or both, would be, an Event of Default.
“Defaulted Amounts” means any amounts on any Note (including, without limitation, the Redemption Price, the Change of Control Repurchase Price, principal and interest) that are payable but are not punctually paid or duly provided for.
“Depositary” means, with respect to each Global Note, the Person specified in Section 2.05(c) as the Depositary with respect to such Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter, “Depositary” shall mean or include such successor.
“Designated Financial Institution” shall have the meaning specified in Section 14.12(a).
“Distributed Property” shall have the meaning specified in Section 14.04(c).

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“Effective Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, reflecting the relevant share split or share combination, as applicable. For the avoidance of doubt, any alternative trading convention on the applicable exchange or market in respect of shares of the Common Stock under a separate ticker symbol or CUSIP number will not be considered “regular way” for this purpose.
“Eligible Market” shall have the meaning specified in Section 14.03(b).
“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
“Estimated Net Contracted Customer Value” means, as of any date of determination, the sum of:
(1)    the present value of the remaining estimated future net cash flows expected to be received by the Company and its Subsidiaries from existing customers during the initial contract term of their leases and power purchase agreements; plus
(2)    the present value of future net cash flows the Company and its Subsidiaries expect to receive from the sale of related solar renewable energy certificates, either under existing contracts or in future sales, and from other performance based incentives related to the solar energy systems; plus
(3)    the carrying value of outstanding customer loans on the Company’s most recent consolidated balance sheet; less
(4)    the present value of estimated net cash distributions to redeemable noncontrolling interests and estimated operating, maintenance and administrative expenses associated with the solar service agreements (including expenses relating to accounting, reporting, audit, insurance, maintenance and repairs (other than maintenance and repair costs for inverters and similar equipment)); less
(5)    the carrying value of the debt of the Company and its Subsidiaries; plus
(6)    cash and restricted cash and the carrying value of construction in progress assets;
with all present value cash flows calculated hereunder using a 6% discount rate.
“Event of Default” shall have the meaning specified in Section 6.01.
“Ex-Dividend Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question, from the Company or, if applicable, from the seller of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market. For the avoidance of doubt, any alternative trading convention on the applicable exchange or market in respect of shares of the Common Stock under a separate ticker symbol or CUSIP number will not be considered “regular way” for this purpose.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exchange Election” shall have the meaning specified in Section 14.12(a).
“Form of Assignment and Transfer” means the “Form of Assignment and Transfer” attached as Attachment 4 to the Form of Note attached hereto as Exhibit A.

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“Form of Change of Control Repurchase Notice” means the “Form of Change of Control Repurchase Notice” attached as Attachment 3 to the Form of Note attached hereto as Exhibit A.
“Form of Note” means the “Form of Note” attached hereto as Exhibit A.
“Form of Notice of Conversion” means the “Form of Notice of Conversion” attached as Attachment 1 to the Form of Note attached hereto as Exhibit A.
The terms “given”, “mailed”, “notify” or “sent” with respect to any notice to be given to a Holder pursuant to this Indenture, shall mean notice (x) given to the Depositary (or its designee) pursuant to the standing instructions from the Depositary or its designee, including by electronic mail in accordance with accepted practices or procedures at the Depositary (in the case of a Global Note) or (y) mailed to such Holder by first class mail, postage prepaid, at its address as it appears on the Note Register (in the case of a Physical Note), in each case, in accordance with Section 17.03. Notice so “given” shall be deemed to include any notice to be “mailed” or “delivered,” as applicable, under this Indenture.
“Global Note” shall have the meaning specified in Section 2.05(b).
“Hedging Obligations” means, with respect to any Person, the obligations of such Person under:
(1)    currency exchange, interest rate or commodity swap agreements (including commodity swaps, commodity options, forward commodity contracts, basis differential swaps, spot contracts, fixed-price physical delivery contracts or other similar agreements or arrangements), currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and
(2)    other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates, solar renewable energy certificate prices or retail electricity prices.
“Holder,” as applied to any Note, or other similar terms (but excluding the term “beneficial holder”), means any Person in whose name at the time a particular Note is registered on the Note Register.
“Incur” means to issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness of a Person existing at the time such person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.
“Indebtedness” means, with respect to any Person:
(1)    the principal of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except any such balance that constitutes (i) a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business, (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP, (iii) any such obligations under ERISA or liabilities associated with customer prepayments and (iv) any such balance or unpaid purchase price to the extent that it is either required to be or at the option of such Person may be satisfied solely through the issuance of Equity Interests of the Company), which purchase price is due more than twelve months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any

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Hedging Obligations, other than Hedging Obligations that are incurred in the normal course of business and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder, if and to the extent that any of the foregoing indebtedness (other than Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;
(2)    to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, the Indebtedness referred to in clause (1) of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and
(3)    to the extent not otherwise included, Indebtedness of the type referred to in clause (1) of another Person secured by a lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of: (a) the fair market value of such asset at such date of determination; and (b) the amount of such Indebtedness of such other Person;
provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) accrued expenses and Contingent Obligations, in each case, Incurred in the ordinary course of business and not in respect of borrowed money, (2) deferred or prepaid revenues, (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller, (4) obligations in respect of surety and bonding requirements of the Company and its Subsidiaries, (5) trade and other ordinary course payables, accrued expenses and intercompany liabilities arising in the ordinary course of business, (6) in the case of the Company and its Subsidiaries, intercompany liabilities in connection with cash management, tax and accounting operations of the Company and its Subsidiaries, (7) asset retirement obligations, (8) obligations in respect of environmental reclamation or site rehabilitation and (9) workers’ compensation obligations (including superannuation, pensions and retiree medical care) that are not delinquent by more than 90 days.
“Indenture” means this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented.
“Initial Notes” shall have the meaning specified in the first paragraph of the recitals of this Indenture.
“Interest Payment Date” means each January 30, April 30, July 30 and October 30 of each year, beginning on April 30, 2020.
“Last Reported Sale Price” of the Common Stock on any date means the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock is traded. If the Common Stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the “Last Reported Sale Price” shall be the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization. If the Common Stock is not so quoted, the “Last Reported Sale Price” shall be the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose. The “Last Reported Sale Price” shall be determined without regard to after-hours trading or any other trading outside of regular trading session hours.
“Majority Holder Designee” has the meaning given to such term in Section 17.17.

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“Market Disruption Event” means, for the purposes of determining amounts due upon conversion (a) a failure by the primary U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading to open for trading during its regular trading session or (b) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for the Common Stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to the Common Stock.
“Maturity Date” means January 30, 2027.
“Merger Event” shall have the meaning specified in Section 14.07(a).
“Note” or “Notes” shall have the meaning specified in the first paragraph of the recitals of this Indenture.
“Note Purchase Agreement” means that certain purchase agreement, dated as of December 20, 2019, by and among the Company and the investors party thereto.
“Note Register” shall have the meaning specified in Section 2.05(a).
“Note Registrar” shall have the meaning specified in Section 2.05(a).
“Notice of Conversion” shall have the meaning specified in Section 14.02(b).
“Notice of Redemption” shall have the meaning specified in Section 16.02(a).
“NYSE” means the New York Stock Exchange, or any successor thereto.
“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities payable under the documentation governing any Indebtedness (including interest, fees, expenses, indemnity claims and other monetary obligations accrued during the pendency of an insolvency proceeding, whether or not constituting an allowed claim in such proceeding); provided that, Obligations with respect to the Notes shall not include fees or indemnifications in favor of third parties other than the Trustee and the holders of the Notes.
“Observation Period” with respect to any Note surrendered for conversion means the 20 consecutive Trading Days beginning on, and including, the 21st Scheduled Trading Day immediately preceding the Conversion Date or, in the case of a Company Conversion, the Company Conversion Notice Date.
“Officer” means, with respect to the Company, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the General Counsel, the Treasurer, the Secretary, any Executive or Senior Vice President or any Vice President (whether or not designated by a number or numbers or word or words added before or after the title “Vice President”).
“Officer’s Certificate,” when used with respect to the Company, means a certificate that is delivered to the Trustee and that is signed by any Officer of the Company. Each such certificate shall include the statements provided for in Section 17.05 if and to the extent required by the provisions of such Section. The Officer giving an Officer’s Certificate pursuant to Section 4.08 shall be the principal executive, financial or accounting officer of the Company.
“open of business” means 9:00 a.m. (New York City time).
“Opinion of Counsel” means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company, or other counsel who is reasonably acceptable to the Trustee, which opinion may contain customary exceptions and qualifications as to the matters set forth therein, that is delivered to the Trustee. Each such opinion shall include the statements provided for in Section 17.05 if and to the extent required by the provisions of such Section 17.05.

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“Optional Redemption” shall have the meaning specified in Section 16.01(a).
“Optional Repurchase” shall have the meaning specified in Section 15.01(a).
“Optional Repurchase Date” shall have the meaning specified in Section 15.01(a).
“Optional Repurchase Notice” shall have the meaning specified in Section 15.01(a).
“Optional Repurchase Price” shall have the meaning set forth in Section 15.01(a).
“outstanding,” when used with reference to Notes, shall, subject to the provisions of Section 8.04, mean, as of any particular time, all Notes authenticated and delivered by the Trustee under this Indenture, except:
(a) Notes theretofore canceled by the Trustee or accepted by the Trustee for cancellation;
(b) Notes, or portions thereof, that have become due and payable and in respect of which monies in the necessary amount shall have been deposited in trust with the Trustee or with any Paying Agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent);
(c) Notes that have been paid pursuant to Section 2.06 or Notes in lieu of which, or in substitution for which, other Notes shall have been authenticated and delivered pursuant to the terms of Section 2.06 unless proof satisfactory to the Trustee is presented that any such Notes are held by protected purchasers in due course;
(d) Notes converted pursuant to Article 14 and required to be cancelled pursuant to Section 2.08;
(e) Notes repurchased pursuant to Article 15 and required to be cancelled pursuant to Section 2.08; and
(f) Notes redeemed pursuant to Article 16.
“Paying Agent” shall have the meaning specified in Section 4.02.
“Permitted Holder” means any investment fund or account affiliated with, managed, advised or sub-advised by (i) Triangle Peak Partners, (ii) Energy Capital Partners, (iii) Newlight Partners or (iv) Elk Mountain Ltd., or any of their respective Affiliates; provided, however, that in no event shall any operating portfolio company or any holding company for any operating portfolio company (other than the Company) be a Permitted Holder. Following the consummation of any transaction not constituting a Change of Control by virtue of the proviso contained at the end of the definition thereof, such new parent entity (but not any of its direct or indirect equity holders) shall be deemed to be an additional Permitted Holder.
“Permitted Indebtedness” has the meaning specified in Section 4.10(b).
“Permitted Payments to Parent” means the distribution by the Company to any future direct or indirect parent of the Company from time to time of amounts necessary to fund the payment by or reimbursement of such parent entity of (i) its general corporate or other operating, administrative, compliance and overhead costs and expenses in the ordinary course of business, (ii) expenses related to the registration and offering of securities (in either case, including any such fees, costs or expenses of independent auditors and legal counsel to such parent entity, to the extent that all or a majority of the proceeds of such offering are or are intended to be permanently contributed to the capital of the Company) and (iii) fees and expenses required to maintain its corporate existence and customary salary, bonus and other benefits payable to its directors, officers and employees, to the extent such costs and expenses are reasonably attributable or related to the ownership of the Company and its Subsidiaries.

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“Person” means an individual, a corporation, a limited liability company, an association, a partnership, a joint venture, a joint stock company, a trust, an unincorporated organization or a government or an agency or a political subdivision thereof.
“Physical Notes” means permanent certificated Notes in registered, non-global form issued in minimum denominations of $1,000 principal amount and integral multiples of $1,000 in excess thereof.
“Physical Settlement” shall have the meaning specified in Section 14.02(a).
“Predecessor Note” of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 2.06 in lieu of or in exchange for a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note that it replaces.
“Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock (or other applicable security) have the right to receive any cash, securities or other property or in which the Common Stock (or such other security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock (or such other security) entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors, by statute, by contract or otherwise).
“Redemption Date” shall have the meaning specified in Section 16.02(a).
“Redemption Price” means an amount equal to (a) (i) for any Notes to be redeemed prior to December 23, 2021, 120% of the principal amount of such Notes, (ii) for any Notes to be redeemed on or after December 23, 2021 and prior to December 23, 2023, 115% of the principal amount of such Notes, or (iii) for any Notes to be redeemed on or after December 23, 2023, 110% of the principal amount of such Notes, plus (b) accrued and unpaid interest, if any, to, but excluding, the Redemption Date (unless the Redemption Date falls after a Regular Record Date but on or prior to the immediately succeeding Interest Payment Date, in which case interest accrued to the Interest Payment Date will be paid by the Company to Holders of record of such Notes as of the close of business on such Regular Record Date, and the Redemption Price will consist solely of the applicable percentage of the principal amount of such Notes pursuant to clause (a) above).
“Reference Property” shall have the meaning specified in Section 14.07(a).
“Registration Default” shall have the meaning specified in the Registration Rights Agreement.
“Registration Default Damages” shall have the meaning specified in the Registration Rights Agreement.
“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the Issue Date, among the Company and the investors party from time to time thereto.
“Regular Record Date,” with respect to any Interest Payment Date, means the January 15, April 15, July 15 or October 15 (whether or not such day is a Business Day) immediately preceding the applicable January 30, April 30, July 30 or October 30 Interest Payment Date, respectively.
“Resale Restriction Termination Date” shall have the meaning specified in Section 2.05(c).
“Responsible Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter relating to this Indenture is referred because of such person’s knowledge of and familiarity with the particular subject and who shall, in each case, have direct responsibility for the administration of this Indenture.

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“Restricted Payments” shall have the meaning specified in Section 4.09(a).
“Restricted Securities” shall have the meaning specified in Section 2.05(c).
“Restrictive Notes Legend” shall have the meaning specified in Section 2.05(c).
“Rule 144” means Rule 144 as promulgated under the Securities Act.
“Rule 144A” means Rule 144A as promulgated under the Securities Act.
“Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading. If the Common Stock is not so listed or admitted for trading, “Scheduled Trading Day” means a Business Day.
“Securities Act” means the Securities Act of 1933, as amended, and the rules of the Commission and regulations promulgated thereunder.
“Settlement Amount” has the meaning specified in Section 14.02(a)(iv).
“Settlement Method” means, with respect to any conversion of Notes, Physical Settlement, Cash Settlement or Combination Settlement, as elected (or deemed to have been elected) by the Company.
“Settlement Notice” has the meaning specified in Section 14.02(a)(iii).
“Significant Subsidiary” means a Subsidiary of the Company, the total assets (after intercompany eliminations) of which exceeds $15,000,000.
“Specified Dollar Amount” means the cash amount per $1,000 principal amount of Notes to be received upon conversion as specified in the Settlement Notice (or deemed specified as provided in Section 14.02(a)(iii)) related to any converted Notes.
“Spin-Off” shall have the meaning specified in Section 14.04(c).
“Subordinated Indebtedness” means any indebtedness of the Company which is by its terms subordinated in right of payment to the Notes.
“Subsidiary” means, with respect to any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries of such Person.
“Successor Entity” shall have the meaning specified in Section 11.01(a).
“Trading Day” means, except for determining amounts due upon conversion as set forth below, a day on which (i) trading in the Common Stock (or other security for which a closing sale price must be determined) generally occurs on the NYSE or, if the Common Stock (or such other security) is not then listed on the NYSE, on the principal other U.S. national or regional securities exchange on which the Common Stock (or such other security) is then listed or, if the Common Stock (or such other security) is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock (or such other security) is then traded and (ii) a Last Reported Sale Price for the Common Stock (or closing sale price for such other security) is available on such securities exchange or market; provided that if the Common Stock (or such other security) is not so listed or traded, “Trading Day” means a Business Day; and provided, further, that for purposes of determining amounts due upon conversion only, “Trading Day” means a day on which (x) there is no Market Disruption Event and (y) trading in the Common Stock generally occurs on the NYSE or, if the Common Stock is not then listed on the NYSE, on the principal other U.S. national or

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regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then listed or admitted for trading, except that if the Common Stock is not so listed or admitted for trading, “Trading Day” means a Business Day.
“transfer” shall have the meaning specified in Section 2.05(c).
“Trigger Event” shall have the meaning specified in Section 14.04(c).
“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, as it was in force at the date of execution of this Indenture; provided, however, that in the event the Trust Indenture Act of 1939 is amended after the date hereof, the term “Trust Indenture Act” shall mean, to the extent required by such amendment, the Trust Indenture Act of 1939, as so amended.
“Trustee” means the Person named as the “Trustee” in the first paragraph of this Indenture until a successor trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder.
“unit of Reference Property” shall have the meaning specified in Section 14.07(a).
“Valuation Period” shall have the meaning specified in Section 14.04(c).
“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled (without regard to the occurrence of any contingency) to vote in the election of the board of directors of such Person.
“Wholly Owned Subsidiary” means, with respect to any Person, any Subsidiary of such Person, except that, solely for purposes of this definition, the reference to “more than 50%” in the definition of “Subsidiary” shall be deemed replaced by a reference to “100%,” the calculation of which shall exclude nominal amounts of the voting power of shares of Capital Stock or other interests in the relevant Subsidiary not held by such person to the extent required to satisfy local minority interest requirements outside of the United States.
Section 1.02.    References to Interest. Unless the context otherwise requires, any reference to interest on, or in respect of, any Note in this Indenture shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to Section 6.03 or the Registration Rights Agreement. Unless the context otherwise requires, any express mention of Additional Interest in any provision hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made.
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

Section 2.01.    Designation and Amount. The Notes shall be designated as the “7.75% Convertible Senior Notes due 2027.” The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is initially limited to $55,000,000, subject to Section 2.10 and except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of other Notes to the extent expressly permitted hereunder.

Section 2.02.    Form of Notes. The Notes and the Trustee’s certificate of authentication to be borne by such Notes shall be substantially in the respective forms set forth in Exhibit A, the terms and provisions of which shall constitute, and are hereby expressly incorporated in and made a part of this Indenture. To the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. In the case of any conflict between this Indenture and a Note, the provisions of this Indenture shall control and govern to the extent of such conflict.

Any Global Note may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Indenture as may be required by the Custodian or the Depositary, or as may be required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange or automated quotation system upon which the Notes may be listed or traded or designated

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for issuance or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Notes are subject.

Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends or endorsements as the Officer executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, or to conform to usage or to indicate any special limitations or restrictions to which any particular Notes are subject.

Each Global Note shall represent such principal amount of the outstanding Notes as shall be specified therein and shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be increased or reduced to reflect redemptions, repurchases, cancellations, conversions, transfers or exchanges permitted hereby. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in such manner and upon instructions given by the Holder of such Notes in accordance with this Indenture. Payment of principal (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price, if applicable) of, and accrued and unpaid interest on, a Global Note shall be made to the Holder of such Note on the date of payment, unless a record date or other means of determining Holders eligible to receive payment is provided for herein.

Section 2.03.    Date and Denomination of Notes; Payments of Interest and Defaulted Amounts. (a) The Notes shall be issuable in registered form without coupons in minimum denominations of $1,000 principal amount and integral multiples of $1,000 in excess thereof. Each Note shall be dated the date of its authentication and shall bear interest from the date specified on the face of such Note. Accrued interest on the Notes shall be computed on the basis of a 360-day year composed of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.

(b)    The Person in whose name any Note (or its Predecessor Note) is registered on the Note Register at the close of business on any Regular Record Date with respect to any Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date. The principal amount of any Note (x) in the case of any Physical Note, shall be payable at the office or agency of the Company maintained by the Company for such purposes in the contiguous United States, which shall initially be the Corporate Trust Office and (y) in the case of any Global Note, shall be payable by wire transfer of immediately available funds to the account of the Depositary or its nominee. The Company shall pay, or cause the Paying Agent to pay, interest (i) on any Physical Notes (A) to Holders holding Physical Notes having an aggregate principal amount of $5,000,000 or less, by check mailed to the Holders of these Notes at their addresses as they appear in the Note Register and (B) to Holders holding Physical Notes having an aggregate principal amount of more than $5,000,000, either by check mailed to each such Holder or, upon written application by such a Holder to the Note Registrar not later than the relevant Regular Record Date, by wire transfer in immediately available funds to that Holder’s account within the United States if such Holder has provided the Company, the Trustee or the Paying Agent (if other than the Trustee) with the requisite information necessary to make such wire transfer, which application shall remain in effect until the Holder notifies, in writing, the Note Registrar to the contrary or (ii) on any Global Note by wire transfer of immediately available funds to the account of the Depositary or its nominee.

(c)    Any Defaulted Amounts shall forthwith cease to be payable to the Holder on the relevant payment date but shall accrue interest per annum at the rate borne by the Notes, subject to the enforceability thereof under applicable law, from, and including, such relevant payment date, and such Defaulted Amounts together with such interest thereon shall be paid by the Company, at its election in each case, as provided in clause (i) or (ii) below:

(i)    The Company may elect to make payment of any Defaulted Amounts to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on a special record date for the payment of such Defaulted Amounts, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of the Defaulted Amounts proposed to be paid on each Note and the date of the proposed payment (which shall be not less than 25 days after the receipt by the Trustee of such notice), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Amounts or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such

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money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Amounts as in this clause provided. Thereupon the Company shall fix a special record date for the payment of such Defaulted Amounts which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment, and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Company shall promptly notify the Trustee and the Holders of the proposed payment of such Defaulted Amounts and the special record date therefor to be delivered to each Holder not less than 10 days prior to such special record date. Notice of the proposed payment of such Defaulted Amounts and the special record date therefor having been so delivered, such Defaulted Amounts shall be paid to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on such special record date and shall no longer be payable pursuant to the following clause (ii) of this Section 2.03(c).

(ii)    The Company may make payment of any Defaulted Amounts in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, and upon such notice as may be required by such exchange or automated quotation system, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

Section 2.04.    Execution, Authentication and Delivery of Notes. The Notes shall be signed in the name and on behalf of the Company by the manual or facsimile signature of any of its Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, Treasurer, Secretary or any of its Executive or Senior Vice Presidents.

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Notes, and the Trustee in accordance with such Company Order shall authenticate and deliver such Notes, without any further action by the Company hereunder; provided that, subject to Section 17.05, the Trustee shall be entitled to receive an Officer’s Certificate and an Opinion of Counsel of the Company with respect to the issuance, authentication and delivery of such Notes.

Only such Notes as shall bear thereon a certificate of authentication substantially in the form set forth on the Form of Note attached as Exhibit A hereto, executed manually by an authorized officer of the Trustee (or an authenticating agent appointed by the Trustee as provided by Section 17.10), shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee (or such an authenticating agent) upon any Note executed by the Company shall be conclusive evidence that the Note so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to the benefits of this Indenture.

In case any Officer of the Company who shall have signed any of the Notes shall cease to be such Officer before the Notes so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Company, such Notes nevertheless may be authenticated and delivered or disposed of as though the person who signed such Notes had not ceased to be such Officer of the Company; and any Note may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Note, shall be the Officers of the Company, although at the date of the execution of this Indenture any such person was not such an Officer.

Section 2.05.    Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary. (a) The Company shall cause to be kept at the Corporate Trust Office a register (the register maintained in such office or in any other office or agency of the Company designated pursuant to Section 4.02, the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes and of transfers of Notes. Such register shall be in written form or in any form capable of being converted into written form within a reasonable period of time. The Trustee is hereby initially appointed the “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided. The Company may appoint one or more co-Note Registrars in accordance with Section 4.02.

Upon surrender for registration of transfer of any Note to the Note Registrar or any co-Note Registrar, and satisfaction of the requirements for such transfer set forth in this Section 2.05, the Company shall execute, and, upon Company Order, the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denominations and of a like principal amount and bearing such restrictive legends as may be required by this Indenture.


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Notes may be exchanged for other Notes of any authorized denominations and of a like principal amount, upon surrender of the Notes to be exchanged at any such office or agency maintained by the Company pursuant to Section 4.02. Whenever any Notes are so surrendered for exchange, the Company shall execute, and, upon Company Order, the Trustee shall authenticate and deliver, the Notes that the Holder making the exchange is entitled to receive, bearing registration numbers not contemporaneously outstanding.

All Notes presented or surrendered for registration of transfer or for exchange, repurchase or conversion shall (if so required by the Company, the Trustee, the Note Registrar or any co-Note Registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and duly executed, by the Holder thereof or its attorney-in-fact duly authorized in writing.

No service charge shall be imposed by the Company, the Trustee, the Note Registrar, any co-Note Registrar or the Paying Agent for any exchange or registration of transfer of Notes, but the Company may require a Holder to pay a sum sufficient to cover any documentary, stamp or similar issue or transfer tax required in connection therewith as a result of the name of the Holder of new Notes issued upon such exchange or registration of transfer being different from the name of the Holder of the old Notes surrendered for exchange or registration of transfer.

None of the Company, the Trustee, the Note Registrar or any co-Note Registrar shall be required to exchange for other Notes or register a transfer of (i) any Notes surrendered for conversion or, if a portion of any Note is surrendered for conversion, such portion thereof surrendered for conversion, (ii) any Notes, or a portion of any Note, surrendered for repurchase (and not withdrawn) in accordance with Article 15 or (iii) any Notes selected for redemption in accordance with Article 16, except the unredeemed portion of any Note being redeemed in part.

All Notes issued upon any registration of transfer or exchange of Notes in accordance with this Indenture shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.

(b)    So long as the Notes are eligible for book-entry settlement with the Depositary, unless otherwise required by law, subject to the fourth paragraph from the end of Section 2.05(c) all Notes shall be represented by one or more Notes in global form (each, a “Global Note”) registered in the name of the Depositary or the nominee of the Depositary. Each Global Note shall bear the legend required on a Global Note set forth in Exhibit A hereto. The transfer and exchange of beneficial interests in a Global Note that does not involve the issuance of a Physical Note shall be effected through the Depositary (but not the Trustee or the Custodian) in accordance with this Indenture (including the restrictions on transfer set forth herein) and the procedures of the Depositary therefor.

(c)    Every Note that bears or is required under this Section 2.05(c) to bear the Restrictive Notes Legend (together with any Common Stock issued upon conversion of the Notes that is required to bear the legend set forth in Section 2.05(d), collectively, the “Restricted Securities”) shall be subject to the restrictions on transfer set forth in this Section 2.05(c) (including those contained in the Restrictive Notes Legend set forth below), unless such restrictions on transfer shall be eliminated or otherwise waived by written consent of the Company, and the Holder of each such Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer. As used in this Section 2.05(c) and Section 2.05(d), the term “transfer” encompasses any sale, pledge, transfer or other disposition whatsoever of any Restricted Security.

Until the date (the “Resale Restriction Termination Date”) that is the later of (1) the date that is one year (or such shorter period of time as permitted by Rule 144 or any successor provision thereto) after the later of the last date of original issuance of the Initial Notes, the last date of the issuance of any Additional Notes or the last date on which the Company or any Affiliate of the Company was the owner of such Note, and (2) such later date, if any, as may be required by applicable law; any certificate evidencing such Note (and all securities issued in exchange therefor or substitution thereof, other than Common Stock, if any, issued upon conversion thereof, which shall bear the legend set forth in Section 2.05(d), if applicable) shall bear a legend in substantially the following form (the “Restrictive Notes Legend”) (unless such Notes have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company in writing, with notice thereof to the Trustee):

THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE

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“SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

(2) AGREES FOR THE BENEFIT OF SUNNOVA ENERGY INTERNATIONAL INC. (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ISSUE DATE OF ANY ADDITIONAL NOTES, OR THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR

(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

THIS NOTE HAS BEEN ISSUED WITH “ORIGINAL ISSUE DISCOUNT” FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. UPON WRITTEN REQUEST TO THE COMPANY AT CHIEF FINANCIAL OFFICER, 20 EAST GREENWAY PLAZA, SUITE 475, HOUSTON, TEXAS 77046, THE COMPANY WILL PROMPTLY MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE THE FOLLOWING INFORMATION: (1) THE ISSUE PRICE AND DATE OF THE NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE AND (3) THE YIELD TO MATURITY OF THE NOTE.

No transfer of any Note prior to the Resale Restriction Termination Date will be registered by the Note Registrar unless the applicable box on the Form of Assignment and Transfer has been checked.

Any Note (or security issued in exchange or substitution therefor) (i) as to which such restrictions on transfer shall have expired in accordance with their terms, (ii) that has been transferred pursuant to a registration statement that has become effective or been declared effective under the Securities Act and that continues to be effective at the time of such transfer or (iii) that has been sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, may, upon surrender of such Note for exchange to the Note Registrar in accordance with the provisions of this Section 2.05, be exchanged for a new Note or Notes, of like tenor and principal amount, which shall not bear the Restrictive Notes Legend required by this Section 2.05(c) and shall not be assigned a restricted CUSIP number. The Company shall be entitled to instruct the Custodian in writing to so surrender any Global Note as to which any of the conditions set forth in clause (i) through (iii) of the immediately preceding sentence have been satisfied, and, upon such instruction, the Custodian shall so surrender such Global Note for exchange;

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and any new Global Note so exchanged therefor shall not bear the Restrictive Notes Legend specified in this Section 2.05(c) and shall not be assigned a restricted CUSIP number. The Company shall promptly notify the Trustee upon the occurrence of the Resale Restriction Termination Date and promptly after a registration statement, if any, with respect to the Notes or any Common Stock issued upon conversion of the Notes has been declared effective under the Securities Act.

Upon the Company’s satisfaction that the Restrictive Notes Legend shall no longer be required in order to maintain compliance with the Securities Act, beneficial interests in a Global Note that is a Restricted Security may be automatically exchanged into beneficial interests in an Unrestricted Global Note without any action required by or on behalf of the Holder (the “Automatic Exchange”) at any time on or after the date that is the 366th calendar day after (i) with respect to any Note issued on the Issue Date, the later of (A) the Issue Date and (B) the last date on which the Company or any Affiliate of the Company was the owner of such Note (or of any other Global Note with the same CUSIP number) or (ii) with respect to any Additional Note, if any, the later of (A) the issue date of such Additional Note and (B) the last date on which the Company or any Affiliate of the Company was the owner of such Note (or of any other Global Note with the same CUSIP number), or, in each case, if such day is not a Business Day, on the next succeeding Business Day (the “Automatic Exchange Date”).

Upon the Company’s satisfaction that the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act, the Company shall (I) provide written notice to the Trustee and the Depositary to exchange all of the outstanding beneficial interests in a particular Global Note that is a Restricted Security to a Global Note not bearing the Restrictive Notes Legend, which the Company shall have previously otherwise made eligible for exchange with the DTC, (II) provide prior written notice (the “Automatic Exchange Notice”) to each Holder at such Holder’s address appearing in the Note Register at least seven calendar days prior to the Automatic Exchange (the “Automatic Exchange Notice Date”), which notice must include (1) the Automatic Exchange Date, (2) the section of this Indenture pursuant to which the Automatic Exchange shall occur, (3) the “CUSIP” number of the Global Note that is a Restricted Security from which such Holder’s beneficial interests will be transferred and (4) the “CUSIP” number of the Global Note not bearing the Restrictive Notes Legend into which such Holder’s beneficial interests will be transferred, and (III) on or prior to the date of the Automatic Exchange, deliver to the Trustee for authentication one or more Global Notes not bearing the Restrictive Notes Legend, duly executed by the Company, in an aggregate principal amount equal to the aggregate principal amount of Global Notes that are Restricted Securities to be exchanged. Notwithstanding anything to the contrary in this Section 2.05(c), during the period between the Automatic Exchange Notice Date and the Automatic Exchange Date, no transfers or exchanges other than pursuant to this Section 2.05(c) shall be permitted without the prior written consent of the Company.

As a condition to any Automatic Exchange, the Company shall provide, and the Trustee shall be entitled to rely upon, an Officer’s Certificate and/or Opinion of Counsel in form reasonably acceptable to the Trustee to the effect that no registration under the Securities Act is required in respect of the Automatic Exchange or re-sales of beneficial interests in such Unrestricted Global Note that are beneficially owned by a holder of beneficial interests therein upon the Automatic Exchange. The Company may request from Holders such information as it reasonably determines is required in order to be able to deliver such Officer’s Certificate. Upon such exchange of beneficial interests pursuant to this Section 2.05(c), the aggregate principal amount of the Global Notes shall be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, to reflect the relevant increase or decrease in the principal amount of such Global Note resulting from the applicable exchange. The Global Note that is a Restricted Security from which beneficial interests are transferred pursuant to an Automatic Exchange shall be canceled following the Automatic Exchange.

Notwithstanding any other provisions of this Indenture (other than the provisions set forth in this Section 2.05(c)), a Global Note may not be transferred as a whole or in part except (i) by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary and (ii) for exchange of a Global Note or a portion thereof for one or more Physical Notes in accordance with the second immediately succeeding paragraph.

The Depositary shall be a clearing agency registered under the Exchange Act. The Company has initially appointed The Depository Trust Company to act as Depositary with respect to each Global Note. Initially, each Global Note shall be issued to the Depositary, registered in the name of Cede & Co., as the nominee of the Depositary, and deposited with the Trustee as custodian for Cede & Co.


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If (i) the Depositary notifies the Company at any time that the Depositary is unwilling or unable to continue as depositary for the Global Notes and a successor depositary is not appointed within 90 days, (ii) the Depositary ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days or (iii) an Event of Default with respect to the Notes has occurred and is continuing and, subject to the Depositary’s applicable procedures, a Beneficial Owner of any Note requests that its beneficial interest therein be issued as a Physical Note, the Company shall execute, and the Trustee, upon receipt of an Officer’s Certificate and a Company Order for the authentication and delivery of Notes, shall authenticate and deliver (x) in the case of clause (iii), a Physical Note to such Beneficial Owner in a principal amount equal to the principal amount of such Note corresponding to such Beneficial Owner’s beneficial interest and (y) in the case of clause (i) or (ii), Physical Notes to each Beneficial Owner of the related Global Notes (or a portion thereof) in a principal amount equal to the principal amount of such Global Notes in exchange for such Global Notes, and upon delivery of the Global Notes to the Trustee such Global Notes shall be canceled.

Physical Notes issued in exchange for all or a part of the Global Note pursuant to this Section 2.05(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, or, in the case of clause (iii) of the immediately preceding paragraph, the relevant Beneficial Owner, shall instruct the Trustee. Upon execution and authentication, the Trustee shall deliver such Physical Notes, at the Company’s expense, to the Persons in whose names such Physical Notes are so registered.

At such time as all interests in a Global Note have been converted, canceled, repurchased upon a Change of Control, redeemed or transferred, such Global Note shall be, upon receipt thereof, canceled by the Trustee in accordance with standing procedures and existing instructions between the Depositary and the Custodian. At any time prior to such cancellation, if any interest in a Global Note is exchanged for Physical Notes, converted, canceled, repurchased upon a Change of Control, redeemed or transferred to a transferee who receives Physical Notes therefor or any Physical Note is exchanged or transferred for part of such Global Note, the principal amount of such Global Note shall, in accordance with the standing procedures and instructions existing between the Depositary and the Custodian, be appropriately reduced or increased, as the case may be, and an endorsement shall be made on such Global Note, by the Trustee or the Custodian, at the direction of the Trustee, to reflect such reduction or increase.

None of the Company, the Trustee or any agent of the Company or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of Beneficial Ownership interests of a Global Note or maintaining, supervising or reviewing any records relating to such Beneficial Ownership interests.

None of the Trustee or any agent shall have any responsibility or obligation to any Beneficial Owner of an interest in a Global Note, a member of, or a participant in, the Depositary or other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, Beneficial Owner or other person (other than the Depositary) of any notice or the payment of any amount or delivery of any Notes (or other security or property) under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders in respect of the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depositary or its nominee in the case of a Global Note). The rights of Beneficial Owners in any Global Note shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary. The Trustee and each agent may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any Beneficial Owners.

None of the Trustee or any agent shall have any obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among the Depositary participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. None of the Trustee, the Conversion Agent or any of their agents shall have any responsibility for any actions taken or not taken by the Depositary.

(d)    Until the Resale Restriction Termination Date, any stock certificate representing Common Stock issued upon conversion of a Note shall bear a legend in substantially the following form (unless such Common Stock has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration

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provided by Rule 144 or any similar provision then in force under the Securities Act, or such Common Stock has been issued upon conversion of a Note that has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company with written notice thereof to the Trustee and any transfer agent for the Common Stock):

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

(2) AGREES FOR THE BENEFIT OF SUNNOVA ENERGY INTERNATIONAL INC. (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO) AFTER THE LATER OF THE LATEST ISSUE DATE OF ANY NOTES UNDER THE INDENTURE UPON THE CONVERSION OF WHICH THIS SECURITY WAS ISSUED OR THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF NOTES UPON THE CONVERSION OF WHICH THIS SECURITY WAS ISSUED AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR

(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRANSFER AGENT FOR THE COMPANY’S COMMON STOCK RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

Any such Common Stock (i) as to which such restrictions on transfer shall have expired in accordance with their terms, (ii) that has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer or (iii) that has been sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, may, upon surrender of the certificates representing such shares of Common Stock for exchange in accordance with the procedures of the transfer agent for the Common Stock, be exchanged for a new certificate or certificates for a like aggregate number of shares of Common Stock, which shall not bear the restrictive legend required by this Section 2.05(d).

(e)    Any Note or Common Stock issued upon the conversion or exchange of a Note that is repurchased or owned by the Company or any Affiliate of the Company (or any Person who was an Affiliate of the

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Company at any time during the three months immediately preceding) may not be resold by the Company or such Affiliate (or such Person, as the case may be) unless registered under the Securities Act or resold pursuant to an exemption from the registration requirements of the Securities Act in a transaction that results in such Note or Common Stock, as the case may be, no longer being a “restricted security” (as defined under Rule 144).

Section 2.06.    Mutilated, Destroyed, Lost or Stolen Notes. In case any Note shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon Company Order the Trustee or an authenticating agent appointed by the Trustee shall authenticate and deliver, a new Note, bearing a registration number not contemporaneously outstanding, in exchange and substitution for the mutilated Note, or in lieu of and in substitution for the Note so destroyed, lost or stolen. In every case the applicant for a substituted Note shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless from any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company, to the Trustee and, if applicable, to such authenticating agent evidence to their satisfaction of the destruction, loss or theft of such Note and of the ownership thereof.

The Trustee or such authenticating agent may authenticate any such substituted Note and deliver the same upon the receipt of such security or indemnity as the Trustee, the Company and, if applicable, such authenticating agent may require. No service charge shall be imposed by the Company, the Trustee, the Note Registrar, any co-Note Registrar or the Paying Agent upon the issuance of any substitute Note, but the Company may require a Holder to pay a sum sufficient to cover any documentary, stamp or similar issue or transfer tax required in connection therewith as a result of the name of the Holder of the new substitute Note being different from the name of the Holder of the old Note that became mutilated or was destroyed, lost or stolen. In case any Note that has matured or is about to mature or has been surrendered for required repurchase or is about to be converted in accordance with Article 14 shall become mutilated or be destroyed, lost or stolen, the Company may, in its sole discretion, instead of issuing a substitute Note, pay or authorize the payment of or convert or authorize the conversion of the same (without surrender thereof except in the case of a mutilated Note), as the case may be, if the applicant for such payment or conversion shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless for any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, evidence satisfactory to the Company, the Trustee and, if applicable, any Paying Agent or Conversion Agent evidence of their satisfaction of the destruction, loss or theft of such Note and of the ownership thereof.

Every substitute Note issued pursuant to the provisions of this Section 2.06 by virtue of the fact that any Note is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note shall be found at any time, and shall be entitled to all the benefits of (but shall be subject to all the limitations set forth in) this Indenture equally and proportionately with any and all other Notes duly issued hereunder. To the extent permitted by law, all Notes shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement, payment, redemption, conversion or repurchase of mutilated, destroyed, lost or stolen Notes and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement, payment, redemption, conversion or repurchase of negotiable instruments or other securities without their surrender.

Section 2.07.    Temporary Notes. Pending the preparation of Physical Notes, the Company may execute and the Trustee or an authenticating agent appointed by the Trustee shall, upon Company Order, authenticate and deliver temporary Notes (printed or lithographed). Temporary Notes shall be issuable in any authorized denomination, and substantially in the form of the Physical Notes but with such omissions, insertions and variations as may be appropriate for temporary Notes, all as may be determined by the Company. Every such temporary Note shall be executed by the Company and authenticated by the Trustee or such authenticating agent upon the same conditions and in substantially the same manner, and with the same effect, as the Physical Notes. Without unreasonable delay, the Company shall execute and deliver to the Trustee or such authenticating agent Physical Notes (other than any Global Note) and thereupon any or all temporary Notes (other than any Global Note) may be surrendered in exchange therefor, at each office or agency maintained by the Company pursuant to Section 4.02 and the Trustee or such authenticating agent shall authenticate and deliver in exchange for such temporary Notes an equal principal amount of Physical Notes. Such exchange shall be made by the Company at its own expense and without any charge therefor. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits and subject to the same limitations under this Indenture as Physical Notes authenticated and delivered hereunder.

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Section 2.08.    Cancellation of Notes Paid, Converted, Etc. The Company shall cause all Notes surrendered for the purpose of payment at maturity, repurchase upon a Change of Control, redemption, registration of transfer or exchange or conversion (other than any Notes exchanged pursuant to Section 14.12), if surrendered to the Company or any of its agents that it controls or Subsidiaries, to be surrendered to the Trustee for cancellation. All Notes delivered to the Trustee shall be canceled promptly by it in accordance with its customary procedures. Except for any Notes surrendered for registration of transfer or exchange, or as otherwise expressly permitted by any of the provisions of this Indenture, no Notes shall be authenticated in exchange for any Notes surrendered to the Trustee for cancellation. The Trustee shall dispose of canceled Notes in accordance with its customary procedures and, after such disposition, shall deliver a certificate of cancellation to the Company, at the Company’s written request in a Company Order.
Section 2.09.    CUSIP Numbers. The Company in issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in all notices issued to Holders as a convenience to such Holders; provided that the Trustee shall have no liability for any defect in the “CUSIP” numbers as they appear on any Note, notice or elsewhere, and, provided, further, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or on such notice and that reliance may be placed only on the other identification numbers printed on the Notes. The Company shall promptly notify the Trustee in writing of any change in the “CUSIP” numbers.
Section 2.10.    Additional Notes; Repurchases. (a) Subject to Section 2.10(b), the Company may, without the consent of, or notice to, the Holders and notwithstanding Section 2.01, reopen this Indenture and issue additional Notes (“Additional Notes”) hereunder with the same terms as the Notes initially issued hereunder (other than differences in the issue date, interest accrued prior to the issue date of such Additional Notes and, if applicable, restrictions on transfer in respect of such Additional Notes) in an unlimited principal amount; provided that if any such Additional Notes are not fungible with the Notes initially issued hereunder for U.S. federal income tax or securities law purposes, such Additional Notes shall have one or more separate CUSIP numbers. Prior to the issuance of any such Additional Notes, the Company shall deliver to the Trustee a Company Order, an Officer’s Certificate and an Opinion of Counsel, such Officer’s Certificate and Opinion of Counsel to cover such matters, in addition to those required by Section 17.05, as the Trustee shall reasonably request, including, without limitation, that the conditions to the issuance of Additional Notes set forth in this Section 2.10 and in the Note Purchase Agreement have been satisfied. In addition, the Company may, directly or indirectly (regardless of whether such Notes are surrendered to the Company), repurchase Notes in the open market or otherwise, whether by the Company or its Subsidiaries or through a privately negotiated transaction or public tender or exchange offer or through counterparties to private agreements, including by cash-settled swaps or other derivatives, in each case, without prior notice to the Holders of the Notes. The Company may, at its option, reissue, resell or surrender to the Trustee for cancellation any Notes that it may repurchase, in the case of a reissuance or resale, so long as such Notes have a separate CUSIP number if the Notes are not fungible with the Notes initially offered for U.S. federal income tax or securities law purposes. Any Notes that the Company may repurchase shall be considered outstanding for all purposes under this Indenture (other than, at any time when such Notes are owned by the Company, by any Subsidiary thereof or by any Affiliate of the Company or any Subsidiary of any Affiliates of the Company, as set forth in Section 8.04) unless and until such time as the Company surrenders them to the Trustee for cancellation and, upon receipt of a Company Order, the Trustee shall cancel all Notes so surrendered.
(b) Notwithstanding anything herein to the contrary, the Company covenants and agrees that it shall not issue any Additional Notes at any time after the Issue Date other than up to $20,000,000 aggregate principal amount of Additional Notes pursuant to, and subject to the satisfaction of the conditions set forth in, the Note Purchase Agreement (as certified to the Trustee by the Company in a Company Order).
ARTICLE 3
SATISFACTION AND DISCHARGE
Section 3.01.    Satisfaction and Discharge. (a) This Indenture and the Notes shall cease to be of further effect when (i) all Notes theretofore authenticated and delivered (other than (x) Notes which have been destroyed, lost or stolen and which have been replaced, paid or converted as provided in Section 2.06 and (y) Notes for whose payment money has heretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 4.04(d)) have been delivered to the Trustee for

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cancellation; or (ii) the Company has deposited with the Trustee or delivered to Holders, as applicable, after the Notes have become due and payable, whether on the Maturity Date, any Redemption Date, any Optional Repurchase Date, any Change of Control Repurchase Date, upon conversion or otherwise, cash or cash, shares of Common Stock or a combination thereof, as applicable, solely to satisfy the Company’s Conversion Obligation, sufficient to pay all of the outstanding Notes and all other sums due and payable under this Indenture or the Notes by the Company; and (b) the Trustee upon request of the Company contained in an Officer’s Certificate and at the expense of the Company, shall execute such instruments reasonably requested by the Company acknowledging satisfaction and discharge of this Indenture and the Notes, when the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture and the Notes have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.06 shall survive. The Trustee shall hold in trust all money deposited with it pursuant to this Section 3.01 and shall apply such deposited money through the Paying Agent and in accordance with this Indenture to the payment of amounts due on the Notes.
ARTICLE 4
PARTICULAR COVENANTS OF THE COMPANY
Section 4.01.    Payment of Principal and Interest. The Company covenants and agrees that it will cause to be paid the principal (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price, if applicable) of, and accrued and unpaid interest on, each of the Notes at the places, at the respective times and in the manner provided herein and in the Notes.
Section 4.02.    Maintenance of Office or Agency. The Company will maintain an office or agency where the Notes may be surrendered for registration of transfer or exchange or for presentation for payment or repurchase (“Paying Agent”) or for conversion (“Conversion Agent”) and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office or the office or agency of the Trustee; provided that no service of legal process against the Company may be made at any office of the Trustee.
The Company may also from time to time designate as co-Note Registrars one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the contiguous United States, for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The terms “Paying Agent” and “Conversion Agent” include any such additional or other offices or agencies, as applicable.
The Company hereby initially designates the Trustee as the Paying Agent, Note Registrar and Conversion Agent and the Corporate Trust Office as the office or agency where Notes may be surrendered for registration of transfer or exchange or for presentation for payment or repurchase or for conversion and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served; provided that the Corporate Trust Office shall not be a place for service of legal process for the Company.
Section 4.03.    Appointments to Fill Vacancies in Trustee’s Office. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.09, a Trustee, so that there shall at all times be a Trustee hereunder.
Section 4.04.    Provisions as to Paying Agent. (a) If the Company shall appoint a Paying Agent other than the Trustee, the Company will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 4.04:

(i)    that it will hold all sums held by it as such agent for the payment of the principal (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price,

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if applicable) of, and accrued and unpaid interest on, the Notes in trust for the benefit of the Trustee and the Holders of the Notes;

(ii)    that it will give the Trustee prompt notice of any failure by the Company to make any payment of the principal (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes when the same shall be due and payable; and

(iii)    that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.

The Company shall, on or before each due date of the principal (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes, deposit with the Paying Agent a sum sufficient to pay such principal (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price, if applicable) or accrued and unpaid interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of any failure to take such action; provided that if such deposit is made on the due date, such deposit must be received by the Paying Agent by 11:00 a.m., New York City time, on such date.

(b)    If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes, set aside, segregate and hold in trust for the benefit of the Trustee and the Holders of the Notes a sum sufficient to pay such principal (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price, if applicable) and accrued and unpaid interest so becoming due and will promptly notify the Trustee in writing of any failure to take such action and of any failure by the Company to make any payment of the principal (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes when the same shall become due and payable.

(c)    Anything in this Section 4.04 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay, cause to be paid or deliver to the Trustee all sums or amounts held in trust by the Company or any Paying Agent hereunder as required by this Section 4.04, such sums or amounts to be held by the Trustee upon the trusts herein contained and upon such payment or delivery by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from all further liability but only with respect to such sums or amounts.

(d)    Subject to applicable escheatment laws, any money and property deposited with the Trustee or any Paying Agent, or then held by the Company, in trust (including in connection with any satisfaction and discharge) for the payment of the principal (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price, if applicable) of, accrued and unpaid interest on and the consideration due upon conversion of any Note and remaining unclaimed for two years after such principal (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price, if applicable), interest or consideration due upon conversion has become due and payable shall be paid to the Company on request of the Company contained in an Officer’s Certificate, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money and shares of Common Stock, and all liability of the Company as trustee thereof, shall thereupon cease.

Section 4.05.    Existence. Subject to Article 11, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

Section 4.06.    Rule 144A Information Requirement and Annual Reports. (a) At any time the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company shall, so long as any of the Notes or any shares of Common Stock issuable upon conversion thereof shall, at such time, constitute “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide to the Trustee and, upon written request, any Holder, Beneficial Owner or bona fide prospective purchaser of such Notes issuable upon conversion of such Notes, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such Notes or shares of Common Stock pursuant to Rule 144A.

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(b)    The Company shall deliver to the Trustee, within 15 days after the same are required to be filed with the Commission, copies of any annual or quarterly reports (on Form 10-K or Form 10-Q or any respective successor form) that the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act (excluding any such information, documents or reports, or portions thereof, subject to confidential treatment and any correspondence with the Commission, and giving effect to any grace period provided by Rule 12b-25 under the Exchange Act (or any successor thereto)). Any such document or report that the Company files with the Commission via the Commission’s EDGAR system (or any successor system) shall be deemed to be delivered to the Trustee for purposes of this Section 4.06(b) at the time such documents are filed via the EDGAR system (or such successor), it being understood that the Trustee shall not be responsible for determining whether such filings have been made. In the event that any direct or indirect parent company of the Company becomes a guarantor of the notes, the Company may satisfy its obligations under this Section 4.06 with respect to financial information relating to the Company by furnishing financial information relating to such parent company; provided that the same be accompanied by consolidated information that explains in reasonable detail the differences between the information relating to such parent, on the one hand, and the information relating to the Company and its Subsidiaries on a standalone basis, on the other hand.

(c)    Delivery of the reports, information and documents described in subsection (b) above to the Trustee is for informational purposes only, and the information and the Trustee’s receipt of such shall not constitute actual or constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely on an Officer’s Certificate). The Trustee shall not be responsible for determining whether the filings described in subsection (b) above have been made, nor shall the Trustee have any duty to review or analyze any report furnished or made available to it.

Section 4.07.    Stay, Extension and Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law that would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the performance of this Indenture; and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

Section 4.08.    Compliance Certificate; Statements as to Defaults. The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company (beginning with the fiscal year ending on December 31, 2020) an Officer’s Certificate stating whether the signers thereof have knowledge of any Event of Default that occurred during the previous year and, if so, specifying each such Event of Default and the nature thereof.

In addition, the Company shall deliver to the Trustee, within 30 days after the Company obtains knowledge of the occurrence of any Event of Default or Default, an Officer’s Certificate setting forth the details of such Event of Default or Default, its status and the action that the Company is taking or proposing to take in respect thereof; provided that the Company is not required to deliver such notice if such Event of Default or Default has been cured or is no longer continuing.

Section 4.09.    Limitation on Restricted Payments. (a) The Company shall not, directly or indirectly:
(i)    declare or pay any dividend or make any distribution on account of any of the Company’s Equity Interests (including, without limitation, any payment by the Company made in connection with any merger, amalgamation or consolidation involving the Company or any of its Subsidiaries), other than dividends or distributions payable solely in the Company’s Equity Interests (excluding, for the avoidance of doubt, any dividends or distributions consisting of Equity Interests of the Company’s Subsidiaries);
(ii)    purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger, amalgamation or consolidation involving the Company) any of its Equity Interests; or

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(iii)    make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Subordinated Indebtedness (excluding any intercompany indebtedness between or among the Company and any of its Subsidiaries), except a payment of interest when due or principal within six months prior to the maturity thereof,
(all such payments and other actions set forth in those clauses (i) through (iii) above being collectively referred to as “Restricted Payments”).
(b)    The provisions of Section 4.09(a) shall not prohibit:
(i)    the payment of any dividend or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend or redemption payment would have complied with the provisions of this Indenture;
(ii)    purchases of Equity Interests deemed to occur upon the upon exercise by any employee, director, officer, manager or consultant of the Company of stock options if such Equity Interest represents a portion of the exercise price, and payments in respect of taxes payable upon exercise or vesting thereof;
(iii)    the repurchase of shares of the Company’s Equity Interests from any employee, director, officer, manager or consultant of the Company or any parent entity; provided that, such repurchases shall not exceed an aggregate of $1,500,000 annually (with unused amounts carried over to subsequent years up to a maximum of $5,000,000 in any calendar year);
(iv)    any repurchase, redemption, defeasance or other acquisition or retirement for value of Equity Interests of the Company or of Subordinated Indebtedness made out of the exchange of, or out of the proceeds of a substantially concurrent issuance of, Equity Interests or Subordinated Indebtedness with a sale being deemed substantially concurrent if such purchase, redemption, defeasance or other acquisition or retirement occurs not more than 60 days after such sale;
(v)    so long as no Default or Event of Default has occurred and is continuing or would occur as a consequence thereof, regular quarterly dividends to holders of Common Stock in an amount not exceeding $0.75 per share of Common Stock then outstanding (subject to adjustment for stock splits, recapitalizations or combinations or similar transactions occurring after the Issue Date) per annum;
(vi)    Permitted Payments to Parent; and
(vii)    so long as no Default or Event of Default has occurred and is continuing or would occur as a consequence thereof, other Restricted Payments in cash in an aggregate amount not to exceed $50.0 million since the Issue Date.
Section 4.10.    Limitation on Incurrence of Indebtedness.
(a)        The Company shall not directly or indirectly, including, but not limited to, through the provision of a guarantee or other credit support by the Company, Incur any Indebtedness.
(b)        The limitations set forth in Section 4.10(a) shall not apply to the following (“Permitted Indebtedness”):
(i)    the Incurrence by the Company of Indebtedness under a Bank Facility at any time outstanding not to exceed the difference between (A) the greater of (x) $150,000,000, (y) at any time after December 23, 2021, (i) if the Company’s Estimated Net Contracted Customer Value is equal to or greater than $1,500,000,000 and less than $2,000,000,000, $200,000,000 and (ii) if the Company’s Estimated Net

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Contracted Customer Value is equal to or greater than $2,000,000,000, $250,000,000, less (B) the amount of Indebtedness outstanding under clause (ii) below;
(ii)    the Incurrence by the Company of Indebtedness represented by the Notes, including any Additional Notes;
(iii)    Indebtedness Incurred by the Company constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;
(iv)    obligations pursuant to any unsecured performance or similar guarantee of the obligations of any Subsidiary, including any guarantee made in connection with any securitization transaction, warehouse financing or tax equity transaction; provided that, this clause shall not permit any guarantee or Incurrence of Indebtedness for borrowed money;
(v)    Hedging Obligations of the Issuer that are not Incurred for speculative purposes;
(vi)    obligations (including reimbursement obligations with respect to letters of credit, bank guarantees warehouse receipts and similar instruments) in respect of tenders, statutory obligations, leases, governmental contracts, trade contracts, stay, performance, bid, appeal and surety bonds, completion guarantees and similar obligations provided by the Issuer in the ordinary course of business or consistent with past practice or industry practice;
(vii)    Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that, such Indebtedness is extinguished within five (5) Business Days of its Incurrence;
(viii)    Indebtedness in respect of Obligations of the Issuer to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that, such obligations are Incurred in connection with open accounts extended by suppliers on customary trade terms in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations; and
(ix)    the Incurrence by the Issuer of intercompany Indebtedness owed to any Subsidiary.
(c)    This covenant shall not restrict (i) the ability of any Subsidiary of the Issuer to refinance or Incur any Indebtedness, and (ii) the Incurrence by the Issuer of Indebtedness contemporaneously with, and for purposes of, the discharge in whole of the Notes and other Obligations outstanding under this Indenture, provided that, the Issuer shall have issued a notice of redemption pursuant to the provisions of Article 16 hereof, and the only condition set forth therein shall be the receipt of proceeds sufficient to redeem the Notes and to pay all other Obligations outstanding under this Indenture.
ARTICLE 5
LISTS OF HOLDERS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 5.01.    Lists of Holders. The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee, quarterly, not more than 15 days after each January 15, April 15, July 15 and October 15 in each year beginning with April 15, 2020, and at such other times as the Trustee may request in writing, within 30 days after receipt by the Company of any such request (or such lesser time as the Trustee may reasonably request in order to enable it to timely provide any notice to be provided by it hereunder), a list in such form as the Trustee may reasonably require of the names and addresses of the Holders as of a date not more than 15 days (or such other date as the Trustee may reasonably request in order to so provide any such notices) prior to the time such information is furnished, except that no such list need be furnished so long as the Trustee is acting as Note Registrar.

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Section 5.02.    Preservation and Disclosure of Lists. The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the Holders contained in the most recent list furnished to it as provided in Section 5.01 or maintained by the Trustee in its capacity as Note Registrar, if so acting. The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01.    Events of Default. Each of the following events shall be an “Event of Default” with respect to the Notes:
(a)    default in any payment of interest on any Note when due and payable, and the default continues for a period of 30 days;
(b)    default in the payment of principal of any Note when due and payable on the Maturity Date, upon an Optional Redemption or Optional Repurchase, upon any required repurchase, upon declaration of acceleration or otherwise;
(c)    failure by the Company to comply with its obligation to convert the Notes in accordance with this Indenture upon exercise of a Holder’s conversion right and such failure continues for three Business Days;
(d)    failure by the Company to issue a Change of Control Company Notice in accordance with Section 15.02(c) or notice of a specified corporate event in accordance with Section 14.01(b), in each case when due and such failure continues for one Business Day;
(e)    failure by the Company to comply with its obligations under Article 11;
(f)    failure by the Company for 60 days after written notice from the Trustee or the Holders of at least 25% in principal amount of the Notes then outstanding has been received by the Company to comply with any of its other agreements contained in the Notes or this Indenture;
(g)    default by the Company or any Significant Subsidiary of the Company with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of $15,000,000 (or its foreign currency equivalent) in the aggregate of the Company and/or any such Significant Subsidiary, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness becoming or being declared due and payable prior to its stated maturity date or (ii) constituting a failure to pay the principal of any such debt when due and payable (after the expiration of all applicable grace periods) at its stated maturity, upon required repurchase, upon redemption or upon declaration of acceleration or otherwise, and in the cases of clauses (i) and (ii), such acceleration shall not have been rescinded or annulled or such failure to pay or default shall not have been cured or waived, or such indebtedness is not paid or discharged, as the case may be, within 30 days after written notice to the Company by the Trustee or to the Company and the Trustee by Holders of at least 25% in principal amount of Notes then outstanding in accordance with this Indenture;
(h)    a final judgment or judgments for the payment of $15,000,000 million (or its foreign currency equivalent) or more (excluding any amounts covered by insurance) in the aggregate rendered against the Company or any Significant Subsidiary of the Company, which judgment is not discharged, bonded, paid, waived or stayed within 60 days after (i) the date on which the right to appeal thereof has expired if no such appeal has commenced, or (ii) the date on which all rights to appeal have been extinguished;
(i)    the Company or any Significant Subsidiary shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to the Company or any such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or any such Significant Subsidiary or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking

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possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors; or
(j)    an involuntary case or other proceeding shall be commenced against the Company or any Significant Subsidiary seeking liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 30 consecutive days.
Section 6.02.    Acceleration; Rescission and Annulment. If one or more Events of Default shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), then, and in each and every such case (other than an Event of Default specified in Section 6.01(i) or Section 6.01(j) with respect to the Company), unless the principal of all of the Notes shall have already become due and payable, either the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding determined in accordance with Section 8.04, by notice in writing to the Company (and to the Trustee if given by Holders), may (and the Trustee, at the written request of such Holders but subject to the provisions of Sections 6.09 and 7.02(h) hereof, shall) declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the Notes to be due and payable immediately, and upon any such declaration the same shall become and shall automatically be immediately due and payable, anything contained in this Indenture or in the Notes to the contrary notwithstanding. If an Event of Default specified in Section 6.01(i) or Section 6.01(j) with respect to the Company occurs and is continuing, 100% of the principal of, and accrued and unpaid interest, if any, on, all Notes shall become and shall automatically be immediately due and payable.
The immediately preceding paragraph, however, is subject to the conditions that if, at any time after the principal of the Notes shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered as hereinafter provided, and if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) any and all existing Events of Default under this Indenture, other than the nonpayment of the principal of and accrued and unpaid interest, if any, on Notes that shall have become due solely by such acceleration, shall have been cured or waived pursuant to Section 6.09, then and in every such case (except as provided in the immediately succeeding sentence) the Holders of a majority in aggregate principal amount of the Notes then outstanding, by written notice to the Company and to the Trustee, may waive all Defaults or Events of Default with respect to the Notes and rescind and annul such declaration and its consequences and such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver or rescission and annulment shall extend to or shall affect any subsequent Default or Event of Default, or shall impair any right consequent thereon. Notwithstanding anything to the contrary herein, no such waiver or rescission and annulment shall extend to or shall affect any Default or Event of Default resulting from (i) the nonpayment of the principal (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price, if applicable) of, or accrued and unpaid interest on, any Notes, (ii) a failure to repurchase any Notes when required or (iii) a failure to pay or deliver, as the case may be, the consideration due upon conversion of the Notes.
Section 6.03.    Additional Interest; Registration Default Damages. Notwithstanding anything in this Indenture or in the Notes to the contrary, to the extent the Company elects, the sole remedy for an Event of Default relating to the Company’s failure to comply with its obligations as set forth in Section 4.06(b) shall, for the first 365 days after the occurrence of such an Event of Default, consist exclusively of the right to receive Additional Interest on the Notes at a rate equal to (x) 0.25% per annum of the principal amount of the Notes outstanding for each day during the first 180 days after the occurrence of such Event of Default and (y) 0.50% per annum of the principal amount of the Notes outstanding from the 181st day to, and including, the 365th day following the occurrence of such Event of Default. Additional Interest payable pursuant to this Section 6.03 shall be in addition to, not in lieu of, any Registration Default Damages payable pursuant to the Registration Rights Agreement. If the Company so elects, such Additional Interest shall be payable in the same manner and on the same dates as the stated interest payable on the Notes. On the 366th day after such Event of Default (if the Event of Default relating to the Company’s failure to comply with its

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obligations as set forth in Section 4.06(b) is not cured or waived prior to such 366th day), the Notes shall be immediately subject to acceleration as provided in Section 6.02. The provisions of this paragraph will not affect the rights of Holders in the event of the occurrence of any Event of Default other than the Company’s failure to comply with its obligations as set forth in Section 4.06(b). In the event the Company does not elect to pay Additional Interest following an Event of Default in accordance with this Section 6.03 or the Company elected to make such payment but does not pay the Additional Interest when due, the Notes shall be immediately subject to acceleration as provided in Section 6.02.
In order to elect to pay Additional Interest as the sole remedy during the first 365 days after the occurrence of any Event of Default relating to the Company’s failure to comply with its obligations as set forth in Section 4.06(b) in accordance with the immediately preceding paragraph, the Company must notify all Holders of the Notes, the Trustee and the Paying Agent in writing of such election within 10 Business Days following the commencement of such 365-day period. Upon the failure to timely give such notice, the Notes shall be immediately subject to acceleration as provided in Section 6.02.
Any Registration Default Damages payable pursuant to the Registration Rights Agreement shall accrue on the relevant Notes from, and including, the day following the relevant Registration Default to, but excluding, the earlier of (1) the day on which such Registration Default has been cured and (2) the date the registration statement is no longer required to be kept effective for the Common Stock under the Registration Rights Agreement. The Registration Default Damages shall be paid to the relevant Holder(s) quarterly in arrears on each Interest Payment Date to the Person in whose name a Note that is entitled to such Registration Default Damages is registered at the close of business on the immediately preceding Regular Record Date and will accrue at a rate per year equal to 0.25% of the principal amount of the relevant Notes to, and including, the 90th day following such Registration Default, increasing by 0.25% per annum every 90 days thereafter to a maximum of 2.0% per annum.
If Additional Interest is payable by the Company pursuant to this Section 6.03 or the Registration Rights Agreement, the Company shall deliver to the Trustee an Officers’ Certificate to that effect stating (i) the amount of such Additional Interest that is payable and (ii) the date on which such Additional Interest is payable. Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Additional Interest is payable. If the Company has paid Additional Interest directly to the Persons entitled to it, the Company shall deliver to the Trustee an Officers’ Certificate setting forth the particulars of such payment. In no event shall the Trustee be responsible for determine whether Additional Interest is due under this Section 6.03 or under the Registration Rights Agreement.
Section 6.04.    Payments of Notes on Default; Suit Therefor. If an Event of Default described in clause (a) or (b) of Section 6.01 shall have occurred and be continuing, the Company shall, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of the Notes, the whole amount then due and payable on the Notes for principal and interest, if any, with interest on any overdue principal and interest, if any, at the rate borne by the Notes at such time and, in addition thereto, such further amount as shall be sufficient to cover any amounts due to the Trustee under Section 7.06. If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon the Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Notes, wherever situated.

In the event there shall be pending proceedings for the bankruptcy or for the reorganization of the Company or any other obligor on the Notes under Title 11 of the United States Code, or any other applicable law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Company or such other obligor, the property of the Company or such other obligor, or in the event of any other judicial proceedings relative to the Company or such other obligor upon the Notes, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 6.04, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal and accrued and unpaid interest, if any, in respect of the Notes, and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents and to take such other actions as it may deem necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses,

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disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceedings relative to the Company or any other obligor on the Notes, its or their creditors, or its or their property, and to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same after the deduction of any amounts due to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization, liquidator, custodian or similar official is hereby authorized by each of the Holders to make such payments to the Trustee, as administrative expenses, and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for reasonable compensation, expenses, advances and disbursements, including agents and counsel fees, and including any other amounts due to the Trustee under Section 7.06, incurred by it up to the date of such distribution. To the extent that such payment of reasonable compensation, expenses, advances and disbursements out of the estate in any such proceedings shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, monies, securities and other property that the Holders of the Notes may be entitled to receive in such proceedings, whether in liquidation or under any plan of reorganization or arrangement or otherwise.

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting such Holder or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Trustee without the possession of any of the Notes, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Notes.

In any proceedings brought by the Trustee (and in any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party) the Trustee shall be held to represent all the Holders of the Notes, and it shall not be necessary to make any Holders of the Notes parties to any such proceedings.

In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of any waiver pursuant to Section 6.09 or any rescission and annulment pursuant to Section 6.02 or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company, the Holders and the Trustee shall, subject to any determination in such proceeding, be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Company, the Holders and the Trustee shall continue as though no such proceeding had been instituted.

Section 6.05.    Application of Monies Collected by Trustee. Any monies collected by the Trustee pursuant to this Article 6 with respect to the Notes shall be applied in the following order, at the date or dates fixed by the Trustee for the distribution of such monies, upon presentation of the several Notes, and stamping thereon the payment, if only partially paid, and upon surrender thereof, if fully paid:

First, to the payment of all amounts due the Trustee under Section 7.06;

Second, in case the principal of the outstanding Notes shall not have become due and be unpaid, to the payment of interest on, and any cash due upon conversion of, the Notes in default in the order of the date due of the payments of such interest and cash due upon conversion, as the case may be, with interest (to the extent that such interest has been collected by the Trustee) upon such overdue payments at the rate borne by the Notes at such time, such payments to be made ratably to the Persons entitled thereto;

Third, in case the principal of the outstanding Notes shall have become due, by declaration or otherwise, and be unpaid to the payment of the whole amount (including, if applicable, the payment of the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price and any cash due upon conversion) then owing and unpaid upon the Notes for principal and interest, if any, with interest on the overdue principal and, to the extent that such interest has been collected by the Trustee, upon overdue installments of interest at the rate borne by the Notes at such time, and in case such monies shall be insufficient to pay in full the whole amounts so due and unpaid upon the Notes, then to the payment of such principal (including, if applicable, the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price and any cash due upon conversion) and interest without preference

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or priority of principal over interest, or of interest over principal or of any installment of interest over any other installment of interest, or of any Note over any other Note, ratably to the aggregate of such principal (including, if applicable, the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price and any cash due upon conversion) and accrued and unpaid interest; and

Fourth, to the payment of the remainder, if any, to the Company.

Section 6.06.    Proceedings by Holders. Except to enforce the right to receive payment of principal (including, if applicable, the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price) or interest when due, or the right to receive payment or delivery of the consideration due upon conversion, no Holder of any Note shall have any right by virtue of or by availing of any provision of this Indenture or the Notes to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture, or for the appointment of a receiver, trustee, liquidator, custodian or other similar official, or for any other remedy hereunder, unless:
(a)    such Holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof, as herein provided;
(b)    Holders of at least 25% in aggregate principal amount of the Notes then outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder;
(c)    such Holders shall have offered, and if requested, provided to the Trustee such security or indemnity satisfactory to it against any loss, liability or expense to be incurred therein or thereby;
(d)    the Trustee for 60 days after its receipt of such notice, request and offer of such security or indemnity, shall have neglected or refused to institute any such action, suit or proceeding; and
(e)    no direction that, in the opinion of the Trustee, is inconsistent with such written request shall have been given to the Trustee by the Holders of a majority of the aggregate principal amount of the Notes then outstanding within such 60-day period pursuant to Section 6.09,
it being understood and intended, and being expressly covenanted by the taker and Holder of every Note with every other taker and Holder and the Trustee that no one or more Holders shall have any right in any manner whatever by virtue of or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other Holder, or to obtain or seek to obtain priority over or preference to any other such Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holder), or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders (except as otherwise provided herein). For the protection and enforcement of this Section 6.06, each and every Holder and the Trustee shall be entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision of any Note, each Holder shall have the right to receive payment or delivery, as the case may be, of (x) the principal (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price, if applicable) of, (y) accrued and unpaid interest, if any, on, and (z) the consideration due upon conversion of, such Note, on or after the respective due dates expressed or provided for in such Note or in this Indenture, or to institute suit for the enforcement of any such payment or delivery, as the case may be.
Section 6.07.    Proceedings by Trustee. In case of an Event of Default, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as are necessary to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

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Section 6.08.    Remedies Cumulative and Continuing. Except as provided in the last paragraph of Section 2.06, all powers and remedies given by this Article 6 to the Trustee or to the Holders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the Holders of the Notes, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any Holder of any of the Notes to exercise any right or power accruing upon any Default or Event of Default shall impair any such right or power, or shall be construed to be a waiver of any such Default or Event of Default or any acquiescence therein; and, subject to the provisions of Section 6.06, every power and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders.
Section 6.09.    Direction of Proceedings and Waiver of Defaults by Majority of Holders. The Holders of a majority of the aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 8.04 shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the Notes; provided, however, that (a) such direction shall not be in conflict with any rule of law or with this Indenture, and (b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. The Trustee may refuse to follow any direction that it determines is unduly prejudicial to the rights of any other Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such direction is unduly prejudicial to any Holder) or that would involve the Trustee in personal liability. The Holders of a majority in aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 8.04 may on behalf of the Holders of all of the Notes waive any past Default or Event of Default hereunder and its consequences except (i) a default in the payment of accrued and unpaid interest, if any, on, or the principal (including any Redemption Price, the Optional Repurchase Price and any Change of Control Repurchase Price) of, the Notes when due that has not been cured pursuant to the provisions of Section 6.01, (ii) a failure by the Company to pay or deliver, as the case may be, the consideration due upon conversion of the Notes or (iii) a default in respect of a covenant or provision hereof which under Article 10 cannot be modified or amended without the consent of each Holder of an outstanding Note affected. Upon any such waiver the Company, the Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon. Whenever any Default or Event of Default hereunder shall have been waived as permitted by this Section 6.09, said Default or Event of Default shall for all purposes of the Notes and this Indenture be deemed to have been cured and to be not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.
Section 6.10.    Notice of Defaults. The Trustee shall, within 90 days after it has notice of the occurrence and continuance of a Default of which a Responsible Officer has actual knowledge, deliver to all Holders notice of all Defaults known to a Responsible Officer, unless such Defaults shall have been cured or waived before the giving of such notice; provided that, except in the case of a Default in the payment of the principal of (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price, if applicable), or accrued and unpaid interest on, any of the Notes or a Default in the payment or delivery of the consideration due upon conversion, the Trustee shall be protected in withholding such notice if and so long as it determines that the withholding of such notice is in the interests of the Holders.
Section 6.11.    Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder of any Note by its acceptance thereof shall be deemed to have agreed, that any court may, in its discretion, require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section 6.11 (to the extent permitted by law) shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Notes at the time outstanding determined in accordance with Section 8.04, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or accrued and unpaid interest, if any, on any Note (including, but not limited to, the Redemption Price, the Optional Repurchase Price and the Change

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of Control Repurchase Price, if applicable) on or after the due date expressed or provided for in such Note or to any suit for the enforcement of the right to convert any Note, or receive the consideration due upon conversion, in accordance with the provisions of Article 14.
ARTICLE 7
CONCERNING THE TRUSTEE
Section 7.01.    Duties and Responsibilities of Trustee. The Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of all Events of Default that may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In the event an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs; provided that if an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any of the Holders unless such Holders have offered, and if requested, provided to the Trustee indemnity or security satisfactory to it against any loss, liability or expense that might be incurred by it in compliance with such request or direction.
No provision of this Indenture shall be construed to relieve the Trustee from liability for its own grossly negligent action, its own grossly negligent failure to act or its own willful misconduct, except that:
(a)    prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default that may have occurred:
(i)    the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii)    in the absence of bad faith and willful misconduct on the part of the Trustee, the Trustee may, as to the truth of the statements and the correctness of the opinions expressed therein, conclusively rely upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions that by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein);
(b)    the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was grossly negligent in ascertaining the pertinent facts;
(c)    the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a majority of the aggregate principal amount of the Notes at the time outstanding determined as provided in Section 8.04 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;
(d)    whether or not therein provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this Section and Section 7.02(l);
(e)    the Trustee shall not be liable in respect of any payment (as to the correctness of amount, entitlement to receive or any other matters relating to payment) or notice effected by the Company or any Paying Agent or any records maintained by any co-Note Registrar with respect to the Notes;

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(f)    if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred, unless a Responsible Officer of the Trustee had actual knowledge of such event;
(g)    all cash received by the Trustee shall be placed in a non-interest bearing trust account, and all cash shall remain uninvested unless otherwise agreed in writing by the Company and the Trustee; and
(h)    in the event that the Trustee is also acting as Custodian, Note Registrar, Paying Agent, Conversion Agent or transfer agent hereunder, the rights and protections afforded to the Trustee pursuant to this Article 7 shall also be afforded to such Custodian, Note Registrar, Paying Agent, Conversion Agent or transfer agent.
None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers.
Section 7.02.    Reliance on Documents, Opinions, Etc. Subject to Section 7.01:
(a)    the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, note, coupon or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;
(b)    any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officer’s Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any Board Resolution may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;
(c)    whenever in the administration of this Indenture, the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of gross negligence or willful misconduct on its part, conclusively rely upon an Officer’s Certificate;
(d)    the Trustee may consult with counsel of its selection, and require an Opinion of Counsel and any advice of such counsel or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;
(e)    the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the expense of the Company and shall incur no liability of any kind by reason of such inquiry or investigation;
(f)    the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, custodians, nominees or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent, custodian, nominee or attorney appointed by it with due care hereunder;
(g)    the permissive rights of the Trustee enumerated herein shall not be construed as duties;
(h)    the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered, and if requested, provided to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

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(i)    the Trustee shall not be obligated to take possession of any Common Stock, whether upon conversion of Notes or in connection with any discharge of this Indenture pursuant to Article 3 hereof, but shall satisfy its obligation as Conversion Agent by working through the stock transfer agent of the Company from time to time as directed by the Company;
(j)    the Trustee may request that the Company deliver an Officer’s Certificate setting forth the names of the individuals and/or titles of Officers authorized at such times to take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed by any Person authorized to sign an Officer’s Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded;
(k)    neither the Trustee nor any of its directors, officers, employees, agents, or affiliates shall be responsible for nor have any duty to monitor the performance or any action of the Company, or any of their respective directors, members, officers, agents, affiliates, or employees, nor shall it have any liability in connection with the malfeasance or nonfeasance by such party. The Trustee shall not be responsible for any inaccuracy in the information obtained from the Company or for any inaccuracy or omission in the records which may result from such information or any failure by the Trustee to perform its duties or set forth herein as a result of any inaccuracy or incompleteness;
(l)    in no event shall the Trustee be liable for any special, indirect, punitive, or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;
(m)    the Trustee shall not be charged with knowledge of any Default or Event of Default with respect to the Notes, unless either (1) a Responsible Officer shall have actual knowledge of such Default or Event of Default or (2) written notice of such Default or Event of Default shall have been given to the Trustee by the Company or by any Holder of the Notes at the Corporate Trust Office and such notice references the Notes and/or this Indenture;
(n)    the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder; and
(o)    the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture.
Section 7.03.    No Responsibility for Recitals, Etc. The recitals contained herein and in the Notes (except in the Trustee’s certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Notes or of any Common Stock. The Trustee shall not be accountable for the use or application by the Company of any Notes or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the provisions of this Indenture. The Trustee shall not be accountable for the use or application by the Company of any Notes or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the provisions of this Indenture.
Section 7.04.    Trustee, Paying Agents, Conversion Agents or Note Registrar May Own Notes. The Trustee, any Paying Agent, any Conversion Agent or Note Registrar, in its individual or any other capacity, may become the owner or pledgee of Notes with the same rights it would have if it were not the Trustee, Paying Agent, Conversion Agent or Note Registrar.
Section 7.05.    Monies to Be Held in Trust. All monies received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as may be agreed from time to time by the Company and the Trustee.

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Section 7.06.    Compensation and Expenses of Trustee. The Company covenants and agrees to pay to the Trustee from time to time and the Trustee shall receive such compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as mutually agreed to in writing between the Trustee and the Company, and the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances reasonably incurred or made by the Trustee in accordance with any of the provisions of this Indenture in any capacity thereunder (including the reasonable compensation and the expenses and disbursements of its agents and counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as shall have been caused by its gross negligence or willful misconduct as determined by a final order of a court of competent jurisdiction. The Company also covenants to indemnify the Trustee and any predecessor Trustee in any capacity under this Indenture and any other document or transaction entered into in connection herewith, its officers, directors, agents or employees and its agents and any authenticating agent for, and to hold them harmless against, any loss, claim, damage, liability or expense incurred without gross negligence or willful misconduct (as determined by a final order of a court of competent jurisdiction) on the part of the Trustee, its officers, directors, agents or employees, or such agent or authenticating agent, as the case may be, and arising out of or in connection with the acceptance or administration of this Indenture or in any other capacity hereunder, including the costs and expenses of defending themselves against any claim of liability in the premises. The obligations of the Company under this Section 7.06 to compensate or indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall be secured by a senior lien to which the Notes are hereby made subordinate on all money or property held or collected by the Trustee, except, subject to the effect of Section 6.05, funds held in trust herewith for the benefit of the Holders of particular Notes. The Trustee’s right to receive payment of any amounts due under this Section 7.06 shall not be subordinate to any other liability or indebtedness of the Company. The obligation of the Company under this Section 7.06 shall survive the satisfaction and discharge of this Indenture and the earlier resignation or removal of the Trustee. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The indemnification provided in this Section 7.06 shall extend to the officers, directors, agents and employees of the Trustee.
Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee and its agents and any authenticating agent incur expenses or render services after an Event of Default specified in Section 6.01(i) or Section 6.01(j) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy, insolvency or similar laws.
Section 7.07.    Officer’s Certificate as Evidence. Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of gross negligence or willful misconduct on the part of the Trustee as determined by a final order of a court of competent jurisdiction, be deemed to be conclusively proved and established by an Officer’s Certificate delivered to the Trustee, and such Officer’s Certificate, in the absence of gross negligence, willful misconduct and bad faith on the part of the Trustee as determined by a final order of a court of competent jurisdiction, shall be full warrant to the Trustee for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof.
Section 7.08.    Eligibility of Trustee. There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act (as if the Trust Indenture Act were applicable hereto) to act as such and has a combined capital and surplus of at least $50,000,000. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.



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Section 7.09.    Resignation or Removal of Trustee. (a) The Trustee may at any time resign by giving written notice of such resignation to the Company and by delivering notice thereof to the Holders. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment within 45 days after the giving of such notice of resignation to the Holders, the resigning Trustee may, upon ten Business Days’ notice to the Company and the Holders, petition any court of competent jurisdiction, at the expense of the Company, for the appointment of a successor trustee, or any Holder who has been a bona fide holder of a Note or Notes for at least six months (or since the date of this Indenture) may, subject to the provisions of Section 6.11, on behalf of himself or herself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.
(b)    In case at any time any of the following shall occur:
(i)    the Trustee shall cease to be eligible in accordance with the provisions of Section 7.08 and shall fail to resign after written request therefor by the Company or by any such Holder, or
(ii)    the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in either case, the Company may by a Board Resolution remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 6.11, any Holder who has been a bona fide holder of a Note or Notes for at least six months (or since the date of this Indenture) may, on behalf of himself or herself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.
(c)    The Holders of a majority in aggregate principal amount of the Notes at the time outstanding, as determined in accordance with Section 8.04, may at any time with 30 days’ prior written notice to the Company and the Trustee remove the Trustee and nominate a successor trustee that shall be deemed appointed as successor trustee unless within ten days after notice to the Company of such nomination the Company objects thereto, in which case the Trustee so removed or any Holder, upon the terms and conditions and otherwise as in Section 7.09(a) provided, may petition any court of competent jurisdiction for an appointment of a successor trustee.
(d)    Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 7.09 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.10.
Section 7.10.    Acceptance by Successor Trustee. Any successor trustee appointed as provided in Section 7.09 shall execute, acknowledge and deliver to the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as Trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 7.06, execute and deliver an instrument transferring to such successor trustee all the rights and powers of the trustee so ceasing to act. Upon request of any such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a senior claim to which the Notes are hereby made subordinate on all money or property held or collected by such trustee as such, except for funds held in trust for the benefit of Holders of particular Notes, to secure any amounts then due it pursuant to the provisions of Section 7.06.

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No successor trustee shall accept appointment as provided in this Section 7.10 unless at the time of such acceptance such successor trustee shall be eligible under the provisions of Section 7.08.
Upon acceptance of appointment by a successor trustee as provided in this Section 7.10, each of the Company and the successor trustee, at the written direction and at the expense of the Company shall deliver or cause to be delivered notice of the succession of such trustee hereunder to the Holders. If the Company fails to deliver such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be delivered at the expense of the Company.
Section 7.11.    Succession by Merger, Etc. Any corporation or other entity into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation or other entity resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or other entity succeeding to all or substantially all of the corporate trust business of the Trustee (including the administration of this Indenture), shall be the successor to the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided that in the case of any corporation or other entity succeeding to all or substantially all of the corporate trust business of the Trustee such corporation or other entity shall be eligible under the provisions of Section 7.08.
In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee or authenticating agent appointed by such predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee or an authenticating agent appointed by such successor trustee may authenticate such Notes either in the name of any predecessor trustee hereunder or in the name of the successor trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor trustee or to authenticate Notes in the name of any predecessor trustee shall apply only to its successor or successors by merger, conversion or consolidation.
Section 7.12.    Trustee’s Application for Instructions from the Company. Any application by the Trustee for written instructions from the Company (other than with regard to any action proposed to be taken or omitted to be taken by the Trustee that affects the rights of the Holders of the Notes under this Indenture) may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable to the Company for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after the date any officer that the Company has indicated to the Trustee should receive such application is deemed to have received such application in accordance with Section 17.03, unless any such officer shall have consented in writing to any earlier date), unless, prior to taking any such action (or the effective date in the case of any omission), the Trustee shall have received written instructions in accordance with this Indenture in response to such application specifying the action to be taken or omitted.
ARTICLE 8
CONCERNING THE HOLDERS
Section 8.01.    Action by Holders. Whenever in this Indenture it is provided that the Holders of a specified percentage of the aggregate principal amount of the Notes may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action, the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in writing, or (b) by the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with the provisions of Article 9, or (c) by a combination of such instrument or instruments and any such record of such a meeting of Holders. Whenever the Company or the Trustee solicits the taking of any action by the Holders of the Notes, the Company or the Trustee may, but shall not be required to, fix in advance of such solicitation,

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a date as the record date for determining Holders entitled to take such action. The record date if one is selected shall be not more than fifteen days prior to the date of commencement of solicitation of such action.

Section 8.02.    Proof of Execution by Holders. Subject to the provisions of Section 7.01, Section 7.02 and Section 9.05, proof of the execution of any instrument or writing by a Holder or its agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The holding of Notes shall be proved by the Note Register or by a certificate of the Note Registrar. The record of any Holders’ meeting shall be proved in the manner provided in Section 9.06.

Section 8.03.    Who Are Deemed Absolute Owners. The Company, the Trustee, any authenticating agent, any Paying Agent, any Conversion Agent and any Note Registrar may deem the Person in whose name a Note shall be registered upon the Note Register to be, and may treat it as, the absolute owner of such Note (whether or not such Note shall be overdue and notwithstanding any notation of ownership or other writing thereon made by any Person other than the Company or any Note Registrar) for the purpose of receiving payment of or on account of the principal (including any Redemption Price, the Optional Repurchase Price and any Change of Control Repurchase Price) of and (subject to Section 2.03) accrued and unpaid interest on such Note, for conversion of such Note and for all other purposes under this Indenture; and neither the Company nor the Trustee nor any Paying Agent nor any Conversion Agent nor any Note Registrar shall be affected by any notice to the contrary. The sole registered Holder of a Global Note shall be the Depositary or its nominee. All such payments or deliveries so made to any Holder for the time being, or upon its order, shall be valid, and, to the extent of the sums or shares of Common Stock so paid or delivered, effectual to satisfy and discharge the liability for monies payable or shares deliverable upon any such Note. Notwithstanding anything to the contrary in this Indenture or the Notes following an Event of Default, any owner of a beneficial interest in a Global Note may directly enforce against the Company, without the consent, solicitation, proxy, authorization or any other action of the Depositary or any other Person, such owner’s right to exchange such beneficial interest for a Physical Note in accordance with the provisions of this Indenture.

Section 8.04.    Company-Owned Notes Disregarded. In determining whether the Holders of the requisite aggregate principal amount of Notes have concurred in any direction, consent, waiver or other action under this Indenture, Notes that are owned by the Company, by any Subsidiary thereof or by any Affiliate of the Company or any Subsidiary thereof shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, consent, waiver or other action only Notes that a Responsible Officer knows are so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as outstanding for the purposes of this Section 8.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to so act with respect to such Notes and that the pledgee is not the Company, a Subsidiary thereof or an Affiliate of the Company or a Subsidiary thereof. In the case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the Company shall furnish to the Trustee promptly an Officer’s Certificate listing and identifying all Notes, if any, known by the Company to be owned or held by or for the account of any of the above described Persons; and, subject to Section 7.01, the Trustee shall be entitled to accept such Officer’s Certificate as conclusive evidence of the facts therein set forth and of the fact that all Notes not listed therein are outstanding for the purpose of any such determination.

Section 8.05.    Revocation of Consents; Future Holders Bound. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the Holders of the percentage of the aggregate principal amount of the Notes specified in this Indenture in connection with such action, any Holder of a Note that is shown by the evidence to be included in the Notes the Holders of which have consented to such action may, by filing written notice with the Trustee at its Corporate Trust Office and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Note. Except as aforesaid, any such action taken by the Holder of any Note shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Note and of any Notes issued in exchange or substitution therefor or upon registration of transfer thereof, irrespective of whether any notation in regard thereto is made upon such Note or any Note issued in exchange or substitution therefor or upon registration of transfer thereof.

ARTICLE 9
HOLDERS’ MEETINGS
Section 9.01.    Purpose of Meetings. A meeting of Holders may be called at any time and from time to time pursuant to the provisions of this Article 9 for any of the following purposes:

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(a)    to give any notice to the Company or to the Trustee or to give any directions to the Trustee permitted under this Indenture, or to consent to the waiving of any Default or Event of Default hereunder (in each case, as permitted under this Indenture) and its consequences, or to take any other action authorized to be taken by Holders pursuant to any of the provisions of Article 6;
(b)    to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article 7;
(c)    to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 10.02; or
(d)    to take any other action authorized to be taken by or on behalf of the Holders of any specified aggregate principal amount of the Notes under any other provision of this Indenture or under applicable law.
Section 9.02.    Call of Meetings by Trustee. The Trustee may at any time call a meeting of Holders to take any action specified in Section 9.01, to be held at such time and at such place as the Trustee shall determine. Notice of every meeting of the Holders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting and the establishment of any record date pursuant to Section 8.01, shall be delivered to Holders of such Notes. Such notice shall also be delivered to the Company. Such notices shall be delivered not less than 20 nor more than 90 days prior to the date fixed for the meeting.
Any meeting of Holders shall be valid without notice if the Holders of all Notes then outstanding are present in person or by proxy or if notice is waived before or after the meeting by the Holders of all Notes then outstanding, and if the Company and the Trustee are either present by duly authorized representatives or have, before or after the meeting, waived notice.
Section 9.03.    Call of Meetings by Company or Holders. In case at any time the Company, pursuant to a Board Resolution, or the Holders of at least 10% of the aggregate principal amount of the Notes then outstanding, shall have requested the Trustee to call a meeting of Holders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have delivered the notice of such meeting within 20 days after receipt of such request, then the Company or such Holders may determine the time and the place for such meeting and may call such meeting to take any action authorized in Section 9.01, by delivering notice thereof as provided in Section 9.02.
Section 9.04.    Qualifications for Voting. To be entitled to vote at any meeting of Holders a Person shall (a) be a Holder of one or more Notes on the record date pertaining to such meeting or (b) be a Person appointed by an instrument in writing as proxy by a Holder of one or more Notes on the record date pertaining to such meeting. The only Persons who shall be entitled to be present or to speak at any meeting of Holders shall be the Persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.
Section 9.05.    Regulations. Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders, in regard to proof of the holding of Notes and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders as provided in Section 9.03, in which case the Company or the Holders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Holders of a majority in aggregate principal amount of the outstanding Notes represented at the meeting and entitled to vote at the meeting.
Subject to the provisions of Section 8.04, at any meeting of Holders each Holder or proxyholder shall be entitled to one vote for each $1,000 principal amount of Notes held or represented by him or her; provided, however,

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that no vote shall be cast or counted at any meeting in respect of any Note challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Notes held by it or instruments in writing as aforesaid duly designating it as the proxy to vote on behalf of other Holders. Any meeting of Holders duly called pursuant to the provisions of Section 9.02 or Section 9.03 may be adjourned from time to time by the Holders of a majority of the aggregate principal amount of Notes represented at the meeting, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice.
Section 9.06.    Voting. The vote upon any resolution submitted to any meeting of Holders shall be by written ballot on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the outstanding aggregate principal amount of the Notes held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was delivered as provided in Section 9.02. The record shall show the aggregate principal amount of the Notes voting in favor of or against any resolution. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters therein stated.
Section 9.07.    No Delay of Rights by Meeting. Nothing contained in this Article 9 shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Holders or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Holders under any of the provisions of this Indenture or of the Notes.
ARTICLE 10
SUPPLEMENTAL INDENTURES
Section 10.01.    Supplemental Indentures Without Consent of Holders. The Company and the Trustee, at the Company’s expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes:
(a)    to cure any ambiguity, mistake, omission, defect or inconsistency;
(b)    to provide for the assumption by a Successor Entity of the obligations of the Company under this Indenture pursuant to Article 11;
(c)    to add guarantees with respect to the Notes;
(d)    to secure the Notes;
(e)    to add to the covenants or Events of Default of the Company for the benefit of the Holders or surrender any right or power conferred upon the Company;
(f)    to make any change that does not adversely affect the rights of any Holder under this Indenture;
(g)    in connection with any Merger Event, to provide that the Notes are convertible into Reference Property, subject to the provisions of Section 14.02, and make such related changes to the terms of the Notes to the extent expressly required by Section 14.07;

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(h)    to comply with the rules of any applicable Depositary, including The Depository Trust Company, so long as such amendment does not adversely affect the rights of any Holder;
(i)    to increase the Conversion Rate in the manner provided herein;
(j)    to irrevocably elect a Settlement Method or a specified dollar amount;
(k)    to provide for the issuance of Additional Notes in accordance with this Indenture; or
(l)    to appoint a successor trustee with respect to the Notes.
Upon the written request of the Company, the Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to, but may in its discretion, enter into any supplemental indenture that affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section 10.01 may be executed by the Company and the Trustee without the consent of the Holders of any of the Notes at the time outstanding, notwithstanding any of the provisions of Section 10.02.
Section 10.02.    Supplemental Indentures with Consent of Holders. With the consent (evidenced as provided in Article 8) of the Holders of at least a majority of the aggregate principal amount of the Notes then outstanding (determined in accordance with Article 8 and including, without limitation, consents obtained in connection with a repurchase of, or tender or exchange offer for, Notes), the Company and the Trustee, at the Company’s expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture, the Notes or any supplemental indenture or of modifying in any manner the rights of the Holders; provided, however, that, without the consent of each Holder of an outstanding Note affected, no such supplemental indenture shall:
(a)    reduce the principal amount of Notes whose Holders must consent to an amendment;
(b)    reduce the rate of or extend the stated time for payment of interest on any Note;
(c)    reduce the principal of or extend the Maturity Date of any Note;
(d)    except as required by this Indenture, make any change that adversely affects the conversion rights of any Notes;
(e)    reduce the Redemption Price, the Optional Repurchase Price or the Change of Control Repurchase Price of any Note or amend or modify in any manner adverse to the Holders the Company’s obligation to make such payments, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;
(f)    make any Note payable in a currency, or at a place of payment, other than that stated in the Note;
(g)    change the ranking of the Notes; or
(h)    make any change in this Article 10 that requires each Holder’s consent or in the waiver provisions in Section 6.02 or Section 6.09.
Upon the written request of the Company, and upon the filing with the Trustee of evidence of the consent of Holders as aforesaid and subject to Section 10.05, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

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Holders do not need under this Section 10.02 to approve the particular form of any proposed supplemental indenture. It shall be sufficient if such Holders approve the substance thereof. After any such supplemental indenture becomes effective, the Company shall deliver to the Holders a notice briefly describing such supplemental indenture. However, the failure to give such notice to all the Holders, or any defect in the notice, will not impair or affect the validity of the supplemental indenture.
Section 10.03.    Effect of Supplemental Indentures. Upon the execution of any supplemental indenture pursuant to the provisions of this Article 10, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitation of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the Holders shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
Section 10.04.    Notation on Notes. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article 10 may, at the Company’s expense, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company or the Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Trustee and the Company, to any modification of this Indenture contained in any such supplemental indenture may, at the Company’s expense, be prepared and executed by the Company, authenticated by the Trustee (or an authenticating agent duly appointed by the Trustee pursuant to Section 17.10) and delivered in exchange for the Notes then outstanding, upon surrender of such Notes then outstanding.
Section 10.05.    Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee. In addition to the documents required by Section 17.05, the Trustee shall receive an Officer’s Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article 10 and is permitted or authorized by this Indenture; such Opinion of Counsel to include a customary legal opinion stating that such supplemental indenture is the valid and binding obligation of the Company, subject to customary exceptions and qualifications. The Trustee shall have no responsibility for determining whether any amendment or supplemental indenture will or may have an adverse effect on any Holder.
ARTICLE 11
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 11.01.    Company May Consolidate, Etc. on Certain Terms. Subject to the provisions of Section 11.02, the Company shall not consolidate with, merge with or into, or sell, convey, transfer or lease all or substantially all of its assets to another Person (other than the sale, conveyance, transfer or lease of all or substantially all of the Company’s assets to one or more of the its Wholly Owned Subsidiaries), unless:
(a)    the resulting, surviving or transferee Person (the “Successor Entity”), if not the Company, shall be a corporation, a limited liability company that is treated as a corporation for U.S. federal income tax purposes, or a partnership that is treated as a corporation for U.S. federal income tax purposes, in any such case, organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and the Successor Entity (if not the Company) shall expressly assume, by supplemental indenture all of the obligations of the Company under the Notes, this Indenture and the Registration Rights Agreement; and
(b)    immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing under this Indenture.
For purposes of this Section 11.01, the sale, conveyance, transfer or lease of all or substantially all of the properties and assets of one or more Subsidiaries of the Company to another Person, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a consolidated basis, shall be deemed to be the sale, conveyance, transfer or lease of all or substantially all of the properties and assets of the Company to another Person.
Section 11.02.    Successor Entity to Be Substituted. In case of any such consolidation, merger, sale, conveyance, transfer or lease (other than the sale, conveyance, transfer or lease of all or substantially all of the Company’s

44


assets to one or more of its Wholly Owned Subsidiaries) and upon the assumption by the Successor Entity, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of and accrued and unpaid interest on all of the Notes, the due and punctual delivery or payment, as the case may be, of any consideration due upon conversion of the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture and the Registration Rights Agreement to be performed by the Company, such Successor Entity (if not the Company) shall succeed to and, except in the case of a lease of all or substantially all of the Company’s properties and assets, shall be substituted for the Company, with the same effect as if it had been named herein as the party of the first part, and may thereafter exercise every right and power of the Company under this Indenture and the Registration Rights Agreement. Such Successor Entity thereupon may cause to be signed, and may issue either in its own name or in the name of the Company any or all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such Successor Entity instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause to be authenticated and delivered, any Notes that previously shall have been signed and delivered by the Officers of the Company to the Trustee for authentication, and any Notes that such Successor Entity thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Notes so issued shall in all respects have the same legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Notes had been issued at the date of the execution hereof. In the event of any such consolidation, merger, sale, conveyance or transfer (but not in the case of a lease), upon compliance with this Article 11 the Person named as the “Company” in the first paragraph of this Indenture (or any successor that shall thereafter have become such in the manner prescribed in this Article 11) may be dissolved, wound up and liquidated at any time thereafter and, except in the case of a lease, such Person shall be released from its liabilities as obligor and maker of the Notes and from its obligations under this Indenture, the Notes and the Registration Rights Agreement.
In case of any such consolidation, merger, sale, conveyance, transfer or lease, such changes in phraseology and form (but not in substance) may be made in the Notes thereafter to be issued as may be appropriate.
ARTICLE 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 12.01.    Indenture and Notes Solely Corporate Obligations. No recourse for the payment of the principal of or accrued and unpaid interest on any Note, nor for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Note, nor because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, Officer or director or Subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Notes.
ARTICLE 13
[INTENTIONALLY OMITTED]
ARTICLE 14
CONVERSION OF NOTES
Section 14.01.    Conversion Privilege. (a) Subject to and upon compliance with the provisions of this Article 14, each Holder of a Note shall have the right, at such Holder’s option, to convert all or any portion (if the portion to be converted is $1,000,000 principal amount or an integral multiple of $1,000 in excess thereof) of such Note (i) under the circumstances described in Section 14.01(b), at any time prior to the close of business on the Business Day immediately preceding December 23, 2021 and (ii) on or after December 23, 2021 and prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date, in each case, at an initial conversion rate of 76.9231 shares of Common Stock (subject to adjustment as provided in this Article 14, the “Conversion Rate”) per $1,000 principal amount of Notes plus accrued and unpaid interest, if any, on such Notes to, but excluding, the

45


Conversion Date (subject to, and in accordance with, the settlement provisions of Section 14.02, the “Conversion Obligation”).
(b)    If a transaction or event that constitutes a Change of Control occurs prior to the close of business on the Business Day immediately preceding December 23, 2021, regardless of whether a Holder has the right to require the Company to repurchase the Notes pursuant to Section 15.02, and pursuant to which the Common Stock would be converted into cash, securities or other assets, all or any portion of a Holder’s Notes may be surrendered for conversion at any time from or after the effective date of such transaction or event until the related Change of Control Repurchase Date. The Company shall notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) in writing as promptly as practicable following the effective date of such transaction, but in no event later than the second Business Day after the effective date of such transaction. Neither the Trustee nor the Conversion Agent shall have any duty to verify the Company’s determination of whether a Change of Control has occurred.
Section 14.02.    Conversion Procedure; Settlement Upon Conversion.
(a)    Subject to this Section 14.02 and Section 14.07(a), upon conversion of any Note, the Company shall satisfy its Conversion Obligation by paying or delivering, as the case may be, to the converting Holder, in respect of each $1,000 principal amount of Notes being converted, cash (“Cash Settlement”), shares of Common Stock, together with cash, if applicable, in lieu of delivering any fractional share of Common Stock in accordance with subsection (j) of this Section 14.02 (“Physical Settlement”) or a combination of cash and shares of Common Stock, together with cash, if applicable, in lieu of delivering any fractional share of Common Stock in accordance with subsection (j) of this Section 14.02 (“Combination Settlement”), at its election, as set forth in this Section 14.02.
(i)    All conversions for which the relevant Conversion Date occurs after the Company’s issuance of a Notice of Redemption with respect to the Notes and prior to the related Redemption Date shall be settled using the same Settlement Method.
(ii)    Except for any conversions for which the relevant Conversion Date occurs after the Company’s issuance of a Notice of Redemption with respect to the Notes but prior to the related Redemption Date, the Company shall use the same Settlement Method for all conversions with the same Conversion Date, but the Company shall not have any obligation to use the same Settlement Method with respect to conversions with different Conversion Dates.
(iii)    If, in respect of any Conversion Date (or any conversions for which the relevant Conversion Date occurs after the Company’s issuance of a Notice of Redemption with respect to the Notes and prior to the related Redemption Date), the Company elects a Settlement Method, the Company shall deliver a notice of the relevant Settlement Method in respect of such Conversion Date (or such period, as the case may be) in writing (the “Settlement Notice”) to converting Holders (with a copy to the Trustee and the Conversion Agent (if other than the Trustee)) no later than the close of business on the Trading Day immediately following the relevant Conversion Date (or, in the case of any conversions for which the relevant Conversion Date occurs after the date of issuance of a Notice of Redemption with respect to the Notes and prior to the related Redemption Date, in such Notice of Redemption). If the Company does not elect a Settlement Method prior to the deadline set forth in the immediately preceding sentence, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement with respect to any conversion on such Conversion Date or during such period, and the Company shall be deemed to have elected Combination Settlement in respect of its Conversion Obligation, and the Specified Dollar Amount per $1,000 principal amount of Notes shall be equal to $1,000. Such Settlement Notice shall specify the relevant Settlement Method and in the case of an election of Combination Settlement, the relevant Settlement Notice shall indicate the Specified Dollar Amount per $1,000 principal amount of Notes. If the Company delivers a Settlement Notice electing Combination Settlement in respect of its Conversion Obligation but does not indicate a Specified Dollar Amount per $1,000 principal amount of Notes to be converted in such Settlement Notice, the Specified Dollar Amount per $1,000 principal amount of Notes shall be deemed to be $1,000.

46


(iv)    The cash, shares of Common Stock or combination of cash and shares of Common Stock in respect of any conversion of Notes (the “Settlement Amount”) shall be computed as follows:
(A) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Physical Settlement, the Company shall deliver to the converting Holder in respect of each $1,000 principal amount of Notes being converted a number of shares of Common Stock equal to the Conversion Rate in effect on the Conversion Date or, in the case of a Company Conversion, the Company Conversion Notice Date;
(B) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Cash Settlement, the Company shall pay to the converting Holder in respect of each $1,000 principal amount of Notes being converted cash in an amount equal to the Conversion Value; and
(C) if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation in respect of such conversion by Combination Settlement, the Company shall pay or deliver, as the case may be, to the converting Holder in respect of each $1,000 principal amount of Notes being converted, a Settlement Amount equal to the Combination Settlement Amount.
(v)    The Combination Settlement Amount (if applicable) and the Conversion Value (if applicable) shall be determined by the Company promptly following the Conversion Date. Promptly after such determination of the Combination Settlement Amount or the Conversion Value, as the case may be, and the amount of cash payable in lieu of delivering any fractional share of Common Stock, the Company shall notify the Trustee and the Conversion Agent (if other than the Trustee) of the Combination Settlement Amount or the Conversion Value, as the case may be, and the amount of cash payable in lieu of delivering fractional shares of Common Stock. The Trustee and the Conversion Agent (if other than the Trustee) shall have no responsibility for any such determination.
(b)    Subject to Section 14.02(e), before any Holder of a Note shall be entitled to convert a Note as set forth above, such Holder shall (i) in the case of a Global Note, comply with the applicable procedures of the Depositary in effect at that time and, if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 14.02(h) and (ii) in the case of a Physical Note (1) complete, manually sign and deliver an irrevocable notice to the Conversion Agent as set forth in the Form of Notice of Conversion (or a facsimile, PDF or other electronic transmission thereof) (a notice pursuant to the applicable procedure of the Depositary or a notice as set forth in the Form of Notice of Conversion, a “Notice of Conversion”) at the office of the Conversion Agent and state in writing therein the principal amount of Notes to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of Common Stock to be delivered upon settlement of the Conversion Obligation to be registered, (2) surrender such Notes, duly endorsed to the Company or in blank (and accompanied by appropriate endorsement and transfer documents), at the office of the Conversion Agent, (3) if required, furnish appropriate endorsements and transfer documents, (4) if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 14.02(h) and (5) if required, pay all transfer and similar taxes as set forth in Section 14.02(d) and Section 14.02(e), if any. The Trustee (and if different, the Conversion Agent) shall notify the Company of any conversion pursuant to this Article 14 on the Conversion Date for such conversion. No Notes may be surrendered for conversion by a Holder thereof if such Holder has also delivered a Change of Control Repurchase Notice or Optional Repurchase Notice to the Company in respect of such Notes and has not validly withdrawn such Change of Control Repurchase Notice or Optional Repurchase Notice in accordance with Section 15.03.
If more than one Note shall be surrendered for conversion at one time by the same Holder, the Conversion Obligation with respect to such Notes shall be computed on the basis of the principal amount of the Notes (or specified portions thereof to the extent permitted thereby) so surrendered.
(c)    A Note shall be deemed to have been converted immediately prior to the close of business on either (i) the date that the Holder has complied with the requirements set forth in subsection (b) above or (ii) in the case of a Company Conversion, the Company Conversion Date (the “Conversion Date”). Except as set forth in Section

47


14.07(a), the Company shall pay or deliver, as the case may be, the consideration due in respect of the Conversion Obligation on the second Business Day immediately following the relevant Conversion Date (provided that, with respect to any Conversion Date following the Regular Record Date immediately preceding the Maturity Date where Physical Settlement applies to the related conversion, the Company shall settle any such conversion on the Maturity Date). If any shares of Common Stock are due to a converting Holder, the Company shall issue or cause to be issued, and deliver (if applicable) to the Conversion Agent or to such Holder, or such Holder’s nominee or nominees, the full number of shares of Common Stock to which such Holder shall be entitled, in book-entry format through the Depositary, in satisfaction of the Company’s Conversion Obligation.
(d)    In case any Note shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of the Note so surrendered a new Note or Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Note, without payment of any service charge by the converting Holder but, if required by the Company or Trustee, with payment of a sum sufficient to cover any documentary, stamp or similar issue or transfer tax or similar governmental charge required by law or that may be imposed in connection therewith as a result of the name of the Holder of the new Notes issued upon such conversion being different from the name of the Holder of the old Notes surrendered for such conversion.
(e)    If a Holder submits a Note for conversion, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issuance of any shares of Common Stock upon conversion thereof, unless the tax is due because the Holder requests such shares to be issued in a name other than the Holder’s name, in which case the Holder shall pay that tax. The Conversion Agent may refuse to deliver or refuse to instruct the stock transfer agent to deliver the certificates representing the shares of Common Stock being issued in a name other than the Holder’s name until the Trustee receives a sum sufficient to pay any tax that is due by such Holder in accordance with the immediately preceding sentence.
(f)    Except as provided in Section 14.04, no adjustment shall be made for dividends on any shares of Common Stock issued upon the conversion of any Note as provided in this Article 14.
(g)    Upon the conversion of an interest in a Global Note, the Trustee, or the Custodian at the direction of the Trustee, shall make a notation on such Global Note as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in writing of any conversion of Notes effected through any Conversion Agent other than the Trustee.
(h)    Upon conversion, a Holder shall not receive any separate cash payment for accrued and unpaid interest, if any, except as set forth below. The Company’s settlement of the full Conversion Obligation shall be deemed to satisfy in full its obligation to pay the principal amount of the Note and accrued and unpaid interest, if any, to, but not including, the relevant Conversion Date. As a result, accrued and unpaid interest, if any, to, but not including, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Upon a conversion of Notes into a combination of cash and shares of Common Stock, accrued and unpaid interest will be deemed to be paid first out of the cash paid upon such conversion. Notwithstanding the foregoing, if Notes are converted after the close of business on a Regular Record Date and prior to the open of business on the corresponding Interest Payment Date, Holders of such Notes as of the close of business on such Regular Record Date will receive the full amount of interest payable on such Notes on the corresponding Interest Payment Date notwithstanding the conversion. Notes surrendered for conversion during the period from the close of business on any Regular Record Date to the open of business on the immediately following Interest Payment Date must be accompanied by funds equal to the amount of interest payable on the Notes so converted; provided that no such payment shall be required (1) for conversions following the Regular Record Date immediately preceding the Maturity Date; (2) if the Company has specified a Redemption Date that is after a Regular Record Date and on or prior to the Scheduled Trading Day immediately following the corresponding Interest Payment Date; (3) if the Company has specified a Change of Control Repurchase Date that is after a Regular Record Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date; or (4) to the extent of any Defaulted Amounts, if any Defaulted Amounts exists at the time of conversion with respect to such Note. Therefore, for the avoidance of doubt, all Holders of record on the Regular Record Date immediately preceding the Maturity Date, any Redemption Date described in clause (2) above and any Change

48


of Control Repurchase Date described in clause (3) above shall receive the full interest payment due on the Maturity Date or other applicable Interest Payment Date in cash regardless of whether their Notes have been converted following such Regular Record Date.
(i)    The Person in whose name the shares of Common Stock shall be issuable upon conversion shall be treated as a stockholder of record as of the close of business on the relevant Conversion Date. Upon a conversion of Notes, such Person shall no longer be a Holder of such Notes surrendered for conversion.
(j)    The Company shall not issue any fractional share of Common Stock upon conversion of the Notes and shall instead pay cash in lieu of delivering any fractional share of Common Stock issuable upon conversion based on the Daily VWAP for the relevant Conversion Date. For each Note surrendered for conversion, if the Company has elected (or is deemed to have elected) Combination Settlement, the full number of shares that shall be issued upon conversion thereof shall be computed on the basis of the Combination Settlement Amount and any fractional shares remaining after such computation shall be paid in cash.
Section 14.03.    Company Conversion.
(a)    Subject to and upon compliance with the provisions of this Article 14 and upon satisfaction of the conditions described in Section 14.03(b), at any time on or after December 23, 2022 and prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date, the Company shall have the right (the “Company Conversion Right”), at the Company’s option, to cause all or any portion (if the portion to be converted is $1,000 principal amount or an integral multiple thereof) (subject to the applicable procedures of the Depositary) of the Notes then outstanding to be automatically converted at the Conversion Rate (subject to, and in accordance with, the settlement provisions of Section 14.02) (any such conversion, a “Company Conversion”).
(b)    The Company may not exercise the Company Conversion Right unless:
(i)    such Company Conversion is with respect to at least $5,000,000 principal amount of Notes;
(ii)    the average of the Daily VWAPs of the Common Stock over the 20 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding Company Conversion Notice Date equals or exceeds 150% of the Conversion Price;
(iii)    the closing price of the Common Stock on the Trading Day immediately prior to the Company Conversion Notice Date equals or exceeds 150% of the Conversion Price;
(iv)    on the Company Conversion Date, the Common Stock is listed or traded on the NYSE, the NASDAQ Global Select Market, the NASDAQ Global Market, or any of their respective successors (each, an “Eligible Market”) and shall not then be suspended from trading on such Eligible Market;
(v)    all shares of Common Stock issuable upon Company Conversion may be issued in full without violating the listing rules of the Eligible Market on which the Common Stock is then listed or traded;
(vi)    a shelf registration statement registering the resale of the shares of Common Stock issuable upon conversion of the Notes is effective under the Securities Act and available for use by the persons to whom such shares are to be issued, and the Company expects such shelf registration statement to remain effective and so available for use from the date the Company sends the Company Conversion Notice through the date that is thirty (30) calendar days following such Company Conversion Date;
(vii)    on the Company Conversion Date, the Company is not in possession of any material non-public information concerning the Company or its Subsidiaries;

49


(viii)    the average daily trading volume of the Common Stock for the 20 consecutive Trading Days immediately prior to the Company Conversion Date is equal to or greater than 500,000 shares (or 1,000,000 shares, if the Company Conversion is with respect to more than $10,000,000 principal amount of Notes);
(ix)    the Company has not defaulted on its obligation to convert any Note before the date the Company sends the Company Conversion Notice, and no Default or Event of Default has occurred and is continuing; and
(x)    no Company Conversion has occurred within the 90 days immediately prior to the Company Conversion Date.
(c)    To exercise the Company Conversion Right, the Company must send notice of the Company’s election (the “Company Conversion Notice”) to the Holders, the Trustee and the Conversion Agent at least five, but not more than ten, Business Days prior to the date of such Company Conversion (the “Company Conversion Date”). The Company Conversion Notice must state:
(i)    that the Notes have been called for Company Conversion, briefly describing the Company Conversion Right under this Indenture;
(ii)    the Company Conversion Date;
(iii)    the current Conversion Rate;
(iv)    whether the Company Conversion will be subject to Cash Settlement, Physical Settlement or Combination Settlement;
(v)    the name and address of the Paying Agent and the Conversion Agent; and
(vi)    the CUSIP and ISIN numbers, if any, of the Notes subject to the Company Conversion Notice.
(d)    The Company’s issuance of a Company Conversion Notice will be irrevocable.
(e)    If the Company exercises the Company Conversion Right in accordance with this ‎Section 14.03, then a Conversion Date will automatically, and without the need for any action on the part of any Holder, the Trustee or the Conversion Agent, be deemed to occur, with respect to each Note then outstanding and identified in the Company Conversion Notice, on the Company Conversion Date, and settlement of the Company Conversion shall be completed pursuant to the method elected in the Company Conversion Notice.
(f)    Notwithstanding anything to the contrary in this ‎Indenture, the Company may not exercise its Company Conversion Right at any time during the period beginning on the effective date of a Change of Control and ending on the related Change of Control Repurchase Date.
(g)    If any Company Conversion involves fewer than all of the then outstanding Notes, the Company shall select the Notes to be mandatorily converted (such that the principal amount of a Holder’s Note not to be converted equals $1,000 or an integral multiple of $1,000 in excess thereof) as follows: (1) in the case of Global Notes, in accordance with the Depositary’s applicable procedures; and (2) in the case of Physical Notes, pro rata, by lot or by such other method as the Trustee shall deem fair and appropriate.
Section 14.04.    Adjustment of Conversion Rate. The Conversion Rate shall be adjusted from time to time by the Company if any of the following events occurs, except that the Company shall not make any adjustments to the Conversion Rate if Holders of the Notes participate (other than in the case of (x) a share split or share combination or (y) a tender or exchange offer), at the same time and upon the same terms as holders of the Common Stock and solely as a result of holding the Notes, in any of the transactions described in this Section 14.04, without having to convert

50


their Notes, as if they held a number of shares of Common Stock equal to the Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.

(a)    If the Company exclusively issues shares of Common Stock as a dividend or distribution on shares of the Common Stock, or if the Company effects a share split or share combination, the Conversion Rate shall be adjusted based on the following formula:

CR1  = CR0 x
OS1
OS0


where,

CR0 
=    the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date of such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as applicable;

CR1 
=    the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date or Effective Date;

OS0 
=    the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date or Effective Date (before giving effect to any such dividend, distribution, split or combination); and

OS1 
=    the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination.

Any adjustment made under this Section 14.04(a) shall become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution, or immediately after the open of business on the Effective Date for such share split or share combination, as applicable. If any dividend or distribution of the type described in this Section 14.04(a) is declared but not so paid or made, the Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(b)    If the Company distributes to all or substantially all holders of the Common Stock any rights, options or warrants (other than pursuant to a stockholder rights plan) entitling them, for a period of not more than 45 calendar days after the announcement date of such distribution, to subscribe for or purchase shares of the Common Stock at a price per share that is less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such distribution, the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 x
OS0 + X
OS0 + Y


where,

CR0 
=    the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;

CR1 
=    the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date;

OS0 
=    the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date;

X
=    the total number of shares of Common Stock distributable pursuant to such rights, options or warrants; and

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Y
=    the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the distribution of such rights, options or warrants.

Any increase made under this Section 14.04(b) shall be made successively whenever any such rights, options or warrants are distributed and shall become effective immediately after the open of business on the Ex-Dividend Date for such distribution. To the extent that shares of the Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect had the increase with respect to the distribution of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights, options or warrants are not so distributed, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such Ex-Dividend Date for such distribution had not occurred.

For purposes of this Section 14.04(b), in determining whether any rights, options or warrants entitle the holders of Common Stock to subscribe for or purchase shares of the Common Stock at less than such average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such distribution, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Company in good faith.

(c)    If the Company distributes shares of its Capital Stock, evidences of its indebtedness, other assets or property of the Company or rights, options or warrants to acquire its Capital Stock or other securities, to all or substantially all holders of the Common Stock, excluding (i) dividends, distributions or issuances as to which an adjustment was effected pursuant to Section 14.04(a) or Section 14.04(b), (ii) except as otherwise provided in Section 14.11, rights issued pursuant to any stockholder rights plan of the Company then in effect, (iii) distributions of Reference Property in exchange for, or upon conversion of, Common Stock in a Merger Event, (iv) dividends or distributions paid exclusively in cash as to which the provisions set forth in Section 14.04(d) shall apply, and (v) Spin-Offs as to which the provisions set forth below in this Section 14.04(c) shall apply (any of such shares of Capital Stock, evidences of indebtedness, other assets or property or rights, options or warrants to acquire Capital Stock or other securities, the “Distributed Property”), then the Conversion Rate shall be increased based on the following formula:

CR1  = CR0  x
SP0
SP0 – FMV


where,

CR0 
=    the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;

CR1 
=    the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date;

SP0 
=    the average of the Daily VWAPs of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and

FMV
=    the fair market value (as determined by the Company in good faith) of the Distributed Property with respect to each outstanding share of the Common Stock on the Ex-Dividend Date for such distribution.

Any increase made under the portion of this Section 14.04(c) above shall become effective immediately after the open of business on the Ex-Dividend Date for such distribution. If such distribution is not so paid or made, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such distribution had not been declared. Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of the Common Stock receive the Distributed Property,

52


the amount and kind of Distributed Property such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Conversion Rate in effect on the Ex-Dividend Date for the distribution.

With respect to an adjustment pursuant to this Section 14.04(c) where there has been a payment of a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit of the Company, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a “Spin-Off”), the Conversion Rate shall be increased based on the following formula:

CR1  = CR0  x
FMV0 + MP0
MP0


where,

CR0 
=    the Conversion Rate in effect immediately prior to the end of the Valuation Period;

CR1 
=    the Conversion Rate in effect immediately after the end of the Valuation Period;

FMV0 
=    the average of the Daily VWAPs of the Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock (determined by reference to the definition of Daily VWAP as set forth in Section 1.01 as if references therein to Common Stock were to such Capital Stock or similar equity interest) over the first 10 consecutive Trading Day period after, and including, the Ex-Dividend Date of the Spin-Off (the “Valuation Period”); and

MP0 
=    the average of the Daily VWAPs of the Common Stock over the Valuation Period.

The increase to the Conversion Rate under the preceding paragraph shall occur at the close of business on the last Trading Day of the Valuation Period; provided that (x) in respect of any conversion of Notes for which Physical Settlement is applicable, if the relevant Conversion Date occurs during the Valuation Period, the reference to “10” in the preceding paragraph shall be deemed to be replaced with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date of such Spin-Off to, and including, the Conversion Date in determining the Conversion Rate and (y) in respect of any conversion of Notes for which Cash Settlement or Combination Settlement is applicable, for any Trading Day that falls within the relevant Observation Period for such conversion and within the Valuation Period, the reference to “10” in the preceding paragraph shall be deemed to be replaced with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date of such Spin-Off to, and including, such Trading Day in determining the Conversion Rate as of such Trading Day of such Observation Period. If any dividend or distribution that constitutes a Spin-Off is declared but not so paid or made, the Conversion Rate shall be immediately decreased, effective as of the date the Board of Directors determines not to pay or make such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared or announced.

For purposes of this Section 14.04(c) (and subject in all respect to Section 14.11), rights, options or warrants distributed by the Company to all holders of the Common Stock entitling them to subscribe for or purchase shares of the Company’s Capital Stock, including Common Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of the Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of the Common Stock, shall be deemed not to have been distributed for purposes of this Section 14.04(c) (and no adjustment to the Conversion Rate under this Section 14.04(c) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 14.04(c). If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Ex-Dividend Date with respect to new rights, options or warrants with such rights (in which case the existing rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution)

53


of rights, options or warrants, or any Trigger Event or other event (of the type described in the immediately preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 14.04(c) was made, (1) in the case of any such rights, options or warrants that shall all have been redeemed or purchased without exercise by any holders thereof, upon such final redemption or purchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and (y) the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by a holder or holders of Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of Common Stock as of the date of such redemption or purchase, and (2) in the case of such rights, options or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights, options and warrants had not been issued.

For purposes of Section 14.04(a), Section 14.04(b) and this Section 14.04(c), if any dividend or distribution to which this Section 14.04(c) is applicable also includes one or both of:

(A) a dividend or distribution of shares of Common Stock to which Section 14.04(a) is applicable (the “Clause A Distribution”); or

(B) a dividend or distribution of rights, options or warrants to which Section 14.04(b) is applicable (the “Clause B Distribution”),

then, in either case, (1) such dividend or distribution, other than the Clause A Distribution and the Clause B Distribution, shall be deemed to be a dividend or distribution to which this Section 14.04(c) is applicable (the “Clause C Distribution”) and any Conversion Rate adjustment required by this Section 14.04(c) with respect to such Clause C Distribution shall then be made, and (2) the Clause A Distribution and Clause B Distribution shall be deemed to immediately follow the Clause C Distribution and any Conversion Rate adjustment required by Section 14.04(a) and Section 14.04(b) with respect thereto shall then be made, except that, if determined by the Company (I) the “Ex-Dividend Date” of the Clause A Distribution and the Clause B Distribution shall be deemed to be the Ex-Dividend Date of the Clause C Distribution and (II) any shares of Common Stock included in the Clause A Distribution or Clause B Distribution shall be deemed not to be “outstanding immediately prior to the open of business on such Ex-Dividend Date or Effective Date” within the meaning of Section 14.04(a) or “outstanding immediately prior to the open of business on such Ex-Dividend Date” within the meaning of Section 14.04(b).

(d)    If the Company makes any cash dividend or distribution to all or substantially all holders of the Common Stock, the Conversion Rate shall be adjusted based on the following formula:

CR1  = CR0  x
SP0
SP0 – C

where,

CR0 
=    the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution;

CR1 
=    the Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution;

SP0 
=    the Daily VWAP of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and

C
=    the amount in cash per share the Company distributes to all or substantially all holders of the Common Stock.

Any increase pursuant to this Section 14.04(d) shall become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Rate shall be decreased, effective as of the date the Board of Directors determines not to make or pay such dividend

54


or distribution, to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall receive, for each $1,000 principal amount of Notes it holds, at the same time and upon the same terms as holders of shares of the Common Stock, the amount of cash that such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Conversion Rate in effect on the Ex-Dividend Date for such cash dividend or distribution.

(e)    If the Company or any of its Subsidiaries make a payment in respect of a tender or exchange offer for the Common Stock that is subject to the then applicable tender offer rules under the Exchange Act (other than any odd-lot tender offer pursuant to Rule 13e-4(h)(5) under the Exchange Act), to the extent that the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the average of the Daily VWAPs of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate shall be increased based on the following formula:

CR1  = CR0  x
AC + (SP1 x OS1)
OS0 x SP1

where,

CR0 
=    the Conversion Rate in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

CR1 
=    the Conversion Rate in effect immediately after the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires;    

AC
=    the aggregate value of all cash and any other consideration (as determined by the Company in good faith) paid or payable for shares of Common Stock purchased in such tender or exchange offer;

OS0 
=    the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer);

OS1 
=    the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and

SP1 
=    the average of the Daily VWAPs of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires.

The increase to the Conversion Rate under this Section 14.04(e) shall occur at the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; provided that (x) in respect of any conversion of Notes for which Physical Settlement is applicable, if the relevant Conversion Date occurs during the 10 Trading Days immediately following, and including, the Trading Day next succeeding the expiration date of any tender or exchange offer, references to “10” or “10th” in the preceding paragraph shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the date that such tender or exchange offer expires to, and including, the Conversion Date in determining the Conversion Rate and (y) in respect of any conversion of Notes for which Cash Settlement or Combination Settlement is applicable, for any Trading Day that falls within the relevant Observation Period for such conversion and within the 10 Trading Days immediately following, and including, the Trading Day next succeeding the expiration date of any tender or exchange offer, references to “10” or “10th” in the preceding paragraph shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the expiration date of such tender or exchange offer to, and including, such Trading Day in determining the Conversion Rate as of such Trading Day of such Observation Period.


55


If the Company is obligated to purchase shares of Common Stock pursuant to any such tender or exchange offer described in this Section 14.04(e) but is permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made or had been made only in respect of the purchases that have been made.

(f)    Notwithstanding this Section 14.04 or any other provision of this Indenture or the Notes, if a Conversion Rate adjustment becomes effective on any Ex-Dividend Date, and a Holder that has converted its Notes on or after such Ex-Dividend Date and on or prior to the related Record Date would be treated as the record holder of the shares of Common Stock as of the related Conversion Date as described under Section 14.02(i) based on an adjusted Conversion Rate for such Ex-Dividend Date, then, notwithstanding the Conversion Rate adjustment provisions in this Section 14.04, the Conversion Rate adjustment relating to such Ex-Dividend Date shall not be made for such converting Holder. Instead, such Holder shall be treated as if such Holder were the record owner of the shares of Common Stock on an unadjusted basis and participate in the related dividend, distribution or other event giving rise to such adjustment.

(g)    Except as stated herein, the Company shall not adjust the Conversion Rate for the issuance of shares of the Common Stock or any securities convertible into or exchangeable for shares of the Common Stock or the right to purchase shares of the Common Stock or such convertible or exchangeable securities.

(h)    In addition to those adjustments required by clauses (a), (b), (c), (d) and (e) of this Section 14.04, and subject to applicable exchange listing rules, the Company from time to time may increase the Conversion Rate by any amount for a period of at least 20 Business Days if the Company determines that such increase would be in the Company’s best interest. In addition, subject to applicable exchange listing rules, the Company may (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in connection with a dividend or distribution of shares of Common Stock (or rights to acquire shares of Common Stock) or similar event.

(i)    Notwithstanding anything to the contrary in this Article 14, the Conversion Rate shall not be adjusted:

(i)    upon the issuance of any shares of Common Stock at a price below the Conversion Price or otherwise, other than any such issuance described in clause (a), (b) or (c) of this Section 14.04;

(ii)    upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in shares of Common Stock under any plan;

(iii)    upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit or incentive plan or program of or assumed by the Company or any of the Company’s Subsidiaries;

(iv)    upon the issuance of any shares of the Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in clause (iii) of this subsection and outstanding as of the date the Notes were first issued;

(v)    for a third-party tender offer by any party other than a tender offer by one or more of the Company’s Subsidiaries as described in clause (e) of this Section 14.04;

(vi)    upon the repurchase of any shares of Common Stock pursuant to an open market share purchase program or other buy-back transaction, including structured or derivative transactions such as accelerated share repurchase transactions or similar forward derivatives, or other buy-back transaction, that is not a tender offer or exchange offer of the kind described under clause (e) of this Section 14.04;

(vii)    solely for a change in the par value of the Common Stock; or

(viii)    for accrued and unpaid interest, if any.


56


(j)    All calculations and other determinations under this Article 14 shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000th) of a share.

(k)    If an adjustment to the Conversion Rate otherwise required by this Section 14.04 would result in a change of less than 1% to the Conversion Rate, then, notwithstanding the foregoing, the Company may, at its election, defer and carry forward such adjustment, except that all such deferred adjustments must be given effect immediately upon the earliest to occur of the following: (i) when all such deferred adjustments would result in an aggregate change of at least 1% to the Conversion Rate, (ii) on the Conversion Date for any Notes (in the case of Physical Settlement), (iii) on each Trading Day of any Observation Period related to any conversion of Notes (in the case of Cash Settlement or Combination Settlement) and (iv) on the effective date of any Change of Control, in each case, unless the adjustment has already been made.

(l)    Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee (and the Conversion Agent if not the Trustee) an Officer’s Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have received such Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has knowledge is still in effect. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall deliver such notice of such adjustment of the Conversion Rate to each Holder. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

(m)    For purposes of this Section 14.04, the number of shares of Common Stock at any time outstanding shall not include shares of Common Stock held in the treasury of the Company so long as the Company does not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company, but shall include shares of Common Stock issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.

Section 14.05.    Adjustments of Prices. Whenever any provision of this Indenture requires the Company to calculate the Last Reported Sale Prices, the Daily VWAPs, the Conversion Value or the Combination Settlement Amount over a span of multiple days (including, without limitation, an Observation Period), the Company shall, in good faith, make appropriate adjustments to each to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date, Effective Date or expiration date, as the case may be, of the event occurs at any time during the period when the Last Reported Sale Prices, the Daily VWAPs, the Conversion Value or the Combination Settlement Amount are to be calculated.
Section 14.06.    Shares to Be Fully Paid. The Company shall provide, free from preemptive rights, out of its authorized but unissued shares or shares held in treasury, sufficient shares of Common Stock to provide for conversion of the Notes from time to time as such Notes are presented for conversion.
Section 14.07.    Effect of Recapitalizations, Reclassifications and Changes of the Common Stock.
(a)    In the case of:
(i)    any recapitalization, reclassification or change of the Common Stock (other than a change to par value, or from par value to no par value, or changes resulting from a subdivision or combination),
(ii)    any consolidation, merger, combination or similar transaction involving the Company,
(iii)    any sale, lease or other transfer to a third party of the consolidated assets of the Company and the Company’s Subsidiaries substantially as an entirety or
(iv)    any statutory share exchange,
in each case, as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (any such event, a “Merger Event”), then, at and

57


after the effective time of such Merger Event, the Company or the Successor Entity, as the case may be, will enter into a supplemental indenture with the Trustee, without the consent of the Holders, providing that the right to convert each $1,000 principal amount of Notes shall be changed into a right to convert such principal amount of Notes into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such Merger Event would have owned or been entitled to receive (the “Reference Property,” with each “unit of Reference Property” meaning the kind and amount of Reference Property that a holder of one share of Common Stock is entitled to receive) upon such Merger Event and, prior to or at the effective time of such Merger Event, the Company or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture permitted under Section 10.01(g) providing for such change in the right to convert each $1,000 principal amount of Notes; provided, however, that at and after the effective time of the Merger Event (A) the Company or the successor or purchasing Person, as the case may be, shall continue to have the right to determine the form of consideration to be paid or delivered, as the case may be, upon conversion of Notes in accordance with Section 14.02 and (B) (I) any amount payable in cash upon conversion of the Notes in accordance with Section 14.02 shall continue to be payable in cash, (II) any shares of Common Stock that the Company would have been required to deliver upon conversion of the Notes in accordance with Section 14.02 shall instead be deliverable in the amount and type of Reference Property that a holder of that number of shares of Common Stock would have received in such Merger Event and (III) the Daily VWAP shall be calculated based on the value of a unit of Reference Property.
If the Merger Event causes the Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), then (i) the Reference Property into which the Notes will be convertible shall be deemed to be the weighted average of the types and amounts of consideration actually received by the holders of Common Stock, and (ii) the unit of Reference Property for purposes of the immediately preceding paragraph shall refer to the consideration referred to in clause (i) attributable to one share of Common Stock. If the holders of the Common Stock receive only cash in such Merger Event, then for all conversions for which the relevant Conversion Date occurs after the effective date of such Merger Event (A) the consideration due upon conversion of each $1,000 principal amount of Notes shall be solely cash in an amount equal to the Conversion Rate in effect on the Conversion Date, multiplied by the price paid per share of Common Stock in such Merger Event and (B) the Company shall satisfy the Conversion Obligation by paying cash to converting Holders on the second Business Day immediately following the relevant Conversion Date. The Company shall notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) in writing of such weighted average as soon as practicable after such determination is made.
If the Reference Property in respect of any such Merger Event includes, in whole or in part, shares of Common Equity or American depositary receipts (or other interests) in respect thereof, such supplemental indenture described in the second immediately preceding paragraph shall provide for anti-dilution and other adjustments that shall be as nearly equivalent as is possible to the adjustments provided for in this Article 14 with respect to the portion of the Reference Property consisting of such Common Equity or American depositary receipts (or other interests) in respect thereof. If, in the case of any Merger Event, the Reference Property includes shares of stock, securities or other property or assets (including any combination thereof), other than cash and/or cash equivalents, of a Person other than the Company or the successor or purchasing entity, as the case may be, in such Merger Event, then such supplemental indenture shall also be executed by such other Person, if such Person is an Affiliate of the Company or the successor or purchasing entity, and shall contain such additional provisions to protect the interests of the Holders as the Company shall in good faith reasonably consider necessary by reason of the foregoing, including the provisions providing for the purchase rights set forth in Article 15.
(b)    When the Company executes a supplemental indenture pursuant to subsection (a) of this Section 14.07, the Company shall promptly file with the Trustee an Officer’s Certificate briefly stating the reasons therefor, the kind or amount of cash, securities or property or asset that will comprise a unit of Reference Property after any such Merger Event, any adjustment to be made with respect thereto and that all conditions precedent have been complied with, and shall promptly deliver or cause to be delivered notice thereof to all Holders. The Company shall cause notice of the execution of such supplemental indenture to be delivered to each Holder within 20 days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

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(c)    The Company shall not become a party to any Merger Event unless its terms are consistent with this Section 14.07. None of the foregoing provisions shall affect the right of a Holder of Notes to convert its Notes into cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable, as set forth in Section 14.01 and Section 14.02 prior to the effective date of such Merger Event.
(d)    The above provisions of this Section shall similarly apply to successive Merger Events.
Section 14.08.    Certain Covenants. (a) The Company covenants that all shares of Common Stock issued upon conversion of Notes will be fully paid, non-assessable and free of preemptive rights and all taxes, liens and charges with respect to the issue thereof.
(b)    The Company covenants that, if any shares of Common Stock to be provided for the purpose of conversion of Notes hereunder require registration with or approval of any governmental authority under any federal or state law before such shares of Common Stock may be validly issued upon conversion (other than solely as a result of the status of the converting Holder as an Affiliate of the Company), the Company will, to the extent then permitted by the rules and interpretations of the Commission, secure such registration or approval, as the case may be.
(c)    The Company further covenants that if at any time the Common Stock shall be listed on any national securities exchange or automated quotation system the Company will list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, any Common Stock issuable upon conversion of the Notes.
Section 14.09.    Responsibility of Trustee. The Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility to any Holder to determine the Conversion Rate (or any adjustment thereto) or whether any facts exist that may require any adjustment (including any increase) of the Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities, property or cash that may at any time be issued or delivered upon the conversion of any Note; and the Trustee and any other Conversion Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Note for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article. Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 14.07 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Holders upon the conversion of their Notes after any event referred to in such Section 14.07 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 7.01, may accept (without any independent investigation) as conclusive evidence of the correctness of any such provisions, and shall be protected in conclusively relying upon, the Officer’s Certificate and Opinion of Counsel (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto. Neither the Trustee nor the Conversion Agent shall be responsible for determining whether any event contemplated by Section 14.01(b) has occurred that makes the Notes eligible for conversion or no longer eligible therefor until the Company has delivered to the Trustee and the Conversion Agent notice of an event referred to in Section 14.01(b) with respect to the commencement or termination of such conversion rights, on which notices the Trustee and the Conversion Agent may conclusively rely, and the Company agrees to deliver such notices to the Trustee and the Conversion Agent immediately after the occurrence of any such event or at such other times as shall be provided for in Section 14.01(b).
Section 14.10.    Notice to Holders Prior to Certain Actions. In case of any:
(a)    action by the Company or one of its Subsidiaries that would require an adjustment in the Conversion Rate pursuant to Section 14.04 or Section 14.11; or
(b)    voluntary or involuntary dissolution, liquidation or winding-up of the Company;

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then, in each case (unless notice of such event is otherwise required pursuant to another provision of this Indenture), the Company shall cause to be filed with the Trustee and the Conversion Agent (if other than the Trustee) and to be delivered to each Holder, as promptly as possible but in any event at least 10 days prior to the applicable date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such action by the Company or one of its Subsidiaries or, if a record is not to be taken, the date as of which the holders of Common Stock of record are to be determined for the purposes of such action by the Company or one of its Subsidiaries, or (ii) the date on which such dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such dissolution, liquidation or winding-up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such action by the Company or one of its Subsidiaries, dissolution, liquidation or winding-up.
Section 14.11.    Stockholder Rights Plans. If the Company has a stockholder rights plan in effect upon conversion of the Notes, each share of Common Stock, if any, issued upon such conversion shall be entitled to receive the appropriate number of rights, if any, and the certificates representing the Common Stock issued upon such conversion shall bear such legends, if any, in each case as may be provided by the terms of any such stockholder rights plan, as the same may be amended from time to time. However, if, prior to any conversion of Notes, the rights have separated from the shares of Common Stock in accordance with the provisions of the applicable stockholder rights plan, the Conversion Rate shall be adjusted at the time of separation as if the Company distributed to all or substantially all holders of the Common Stock Distributed Property as provided in Section 14.04(c), subject to readjustment in the event of the expiration, termination or redemption of such rights.
Section 14.12.    Exchange In Lieu Of Conversion.
(a)    When a Holder surrenders its Notes for conversion, the Company may, at its election (an “Exchange Election”), direct the Conversion Agent to surrender, on or prior to the Trading Day immediately following the Conversion Date, such Notes to one or more financial institutions designated by the Company (each, a “Designated Financial Institution”) for exchange in lieu of conversion. In order to accept any Notes surrendered for conversion, the Designated Financial Institution(s) must agree to timely pay and/or deliver, as the case may be, in exchange for such Notes, the cash, shares of Common Stock or combination thereof that would otherwise be due upon conversion pursuant to Section 14.02 (the “Conversion Consideration”). If the Company makes an Exchange Election, the Company shall, by the close of business on the Trading Day following the relevant Conversion Date, notify in writing the Trustee, the Conversion Agent (if other than the Trustee) and the Holder surrendering Notes for conversion that the Company has made the Exchange Election, and the Company shall promptly notify the Designated Financial Institution(s) of the relevant deadline for delivery of the Conversion Consideration and the type of Conversion Consideration to be paid and/or delivered, as the case may be.
(b)    Any Notes exchanged by the Designated Financial Institution(s) shall remain outstanding, subject to the applicable procedures of the Depositary. If the Designated Financial Institution(s) agree(s) to accept any Notes for exchange but does not timely pay and/or deliver, as the case may be, the related Conversion Consideration to the Holder surrendering any such Notes for conversion, or if such Designated Financial Institution(s) does not accept the Notes for exchange, the Company shall pay and/or deliver, as the case may be, the relevant Conversion Consideration, as, and at the time, required pursuant to this Indenture as if the Company had not made the Exchange Election.
(c)    The Company’s designation of any Designated Financial Institution(s) to which the Notes may be submitted for exchange does not require such Designated Financial Institution(s) to accept any Notes.
ARTICLE 15
REPURCHASE OF NOTES AT OPTION OF HOLDERS
Section 15.01.    Repurchase at Option of Holders. (a) On or after September 23, 2024, each Holder shall have the right, at such Holder’s option, by delivery to the Trustee of a duly completed notice (the “Optional Repurchase Notice”) in the form set forth in Attachment 2 to the Form of Note attached hereto as Exhibit A, if the Notes are Physical Notes, or in compliance with applicable procedures of the Depositary, if the Notes are Global Notes, to require the

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Company to repurchase for cash all (but not less than all) of such Holder’s Notes properly surrendered and not validly withdrawn pursuant to Section 15.03 (an “Optional Repurchase”) on a date specified by the Company that is not more than 90 days following the date of the Optional Repurchase Notice (the “Optional Repurchase Date”) at a price equal to 110% of the principal amount of Notes to be repurchased plus accrued and unpaid interest thereon to, but excluding, the Optional Repurchase Date (the “Optional Repurchase Price”).
(b)    Repurchases of Notes under this Section 15.01 shall be made upon delivery of the Notes, if the Notes are Physical Notes, to the Trustee at any time after delivery of the Optional Repurchase Notice (together with all necessary endorsements for transfer) at the Corporate Trust Office of the Trustee, or book-entry transfer of the Notes, if the Notes are Global Notes, in compliance with the procedures of the Depositary, in each case, such delivery or transfer being a condition to receipt by the Holder of the Optional Repurchase Price therefor.
(c)    Notwithstanding anything herein to the contrary, any Holder delivering to the Trustee an Optional Repurchase Notice contemplated by this Section 15.01 shall have the right to withdraw, in whole or in part, such Optional Repurchase Notice at any time prior to the close of business on the Business Day immediately preceding the Optional Repurchase Date by delivery of a written notice of withdrawal to the Trustee in accordance with Section 15.03, in the case of Physical Notes, or through the applicable procedures of the Depositary, in the case of Global Notes. The Trustee shall promptly notify the Company of the receipt by it of any Optional Repurchase Notice or written notice of withdrawal thereof. Notes which are the subject of a withdrawal shall not thereafter be subject to an Optional Repurchase for a period of 180 days after the date of such withdrawal.
Section 15.02.    Repurchase at Option of Holders Upon a Change of Control. (a) If a Change of Control occurs at any time, each Holder shall have the right, at such Holder’s option, to require the Company to repurchase (a “Change of Control Repurchase”) for cash all of such Holder’s Notes, or any portion of the principal amount thereof properly surrendered and not validly withdrawn pursuant to Section 15.03 that is equal to $1,000 or an integral multiple of $1,000, on the date (the “Change of Control Repurchase Date”) specified by the Company that is not less than 20 Business Days or more than 35 Business Days following the date of the Change of Control Company Notice at a repurchase price equal to 110% of the principal amount thereof, plus accrued and unpaid interest thereon to, but excluding, the Change of Control Repurchase Date (the “Change of Control Repurchase Price”), unless the Change of Control Repurchase Date falls after a Regular Record Date but on or prior to the Interest Payment Date to which such Regular Record Date relates, in which case the Company shall instead pay the full amount of accrued and unpaid interest to Holders of record as of such Regular Record Date, and the Change of Control Repurchase Price shall be equal to 110% of the principal amount of Notes to be repurchased pursuant to this Article 15.
(b)    Repurchases of Notes under this Section 15.02 shall be made, at the option of the Holder thereof, upon:
(i)    delivery to the paying agent by a Holder of a duly completed notice (the “Change of Control Repurchase Notice”) in the form set forth in Attachment 3 to the Form of Note attached hereto as Exhibit A, if the Notes are Physical Notes, or in compliance with the Depositary’s procedures for surrendering interests in Global Notes, if the Notes are Global Notes, in each case, on or before the close of business on the Business Day immediately preceding the Change of Control Repurchase Date; and
(ii)    delivery of the Notes, if the Notes are Physical Notes, to the paying agent at any time after delivery of the Change of Control Repurchase Notice (together with all necessary endorsements for transfer) at the Corporate Trust Office of the paying agent, or book-entry transfer of the Notes, if the Notes are Global Notes, in compliance with the procedures of the Depositary, in each case, such delivery or transfer being a condition to receipt by the Holder of the Change of Control Repurchase Price therefor.
The Change of Control Repurchase Notice in respect of any Physical Notes to be repurchased shall state:
(i)    the certificate numbers of the Notes to be delivered for repurchase;
(ii)    the portion of the principal amount of Notes to be repurchased, which must be $1,000 or an integral multiple thereof; and

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(iii)    that the Notes are to be repurchased by the Company pursuant to the applicable provisions of the Notes and this Indenture.
If the Notes are Global Notes, to exercise the Change of Control repurchase right, Holders must surrender their Notes in accordance with applicable Depositary procedures.
Notwithstanding anything herein to the contrary, any Holder delivering to the paying agent the Change of Control Repurchase Notice contemplated by this Section 15.02 shall have the right to withdraw, in whole or in part, such Change of Control Repurchase Notice at any time prior to the close of business on the Business Day immediately preceding the Change of Control Repurchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 15.03, in the case of Physical Notes, or through the applicable procedures of the Depositary, in the case of Global Notes.
The paying agent shall promptly notify the Company of the receipt by it of any Change of Control Repurchase Notice or written notice of withdrawal thereof.
(c)    On or before the 20th Business Day after the occurrence of the effective date of a Change of Control, the Company shall provide to all Holders and the Trustee and the Paying Agent (in the case of a Paying Agent other than the Trustee) a notice (the “Change of Control Company Notice”) of the occurrence of the effective date of the Change of Control and of the repurchase right at the option of the Holders arising as a result thereof. In the case of Physical Notes, such notice shall be by first class mail or, in the case of Global Notes. Such notice shall be delivered in accordance with Section 17.03. Simultaneously with providing such notice, the Company shall publish such information on the Company’s website or through such other public medium as the Company may use at that time. Each Change of Control Company Notice shall specify:
(i)    the events causing the Change of Control;
(ii)    the effective date of the Change of Control;
(iii)    the last date on which a Holder may exercise the repurchase right pursuant to this Section 15.02;
(iv)    the Change of Control Repurchase Price;
(v)    the Change of Control Repurchase Date;
(vi)    the name and address of the Paying Agent and the Conversion Agent;
(vii)    the then current Conversion Rate;
(viii)    that the Notes with respect to which a Change of Control Repurchase Notice has been delivered by a Holder may be converted only if the Holder withdraws the Change of Control Repurchase Notice in accordance with the terms of this Indenture; and
(ix)    the procedures that Holders must follow to require the Company to repurchase their Notes.
No failure of the Company to give the foregoing notices and no defect therein shall limit the Holders’ repurchase rights or affect the validity of the proceedings for the repurchase of the Notes pursuant to this Section 15.02.
At the Company’s request, the Trustee shall give such notice in the Company’s name and at the Company’s expense; provided, however, that, in all cases, the text of such Change of Control Company Notice shall be prepared by the Company.

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(d)    Notwithstanding anything to the contrary in this Article 15, the Company shall not be required to repurchase, or to make an offer to repurchase, the Notes upon a Change of Control if a third party makes such an offer in the same manner, at the same time and otherwise in compliance with the requirements for an offer made by the Company as set forth in this Article 15 and such third party purchases all Notes properly surrendered and not validly withdrawn under its offer in the same manner, at the same time and otherwise in compliance with the requirements for an offer made by the Company as set forth above.
(e)    Notwithstanding the foregoing, no Notes may be repurchased by the Company on any date at the option of the Holders upon a Change of Control if the principal amount of the Notes has been accelerated, and such acceleration has not been rescinded, on or prior to such date (except in the case of an acceleration resulting from a Default by the Company in the payment of the Change of Control Repurchase Price with respect to such Notes). The Paying Agent will promptly return to the respective Holders thereof any Physical Notes held by it during the acceleration of the Notes (except in the case of an acceleration resulting from a Default by the Company in the payment of the Change of Control Repurchase Price with respect to such Notes), or any instructions for book-entry transfer of the Notes in compliance with the applicable procedures of the Depositary shall be deemed to have been cancelled, and, upon such return or cancellation, as the case may be, the Change of Control Repurchase Notice with respect thereto shall be deemed to have been withdrawn.
(f)    If Holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Repurchase and the Company, or any other Person making a Change of Control Repurchase in lieu of the Company, purchases all of the Notes validly tendered and not withdrawn by such Holders, the Company will have the right, upon not less than 15 nor more than 60 days’ prior written notice, given not more than 30 days following such purchase pursuant to the Change of Control Repurchase, to redeem all Notes that remain outstanding following such purchase at a redemption price in cash equal to the applicable Change of Control Repurchase Price plus, to the extent not included in the Change of Control Repurchase Price, accrued and unpaid interest, if any, to the date of redemption (subject to the right of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date).
Section 15.03.    Withdrawal of Change of Control Repurchase or Optional Repurchase Notice. (a) A Change of Control Repurchase Notice or Optional Repurchase Notice may be withdrawn (in whole or in part) in respect of Physical Notes by means of a written notice of withdrawal delivered to the Corporate Trust Office of the Trustee or paying agent, as applicable, in accordance with this Section 15.03 at any time prior to the close of business on the Business Day immediately preceding the Change of Control Repurchase Date or Optional Repurchase Date, as applicable, specifying:
(i)    the principal amount of the Notes with respect to which such notice of withdrawal is being submitted, which must be $1,000 or an integral multiple thereof,
(ii)    the certificate number of the Note in respect of which such notice of withdrawal is being submitted, and
(iii)    the principal amount, if any, of such Note that remains subject to the original Change of Control Repurchase Notice, which portion must be in principal amounts of $1,000 or an integral multiple of $1,000;
If the Notes are Global Notes, Holders may withdraw their Notes subject to repurchase at any time prior to the close of business on the Business Day immediately preceding the Change of Control Repurchase Date or Optional Repurchase Date, as applicable, in accordance with applicable procedures of the Depositary.
Section 15.04.    Deposit of Change of Control Repurchase Price or Optional Repurchase Price. (a) The Company will deposit with the Trustee (or other Paying Agent appointed by the Company, or if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in Section 4.04) on or prior to 11:00 a.m., New York City time, on the Change of Control Repurchase Date or Optional Repurchase Date, as applicable, an amount of money sufficient to repurchase all of the Notes to be repurchased at the appropriate Change of Control Repurchase

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Price or Optional Repurchase Price. Subject to receipt of funds and/or Notes by the Trustee (or other Paying Agent appointed by the Company), payment for Notes surrendered for repurchase (and not validly withdrawn prior to the close of business on the Business Day immediately preceding the Change of Control Repurchase Date or Optional Repurchase Date, as applicable) will be made on the later of (i) the Change of Control Repurchase Date or Optional Repurchase Date, as applicable (provided that the Holder has satisfied the conditions in Section 15.01 or 15.02, as applicable), and (ii) the time of book-entry transfer or the delivery of such Note to the Trustee (or other Paying Agent appointed by the Company) by the Holder thereof in the manner required by Section 15.01 or 15.02, as applicable, by mailing checks for the amount payable to the Holders of such Notes entitled thereto as they shall appear in the Note Register; provided, however, that payments to the Depositary shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee. The Trustee shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Change of Control Repurchase Price or Optional Repurchase Price.
(b)    If by 11:00 a.m. New York City time, on the Change of Control Repurchase Date or Optional Repurchase Date, the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to pay the Change of Control Repurchase Price or Optional Repurchase Price, as applicable (and, to the extent not included in the Change of Control Repurchase Price or Optional Repurchase Price, accrued and unpaid interest, if applicable), of the Notes to be repurchased on such Change of Control Repurchase Date or Optional Repurchase Date, then, with respect to the Notes that have been properly surrendered for repurchase and have not been validly withdrawn, (i) such Notes will cease to be outstanding, (ii) interest will cease to accrue on such Notes (whether or not book-entry transfer of the Notes has been made or whether or not the Notes have been delivered to the Trustee or Paying Agent) and (iii) all other rights of the Holders of such Notes will terminate (other than the right to receive the Change of Control Repurchase Price or Optional Repurchase Price and, to the extent not included in the Change of Control Repurchase Price or Optional Repurchase Price, accrued and unpaid interest, if applicable).
(c)    Upon surrender of a Note that is to be repurchased in part pursuant to Section 15.02, the Company shall execute and the Trustee shall authenticate and deliver to the Holder a new Note in an authorized denomination equal in principal amount to the unrepurchased portion of the Note surrendered.
Section 15.05.    Covenant to Comply with Applicable Laws Upon Repurchase of Notes. In connection with any repurchase offer upon a Change of Control pursuant to this Article 15, the Company will, if required:
(a)    comply with the tender offer rules under the Exchange Act that may then be applicable; and
(b)    file a Schedule TO or any other required schedule under the Exchange Act;
in each case, so as to permit the rights and obligations under this Article 15 to be exercised in the time and in the manner specified in this Article 15.
To the extent that the provisions of any securities laws or regulations adopted after the date of this Indenture conflict with the provisions of this Indenture relating to the Company’s obligations to repurchase the Notes upon a Change of Control, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under such provisions of this Indenture by virtue of such conflict.
ARTICLE 16
OPTIONAL REDEMPTION
Section 16.01.    Optional Redemption. The Company may redeem (an “Optional Redemption”) for cash all or any portion of the Notes at the applicable Redemption Price; provided that Notes of less than $5,000,000 in principal amount shall not be redeemed in part.



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Section 16.02.    Notice of Optional Redemption; Selection of Notes. (a) In case the Company exercises its Optional Redemption right to redeem all or, as the case may be, any part of the Notes pursuant to Section 16.01, it shall fix a date for redemption (each, a “Redemption Date”) and it or, at its written request (containing the form of the Notice of Redemption) received by the Trustee not less than 5 Business Days prior to the date such Notice of Redemption is to be sent (or such shorter period of time as may be acceptable to the Trustee), the Trustee, in the name of and at the expense of the Company, shall deliver or cause to be delivered a notice of such Optional Redemption (a “Notice of Redemption”) not less than 10 nor more than 20 Scheduled Trading Days prior to the Redemption Date to each Holder so to be redeemed as a whole or in part; provided, however, that, if the Company shall give such notice, it shall also give written notice of the Redemption Date to the Trustee and the Paying Agent (if other than the Trustee). The Redemption Date must be a Business Day.
(b)    The Notice of Redemption, if delivered in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice. In any case, failure to give such Notice of Redemption or any defect in the Notice of Redemption to the Holder of any Note designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Redemption notices may specify that any redemption may be subject to satisfaction of one or more conditions precedent, and that, in the Company’s discretion, the Redemption Date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the Redemption Date, or by the Redemption Date so delayed.
(c)    Each Notice of Redemption shall specify:
(i)    the Redemption Date;
(ii)    the Redemption Price;
(iii)    that on the Redemption Date, subject to the satisfaction of any conditions precedent, which shall also be described, the Redemption Price will become due and payable upon each Note to be redeemed, and that interest thereon, if any, shall cease to accrue on and after the Redemption Date;
(iv)    the place or places where such Notes are to be surrendered for payment of the Redemption Price;
(v)    that Holders may surrender their Notes for conversion at any time prior to the close of business on the Scheduled Trading Day immediately preceding the Redemption Date;
(vi)    the procedures a converting Holder must follow to convert its Notes and the Settlement Method and Specified Dollar Amount, if applicable;
(vii)    the Conversion Rate;
(viii)    the CUSIP, ISIN or other similar numbers, if any, assigned to such Notes; and
(ix)    in case any Note is to be redeemed in part only, the portion of the principal amount thereof to be redeemed and on and after the Redemption Date, upon surrender of such Note, a new Note in principal amount equal to the unredeemed portion thereof shall be issued.
(d)    If fewer than all of the outstanding Notes are to be redeemed and the Notes to be redeemed are Global Notes, the Notes to be redeemed shall be selected by the Depositary in accordance with the applicable procedures of the Depositary. If fewer than all of the outstanding Notes are to be redeemed and the Notes to be redeemed are not Global Notes, the Trustee shall select the Notes or portions thereof to be redeemed (in principal amounts of $1,000 or multiples thereof) by lot, on a pro rata basis or by another method the Trustee considers to be fair and appropriate. If any Note selected for partial redemption is submitted for conversion in part after such selection, the portion of the Note submitted for conversion shall be deemed (so far as may be possible) to be the portion selected for redemption, subject, in the case of Notes represented by a Global Note, to the Depositary’s applicable procedures.

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Section 16.03.    Payment of Notes Called for Redemption. (a) If any Notice of Redemption has been given in respect of the Notes in accordance with Section 16.02, the Notes shall become due and payable on the Redemption Date at the place or places stated in the Notice of Redemption and at the applicable Redemption Price. On presentation and surrender of the Notes at the place or places stated in the Notice of Redemption, the Notes shall be paid and redeemed by the Company at the applicable Redemption Price.
(b)    Prior to 11:00 a.m. New York City time on the Redemption Date, the Company shall deposit with the Paying Agent or, if the Company or a Subsidiary of the Company is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 7.05 an amount of cash (in immediately available funds if deposited on the Redemption Date), sufficient to pay the Redemption Price of all of the Notes to be redeemed on such Redemption Date. Subject to receipt of funds by the Paying Agent, payment for the Notes to be redeemed shall be made on the Redemption Date for such Notes. The Paying Agent shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Redemption Price.
Section 16.04.    Restrictions on Redemption. The Company may not redeem any Notes on any date if the principal amount of the Notes has been accelerated in accordance with the terms of this Indenture, and such acceleration has not been rescinded, on or prior to the Redemption Date (except in the case of an acceleration resulting from a Default by the Company in the payment of the Redemption Price with respect to such Notes).
ARTICLE 17
MISCELLANEOUS PROVISIONS
Section 17.01.    Provisions Binding on Company’s Successors. All the covenants, stipulations, promises and agreements of the Company contained in this Indenture shall bind its successors as set forth in Article 11.
Section 17.02.    Official Acts by Successor Corporation. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or Officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation or other entity that shall at the time be the lawful sole successor of the Company.
Section 17.03.    Addresses for Notices, Etc. Any notice or demand that by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Holders on the Company shall be deemed to have been sufficiently given or made, for all purposes if given or served by overnight courier or by being deposited postage prepaid by registered or certified mail in a post office letter box addressed (until another address is filed by the Company with the Trustee) to Sunnova Energy International Inc., 20 East Greenway Plaza, Suite 475, Houston, Texas 77046, Attention: General Counsel. Any notice, direction, request or demand hereunder to or upon the Trustee shall be deemed to have been sufficiently given or made if in writing and upon receipt by the Trustee at its Corporate Trust Office or to an email address specified by the Trustee (if sent electronically in PDF format).
The Trustee agrees to accept and act upon instructions or directions from the Company pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions or directions notwithstanding whether such instructions or directions conflict or are inconsistent with a subsequent written instruction or direction or if the subsequent written instruction or direction is never received. The party providing instructions or directions by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods, as aforesaid, agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties.
The Trustee, by notice to the Company, may designate additional or different addresses for subsequent notices or communications.
Any notice or communication delivered or to be delivered to a Holder of Physical Notes shall be mailed to it by first class mail, postage prepaid, at its address as it appears on the Note Register and shall be sufficiently given to it if so mailed within the time prescribed. Any notice or communication delivered or to be delivered to a Holder of

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Global Notes shall be delivered in accordance with the applicable procedures of the Depositary and shall be sufficiently given to it if so delivered within the time prescribed. Notwithstanding any other provision of this Indenture or any Note, where this Indenture or any Note provides for notice of any event (including any Change of Control Company Notice) to a Holder of a Global Note (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the standing instructions from the Depositary or its designee, including by electronic mail in accordance with the Depositary’s applicable procedures.
Failure to mail or deliver a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed or delivered, as the case may be, in the manner provided above, it is duly given, whether or not the addressee receives it.
Section 17.04.    Governing Law; Jurisdiction. THIS INDENTURE AND EACH NOTE, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS INDENTURE AND EACH NOTE, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company irrevocably consents and agrees, for the benefit of the Holders from time to time of the Notes and the Trustee, that any legal action, suit or proceeding against it with respect to obligations, liabilities or any other matter arising out of or in connection with this Indenture or the Notes may be brought in the courts of the State of New York or the courts of the United States located in the Borough of Manhattan, New York City, New York and, until amounts due and to become due in respect of the Notes have been paid, hereby irrevocably consents and submits to the non-exclusive jurisdiction of each such court in personam, generally and unconditionally with respect to any action, suit or proceeding for itself in respect of its properties, assets and revenues.
The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this Indenture or the Notes brought in the courts of the State of New York or the courts of the United States located in the Borough of Manhattan, New York City, New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
Section 17.05.    Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee. Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall, if requested by the Trustee, furnish to the Trustee an Officer’s Certificate and Opinion of Counsel stating that such action is permitted by the terms of this Indenture. With respect to matters of fact, an Opinion of Counsel may rely on an Officer’s Certificate or certificates of public officials.
Each Officer’s Certificate and Opinion of Counsel provided for, by or on behalf of the Company in this Indenture and delivered to the Trustee with respect to compliance with this Indenture (other than the Officer’s Certificates provided for in Section 4.08) shall include (a) a statement that the person signing such certificate or opinion is familiar with the requested action and this Indenture; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statement contained in such certificate is based; (c) a statement that, in the judgment of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed judgment as to whether or not all conditions precedent provided for in this Indenture have been complied with and whether or not such action is permitted by this Indenture; and (d) a statement as to whether or not, in the judgment of such person, such action is permitted by this Indenture and that all conditions precedent to such action have been complied with; provided that no Opinion of Counsel shall be required to be delivered in connection with (1) the original issuance of Notes on the date hereof under this Indenture or (2) a request by the Company that the Trustee deliver a notice to Holders under this Indenture where the Trustee receives an Officer’s Certificate with respect to such notice. With respect to matters of fact, an Opinion of Counsel may rely on an Officer’s Certificate or certificates of public officials.

67


Notwithstanding anything to the contrary in this Section 17.05, if any provision in this Indenture specifically provides that the Trustee shall or may receive an Opinion of Counsel in connection with any action to be taken by the Trustee or the Company hereunder, the Trustee shall be entitled to such Opinion of Counsel.
Section 17.06.    Legal Holidays. In any case where any Interest Payment Date, any Change of Control Repurchase Date, any Optional Repurchase Date, any Redemption Date or the Maturity Date is not a Business Day, then any action to be taken on such date need not be taken on such date, but may be taken on the next succeeding Business Day with the same force and effect as if taken on such date, and no interest shall accrue in respect of the delay.
Section 17.07.    Reserved.
Section 17.08.    Benefits of Indenture. Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the Holders, the parties hereto, any Paying Agent, any Conversion Agent, any authenticating agent, any Note Registrar and their successors hereunder, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 17.09.    Table of Contents, Headings, Etc. The table of contents and the titles and headings of the articles and sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.
Section 17.10.    Authenticating Agent. The Trustee may appoint an authenticating agent that shall be authorized to act on its behalf and subject to its direction in the authentication and delivery of Notes in connection with the original issuance thereof and transfers and exchanges of Notes hereunder, including under Section 2.04, Section 2.05, Section 2.06, Section 2.07, Section 10.04 and Section 15.04 as fully to all intents and purposes as though the authenticating agent had been expressly authorized by this Indenture and those Sections to authenticate and deliver Notes. For all purposes of this Indenture, the authentication and delivery of Notes by the authenticating agent shall be deemed to be authentication and delivery of such Notes “by the Trustee” and a certificate of authentication executed on behalf of the Trustee by an authenticating agent shall be deemed to satisfy any requirement hereunder or in the Notes for the Trustee’s certificate of authentication. Such authenticating agent shall at all times be a Person eligible to serve as trustee hereunder pursuant to Section 7.08.

Any corporation or other entity into which any authenticating agent may be merged or converted or with which it may be consolidated, or any corporation or other entity resulting from any merger, consolidation or conversion to which any authenticating agent shall be a party, or any corporation or other entity succeeding to the corporate trust business of any authenticating agent, shall be the successor of the authenticating agent hereunder, if such successor corporation or other entity is otherwise eligible under this Section 17.10, without the execution or filing of any paper or any further act on the part of the parties hereto or the authenticating agent or such successor corporation or other entity.

Any authenticating agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time terminate the agency of any authenticating agent by giving written notice of termination to such authenticating agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any authenticating agent shall cease to be eligible under this Section, the Trustee may appoint a successor authenticating agent (which may be the Trustee), shall give written notice of such appointment to the Company and shall deliver notice of such appointment to all Holders.

The Company agrees to pay to the authenticating agent from time to time reasonable compensation for its services although the Company may terminate the authenticating agent, if it determines such agent’s fees to be unreasonable.

The provisions of Section 7.02, Section 7.03, Section 7.04, Section 8.03 and this Section 17.10 shall be applicable to any authenticating agent.

If an authenticating agent is appointed pursuant to this Section 17.10, the Notes may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:


68


__________________,


as Authenticating Agent, certifies that this is one of the Notes described in the within-named Indenture.

By:        

Authorized Officer

Section 17.11.    Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Indenture and of signature pages by facsimile, PDF or other electronic transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile, PDF or other electronic transmission shall constitute effective execution and delivery of this Indenture as to the other parties hereto shall be deemed to be their original signatures for all purposes.

Section 17.12.    Severability. In the event any provision of this Indenture or in the Notes shall be invalid, illegal or unenforceable, then (to the extent permitted by law) the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired.

Section 17.13.    Waiver of Jury Trial. EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 17.14.    Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

Section 17.15.    Calculations. The Company shall be responsible for making all calculations called for under the Notes. These calculations include, but are not limited to, determinations of the Last Reported Sale Prices of the Common Stock, the Daily VWAPs, the average daily trading volume, the Conversion Value, the Combination Settlement Amount, accrued interest payable on the Notes, Additional Interest, if any, payable on the Notes, and the Conversion Rate and Conversion Price of the Notes. The Company shall make all these calculations in good faith and, absent manifest error, the Company’s calculations shall be final and binding on Holders of Notes, including adjustments to the Conversion Rate and Conversion Price. The Company shall provide a schedule of its calculations to each of the Trustee, the Paying Agent and the Conversion Agent, and each of the Trustee, the Paying Agent and Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The Trustee will forward the Company’s calculations to any Holder of Notes upon the request of that Holder at the sole cost and expense of the Company.

Section 17.16.    USA PATRIOT Act. The parties hereto acknowledge that in accordance with Section 326 of the USA PATRIOT Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the USA PATRIOT Act.

Section 17.17.    Designation of Majority Holder Designee. Certain Holders party to the Note Purchase Agreement shall, pursuant to the terms thereof, have the right to designate, by written notice to the Trustee pursuant to the terms of the Note Purchase Agreement, a designee or co-designees for the purpose of approving any matter requiring the consent, authorization, satisfaction or any other approval of the Holders of at least a majority of the aggregate principal amount of Notes as specified in this Indenture (such designee or such co-designees, collectively, the “Majority

69


Holder Designee”). The designation of a Majority Holder Designee shall continue to be effective unless and until the Trustee receives written notice that such Majority Holder Designee has been replaced or removed pursuant to the terms of the Note Purchase Agreement. Neither the Majority Holder Designee nor any of its officers, partners, directors, employees or agents shall be liable to the Holders for any action taken or omitted by the Majority Holder Designee under or in connection with this Indenture. As of the Issue Date, the Majority Holder Designee shall be, collectively, MTP Energy Management LLC and Tortoise Capital Advisors, LLC. The Trustee shall not be charged with the knowledge of any change in the Majority Holder Designee absent receipt of a notice in accordance with this Section.

Section 17.18.    Trustee Reliance. Subject to the next sentence, the Trustee shall be entitled to rely on the written directions of the Majority Holder Designee as binding with respect to those matters expressly stated to require the consent, authorization, satisfaction or any other approval of the Holders of at least a majority of the aggregate principal amount of Notes in this Indenture. In the event that the beneficial owners then holding the right to appoint a Majority Holder Designee pursuant to the Note Purchase Agreement, together with their respective affiliates (including funds, accounts or persons managed, advised, sub-advised by or affiliated with any appointing holder or its affiliates), successors and assigns cease to hold a majority of the outstanding principal amount of Notes (as certified to the Trustee in writing by the Majority Holder Designee, upon which certification the Trustee may conclusively rely without investigation), any matter requiring the consent, authorization, satisfaction or any other approval of the Holders of at least a majority of the aggregate principal amount of Notes under this Indenture shall require the consent of such Holders and the consent of each Majority Holder Designee, if any, acting individually. The obligation of the Trustee to act, or refrain from acting pursuant to any Majority Holder Designee direction shall be subject to the same rights, privileges and immunities as applicable to the obligation to act, or refrain from acting pursuant to the direction of the Holders of at least a majority of the aggregate principal amount of Notes under this Indenture. The Trustee shall have no liability to the Holders or the company or any other Person for any actions taken or refraining from acting as directed by Majority Holder Designee.

[Remainder of page intentionally left blank]




70


IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first written above.
SUNNOVA ENERGY INTERNATIONAL INC.
By:    /s/ Robert L. Lane    
Name: Robert L. Lane
Title: Executive Vice President and Chief Financial Officer
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee
By:    /s/ Shawn P. Goffinet    
Name: Shawn P. Goffinet
Title: Assistant Vice President



[Signature Page to Indenture]



EXHIBIT A
[FORM OF FACE OF NOTE]
[INCLUDE FOLLOWING LEGEND IF A GLOBAL NOTE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREUNDER IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[INCLUDE FOLLOWING LEGEND IF A RESTRICTED SECURITY]
[THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING:
(A) IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT), OR
(B) IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, AND
(C) THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
(2) AGREES FOR THE BENEFIT OF SUNNOVA ENERGY INTERNATIONAL INC. (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ISSUE DATE OF ANY ADDITIONAL NOTES, OR THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR
(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

A-1
 


PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

[BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.

HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONDUCTED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT.]1 

THIS NOTE HAS BEEN ISSUED WITH “ORIGINAL ISSUE DISCOUNT” FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. UPON WRITTEN REQUEST TO THE COMPANY AT CHIEF FINANCIAL OFFICER, 20 EAST GREENWAY PLAZA, SUITE 475, HOUSTON, TEXAS 77046, THE COMPANY WILL PROMPTLY MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE THE FOLLOWING INFORMATION: (1) THE ISSUE PRICE AND DATE OF THE NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE AND (3) THE YIELD TO MATURITY OF THE NOTE.]































______________________________
1 Include if a Regulation S note.

A-2
 


Sunnova Energy International Inc.
7.75% Convertible Senior Note due 2027
No. [            ]
 
[Initially]2 $[ ]

CUSIP No. [●]
Sunnova Energy International Inc., a corporation duly organized and validly existing under the laws of the State of Delaware (the “Company,” which term includes any successor corporation or other entity under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to [CEDE & CO.]3 [            ]4, or registered assigns, the principal sum [as set forth in the “Schedule of Increases and Decreases in Global Note” attached hereto]5 [of $[            ]]6, which amount, taken together with the principal amounts of all other outstanding Notes, shall not, unless permitted by the Indenture, exceed $55,000,000 or, up to $75,000,000, subject to the satisfaction of the conditions set forth in the Note Purchase Agreement and Section 2.10 of the Indenture, in accordance with the rules and applicable procedures of the Depositary, on January 30, 2027, and interest thereon as set forth below.
This Note shall bear interest at the rate of 7.75% per year from December 23, 2019, or from the most recent date to which interest had been paid or provided for to, but excluding, the next scheduled Interest Payment Date until January 30, 2027. Interest is payable quarterly in arrears on each January 30, April 30, July 30 and October 30, commencing on April 30, 2020, to Holders of record at the close of business on the preceding January 15, April 15, July 15 and October 15 (whether or not such day is a Business Day), respectively. Additional Interest will be payable as set forth in Section 6.03 of the within-mentioned Indenture and the Registration Rights Agreement, and any reference to interest on, or in respect of, any Note therein shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of such Section 6.03 or the Registration Rights Agreement, and any express mention of the payment of Additional Interest in any provision therein shall not be construed as excluding Additional Interest in those provisions thereof where such express mention is not made.
Any Defaulted Amounts shall accrue interest per annum at the rate borne by the Notes, subject to the enforceability thereof under applicable law, from, and including, the relevant payment date to, but excluding, the date on which such Defaulted Amounts shall have been paid by the Company, at its election, in accordance with Section 2.03(c) of the Indenture.
The Company shall pay the principal of and interest on this Note, if and so long as such Note is a Global Note, in immediately available funds to the Depositary or its nominee, as the case may be, as the registered Holder of such Note. As provided in and subject to the provisions of the Indenture, the Company shall pay the principal of any Notes (other than Notes that are Global Notes) at the office or agency designated by the Company for that purpose. The Company has initially designated the Trustee as its Paying Agent and Note Registrar in respect of the Notes as a place where Notes may be presented for payment or for registration of transfer and exchange.
Reference is made to the further provisions of this Note set forth on the reverse hereof, including, without limitation, provisions giving the Holder of this Note the right to convert this Note into cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable, on the terms and subject to the limitations set forth in the Indenture. Such further provisions shall for all purposes have the same effect as though fully set forth at this place.





_____________________________
2 Include if a global note.
3 Include if a global note.
4 Include if a physical note.
5 Include if a global note.
6 Include if a physical note.

A-3
 



This Note, and any claim, controversy or dispute arising under or related to this Note, shall be construed in accordance with and governed by the laws of the State of New York.
In the case of any conflict between this Note and the Indenture, the provisions of the Indenture shall control and govern.
This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed manually by the Trustee or a duly authorized authenticating agent under the Indenture.
[Remainder of page intentionally left blank]

A-4
 



IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
SUNNOVA ENERGY INTERNATIONAL INC.
By:    
Name:
Title:
Dated: December 23, 2019
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
WILMINGTON TRUST, NATIONAL ASSOCIATION
as Trustee, certifies that this is one of the Notes described
in the within-named Indenture.
By:            
Authorized Officer

A-5
 



[FORM OF REVERSE OF NOTE]
Sunnova Energy International Inc.
7.75% Convertible Senior Note due 2027
This Note is one of a duly authorized issue of Notes of the Company, designated as its 7.75% Convertible Senior Notes due 2027 (the “Notes”), initially limited to the aggregate principal amount of $55,000,000 or, up to $75,000,000, subject to the satisfaction of the conditions set forth in the Note Purchase Agreement and Section 2.10 of the Indenture, all issued or to be issued under and pursuant to an Indenture dated as of December 23, 2019 (the “Indenture”), between the Company and Wilmington Trust, National Association (the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Notes. Additional Notes may be issued in an unlimited aggregate principal amount, subject to certain conditions specified in the Indenture. Capitalized terms used in this Note and not defined in this Note shall have the respective meanings set forth in the Indenture.
In case certain Events of Default shall have occurred and be continuing, the principal of, and interest on, all Notes may be declared, by either the Trustee or Holders of at least 25% in aggregate principal amount of Notes then outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions and certain exceptions set forth in the Indenture.
Subject to the terms and conditions of the Indenture, the Company will make all payments and deliveries in respect of the Change of Control Repurchase Price on the Change of Control Repurchase Date, the Optional Repurchase Price on the Optional Repurchase Date and the principal amount on the Maturity Date, as the case may be, to the Holder who surrenders a Note to a Paying Agent to collect such payments in respect of the Note. The Company will pay cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts.
The Indenture contains provisions permitting the Company and the Trustee in certain circumstances, without the consent of the Holders of the Notes, and in certain other circumstances, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding, evidenced as in the Indenture provided, to execute supplemental indentures modifying the terms of the Indenture and the Notes as described therein. It is also provided in the Indenture that, subject to certain exceptions, the Holders of a majority in aggregate principal amount of the Notes at the time outstanding may on behalf of the Holders of all of the Notes waive any past Default or Event of Default under the Indenture and its consequences.
Each Holder shall have the right to receive payment or delivery, as the case may be, of (x) the principal (including the Redemption Price, the Optional Repurchase Price and the Change of Control Repurchase Price, if applicable) of, (y) accrued and unpaid interest, if any, on, and (z) the consideration due upon conversion of, this Note at the place, at the respective times, at the rate and in the lawful money or shares of Common Stock, as the case may be, herein prescribed.

A-6
 



The Notes are issuable in registered form without coupons in minimum denominations of $1,000 principal amount and integral multiples of $1,000 in excess thereof. At the office or agency of the Company referred to on the face hereof, and in the manner and subject to the limitations provided in the Indenture, Notes may be exchanged for a like principal amount of Notes of other authorized denominations, without payment of any service charge but, if required by the Company or Trustee, with payment of a sum sufficient to cover any transfer or similar tax that may be imposed in connection therewith as a result of the name of the Holder of the new Notes issued upon such exchange of Notes being different from the name of the Holder of the old Notes surrendered for such exchange.
The Notes shall be redeemable at the Company’s option in accordance with the terms and subject to the conditions specified in the Indenture. No sinking fund is provided for the Notes.
On or after September 23, 2024, each Holder has the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Notes on the Optional Repurchase Date at a price equal to the Optional Repurchase Price.
Upon the occurrence of a Change of Control, the Holder has the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Notes or any portion thereof (in principal amounts of $1,000 or integral multiples thereof) on the Change of Control Repurchase Date at a price equal to the Change of Control Repurchase Price.
Subject to the provisions of the Indenture, the Holder hereof has the right, at its option, during certain periods and upon the occurrence of certain conditions specified in the Indenture, prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date, to convert any Notes or portion thereof that is $1,000,000 or an integral multiple of $1,000 in excess thereof, into cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable, at the Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture. The Company will have the right to cause the automatic conversion of all or any portion of the Notes then outstanding in the manner, and subject to the terms, set forth in Section 14.03 of the Indenture.
In addition to the rights provided to Holders of Notes under the Indenture, Holders shall have all the rights set forth in the Registration Rights Agreement, dated as of the Issue Date, among the Company and the investors party from time to time thereto.

A-7
 



ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM = as tenants in common
UNIF GIFT MIN ACT = Uniform Gifts to Minors Act
CUST = Custodian
TEN ENT = as tenants by the entireties
JT TEN = joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.

A-8
 



SCHEDULE A7 
SCHEDULE OF INCREASES AND DECREASES IN GLOBAL NOTE
Sunnova Energy International Inc.
7.75% Convertible Senior Notes due 2027
The initial principal amount of this Global Note is [•] ($[•]). The following increases or decreases in this Global Note have been made:
Date of increase or decrease
Amount of decrease in principal amount of this Global Note
Amount of increase in principal amount of this Global Note
Principal amount of this Global Note following such decrease or increase
Signature of authorized signatory of Trustee or Custodian
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 















____________________________
7 Include if a global note.



A-9
 


ATTACHMENT 1
[FORM OF NOTICE OF CONVERSION]
To:    Wilmington Trust, National Association
15950 N. Dallas Parkway, Suite 550
Dallas, TX 75248
Attention: Sunnova Energy International Inc. Administrator
The undersigned registered owner of this Note hereby exercises the option to convert this Note, or the portion hereof (that is $1,000,000 principal amount or an integral multiple of $1,000 in excess thereof) below designated, into cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable, in accordance with the terms of the Indenture referred to in this Note, and directs that any cash payable and any shares of Common Stock issuable and deliverable upon such conversion, together with any cash for any fractional share, and any Notes representing any unconverted principal amount hereof, be issued and delivered to the registered Holder hereof unless a different name has been indicated below. If any shares of Common Stock or any portion of this Note not converted are to be issued in the name of a Person other than the undersigned, the undersigned will pay all documentary, stamp or similar issue or transfer taxes, if any in accordance with Section 14.02(d) and Section 14.02(e) of the Indenture. Any amount required to be paid to the undersigned on account of interest accompanies this Note. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.
Dated:     
    

Signature(s)
    

Signature Guarantee
Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if shares of Common Stock are to be issued, or Notes are to be delivered, other than to and in the name of the registered holder.

1
 



Fill in for registration of shares if to be issued, and Notes if to be delivered, other than to and in the name of the registered holder:
    

(Name)
    

(Street Address)

(City, State and Zip Code)
Please print name and address
Principal amount to be converted (if less than all): $            ,000
NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.

Social Security or Other Taxpayer
Identification Number



2
 


ATTACHMENT 2
[FORM OF OPTIONAL REPURCHASE NOTICE]
To:    Wilmington Trust, National Association
15950 N. Dallas Parkway, Suite 550
Dallas, TX 75248
Attention: Sunnova Energy International Inc. Administrator
The undersigned registered owner of this Note hereby requests and instructs the Company to pay to the registered Holder hereof in accordance with Section 15.01 of the Indenture referred to in this Note (1) the entire principal amount of this Note, and (2) if such Optional Repurchase Date does not fall during the period after a Regular Record Date and on or prior to the corresponding Interest Payment Date, accrued and unpaid interest, if any, thereon to, but excluding, such Optional Repurchase Date. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.
In the case of Physical Notes, the certificate numbers of the Notes to be repurchased are as set forth below:
Dated:    
    
    

Signature(s)
    

Social Security or Other Taxpayer Identification Number
Principal amount to be repurchased (if less than all): $            ,000
NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.


1
 



ATTACHMENT 3
[FORM OF CHANGE OF CONTROL REPURCHASE NOTICE]
To:    Wilmington Trust, National Association
15950 N. Dallas Parkway, Suite 550
Dallas, TX 75248
Attention: Sunnova Energy International Inc. Administrator
The undersigned registered owner of this Note hereby acknowledges receipt of a notice from Sunnova Energy International Inc. (the “Company”) as to the occurrence of a Change of Control with respect to the Company and specifying the Change of Control Repurchase Date and requests and instructs the Company to pay to the registered Holder hereof in accordance with Section 15.02 of the Indenture referred to in this Note (1) the entire principal amount of this Note, or the portion thereof (that is $1,000 principal amount or an integral multiple thereof) below designated, and (2) if such Change of Control Repurchase Date does not fall during the period after a Regular Record Date and on or prior to the corresponding Interest Payment Date, accrued and unpaid interest, if any, thereon to, but excluding, such Change of Control Repurchase Date. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.
In the case of Physical Notes, the certificate numbers of the Notes to be repurchased are as set forth below:
Dated:    
    
    

Signature(s)
    

Social Security or Other Taxpayer Identification Number
Principal amount to be repurchased (if less than all): $            ,000
NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.



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ATTACHMENT 4
[FORM OF ASSIGNMENT AND TRANSFER]
For value received                     hereby sell(s), assign(s) and transfer(s) unto                         (Please insert social security or Taxpayer Identification Number of assignee) the within Note, and hereby irrevocably constitutes and appoints                         attorney to transfer the said Note on the books of the Company, with full power of substitution in the premises.
In connection with any transfer of the within Note occurring prior to the Resale Restriction Termination Date, as defined in the Indenture governing such Note, the undersigned confirms that such Note is being transferred:
☐ To Sunnova Energy International Inc. or a subsidiary thereof; or
☐ Pursuant to a registration statement that has become or been declared effective under the Securities Act of 1933, as amended; or
☐ Pursuant to and in compliance with Regulation S in an offshore transaction in compliance with Rule 904 under the Securities Act of 1933 and such Note shall be held immediately after the transfer through Euroclear or Clearstream until the expiration of the Resale Restriction Termination Date; or
☐ Pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or
☐ Pursuant to and in compliance with Rule 144 under the Securities Act of 1933, as amended, or any other available exemption from the registration requirements of the Securities Act of 1933, as amended.

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Dated:     
    
    

Signature(s)
    

Signature Guarantee
Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if Notes are to be delivered, other than to and in the name of the registered holder.
NOTICE: The signature on the assignment must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.


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Exhibit 10.4


AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT
(SLA)
This AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), is dated as of December 4, 2019 (the “Effective Date”) among SUNNOVA EZ-OWN PORTFOLIO, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA SLA MANAGEMENT, LLC, a Delaware limited liability company, as manager (in such capacity, the “Manager”), SUNNOVA SLA MANAGEMENT, LLC, a Delaware limited liability company, as servicer (in such capacity, the “Servicer”), SUNNOVA ASSET PORTFOLIO 7 HOLDINGS, LLC, a Delaware limited liability company (the “Seller”), the financial institutions parties hereto (each such financial institution (including any Conduit Lender), a “Lender” and collectively, the “Lenders”), each Funding Agent representing a group of Lenders party hereto (each a “Funding Agent” and, collectively, the “Funding Agents”), and CREDIT SUISSE AG, NEW YORK BRANCH, as agent for the Lenders (in such capacity, the “Agent”).
RECITALS:
WHEREAS, the Borrower, the Manager, the Servicer, the Seller, the Lenders, the Funding Agents, the Agent, Wells Fargo Bank, National Association, as paying agent, and U.S. Bank National Association, as custodian, entered into the Amended and Restated Credit Agreement, dated as of March 27, 2019 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”);
WHEREAS, in accordance with Section 10.2 of the Credit Agreement, the parties hereto desire to amend the Credit Agreement subject to the terms hereof;
NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth, and for other good and adequate consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows (except as otherwise defined in this Amendment, terms defined in the Credit Agreement are used herein as defined therein):
SECTION 1.01.
AMENDMENTS.
Subject to the satisfaction of the conditions precedent set forth in Section 2.01 below, the Credit Agreement shall be, and it hereby is, amended as follows:
(a)    Section 4.1 of the Credit Agreement is hereby amended by adding a new subsection (V) at the end thereof to read in its entirety as follows:

4824-0626-3725
3611456

(V)    Beneficial Ownership Certification. The information included in any Beneficial Ownership Certification delivered by the Borrower is true and correct in all respects.
(b)    Section 5.1 of the Credit Agreement is hereby amended by adding a new subsection (X) at the end thereof to read in its entirety as follows:
(X)    Beneficial Owner Certification. Promptly following any request therefor, the Borrower shall provide such information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” requirements under the Patriot Act, the Beneficial Ownership Regulation or other applicable anti-money laundering laws.
(c)    Section 6.1(E) of the Credit Agreement are hereby amended and restated in its entirety to read as follows:
(E)    Insolvency Event. An Insolvency Event shall have occurred with respect to SEI, Parent, the Seller or the Borrower.
(d)    Article X of the Credit Agreement is hereby amended by adding a new Section 10.27 at the end thereof to read in its entirety as follows:
Section 10.27    Acknowledgement Regarding Any Supported QFCs. To the extent that the Transaction Documents provide support, through a guarantee or otherwise, for Hedge Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Transaction Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

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In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Transaction Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Transaction Documents were governed by the laws of the United States or a state of the United States.
(e)    Each of the following defined terms appearing in Exhibit A of the Credit Agreement are hereby amended and restated in their respective entireties to read as follows:
“Advance Rate” shall mean, as of any date of determination, with respect to each Eligible Solar Loan, the lesser of (A) (i) if the Related Property for such Eligible Solar Loan is located in a state of the United States and such Eligible Solar Loan is not a Substantial Stage Date Solar Loan, 85%; (ii) if the Related Property for such Eligible Solar Loan is located in an Approved U.S. Territory and such Eligible Solar Loan is not a Substantial Stage Date Solar Loan, 75% and (iii) if such Eligible Solar Loan is a Substantial Stage Date Solar Loan, 70% during the Temporary Step-Up Period and 60% at all times thereafter; and (B) the amount, expressed as a percentage, determined by dividing (x) 94% of the purchase price for the related PV System or Independent Energy Storage System (as applicable, in each case as set forth in the

3


related Solar Loan Contract and any installation agreement related thereto) by (y) the Solar Loan Balance for such Solar Loan; provided however that if the Weighted Average Advance Rate with respect to all Eligible Solar Loans for which the Related Property is located in a state of the United States and which are not Substantial Stage Date Solar Loans would exceed 83% as of such date, the Advance Rate with respect to all such Eligible Solar Loans for which the Related Property is located in a state of the United States and which are not Substantial Stage Date Solar Loans shall be 83%.
“Carrying Cost” shall mean, as of any date of determination, the sum of (i) the Swap Rate as of such date of determination, (ii) the Usage Fee Rate and (iii) 0.75%.
“Hedge Requirements” shall mean the requirements of the Borrower to within two (2) Business Days of the Restatement Date and on each Borrowing Date thereafter, enter into and maintain according to the provisions hereof (for the avoidance of doubt, including breakage or modification to remain within the required amortizing schedule) one or more (i) fixed-floating interest rate swap agreements at the then applicable Hedge Swap Rate or (ii) interest rate cap agreements for which the strike rate is not more than 2.75%. In each case, the interest rate agreement shall be (x) entered into with a Qualifying Hedge Counterparty and (y) on an amortizing schedule that does not exceed 110.0% but is not less than 90.0% of the expected amortization schedule of the aggregate outstanding principal balance of the Loan Notes associated with the Advance made on such date (unless the notional amount of such swap agreements previously entered into in connection with prior Advances is sufficient to satisfy such notional balance requirement) on terms and conditions and pursuant to such documentation as shall be reasonably acceptable to the Agent.
“Lender Fee Letter” shall mean that certain fee letter agreement, dated as of the Third Amendment Effective Date, entered into by and between the Agent and the Borrower.

4


“Temporary Step-Up Period” shall mean the period from the Third Amendment Effective Date to the earlier to occur of (i) the closing date of the first Takeout Transaction to occur following the Third Amendment Effective Date and (ii) March 31, 2020.
(f)    Exhibit A of the Credit Agreement is hereby further amended by adding the following new defined terms in the appropriate alphabetical sequence to read in their respective entireties as follows:
“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation, which certification shall be substantially similar in form and substance to the form of Certification Regarding Beneficial Owners of Legal Entity Customers published jointly, in May 2018, by the Loan Syndications and Trading Association and Securities Industry and Financial Markets Association.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Covered Party” shall have the meaning set forth in Section 10.27 hereof.
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

5


“Hedge Swap Rate” shall mean, the then current fixed versus LIBOR swap rate associated with the weighted average life of the expected amortization schedule of the Aggregate Outstanding Advances which is determined by the Agent’s proprietary model and mutually agreed upon by the Agent and the Borrower.
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
“QFC Credit Support” shall have the meaning set forth in Section 10.27 hereof.
“Supported QFC” shall have the meaning set forth in Section 10.27 hereof.
“Third Amendment Effective Date” means December 4, 2019.
“U.S. Special Resolution Regime” shall have the meaning set forth in Section 10.27 hereof.
(g)    Exhibit A of the Credit Agreement is hereby further amended by deleting the following defined term in its entirety:
“Swap Rate” shall mean, the then current fixed versus LIBOR swap rate associated with the weighted average life of the expected amortization schedule of the Aggregate Outstanding Advances which is determined by the Agent’s proprietary model and mutually agreed upon by the Agent and the Borrower.
SECTION 2.01.
CONDITIONS PRECEDENT TO EFFECTIVENESS OF AMENDMENT.
The effectiveness of this Amendment is subject to the satisfaction of all of the following conditions precedent:
(a)    The Agent, the Borrower, the Manager, the Servicer, the Seller, and the Lenders shall have executed and delivered this Amendment;

6


(b)    The Agent shall have received an executed copy of the Lender Fee Letter; and
(c)    The Agent shall have received the amendment fee set forth in Section 2.5(H) of the Credit Agreement.
SECTION 3.01.
REPRESENTATIONS AND WARRANTIES
Each of the Borrower, the Manager, the Servicer, and the Seller hereby represents and warrants to the Secured Parties that, after giving effect to this Amendment: (a) the representations and warranties set forth in each of the Transaction Documents by each of the Borrower, the Manager, the Servicer, and the Seller, as applicable, are true and correct in all material respects on and as of the date hereof, with the same effect as though made on and as of such date (except to the extent that any representation and warranty expressly relates to an earlier date, then such earlier date), and (b) no Amortization Event, Event of Default, Potential Amortization Event or Potential Default has occurred and is continuing.
SECTION 4.01
REFERENCES IN ALL TRANSACTION DOCUMENTS.
To the extent any Transaction Document contains a provision that conflicts with the intent of this Amendment, the parties agree that the provisions herein shall govern.
SECTION 5.01.
COUNTERPARTS.
This Amendment may be executed (by facsimile or otherwise) in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same instrument.
SECTION 5.02.
GOVERNING LAW.
THIS AMENDMENT SHALL, IN ACCORDANCE WITH SECTION 5‑1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
SECTION 5.03.
SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of this Amendment shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or

7


terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Amendment and shall in no way affect the validity or enforceability of the other provisions of this Amendment.
SECTION 5.04.
CONTINUING EFFECT.
Except as expressly amended hereby, each Transaction Document shall continue in full force and effect in accordance with the provisions thereof and each Transaction Document is in all respects hereby ratified, confirmed and preserved.
SECTION 5.05.
SUCCESSORS AND ASSIGNS.
This Amendment shall be binding upon and inure to the benefit of the Borrower, the Paying Agent, the Custodian and the Agent and each Lender, and their respective successors and permitted assigns.
SECTION 5.06.
NO BANKRUPTCY PETITION.
Each of the parties to this Amendment hereby covenants and agrees that, prior to the date which is one year and one day after the payment in full of all outstanding indebtedness for borrowed money of a Conduit Lender or any CS Conduit Lender, it will not institute against, or join any other Person in instituting against such Conduit Lender or CS 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 or of any other jurisdiction.
Each of the parties to this Amendment hereby covenants and agrees that, prior to the date which is one year and one day after the payment in full of each Loan Note, it will not institute against, or join any other Person in instituting against the Borrower 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 Section 5.06 shall survive the termination of this Amendment.
SECTION 5.07
COSTS AND EXPENSES.
The Borrower agrees to pay all costs and expenses in connection with the preparation, execution, delivery, filing, recording, administration, modification, amendment and/or waiver of this Amendment as required by Section 10.6 of the Credit Agreement.
[SIGNATURE PAGES FOLLOW]

8



IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to Amended and Restated Credit Agreement be executed and delivered as of the date first above written.
SUNNOVA EZ-OWN PORTFOLIO, LLC, as the Borrower


By: /s/ Christopher Smith    
Name: Christopher Smith
Title: SVP, Head of Finance and Treasurer
SUNNOVA SLA MANAGEMENT, LLC,
as Manager


By: /s/ Christopher Smith    
Name: Christopher Smith
Title: SVP, Head of Finance and Treasurer
SUNNOVA ASSET PORTFOLIO 7 HOLDINGS, LLC, as Seller


By: /s/ Christopher Smith    
Name: Christopher Smith
Title: SVP, Head of Finance and Treasurer
SUNNOVA SLA MANAGEMENT, LLC,
as Servicer


By: /s/ Christopher Smith    
Name: Christopher Smith
Title: SVP, Head of Finance and Treasurer


[Signature Page to Amendment No. 3 to Amended and Restated Credit Agreement]



CREDIT SUISSE AG, NEW YORK BRANCH, as Agent


By: /s/ Kenneth Aini    
Name: Kenneth Aini
Title: Vice President
By: /s/ Kevin Quinn    
Name: Kenneth Aini
Title: Vice President
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Committed Lender


By: /s/ Kenneth Aini    
Name: Kenneth Aini
Title: Authorized Signatory
By: /s/ Kevin Quinn    
Name: Kevin Quinn
Title: Authorized Signatory
GIFS CAPITAL COMPANY, LLC, as a Conduit Lender


By: /s/ Carey D. Fear    
Name: Carey D. Fear
Title: Manager


[Signature Page to Amendment No. 3 to Amended and Restated Credit Agreement]



ALPINE SECURITIZATION LTD, as a Conduit Lender

By: Credit Suisse AG, New York Branch, as attorney-in-fact


By: /s/ Kenneth Aini    
Name: Kenneth Aini
Title: Vice President
By: /s/ Kevin Quinn    
Name: Kevin Quinn
Title: Vice President


[Signature Page to Amendment No. 3 to Amended and Restated Credit Agreement]
EXHIBIT 10.32

FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made as of this 2nd day of December, 2019, by and among SUNNOVA TEP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA TE MANAGEMENT, LLC, a Delaware limited liability company, in its capacity as Facility Administrator (the “Facility Administrator”), CREDIT SUISSE AG, NEW YORK BRANCH, in its capacity as Administrative Agent for the Lenders (the “Administrative Agent”), the Lenders and the Funding Agents representing a group of Lenders party to the Credit Agreement (defined below) (together with the Borrower, the Administrative Agent, the Lenders and the Facility Administrator, the “Parties”), and amends that certain Credit Agreement, dated as of September 6, 2019 (as amended, modified, restated, supplemented or extended prior to the date hereof, the “Credit Agreement”), by and among the Borrower, the Facility Administrator, the Administrative Agent, the Lenders and the Funding Agents representing a group of Lenders party thereto, Wells Fargo Bank, National Association, in its capacity as Paying Agent, and U.S. Bank National Association, in its capacity as Verification Agent. Capitalized terms used herein have the meanings set forth in the Credit Agreement.
RECITALS
WHEREAS, the Parties hereto desire to amend the Credit Agreement in accordance with Section 10.2(A) thereof as set forth in Sections 1 hereof.
NOW, THEREFORE, in consideration of the foregoing, the terms and conditions set forth in this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1.Amendments to the Credit Agreement. The Credit Agreement in effect immediately prior to the date hereof is hereby amended to delete the red, stricken text (indicated textually in the same manner as the following example: stricken text) and to add the blue, double underlined text (indicated in the same manner as the following example: underlined text) as set for on Exhibit A hereto.
2.    Representations and Warranties. Each of the Borrower and the Facility Administrator represents and warrants as of the date of this Amendment as follows:
(i)this Amendment has been duly and validly executed and delivered by such party and constitutes its valid and binding obligation, legally enforceable against such party in accordance with its terms, except as enforceability may be limited by applicable insolvency laws and general principles of equity (whether considered in a proceeding at law or in equity);
(ii)    the execution, delivery and performance by it of this Amendment are within its powers, and do not conflict with, and will not result in a violation of, or constitute or give rise to an event of default under (i) any of its organizational documents, (ii) any agreement or other instrument which may be binding upon it, or (iii) any law, governmental regulation, court decree or order applicable to it or its properties, except, in each case, where


[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.        


such conflict, violation or event of default could not reasonably be expected to result in a Material Adverse Effect;
(iii)    it has all powers and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted except where the failure to obtain such licenses, authorizations, consents and approvals would not result in a Material Adverse Effect; and
(iv)    the representations and warranties of such party set forth in the Transaction Documents to which it is a party are true and correct in all material respects (except to the extent there are already materiality qualifiers therein) as of the date hereof.
Each of the Borrower and the Facility Administrator represents and warrants that (i) immediately prior to this Amendment, no Potential Default, Event of Default, Potential Amortization Event or Amortization Event has occurred and is continuing and (ii) no Potential Default, Event of Default, Potential Amortization Event or Amortization Event will occur as a result of the execution of this Amendment.
3.    Effect of Amendment. This Amendment shall not in any manner constitute or be construed to constitute a novation, discharge, forgiveness, extinguishment or release of any obligation under the Credit Agreement or the other Transaction Documents or to keep and perform any of the terms, conditions, agreements contained in therein. Except as expressly amended and modified by this Amendment, all provisions of the Credit Agreement shall remain in full force and effect and each reference to the Credit Agreement and words of similar import in the Transaction Documents shall be a reference to the Credit Agreement as amended hereby and as the same may be further amended, supplemented and otherwise modified and in effect from time to time. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Credit Agreement other than as set forth herein. This Amendment is a Transaction Document.
4.    No Release or Novation; Ratification of Related Documents; Binding Effect. Nothing contained herein and nothing done pursuant hereto shall affect or be construed to affect or to release the liability of any party or parties whomsoever who may now or hereafter be liable under or on account of the Indebtedness under the Credit Agreement and the other Transaction Documents. Except as expressly provided herein, (i) nothing herein shall limit in any way the rights and remedies of the Secured Parties under the Credit Agreement and the other Transaction Documents, and (ii) the terms and conditions of the Credit Agreement and the other Transaction Documents remain in full force and effect and are hereby ratified and affirmed. The Borrower hereby ratifies and affirms all of its promises, covenants and obligations to promptly and properly pay any and all sums due under the Credit Agreement and the other Transaction Documents, as amended by this Amendment and to promptly and properly perform and comply with any and all of its obligations, duties and agreements pursuant thereto, as modified hereby or in connection herewith. This Amendment shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

2    

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


5.    Entire Agreement; Effectiveness. This Amendment constitutes the entire agreement among the Parties with respect to the matters dealt with herein. All previous documents, undertakings and agreements, whether verbal, written or otherwise, among the Parties with respect to the subject matter of this Amendment, are hereby cancelled and superseded and shall not affect or modify any of the terms or obligations set forth in this Amendment. Upon the execution of this Amendment, this Amendment shall be binding upon and inure to the benefit of the Parties.
6.    Severability. Any provision hereof which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and without affecting the validity or enforceability of any provision in any other jurisdiction.
7.    Incorporation By Reference. Sections 10.9 (Governing Law), 10.10 (Jurisdiction), 10.11 (Waiver of Jury Trial), 10.20 (Non-Petition) and 10.21 (Non-Recourse) of the Credit Agreement hereby are incorporated by reference as if fully set forth in this Amendment mutatis mutandis.
8.    Counterparts. This Amendment may be executed in any number of counterparts and by different Parties hereto in separate counterparts, each of which when so executed 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 a signature page to this Amendment by facsimile or by e-mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Amendment.
[Signature Pages Follow]




3    

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written above.
SUNNOVA TEP HOLDINGS, LLC. as Borrower
By: /s/ Christopher Smith    
Name: Christopher Smith
Title: SVP, Head of Finance and Treasurer
SUNNOVA TE MANAGEMENT, LLC
By: /s/ Christopher Smith    
Name: Christopher Smith
Title: SVP, Head of Finance and Treasurer



[Signature Page to Sunnova TEP IV Warehouse Credit Agreement First Amendment]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.




CREDIT SUISSE AG, NEW YORK BRANCH,
as Administrative Agent and as Funding Agent
By: /s/ Patrick Duggan    
Name: Patrick Duggan
Title: Vice President
By: /s/ Kenneth Aiani    
Name: Kenneth Aiani
Title: Vice President
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender
By: /s/ Patrick Duggan    
Name: Patrick Duggan
Title: Authorized Signatory
By: /s/ Kenneth Aiani    
Name: Kenneth Aiani
Title: Authorized Signatory

[Signature Page to Sunnova TEP IV Warehouse Credit Agreement First Amendment]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.




MOUNTCLIFF FUNDING LLC, AS A CONDUIT LENDER
By: /s/ Josh Borg    
Name: Josh Borg
Title: Authorized Signatory




[Signature Page to Sunnova TEP IV Warehouse Credit Agreement First Amendment]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



Exhibit A
[see attached]




[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.
EXECUTION COPYEXHIBIT A


CREDIT AGREEMENT
dated as of September 6, 2019
among
SUNNOVA TEP HOLDINGS, LLC,
as Borrower
SUNNOVA TE MANAGEMENT, LLC,
as Facility Administrator
CREDIT SUISSE AG, NEW YORK BRANCH,
as Administrative Agent for the financial institutions
that may from time to time become parties hereto as Lenders
LENDERS
from time to time party hereto
FUNDING AGENTS
from time to time party hereto
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Paying Agent
and
U.S. BANK NATIONAL ASSOCIATION,
as Verification Agent




[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


TABLE OF CONTENTS
Section
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ARTICLE I    CERTAIN DEFINITIONS    1
Section 1.1.
Certain Definitions    1
Section 1.2.
Computation of Time Periods    1
Section 1.3.
Construction    1
Section 1.4.
Accounting Terms    2
ARTICLE II    AMOUNTS AND TERMS OF THE ADVANCES    2
Section 2.1.
Establishment of the Credit Facility    2
Section 2.2.
The Advances    2
Section 2.3.
Use of Proceeds    3
Section 2.4.
Making the Advances    3
Section 2.5.
Fees    5
Section 2.6.
Reduction/Increase of the Commitments    6
Section 2.7.
Repayment of the Advances    7
Section 2.8.
Certain Prepayments    13
Section 2.9.
Mandatory Prepayments of Advances    14
Section 2.10.
[Reserved]    14
Section 2.11.
Interest    14
Section 2.12.
Breakage Costs; Liquidation Fees; Increased Costs; Capital Adequacy; Illegality; Additional Indemnifications    14
Section 2.13.
Payments and Computations    16
Section 2.14.
Payment on Non-Business Days    16
Section 2.15.
[Reserved]    16
Section 2.16.
Extension of the Scheduled Commitment Termination Date    16
Section 2.17.
Taxes    17
Section 2.18.
Request for Borrowing Exceeding Aggregate Commitment    21
ARTICLE III    CONDITIONS OF LENDING AND CLOSING    22
Section 3.1.
Conditions Precedent to Closing    22
Section 3.2.
Conditions Precedent to All Advances    25
Section 3.3.
Conditions Precedent to Acquisition of Additional Managing Members    26
ARTICLE IV    REPRESENTATIONS AND WARRANTIES    27
Section 4.1.
Representations and Warranties of the Borrower    27
ARTICLE V    COVENANTS    31

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 5.1.
Affirmative Covenants    31
Section 5.2.
Negative Covenants    41
Section 5.3.
Covenants Regarding the Solar Asset Owner Member Interests    45
ARTICLE VI    EVENTS OF DEFAULT    47
Section 6.1.
Events of Default    47
Section 6.2.
Remedies    49
Section 6.3.
Class B Lender Purchase Option    49
Section 6.4.
Sale of Collateral    51
ARTICLE VII    THE ADMINISTRATIVE AGENT AND FUNDING AGENTS    52
Section 7.1.
Appointment; Nature of Relationship    52
Section 7.2.
Powers    52
Section 7.3.
General Immunity    52
Section 7.4.
No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc.    53
Section 7.5.
Action on Instructions of Lenders    53
Section 7.6.
Employment of Administrative Agents and Counsel    53
Section 7.7.
Reliance on Documents; Counsel    53
Section 7.8.
The Administrative Agent’s Reimbursement and Indemnification    53
Section 7.9.
Rights as a Lender    54
Section 7.10.
Lender Credit Decision    54
Section 7.11.
Successor Administrative Agent    54
Section 7.12.
Transaction Documents; Further Assurances    55
Section 7.13.
Collateral Review    55
Section 7.14.
Funding Agent Appointment; Nature of Relationship    55
Section 7.15.
Funding Agent Powers    56
Section 7.16.
Funding Agent General Immunity    56
Section 7.17.
Funding Agent Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc.    56
Section 7.18.
Funding Agent Action on Instructions of Lenders    57
Section 7.19.
Funding Agent Employment of Agents and Counsel    57
Section 7.20.
Funding Agent Reliance on Documents; Counsel    57
Section 7.21.
Funding Agent’s Reimbursement and Indemnification    57
Section 7.22.
Funding Agent Rights as a Lender    57
Section 7.23.
Funding Agent Lender Credit Decision    58
Section 7.24.
Funding Agent Successor Funding Agent    58
Section 7.25.
Funding Agent Transaction Documents; Further Assurances    58
ARTICLE VIII    ADMINISTRATION AND SERVICING OF THE COLLATERAL    59
Section 8.1.
Management Agreements/Servicing Agreements/Facility Administration Agreement    59
Section 8.2.
Accounts    61

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 8.3.
Adjustments    71
ARTICLE IX    THE PAYING AGENT    71
Section 9.1.
Appointment    71
Section 9.2.
Representations and Warranties    71
Section 9.3.
Limitation of Liability of the Paying Agent    72
Section 9.4.
Certain Matters Affecting the Paying Agent    72
Section 9.5.
Indemnification    77
Section 9.6.
Successor Paying Agent    78
ARTICLE X    MISCELLANEOUS    79
Section 10.1.
Survival    79
Section 10.2.
Amendments, Etc    79
Section 10.3.
Notices, Etc    80
Section 10.4.
No Waiver; Remedies    80
Section 10.5.
Indemnification    80
Section 10.6.
Costs, Expenses and Taxes    81
Section 10.7.
Right of Set-off; Ratable Payments; Relations Among Lenders    82
Section 10.8.
Binding Effect; Assignment    83
Section 10.9.
GOVERNING LAW    85
Section 10.10.
Jurisdiction    86
Section 10.11.
Waiver of Jury Trial    86
Section 10.12.
Section Headings    86
Section 10.13.
Tax Characterization    86
Section 10.14.
Execution    86
Section 10.15.
Limitations on Liability    86
Section 10.16.
Confidentiality    87
Section 10.17.
Limited Recourse    88
Section 10.18.
Customer Identification - USA Patriot Act Notice    89
Section 10.19.
Paying Agent Compliance with Applicable Anti-Terrorism and Anti-Money Laundering Regulations    89
Section 10.20.
Non-Petition    89
Section 10.21.
No Recourse    89
Section 10.22.
[Reserved]    90
Section 10.23.
Additional Paying Agent Provisions    90
Section 10.24.
Acknowledgement Regarding Any Supported QFCs    90

SCHEDULE I
—     Eligibility Criteria
SCHEDULE II
—     The Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, the Takeout Transaction Account, the Borrower’s Account and the TEP Collateral Account
SCHEDULE III
—     [Reserved]
SCHEDULE IV
—     Scheduled Hedged SREC Payments

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE V
—     Scheduled Host Customer Payments
SCHEDULE VI
—     Scheduled PBI Payments
SCHEDULE VII
—     Scheduled Managing Member Distributions
SCHEDULE VIII
—     Tax Equity Financing Documents
SCHEDULE IX
—     SAP Financing Documents
EXHIBIT A
—     Defined Terms
EXHIBIT B-1
—     Form of Borrowing Base Certificate
EXHIBIT B-2
—     Form of Notice of Borrowing
EXHIBIT C
—     [Reserved]
EXHIBIT D-1
—     Form of Class A Loan Note
EXHIBIT D-2
—     Form of Class B Loan Note
EXHIBIT E
—     Commitments
EXHIBIT F
—     Form of Assignment Agreement
EXHIBIT G
—     Form of Solar Service Agreement
EXHIBIT H
—     Form of Notice of Delayed Funding
EXHIBIT I
—     Delayed Funding Notice
EXHIBIT J
—     Form of Underwriting and Reassignment Credit Policy



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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.
EXECUTION VERSION

CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this “Agreement”) is entered into as of September 6, 2019, by and among SUNNOVA TEP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA TE MANAGEMENT, LLC, a Delaware limited liability company, as Facility Administrator (in such capacity, the “Facility Administrator”), the financial institutions from time to time parties hereto (each such financial institution (including any Conduit Lender), a “Lender” and collectively, the “Lenders”), each Funding Agent representing a group of Lenders, CREDIT SUISSE AG, NEW YORK BRANCH (“CSNY”), as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders, WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Paying Agent (as defined below), and U.S. BANK NATIONAL ASSOCIATION, as Verification Agent (as defined below).
RECITALS
WHEREAS, the Borrower has requested that the Lenders provide loans to Borrower in connection with its ownership interest in the Solar Asset Owner Member Interests; and
WHEREAS, the Lenders are willing to provide such loans upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows:
ARTICLE I

CERTAIN DEFINITIONS
Section 1.1.    Certain Definitions. Capitalized terms used but not otherwise defined herein have the meanings given to them in Exhibit A attached hereto.
Section 1.2.    Computation of Time Periods. In this Agreement, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each means “to but excluding” and the word “through” means “through and including.” Any references to completing an action on a non-Business Day (including any payments), shall be automatically extended to the next Business Day
Section 1.3.    Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (A) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein), (B) any reference

        
[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


herein to any Person shall be construed to include such Person’s successors and permitted assigns, (C) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (D) all references herein to Sections, Schedules and Exhibits shall be construed to refer to Sections of, and Schedules and Exhibits to, this Agreement, (E) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all real property, tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and interests in any of the foregoing, (F) any reference to a statute, rule or regulation is to that statute, rule or regulation as now enacted or as the same may from time to time be amended, re-enacted or expressly replaced and (G) “or” is not exclusive. References to “Managing Member” in this Agreement shall be deemed to include all entities comprising such defined term unless the context requires otherwise. “References to “Manager” in this Agreement shall be deemed to include all entities comprising such defined term unless the context requires otherwise.
Section 1.4.    Accounting Terms. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited financial statements, except as otherwise specifically prescribed herein.
ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES
Section 2.1.    Establishment of the Credit Facility. On the Closing Date, and subject to and upon the terms and conditions set forth in this Agreement and the other Transaction Documents, the Administrative Agent and the Lenders agreed to establish the credit facility set forth in this Agreement for the benefit of the Borrower.
Section 2.2.    The Advances. (A) Subject to the terms and conditions set forth herein, each Non-Conduit Lender in a Class A Lender Group agrees, severally and not jointly, to make one or more loans (each such loan, a “Class A Advance”) to the Borrower, from time to time during the Availability Period, in an amount, for each Class A Lender Group, equal to its Class A Lender Group Percentage of the aggregate Class A Advances requested by the Borrower pursuant to Section 2.4; provided that the Class A Advances made by any Class A Lender Group shall not exceed its Class A Lender Group Percentage of the lesser of (i) the Class A Aggregate Commitment effective at such time and (ii) the Class A Borrowing Base at such time; provided, further, that a Non-Conduit Lender in a Class A Lender Group shall be deemed to have satisfied its obligation to make a Class A Advance hereunder (solely with respect to such Class A Advance) to the extent any Conduit Lender in such Lender Group funds such Class A Advance in place of such Non-Conduit Lender in accordance with this Agreement, it being understood that such Conduit Lender may fund a Class A Advance in its sole discretion.
(B)    Subject to the terms and conditions set forth herein, each Non-Conduit Lender in a Class B Lender Group agrees, severally and not jointly, to make one or more loans (each such

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


loan, a “Class B Advance”) to the Borrower, from time to time during the Availability Period, in an amount, for each Class B Lender Group, equal to its Class B Lender Group Percentage of the aggregate Class B Advances requested by the Borrower pursuant to Section 2.4; provided that the Class B Advances made by any Class B Lender Group shall not exceed its Class B Lender Group Percentage of the lesser of (i) the Class B Aggregate Commitment effective at such time and (ii) the Class B Borrowing Base at such time; provided, further, that a Non-Conduit Lender in a Class B Lender Group shall be deemed to have satisfied its obligation to make a Class B Advance hereunder (solely with respect to such Class B Advance) to the extent any Conduit Lender in such Lender Group funds such Class B Advance in place of such Non-Conduit Lender in accordance with this Agreement, it being understood that such Conduit Lender may fund a Class B Advance in its sole discretion.
Section 2.3.    Use of Proceeds. Proceeds of the Advances shall only be used by the Borrower to (i) purchase Solar Assets and/or Solar Asset Owner Member Interests from the Seller under the Sale and Contribution Agreement, (ii) make deposits into the Liquidity Reserve Account (up to the Liquidity Reserve Account Required Balance), (iii) make deposits into the Supplemental Reserve Account (up to the Supplemental Reserve Account Required Balance), (iv) make distributions to the Parent and (v) pay certain fees and expenses incurred in connection with establishment of the credit facility set forth in this Agreement.
Section 2.4.    Making the Advances. (A) Except as otherwise provided herein, the Borrower may request that the Lenders make Advances to the Borrower by the delivery to the Administrative Agent, each Funding Agent, the Paying Agent and, so long as it remains a Lender hereunder, the CS Conduit Lender, not later than 1:00 P.M. (New York City time) two (2) Business Days prior to the proposed Funding Date of a written notice of such request substantially in the form of Exhibit B-2 attached hereto (each such notice, a “Notice of Borrowing”) together with a duly completed Borrowing Base Certificate signed by a Responsible Officer of the Borrower. Any Notice of Borrowing or Borrowing Base Certificate received by the Administrative Agent, the Funding Agents and the Paying Agent after the time specified in the immediately preceding sentence shall be deemed to have been received by the Administrative Agent, the Funding Agents and the Paying Agent on the next Business Day, and to the extent that results in the proposed Funding Date being earlier than two (2) Business Days after the date of delivery of such Notice of Borrowing, then the date specified in such Notice of Borrowing as the proposed Funding Date of an Advance shall be deemed to be the Business Day immediately succeeding the proposed Funding Date of such Advance specified in such Notice of Borrowing. The proposed Funding Date specified in a Notice of Borrowing shall be no earlier than two (2) Business Days after the date of delivery of such Notice of Borrowing and may be up to a maximum of thirty (30) days after the date of delivery of such Notice of Borrowing. Unless otherwise provided herein, each Notice of Borrowing shall be irrevocable. The aggregate principal amount of the Class A Advance and Class B Advance requested by the Borrower for any Funding Date shall not be less than the lesser of (x) $1,000,000 and (y) the remaining amount necessary in order for the Borrower to fully utilize all available Commitments. If the Administrative Agent delivers a written notice (including by electronic mail) to the Borrower contesting the Borrower’s calculations or any statement within such Notice of Borrowing, it shall promptly inform the Borrower. The Borrower may then deliver an amended Notice of Borrowing to the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Administrative Agent, the Funding Agents and the Paying Agent or, by written notice, rescind the Notice of Borrowing.
(B)    The Notice of Borrowing shall specify (i) the aggregate amount of Class A Advances requested together with the allocated amount of Class A Advances to be paid by each Class A Lender Group based on its respective Class A Lender Group Percentage, (ii) the aggregate amount of Class B Advances requested together with the allocated amount of Class B Advances to be paid by each Class B Lender Group based on its respective Class B Lender Group Percentage and (iii) the Funding Date; provided that the amount of Class A Advances to Class B Advances requested shall be determined on a pro rata basis based on the Class A Aggregate Commitment and Class B Aggregate Commitment as of the proposed Funding Date.
(C)    With respect to the Advances to be made on the Closing Date, each Lender shall pay the amount of its Advance by wire transfer of such funds to the Borrower’s Account no later than 4:00 P.M. (New York City time) on the Closing Date.
(D)    With respect to the Advances to be made on any Funding Date, other than the initial Advance to be made on the Closing Date, upon a determination by the Administrative Agent that all conditions precedent to the Advances to be made on such Funding Date set forth in Article III have been satisfied or otherwise waived, each Lender shall fund the amount of its Advance by wire transfer of such funds in accordance with the Borrower’s written instructions initiated no later than 2:00 P.M. (New York City time) on such Funding Date.
(E)    Notwithstanding the foregoing, if any Non-Conduit Lender who shall have previously notified the Borrower in writing, in substantially the form of Exhibit H hereto, that it has incurred any external cost, fee or expense directly related to and as a result of the “liquidity coverage ratio” under Basel III in respect of its Commitment hereunder or any liquidity agreement between such Non-Conduit Lender and the Conduit Lender, or its interest in the Advances, such Non-Conduit Lender may, upon receipt of a Notice of Borrowing pursuant to Section 2.4(A), notify the Borrower in writing by 5:00 P.M. (New York City time) two (2) Business Days prior to the Funding Date specified in such Notice of Borrowing, in substantially the form of Exhibit I hereto (a “Delayed Funding Notice”), of its intent to fund (or, if applicable and if such Conduit Lender so agrees in its sole discretion, have its Conduit Lender, if applicable, fund all or part of) its allocated amount of the related Advance in an amount that would, if combined with all other requested Advances within the past thirty-five (35) days, exceed $20,000,000 (such amount, the “Delayed Amount”) on a Business Day that is on or before the thirty-fifth (35th) day following the date of delivery of such Non-Conduit Lender of such Delayed Funding Notice (the “Delayed Funding Date”) rather than on the date specified in such Notice of Borrowing. If any Non-Conduit Lender provides a Delayed Funding Notice to the Borrower following the delivery by the Borrower of a Notice of Borrowing, the Borrower may revoke such Notice of Borrowing by delivering written notice of the same to the Administrative Agent and the Funding Agents by 12:00 P.M. (New York city time) on the Business Day preceding the related Funding Date. No Non-Conduit Lender that has provided a Delayed Funding Notice in respect of an Advance (a “Delayed Funding Lender”) shall be considered to be in default of its obligation to fund its Delayed Amount pursuant to Section 2.4(D) hereunder unless and until it has failed to fund the Delayed Amount on or before the Delayed

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Funding Date. A Delayed Funding Lender is not obliged to fund until thirty-five (35) days have elapsed since the funding request. For the avoidance of doubt, a Delayed Funding Lender shall be required to fund its Delayed Amount regardless of the occurrence of an Amortization Event, Event of Default, Potential Amortization Event or Potential Default which occurs during the period from and including the related Funding Date to and including the related Delayed Funding Date, unless such Amortization Event, Event of Default, Potential Amortization Event or Potential Default relates to an Insolvency Event with respect to the Borrower.
(F)    If (i) one or more Delayed Funding Lenders provide a Delayed Funding Notice to the Borrower in respect of a Notice of Borrowing and (ii) the Borrower shall not have revoked the Notice of Borrowing prior to the Business Day preceding such Funding Date, the Administrative Agent shall, by no later than 12:00 P.M. (New York City time) on the Business Day preceding such Funding Date, direct each Lender Group and each Non-Conduit Lender that is not a Delayed Funding Lender with respect to such Funding Date (each a “Non-Delayed Funding Lender”) to fund an additional portion of such Advance on such Funding Date equal to such Non‑Delayed Funding Lender’s proportionate share (based upon such Non-Delayed Funding Lender’s Commitment relative to the sum of the Commitments of all Non-Delayed Funding Lenders) of the aggregate Delayed Amounts with respect to such Funding Date; provided, that in no event shall a Non-Delayed Funding Lender be required to fund any amounts in excess of its Commitment. Subject to Section 2.4(D), in the case of a Non-Delayed Funding Lender that is a Non-Conduit Lender, such Non-Conduit Lender hereby agrees, or, in the case of a Non-Delayed Funding Lender that is a Lender Group, the Conduit Lender in such Lender Group may agree, in its sole discretion, and the Non-Conduit Lenders in such Lender Group hereby agree, to fund such portion of the Advance on such Funding Date.
(G)    After the Non-Delayed Funding Lenders fund a Delayed Amount on any Funding Date in accordance with Section 2.4(F), the Delayed Funding Lender in respect of such Delayed Amount will be obligated to fund an amount equal to the excess, if any, of (a) such Delayed Amount over (b) the amount, if any, by which the portion of any principal distribution amount paid to such Non-Delayed Funding Lenders pursuant to Section 2.7 or any decrease to the outstanding principal balance made in accordance with Section 2.8, on any date during the period from and including such Funding Date to but excluding the Delayed Funding Date for such Delayed Amount, was greater than what it would have been had such Delayed Amount been funded by such Delayed Funding Lender on such Funding Date (the “Delayed Funding Reimbursement Amount”) with respect to such Delayed Amount on or before its Delayed Funding Date, irrespective of whether the Borrower would be able to satisfy the conditions set forth in Section 3.2(A) to an Advance, in an amount equal to such Delayed Funding Reimbursement Amount on such Delayed Funding Date. Such Delayed Funding Lender shall fund such Delayed Funding Reimbursement Amount on such Delayed Funding Date by paying such amount to the Administrative Agent in immediately available funds, and the Administrative Agent shall distribute such funds to each such Non-Delayed Funding Lender, pro rata based on the relative amount of such Delayed Amount funded by such Non-Delayed Funding Lender on such Funding Date pursuant to Section 2.4(F).
Section 2.5.    Fees.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(A)    Facility Administrator Fee. Subject to the terms and conditions of the Facility Administration Agreement, the Borrower shall pay the Facility Administrator Fee to the initial Facility Administrator and after the resignation or replacement of the initial Facility Administrator, the Borrower shall pay the Facility Administrator Fee to a Successor Facility Administrator appointed in accordance with the Facility Administration Agreement.
(B)    Verification Agent Fee. Subject to the terms and conditions of the Verification Agent Agreement, the Borrower shall pay to the Verification Agent the Verification Agent Fee.
(C)    Paying Agent Fee. Subject to the terms and conditions of the Paying Agent Fee Letter, the Borrower shall pay to the Paying Agent the Paying Agent Fee.
(D)    Unused Line Fees. Solely during the Availability Period, the Borrower agrees to pay to each Funding Agent, for the benefit of the Non-Conduit Lender in its Lender Group and as consideration for the Commitment of such Non-Conduit Lender in such Lender Group unused line fees in Dollars (the “Unused Line Fee”) for the period from the Closing Date to the last day of the Availability Period, computed as (a) the Unused Line Fee Percentage multiplied by (b) the average Unused Portion of the Commitments with respect to such Lender Group during a calendar quarter. Accrued Unused Line Fees shall be due and payable in arrears (from available Collections as set forth and in the order of priority established pursuant to Section 2.7) on the Payment Date immediately following the last day of the applicable calendar quarter for which such fee was calculated and on the last day of the Availability Period.
(E)    Payment of Fees. The fees set forth in Section 2.5(A), (B), (C), and (D) and (E) shall be payable on each Payment Date by the Borrower from Distributable Collections as set forth in and in the order of priority established pursuant to Section 2.7(B). Notwithstanding anything to the contrary herein or in any Transaction Document, the fees referred to in this Section 2.5 shall not constitute “Confidential Information.”
(F)    Amendment Fee. Commencing on the Amendment Closing Date and thereafter, the Borrower shall pay to the Administrative Agent a fee of $10,000 in connection with each amendment (or group of related amendments effective of the same date) to the Transaction Documents requested by it, which fee shall be in addition to the reimbursement of costs and expenses associated therewith that is provided for in Section 10.6 hereof. For the avoidance of doubt, any consent to a Proposed Form delivered by the Administrative Agent pursuant to Section 5.1(X) shall not give rise to the obligation to pay the amendment fee set forth in this Section 2.5(F) so long as no amendment to any Transaction Document is required in connection with such Proposed Form as determined by the Administrative Agent in its sole discretion.
Section 2.6.    Reduction/Increase of the Commitments.
(A)    The Borrower may, on any Business Day, upon written notice given to the Administrative Agent and each of the Funding Agents not later than ten (10) Business Days prior to the date of the proposed action (which notice may be conditioned upon any event), terminate in whole or reduce in part, on a pro rata basis based on its Lender Group Percentage, the Unused Portion of the Commitments with respect to each Lender Group (and on a pro rata basis with respect

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


to each Non-Conduit Lender in such Lender Group); provided, that (i) any partial reduction shall be in the amount of $1,000,000 or an integral multiple thereof and (ii) any Unused Portion of the Commitments so reduced may not be increased again without the written consent of the related Non-Conduit Lenders in such Lender Group.
(B)    The Borrower may, on any Business Day upon written notice given to the Administrative Agent and each of the Funding Agents, request an increase, on a pro rata basis based on its Lender Group Percentage, of the Commitments of the Non-Conduit Lender(s) in each Lender Group; provided, that any increase shall be at least equal to $5,000,000 or an integral multiple thereof but shall in no event cause the Aggregate Commitment to exceed the Maximum Facility Amount, the Class A Aggregate Commitment to exceed the Class A Maximum Facility Amount or the Class B Aggregate Commitment to exceed the Class B Maximum Facility Amount. Each Non-Conduit Lender shall, within five (5) Business Days of receipt of such request, notify the Administrative Agent and the Administrative Agent shall in turn notify the Borrower in writing (with copies to the other members of the applicable Lender Group) whether or not each Non-Conduit Lender has, in its sole discretion, agreed to increase its Commitment. If a Non-Conduit Lender does not send any notification to the Administrative Agent within such five (5) Business Day period, such Non-Conduit Lender shall be deemed to have declined to increase its Commitment. Any increase in Commitments agreed to pursuant to this Section 2.6(B) may be reduced by a Non-Conduit Lender, at any time, upon five Business Days’ written notice to the Borrower from the Administrative Agent (with copies to the other members of the applicable Lender Group) setting forth the amount of such reduction; provided, however, that such Commitment may not be reduced to an amount less than such Non-Conduit Lender’s initial Commitment on the Closing Date (if such reduction is prior to a Takeout Transaction) or to an amount less than such Non-Conduit Lender’s Commitment on or after a Takeout Transaction (if such reduction is on or after a Takeout Transaction), but may be reduced to an amount that is less than the then Aggregate Outstanding Advances.
Section 2.7.    Repayment of the Advances. (A) Notwithstanding any other provision to the contrary, the outstanding principal balance of the Advances and the other Obligations owing under this Agreement, together with all accrued but unpaid interest thereon, shall be due and payable in full, if not due and payable earlier, on the Maturity Date. For the avoidance of doubt, amounts borrowed and repaid hereunder may be reborrowed in accordance with the terms hereof.
(B)    On any Business Day, the Borrower may direct the Paying Agent to, and on each Payment Date, the Borrower shall direct the Paying Agent to, subject to Section 2.7(D), apply all amounts on deposit in the Collection Account (including (x)(1)(a) Collections deposited therein during the related Collection Period and (b) any amounts due during the related Collection Period but deposited into the Collection Account within ten (10) Business Days after the end of such Collection Period that the Facility Administrator (at its option) has determined (with written notice thereof to the Paying Agent (with a copy to the Administrative Agent and the Borrower)) to be treated as if such amounts were on deposit in the Collection Account at the end of such Collection Period, (2) amounts deposited therein from the Liquidity Reserve Account or the Supplemental Reserve Account, in each case in accordance with Section 8.2 or (3) any amounts deposited therein by the Seller or the Parent pursuant to the Sale and Contribution Agreement or the Parent Guaranty,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


respectively, but (y) excluding Collections deposited therein in the current Collection Period except as necessary to make distributions pursuant to clauses (i) through (iii) of this Section or as otherwise determined by the Facility Administrator pursuant to clause (x)(1)(a) above) (the “Distributable Collections”), to the Obligations in the following order of priority based solely on information contained in (I) with respect to any Payment Date, the Facility Administrator Report for such related Collection Period or, if no Facility Administrator Report is available, solely as directed in writing by the Administrative Agent or (II) with respect to any other Business Day, including the date of closing for a Takeout Transaction, on which the Borrower requests an application and distribution of funds in the Collection Account (and/or Takeout Transaction Account, if applicable), an interim Facility Administrator Report or such other report in form and substance reasonably satisfactory to the Administrative Agent (as confirmed by the Administrative Agent via an email sent to the Paying Agent) and the Paying Agent relating to the Distributable Collections and proceeds of a Takeout Transaction, if applicable, that is delivered by the Facility Administrator (which the Facility Administrator hereby agrees to deliver at the request of the Administrative Agent):
(i)    first (Service Providers), ratably, (a) to the Paying Agent (1) the Paying Agent Fee and (2)(x) any accrued and unpaid Paying Agent Fees with respect to prior Payment Dates plus (y) out-of-pocket expenses and indemnities of the Paying Agent incurred and not reimbursed in connection with its obligations and duties under this Agreement; provided that the aggregate payments to the Paying Agent reimbursement for clauses (2)(y) will be limited to $50,000 per calendar year so long as no Event of Default or Amortization Event has occurred pursuant to this Agreement (unless otherwise approved by the Majority Lenders and, if such reimbursement amount is to be increased, the Majority Class B Lenders (the approval of the Majority Class B Lenders not to be unreasonably withheld, conditioned or delayed if otherwise approved by the Majority Lenders); provided that if the Majority Class B Lenders have not affirmatively disapproved such increase in writing within five (5) Business Days of receiving notice of such increase and the Majority Lenders have otherwise approved such increase, such increase shall be deemed approved); (b) to the Facility Administrator, the Facility Administrator Fee, and (c) to the Verification Agent, the Verification Agent Fee;
(ii)    second (Hedge Agreement Payments and Class A Interest Distribution Amount), on a pari passu basis (a) to the Qualifying Hedge Counterparty under each Hedge Agreement, the payment of all amounts which are due and payable by the Borrower to such Qualifying Hedge Counterparty on such date (other than fees, expenses, termination payments, indemnification payments, tax payments or other similar amounts), pursuant to the terms of the applicable Hedge Agreement (net of all amounts which are due and payable by such Qualifying Hedge Counterparty to the Borrower on such date pursuant to the terms of such Hedge Agreement) and (b) to each Class A Funding Agent, for the benefit of and on behalf of the Class A Lenders in its Class A Lender Group, the Class A Interest Distribution Amount then due (allocated among the Class A Lender Groups based on their Class A Lender Group Percentages) until paid in full;
(iii)    third (Class B Interest Distribution Amount (Non-Event of Default)), so long as no Event of Default has occurred and is continuing, to each Class B Funding Agent,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


for the benefit of and on behalf of the Class B Lenders in its Class B Lender Group, the Class B Interest Distribution Amount then due (allocated among the Class B Lender Groups based on their Class B Lender Group Percentages) until paid in full;
(iv)    fourth (Unused Line Fee), first, to each Class A Funding Agent, for the benefit of and on behalf of the related Non-Conduit Lender(s) in its Lender Group, the payment of the Unused Line Fee then due (allocated among the Lender Groups based on their Lender Group Percentages) until paid in full and second, to each Class B Funding Agent, for the benefit of and on behalf of the related Non-Conduit Lender(s) in its Lender Group, the payment of the Unused Line Fee then due (allocated among the Lender Groups based on their Lender Group Percentages) until paid in full;
(v)    fifth (Liquidity Reserve Account), if the amount on deposit in the Liquidity Reserve Account is less than the Liquidity Reserve Account Required Balance and no Amortization Event has occurred and is continuing, to the Liquidity Reserve Account until the amount on deposit in the Liquidity Reserve Account shall equal the Liquidity Reserve Account Required Balance;
(vi)    sixth (Supplemental Reserve Account), to the Supplemental Reserve Account, the Supplemental Reserve Account Deposit, if any;
(vii)    seventh (Class A Borrowing Base Deficiency), to the extent required under Section 2.9 in connection with a Class A Borrowing Base Deficiency, to each Class A Funding Agent, on behalf of the Class A Lenders in its Class A Lender Group, for the prepayment and reduction of the outstanding principal amount of any Class A Advances, an amount equal to the amount necessary to cure such Class A Borrowing Base Deficiency (allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages) plus, to the extent not paid as provided above, accrued and unpaid interest on the Class A Advances prepaid until paid in full;
(viii)    eighth (Class B Interest Distribution Amount (Event of Default)), if an Event of Default has occurred and is continuing, to each Class B Funding Agent, for the benefit of and on behalf of the Class B Lenders in its Class B Lender Group, the Class B Interest Distribution Amount then due (allocated among the Class B Lender Groups based on their Class B Lender Group Percentages) until paid in full;
(ix)    ninth (Class B Borrowing Base Deficiency), to the extent required under Section 2.9 in connection with a Class B Borrowing Base Deficiency, to each Class B Funding Agent, on behalf of the Class B Lenders in its Class B Lender Group, for the prepayment and reduction of the outstanding principal amount of any Class B Advances, an amount equal to the amount necessary to cure such Class B Borrowing Base Deficiency (allocated ratably among the Class B Lender Groups based on their Class B Lender Group Percentages) plus, to the extent not paid as provided above, accrued and unpaid interest on the Class B Advances prepaid until paid in full;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(x)    tenth (Qualifying Hedge Counterparty Breakage and Amortization Period Class A Lender Obligations), on a pari passu basis (a) to the Administrative Agent for the account of the Hedge Counterparty under each Hedge Agreement, all payments which arose due to a default by the Borrower or due to any prepayments of amounts under such Hedge Agreement and all fees, expenses, indemnification payments, tax payments or other amounts (to the extent not previously paid hereunder) which are due and payable by the Borrower to such Hedge Counterparty on such date, pursuant to the terms of the applicable Hedge Agreement (net of all amounts which are due and payable by such Qualifying Hedge Counterparty to the Borrower on such date pursuant to the terms of such Hedge Agreement) and (b) during the Amortization Period, to the Administrative Agent and each Class A Funding Agent on behalf of itself and the Class A Lenders in its related Class A Lender Group, all remaining amounts, for application to the principal balance of the outstanding Class A Advances and the aggregate amount of all Obligations then due from the Borrower to the Administrative Agent, such Class A Funding Agent and each such Class A Lender in the Class A Lender Group (allocated among such Obligations as selected by the Administrative Agent; provided that payment of the principal balance of outstanding Class A Advances shall be allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages) until paid in full;
(xi)    eleventh (Amortization Period Class B Lender Obligations), during the Amortization Period, to the Administrative Agent and each Class B Funding Agent on behalf of itself and the Class B Lenders in its related Class B Lender Group, all remaining amounts, for application to the payment of the principal balance of the outstanding Class B Advances and the aggregate amount of all Obligations then due from the Borrower to the Administrative Agent, such Class B Funding Agent and each such Class B Lender in the Class B Lender Group (allocated among such Obligations as selected by the Administrative Agent; provided that payment of the principal balance of outstanding Class B Advances shall be allocated ratably among the Class B Lender Groups based on their Class B Lender Group Percentages) until paid in full;
(xii)    twelfth (Lender Fees and Expenses), first, to the Administrative Agent and each Class A Funding Agent on behalf of itself and the Class A Lenders in its related Class A Lender Group, the payment of all Breakage Costs, all Liquidation Fees and all other amounts (other than those already provided for above) due and payable by the Borrower to the Administrative Agent, such Class A Funding Agent and such Class A Lenders (solely in their capacity as a Class A Lender) hereunder or under any other Transaction Document until paid in full and second, to each Class B Funding Agent on behalf of itself and the Class B Lenders in its related Class B Lender Group, the payment of all Breakage Costs, all Liquidation Fees and all other amounts (other than those already provided for above) due and payable by the Borrower to such Class B Funding Agent and such Class B Lenders (solely in their capacity as a Class B Lender) hereunder or under any other Transaction Document until paid in full;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(xiii)    thirteenth (All Other Obligations), to the Administrative Agent on behalf of any applicable party, the ratable payment of all other Obligations that are past due and/or payable on such date;
(xiv)    fourteenth (Service Provider Indemnities), ratably, to the Paying Agent, the Verification Agent and/or the Facility Administrator, any indemnification, expenses, fees or other obligations owed to the Paying Agent, the Verification Agent and/or the Facility Administrator, respectively (including out-of-pocket expenses and indemnities of the Paying Agent and the Verification Agent not paid pursuant to clause (i) above and any Facility Administrator Fees, Paying Agent Fees or Verification Agent Fees not paid pursuant to clause (i) above), pursuant to the Transaction Documents;
(xv)    fifteenth (Class A Principal Prepayments; Class B Principal Prepayments), ratably, unless an Event of Default or Amortization Event has occurred and is continuing, then, sequentially, as specified in Section 2.8(A), (a) to each Class A Funding Agent on behalf of its related Class A Lender Group, to the prepayment of Class A Advances in accordance with Sections 2.8(A), 2.11, 2.12(A) and 2.13 (allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages), and (b) to each Class B Funding Agent on behalf of its related Class B Lender Group, to the prepayment of Class B Advances in accordance with Sections 2.8(A), 2.11, 2.12(A) and 2.13 (allocated ratably among the Class B Lender Groups based on their Class B Lender Group Percentages);
(xvi)    sixteenth (Eligible Letter of Credit Bank), to each Eligible Letter of Credit Bank or other party as directed by the Facility Administrator (a) any fees and expenses related to a Letter of Credit and (b) any amounts which have been drawn under a Letter of Credit and any interest due thereon; and
(xvii)    seventeenth (Remainder), all Distributable Collections remaining in the Collection Account after giving effect to the preceding distributions in this Section 2.7(B), to the Borrower’s Account (to cover any other expenses of the Borrower) and (x) prior to the satisfaction of the covenant set forth in Section 5.1(W), otherwise to the Collection Account and (y) after satisfaction of the covenant set forth in Section 5.1(W), otherwise to the TEP Collateral Account.
(C)    After giving effect to the application of Distributable Collections in accordance with Section 2.7(B) on any Business Day, if any, the Paying Agent shall, subject to Sections 2.7(D) and 2.8(B), apply all amounts on deposit in the Takeout Transaction Account on such Business Day representing net proceeds of any Takeout Transaction to the Obligations in the following order of priority:
(i)    first (Interest), (a) first, to each Class A Funding Agent, on behalf of the Class A Lenders in its Class A Lender Group, the excess, if any, of the Class A Interest Distribution Amount accrued with respect to the amount of Class A Advances prepaid on such day (allocated among the Class A Lender Groups based on their Class A Lender Group Percentages) with respect to the related Interest Accrual Period over the amount distributed (or distributable) to the Class A Funding Agent on such day pursuant to Section 2.7(B)(ii)

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(b) and (b) second, to each Class B Funding Agent, for the benefit of and on behalf of the Class B Lenders in its Class B Lender Group, the excess, if any, of the Class B Interest Distribution Amount accrued with respect to the amount of Class B Advances prepaid on such day (allocated among the Class B Lender Groups based on their Class B Lender Group Percentages) with respect to the related Interest Accrual Period over the amount distributed (or distributable) to the Class B Funding Agent on such day pursuant to Section 2.7(B)(iii);
(ii)    second (Liquidation Fees and Other Obligations Owing to Administrative Agents, Lenders and Funding Agents), (a)first, to each Funding Agent on behalf of the Lenders in its related Lender Group, for application to the aggregate amount of all Liquidation Fees accrued with respect to the amount of Advances prepaid on such day (other than those already provided for pursuant to this Section 2.7(C)) then due and payable by the Borrower (allocated ratably among the Class A Lender Groups and the Class B Lender Groups based on the percentage of the Aggregate Outstanding Advances funded by each such Lender Group and within each Lender Group based on their applicable Lender Group Percentages) until paid in full, (b) second, ratably, to the Administrative Agent and each Class A Funding Agent, on behalf of itself and the Class A Lenders in its related Class A Lender Group, the aggregate amount of all Obligations accrued with respect to the amount of Class A Advances prepaid on such day (other than those provided for in other clauses of this Section 2.7(C)) then due and payable by the Borrower to the Administrative Agent, such Class A Funding Agent and such Class A Lenders (solely in its capacity as a Class A Lender) hereunder or under any other Transaction Document until paid in full, and (c) third, to each Class B Funding Agent, on behalf of itself and the Class B Lenders in its related Class B Lender Group, the aggregate amount of all Obligations accrued with respect to the amount of Class B Advances prepaid on such day (other than those provided for in other clauses of this Section 2.7(C)) then due and payable by the Borrower to such Class B Funding Agent or such Class B Lenders (solely in its capacity as a Class B Lender) hereunder or under any other Transaction Document until paid in full;
(iii)    third (Principal), so long as no Event of Default or Amortization Event has occurred and is continuing, pro rata based on amounts then due to the Class A Lenders and the Class B Lenders, and if an Event of Default or Amortization Event has occurred and is continuing, sequentially, (a) to each Class A Funding Agent on behalf of its related Class A Lender Group, to the prepayment of Class A Advances in accordance with Sections 2.8(A), 2.11, 2.12(A) and 2.13 (allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages) and (b) to each Class B Funding Agent on behalf of its related Class B Lender Group, to the prepayment of Class B Advances in accordance with Sections 2.8(A), 2.11, 2.12(A) and 2.13 (allocated ratably among the Class B Lender Groups based on their Class B Lender Group Percentages);
(iv)    fourth (Qualifying Hedge Counterparty and Eligible Hedged SREC Counterparty Payments), ratably to (a) to the Administrative Agent for the account of the Qualifying Hedge Counterparty under each Hedge Agreement, all payments that are due and payable by the Borrower to such Qualifying Hedge Counterparty on such date arising as a result of the prepayment of Advances in connection with such Takeout Transaction

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(including all fees, expenses, indemnification payments, tax payments, termination payments and other amounts), pursuant to the terms of the applicable Hedge Agreement (net of all amounts which are due and payable by such Qualifying Hedge Counterparty to the Borrower on such date pursuant to the terms of such Hedge Agreement) and (b) to the Eligible Hedged SREC Counterparty under each Hedged SREC Agreement, all payments that are due and payable by the Borrower under such Hedged SREC Agreement on such date arising as a result of the prepayment of Advances in connection with such Takeout Transaction (including all fees, expenses, indemnification payments, tax payments, termination payments and other amounts), pursuant to the terms of the applicable Hedged SREC Agreement;
(v)    fifth (Eligible Letter of Credit Bank), to the Eligible Letter of Credit Bank or other party as directed by the Facility Administrator (a) any fees and expenses related to a Letter of Credit and (b) any amounts which have been drawn under a Letter of Credit and any interest due thereon; and
(vi)    sixth (Remainder), to the Collection Account, all proceeds of such Takeout Transaction remaining in the Takeout Transaction Account for application in accordance with Section 2.7(B).
(D)    Notwithstanding anything to the contrary set forth in this Section 2.7 or Section 8.2, the Paying Agent shall not be obligated to make any determination or calculation with respect to the payments or allocations to be made pursuant to either of such Sections, and in making the payments and allocations required under such Sections, the Paying Agent shall be entitled to rely exclusively and conclusively upon the information in the latest Facility Administrator Report (or such other report or direction signed by the Administrative Agent) received by the Paying Agent pursuant to either such Section prior to the applicable payment date. Any payment direction to be acted upon by the Paying Agent pursuant to either such Section on a payment date other than a Payment Date shall be delivered to the Paying Agent at least two (2) Business Days prior to the date on which any payment is to be made.
Section 2.8.    Certain Prepayments. (A) The Borrower (through the Paying Agent pursuant to Section 2.7(B) and as otherwise permitted in this Agreement) may at any time upon written notice to the Administrative Agent, the Funding Agents and the Paying Agent, and subject to the priority of payments set forth in Section 2.7(B), prepay all or any portion of the balance of the principal amount of the Class A Advances or the Class B Advances based on the outstanding principal amounts thereof, which notice shall be given at least three (3) Business Days prior to the proposed date of such prepayment. Each such prepayment (which need not be on a Payment Date) shall be accompanied by (a) the payment of all accrued but unpaid interest on the amounts to be so prepaid and (b) any Liquidation Fee in connection with such prepayment if such prepayment is not made on a Payment Date. Prepayments made in accordance with this Section shall be applied to the outstanding principal amount of Class A Advances and Class B Advances (i) in the absence of an Event of Default or Amortization Event, ratably and (ii) otherwise, sequentially.
(B)    The Borrower shall deposit all proceeds of any Takeout Transaction (net of reasonable fees, taxes, commissions, premiums and expenses incurred by the Borrower in

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


connection with such Takeout Transaction so long as such deposit is greater than or equal to the Minimum Payoff Amount) into the Takeout Transaction Account, and the Administrative Agent shall apply such proceeds to prepay the applicable Class A Advances and Class B Advances made in respect of the Collateral that is subject to such Takeout Transaction and make other related payments in accordance with Sections 2.7(B) and 2.7(C), including any such payments due to the Paying Agent.
Section 2.9.    Mandatory Prepayments of Advances. On any date that the Borrower either (a) obtains knowledge that (i) as of any prior Funding Date, any prior Payment Date or date on which a prepayment was made in accordance with Section 2.8 or (ii) in connection with the delivery of a Borrowing Base Certificate for an upcoming Funding Date, Payment Date or date on which a prepayment is to made in accordance with Section 2.8, or (b) receives notice from the Administrative Agent (with calculations set forth in reasonable detail), that as of any Funding Date, Payment Date or date on which a prepayment is made in accordance with Section 2.8, (i) the aggregate outstanding principal amount of all Class A Advances exceeds the lesser of (x) the amount of the Class A Aggregate Commitment in effect as of such date (without giving effect to or treating as outstanding any Advance that was approved pursuant to Section 2.18) and (y) the Class A Borrowing Base (the occurrence of any such excess being referred to herein as a “Class A Borrowing Base Deficiency”), or (ii) the aggregate outstanding principal amount of all Class B Advances exceeds the lesser of (x) the amount of the Class B Aggregate Commitment in effect as of such date (without giving effect to or treating as outstanding any Advance that was approved pursuant to Section 2.18) and (y) the Class B Borrowing Base (the occurrence of any such excess being referred to herein as a “Class B Borrowing Base Deficiency” and together with the Class A Borrowing Base Deficiency, a “Borrowing Base Deficiency”), the Borrower shall pay to the Class A Funding Agent and/or Class B Funding Agent, as applicable, for the account of its Lender Group the amount of any such excess (to be applied to the reduction of the applicable Advances ratably among all applicable Lender Groups based on their Lender Group Percentages to the extent necessary to cure such Borrowing Base Deficiency), together with accrued but unpaid interest on the amount required to be so prepaid to the date of such prepayment and any Liquidation Fee in connection with such prepayment if such prepayment is not made on a Payment Date.
Section 2.10.     [Reserved].
Section 2.11.    Interest. The makers of the Advances shall be entitled to the applicable Interest Distribution Amount payable on each Payment Date in accordance with Sections 2.7(B) and 2.7(C).
Section 2.12.    Breakage Costs; Liquidation Fees; Increased Costs; Capital Adequacy; Illegality; Additional Indemnifications.
(A)    Breakage Costs and Liquidation Fees. (i) If any Advance is not made on the date specified by the Borrower for any reason other than default by the Lenders, the Borrower hereby agrees to pay Breakage Costs, if any, and (ii) the Borrower agrees to pay all Liquidation Fees associated with a reduction of the principal balance of a Class A Advance or Class B Advance at any time. The Borrower shall not be responsible for any Liquidation Fees or any other loss, cost, or expenses arising at the time of, and arising solely as a result of, any assignment made pursuant

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


to Section 10.8 and the reallocation of any portion of a Class A Advance or Class B Advance of the applicable Lender making such assignment unless, in each case, such assignment is requested by the Borrower.
(B)    Increased Costs. If any Change in Law (a) shall subject any Lender, the Administrative Agent or any Affiliate thereof (each of which, an “Affected Party”) to any Taxes (other than (x) Indemnified Taxes, (y) Taxes described in clauses (ii) through (iv) of the definition of Excluded Taxes and (z) Connection Income Taxes) on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, (b) shall impose, modify or deem applicable any reserve requirement (including any reserve requirement imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Affected Party, or (c) shall impose any other condition affecting the Collateral or the rights of any Lender and the Administrative Agent hereunder, the result of which is to increase the cost to any Affected Party under this Agreement or to reduce the amount of any sum received or receivable by an Affected Party under this Agreement, then on the next Payment Date after written demand by such Affected Party, such Affected Party shall receive such additional amount or amounts as will compensate such Affected Party for such additional or increased cost incurred or such reduction suffered to the extent such additional or increased costs or reduction are incurred or suffered in connection with the Collateral, any obligation to make Advances hereunder, any of the rights of such Lender or the Administrative Agent hereunder, or any payment made hereunder in accordance with Section 2.7(B); provided, that the Borrower shall not be required to compensate such Affected Party for any portion of such additional or increased cost or such reduction that is incurred more than one hundred eighty (180) days prior to any such demand (except that, if the event giving rise to such additional or increased cost or such reduction is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof).
(C)    Capital Adequacy. If any Change in Law has or would have the effect of reducing the rate of return on the capital of any Affected Party as a consequence of its obligations hereunder or arising in connection herewith to a level below that which any such Affected Party could have achieved but for such Change in Law (taking into consideration the policies of such Affected Party with respect to capital adequacy) by an amount deemed by such Affected Party to be material, then from time to time, then on the next Payment Date after written demand by such Affected Party (which demand shall be accompanied by a statement setting forth the basis for such demand), such Affected Party shall receive such additional amount or amounts as will compensate such Affected Party for such reduction in accordance with Section 2.7(B); provided, that the Borrower shall not be required to compensate such Affected Party for any portion of such additional amount or amounts that are incurred more than one hundred eighty (180) days prior to any such demand (except that, if the event giving rise to such additional amount or amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof).
(D)    Compensation. If as a result of any event or circumstance similar to those described in Section 2.12(A), 2.12(B), or 2.12(C), any Affected Party is required to compensate a bank or other financial institution providing liquidity support, credit enhancement or other similar

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


support to such Affected Party in connection with this Agreement or the funding or maintenance of Advances hereunder, then on the next Payment Date after written demand by such Affected Party, such Affected Party shall receive such additional amount or amounts as may be necessary to reimburse such Affected Party for any amounts paid by it; provided, that the Borrower shall not be required to compensate such Affected Party for any portion of such additional amount or amounts that are incurred more than one hundred eighty (180) days prior to any such demand (except that, if the event giving rise to such additional amount or amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof).
(E)    Calculation. In determining any amount provided for in this Section 2.12, the Affected Party may use any reasonable averaging and attribution methods. Any Affected Party making a claim under this Section 2.12 shall submit to the Borrower a certificate as to such additional or increased cost or reduction, which certificate shall be conclusive absent manifest error.
Section 2.13.    Payments and Computations. (A) The Borrower (through the Paying Agent pursuant to Sections 2.7(B) and 2.7(C) and as otherwise permitted in this Agreement) shall make each payment and prepayment hereunder and under the Advances in respect of principal, interest, expenses, indemnities, fees or other Obligations due from the Borrower not later than 4:00 P.M. (New York City time) on the day when due in U.S. Dollars to the related Funding Agent at its address referred to in Section 10.3 or to such account provided by such Funding Agent in immediately available, same-day funds. Payments on Obligations may also be made by application of funds in the Collection Account or the Takeout Transaction Account as provided in Section 2.7(B) or 2.7(C), as applicable, or the TEP Collateral Account. All computations of interest for Advances made under the Base Rate shall be made by the applicable Funding Agent on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed (including the first day but excluding the last day) occurring in the period for which such interest is payable. All other computations of fees and interest provided hereunder shall be made on the basis of a 360-day year and actual days elapsed (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by a Funding Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.
(B)    All payments to be made in respect of fees, if any, due to the Administrative Agent from the Borrower hereunder shall be made on the date when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without setoff, counterclaim or other deduction of any nature (other than with respect to Taxes pursuant to Section 2.17), and an action therefor shall immediately accrue. The Borrower agrees that, to the extent there are insufficient funds in the Administrative Agent’s Account, to make any payment under this clause (B) when due, the Borrower shall immediately pay to the Administrative Agent all amounts due that remain unpaid.




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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 2.14.    Payment on Non-Business Days. Whenever any payment hereunder or under the Advances shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest.
Section 2.15.     [Reserved].
Section 2.16.    Extension of the Scheduled Commitment Termination Date. No earlier than ninety (90) days, and no later than sixty (60) days, prior to the then Scheduled Commitment Termination Date, the Borrower may deliver written notice to the Administrative Agent and each Funding Agent requesting an extension of such Scheduled Commitment Termination Date. The Administrative Agent shall respond to such request no later than thirty (30) days following the date of its receipt of such request, indicating whether it is considering such request and preliminary conditions precedent to any extension of the Scheduled Commitment Termination Date as the Administrative Agent determines to include in such response. The Administrative Agent’s failure to respond to a request delivered by the Borrower pursuant to this Section 2.16 shall not be deemed to constitute any agreement by the Administrative Agent to any such extension. The granting of any extension of the Scheduled Commitment Termination Date requested by the Borrower shall be in the mutual discretion of the Borrower and the Administrative Agent (on behalf of the Lenders with the consent of all Lender Groups).
Section 2.17.    Taxes.
(A)    Defined Terms. For purposes of this Section 2.17 the term “applicable Law” includes FATCA.
(B)    Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower under any Transaction Document shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(C)    Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of a Funding Agent timely reimburse it for the payment of, any Other Taxes.
(D)    Indemnification by the Borrower. The Borrower shall indemnify each Recipient, within ten days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified 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 the Borrower by a Recipient (with a copy to each Funding Agent), or by a Funding Agent on its own behalf or on behalf of a Recipient, shall be conclusive absent manifest error.
(E)    Indemnification by the Lenders. Each Non-Conduit Lender shall severally indemnify each Funding Agent, within ten days after demand therefor, for (i) any Indemnified Taxes attributable to such Non-Conduit Lender (but only to the extent that the Borrower has not already indemnified such Funding Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), and (ii) any Excluded Taxes attributable to such Non-Conduit Lender, in each case, that are payable or paid by a Funding Agent in connection with any Transaction 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 Non-Conduit Lender by its Funding Agent shall be conclusive absent manifest error. Each Non-Conduit Lender hereby authorizes its Funding Agent to set off and apply any and all amounts at any time owing to such Non-Conduit Lender under any Transaction Document or otherwise payable by such Funding Agent to the Non-Conduit Lender from any other source against any amount due to such Funding Agent under this paragraph (E).
(F)    Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section 2.17, the Borrower shall deliver to each Funding Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to such Funding Agent.
(G)    Status of Recipients. (i) Any Recipient that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall deliver to the Borrower, the Paying Agent and the related Funding Agent, at the time or times reasonably requested by the Borrower, the Paying Agent or such Funding Agent, such properly completed and executed documentation reasonably requested by the Borrower, the Paying Agent or such Funding Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Recipient, if reasonably requested by the Borrower, the Paying Agent or the related Funding Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower, the Paying Agent or such Funding Agent as will enable the Borrower, the Paying Agent or such Funding Agent to determine whether or not such Recipient 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 clauses (ii)(a), (ii)(b) and (ii)(d) below) shall not be required if in the Recipient’s reasonable judgment such completion, execution or submission would subject such Recipient to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Recipient.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(ii)    Without limiting the generality of the foregoing,
(a)    any Recipient that is a U.S. Person shall deliver to the Borrower, the Paying Agent and the related Funding Agent on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower, the Paying Agent or such Funding Agent), executed originals of Internal Revenue Service Form W-9 certifying that such Recipient is exempt from U.S. federal backup withholding tax;
(b)    any Recipient that is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Borrower, the Paying Agent and the related Funding Agent (in such number of copies as shall be requested by the Borrower, the Paying Agent or such Funding Agent) on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower, the Paying Agent or such Funding Agent), whichever of the following is applicable:
(1)    in the case of a Recipient 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 Transaction Document, executed originals of Internal Revenue Service Form W-8BEN or W-8BEN-E 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 Transaction Document, Internal Revenue Service Form W-8BEN or W-8BEN-E 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;
(2)    executed copies of Internal Revenue Service Form W-8ECI;
(3)    in the case of a Recipient claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Internal Revenue Code, (x) a certificate to the effect that such Recipient is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of Internal Revenue Service Form W-8BEN or W-8BEN-E; or
(4)    to the extent a Recipient is not the beneficial owner, executed originals of Internal Revenue Service Form W-8IMY, accompanied by Internal Revenue Service Form W-8ECI, Internal Revenue Service Form W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate, Internal Revenue Service Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Recipient is a partnership

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


and one or more direct or indirect partners of such Recipient are claiming the portfolio interest exemption, such Recipient may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner;
(c)    any Recipient which is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Borrower, the Paying Agent and the related Funding Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower, the Paying Agent or such Funding 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, the Paying Agent or such Funding Agent to determine the withholding or deduction required to be made; and
(d)    if a payment made to a Recipient under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Recipient were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Recipient shall deliver to the Borrower, the Paying Agent and the related Funding Agent at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower, the Paying Agent or such Funding Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower, the Paying Agent or such Funding Agent as may be necessary for the Borrower, the Paying Agent and such Funding Agent to comply with their obligations under FATCA and to determine that such Recipient has complied with such Recipient’s obligations under FATCA or to determine the amount, if any, 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.
Each Recipient agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower, the Paying Agent and the related Funding Agent in writing of its legal inability to do so.
(H)    Forms for Paying Agent. The Administrative Agent and each Funding Agent shall deliver to the Paying Agent on or before the first Payment Date, executed originals of Internal Revenue Service Form W-9 or W-8, as applicable, certifying that the Administrative Agent or such Funding Agent is exempt from U.S. federal backup withholding tax. The Administrative Agent and each Funding Agent agrees that if such Internal Revenue Service Form previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or promptly notify the Paying Agent and the Borrower in writing of its legal inability to do so.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(I)    Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.17 (including by the payment of additional amounts pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (I) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (I), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (I) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party 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 indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(J)    Survival. Each party’s obligations under this Section 2.17 shall survive the resignation or replacement of a Funding Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Transaction Document.
Section 2.18.    Request for Borrowing Exceeding Aggregate Commitment.
(A)    Notice. The Borrower may, from time to time during the Availability Period, prior to the issuance of a Notice of Borrowing, send a written notice to the Administrative Agent (who shall promptly forward the same to each Lender Group) setting forth the Borrower’s intent to request a borrowing that will cause the Aggregate Outstanding Advances to exceed the Aggregate Commitment (but not the Maximum Facility Amount) then in effect. Such notice shall be sent no later than five (5) Business Days prior to the date on which the Borrower intends to send the related Notice of Borrowing and shall set forth the amount by which the sum of the Aggregate Outstanding Advances (after giving effect to such borrowing) will exceed the Aggregate Commitment and the related Funding Date.
(B)    Approval/Disapproval. Upon receipt of the notice described in Section 2.18(A) by the Administrative Agent, the Administrative Agent shall, no later than five (5) Business Days after receipt thereof, obtain the written approval or disapproval of each Non-Conduit Lender regarding the requested Advances, which approval shall be granted or not granted in the sole discretion of the Non-Conduit Lenders. If the making of the requested Advances is approved, the Borrower shall, in accordance with procedures set forth in Section 2.4, send the related Notice of Borrowing. Any approved Advances to be made by the Lenders in the related Lender Group shall be funded within such Lender Group pursuant to any allocation as agreed to by all of the members

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


of such Lender Group. If the making of the requested Advances is not approved, then the Borrower shall, prior to sending its Notice of Borrowing, modify the same in a manner sufficient to ensure that the requested borrowing does not cause the Aggregate Outstanding Advances to exceed the Aggregate Commitment then in effect, as applicable.
(C)    Commitment. For the avoidance of doubt, if the making of an Advance by a Lender Group that would cause the Aggregate Outstanding Advances to exceed the Aggregate Commitment, as applicable, is approved, each Non-Conduit Lender’s Commitment shall be increased solely to the extent such Non-Conduit Lender approved the Advance. Each Non-Conduit Lender’s Commitment shall otherwise remain as set forth on Exhibit E unless increased and/or reduced from time to time in accordance with Section 2.6 or amended in connection with assignments made by a Non-Conduit Lender pursuant to Section 10.8. Moreover, the Borrower must go through the procedures described in Sections 2.18(A) and (B) each time a request for an Advance is made which would cause the sum of all outstanding Advances to exceed the Aggregate Commitment, as applicable.
(D)    Nothing set forth in this Section 2.18 requires a Conduit Lender to make any Advance; provided, however, a Conduit Lender may, in its sole discretion, make the Advance requested pursuant to this Section 2.18 for its Lender Group. Any Advance approved pursuant to this Section 2.18 shall be made pursuant to and in accordance with Sections 2.2 and 2.4.
ARTICLE III

CONDITIONS OF LENDING AND CLOSING
Section 3.1.    Conditions Precedent to Closing. The following conditions shall be satisfied on or before the Closing Date:
(A)    Closing Documents. The Administrative Agent shall have received each of the following documents, in form and substance satisfactory to Administrative Agent, duly executed, and each such document shall be in full force and effect, and all consents, waivers and approvals necessary for the consummation of the transactions contemplated thereby shall have been obtained:
(i)    this Agreement;
(ii)    a Loan Note for each Lender Group that has requested the same;
(iii)    the Contribution Agreement;
(iv)    the Sale and Contribution Agreement;
(v)    the SAP Contribution Agreement;
(vi)    the Security Agreement;
(vii)    the Pledge Agreement;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(viii)    the Subsidiary Guaranty;
(ix)    the Facility Administration Agreement;
(x)    the Verification Agent Agreement;
(xi)    the Parent Guaranty;
(xii)    the Tax Equity Investor Consents;
(xiii)    each Fee Letter;
(xiv)    the Verification Agent Fee Letter; and
(xv)    the Paying Agent Fee Letter.
(B)    Secretary’s Certificates. The Administrative Agent shall have received: (i) a certificate from the Assistant Secretary of the Verification Agent, and the Paying Agent, (ii) a certificate from the Secretary of each of the Parent, Intermediate Holdco, the Seller, the Facility Administrator, the Managing Members, SAP, the Borrower and each Affiliate thereof that is party to a Transaction Document (a) attesting to the resolutions of such Person’s members, managers or other governing body authorizing its execution, delivery, and performance of this Agreement and the other Transaction Documents to which it is a party, (b) authorizing specific Responsible Officers for such Person to execute the same, and (c) attesting to the incumbency and signatures of such specific Responsible Officers; (iii) copies of governing documents, as amended, modified, or supplemented prior to the Closing Date of each of the Parent, Intermediate Holdco, the Seller, the Facility Administrator, the Managing Members, SAP, the Borrower and each Affiliate thereof that is party to a Transaction Document, in each case certified by a Responsible Officer of such Person; and (iv) a certificate of status with respect to each of the Parent, Intermediate Holdco, the Seller, the Facility Administrator, the Managing Members, SAP, the Borrower and each Affiliate thereof that is party to a Transaction Document dated within fifteen (15) days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such entity, which certificate shall indicate that such entity is in good standing in such jurisdiction.
(C)    Legal Opinions. The Administrative Agent shall have received customary opinions from (i) counsel (which may be in-house counsel) to Paying Agent and Verification Agent addressing authorization and enforceability of the Transaction Documents and other corporate matters and (ii) counsel to the Parent, Intermediate Holdco, the Seller, the Facility Administrator, the Managing Members, SAP, the Borrower and each Affiliate thereof that is party to a Transaction Document addressing (a) authorization and enforceability of the Transaction Documents and other corporate matters, (b) security interest and UCC matters, (c) substantive consolidation matters and (d) true sale matters.
(D)    No Material Adverse Effect. Since December 31, 2018 there has been no Material Adverse Effect.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(E)    Know Your Customer Information. The Administrative Agent and the Paying Agent shall have received all documentation and other information required by regulatory authorities under applicable “Know Your Customer” and anti-money laundering rules and regulations, including the Patriot Act.
(F)    Payment of Fees. The Borrower shall have paid all fees previously agreed in writing to be paid on or prior to the Closing Date.
(G)    Evidence of Insurance. The Administrative Agent shall have received certification evidencing coverage under the insurance policies referred to in Section 5.1(L).
(H)    TEP II Transaction Documents and Opinions. The Administrative Agent shall have received (i) an amendment to the TEP II Credit Agreement and other TEP II Transaction Documents, in each case, in form and substance satisfactory to the Administrative Agent and (ii) customary opinions from counsel to the Parent and its Affiliates addressing substantive consolidation matters related to amendments referred to in clause (i).
(I)    [Reserved].
(J)    Taxes. The Administrative Agent shall have received a certificate from the Borrower that all sales, use and property taxes, and any other taxes in connection with any period prior to the Closing Date, that are due and owing with respect to each Solar Asset and/or Solar Asset Owner Member Interest have been paid or provided for by the Parent.
(K)    Closing Date Certificate of the Borrower. The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower (in his or her capacity as such) in form satisfactory to Administrative Agent certifying that its representations and warranties set forth in the Transaction Documents to which it is a party are true and correct in all material respects as of the Closing Date (except to the extent such representations and warranties expressly relate to any earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date).
(L)    UCC Search Results. Administrative Agent shall have received the results of a recent search of all effective UCC financing statements (or equivalent filings) made with respect to the Assignors, the Seller, the Borrower, SAP, the Managing Members and the Financing Funds in all appropriate jurisdictions together with copies of all such filings disclosed by such search.
(M)    UCC Financing Statements. The Borrower shall have duly filed proper financing statements (or the equivalent thereof in any applicable foreign jurisdiction, as applicable), on or before the Closing Date, under the UCC with the Delaware Secretary of State and any other applicable filing office in any applicable jurisdiction that the Administrative Agent deems necessary or desirable in order to perfect the Administrative Agent’s interests in the Collateral. The Borrower shall have filed proper financing statement amendments (or the equivalent thereof in any applicable foreign jurisdiction, as applicable), if any, necessary to release all security interests and other rights of any Person in the Collateral previously granted by the Borrower or any of its affiliates;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(N)    Accounts. The Administrative Agent shall have received evidence reasonably satisfactory to it that the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, the Takeout Transaction Account and the Borrower’s Account have been established.
(O)    Tax Equity Facility Due Diligence. The Administrative Agent shall be satisfied with the results of any due diligence of the Financing Funds, the SAP Financing Documents, the Tax Equity Financing Documents and the transactions contemplated by the SAP Financing Documents and Tax Equity Financing Documents, including receipt of fully executed Tax Equity Financing Documents and any related Tax Loss Insurance Policy, in its sole discretion.
Section 3.2.    Conditions Precedent to All Advances. (A) Except as otherwise expressly provided below, the obligation of each Non-Conduit Lender to make or participate in each Advance (including the initial Advances made on the Closing Date) shall be subject, at the time thereof, to the satisfaction of the following conditions:
(i)    Funding Documents. The Administrative Agent shall have received, no later than two (2) Business Days prior to the Funding Date, a completed Notice of Borrowing and a Borrowing Base Certificate, each in form and substance satisfactory to the Administrative Agent.
(ii)    Solar Assets. All conditions to the acquisition of Solar Assets by the respective Financing Fund under the applicable Tax Equity Financing Documents have been satisfied and all conditions to the acquisition of Solar Assets by the Seller, the Borrower and SAP under the Contribution Agreement, the Sale and Contribution Agreement and the SAP Contribution Agreement, as applicable, have been satisfied.
(iii)    Managing Members. All conditions to the acquisition of Managing Members by the Seller and the Borrower under the Contribution Agreement, the Sale and Contribution Agreement and Section 3.3 shall have been satisfied.
(iv)    Representations and Warranties. All of the representations and warranties of the Borrower, the Seller, Intermediate Holdco, the Parent and the initial Facility Administrator contained in this Agreement or any other Transaction Document that relate to the eligibility of the Solar Assets shall be true and correct as of the Funding Date and all other representations and warranties of the Borrower, the Seller, Intermediate Holdco, the Parent, the Managing Members, SAP and the initial Facility Administrator contained in this Agreement or any other Transaction Document shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality, in which case such representations and warranties shall be true and correct in all respects) as of the Funding Date (or such earlier date or period specifically stated in such representation or warranty).
(v)    No Defaults; Solvency. The Administrative Agent shall have received a certification that no Amortization Event, Event of Default, Potential Amortization Event or Potential Default has occurred and is continuing or would result from any borrowing of any

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Advance or from the application of the proceeds therefrom and after giving effect to such Advance or from the application of the proceeds therefrom, the Borrower will be Solvent.
(vi)    Verification Agent Certificate. The Administrative Agent shall have received the A-1 Verification Agent Certification (or, in respect of the initial Advance, the Closing Date Verification Agent Certification) in respect of the Solar Assets from the Verification Agent pursuant to the Verification Agent Agreement.
(vii)    Hedge Requirements. The Borrower shall be in compliance with all applicable Hedge Requirements.
(viii)    Liquidity Reserve. The amount on deposit in the Liquidity Reserve Account shall not be less than the Liquidity Reserve Account Required Balance, taking into account the application of the proceeds of the Advances on the Funding Date.
(ix)    Aggregate Commitment/No Borrowing Base Deficiency. After giving effect to such Advance, the Aggregate Outstanding Advances shall not exceed the Aggregate Commitment in effect as of such Funding Date unless the Borrower shall have, pursuant to the procedures set forth in Section 2.18, received the written approval of the Non-Conduit Lenders with respect to such Advance, such approval to be granted by each Non-Conduit Lender in its sole discretion. After giving effect to such Advance, there should not exist a Class A Borrowing Base Deficiency or a Class B Borrowing Base Deficiency.
(x)    Availability Period. The Commitment Termination Date shall not have occurred, nor shall it occur as a result of making such Advance, nor has the Availability Period ended.
(xi)    Updated Schedules. The Borrower shall have provided the Administrative Agent an updated Schedule IV, an updated Schedule V, an updated Schedule VI and an updated Schedule VII to reflect the Scheduled Hedged SREC Payments, Scheduled Host Customer Payments, Scheduled PBI Payments and Scheduled Managing Member Distributions as of such Funding Date.
(xii)    Other Documents. The Borrower shall have provided the Administrative Agent with all documents reasonably requested by the Administrative Agent related to the Solar Assets being financed by the Borrower (indirectly through its ownership of the Solar Asset Owner Member Interests) on such Funding Date.
(B)    Each Notice of Borrowing submitted by the Borrower after the Closing Date shall be deemed to be a representation and warranty that the conditions specified in this Section 3.2 have been satisfied on and as of the date of the applicable Notice of Borrowing.



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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 3.3.    Conditions Precedent to Acquisition of Additional Managing Members. As a condition to the acquisition of a Managing Member after the Closing Date, the Borrower shall have provided the Administrative Agent with all documents reasonably requested by the Administrative Agent related to the such Managing Member and the related Financing Fund.
ARTICLE IV

REPRESENTATIONS AND WARRANTIES
Section 4.1.    Representations and Warranties of the Borrower. The Borrower represents and warrants to the Administrative Agent and each Lender as of the Closing Date, as of each Funding Date, and with respect to paragraphs (A), (B), (F), (G), (I), (K), and (L) through (S) as of each Payment Date, as follows:
(A)    Organization; Corporate Powers. Each Relevant Party (i) is a duly organized and validly existing limited liability company, in good standing under the laws of the State of Delaware, (ii) has the limited liability company power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage, and (iii) is duly qualified and is authorized to do business in all jurisdictions where it is required to be so qualified or authorized.
(B)    Authority and Enforceability. Each Relevant Party has the limited liability company or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Transaction Documents to which it is party and has taken all necessary company or other organizational action to authorize the execution, delivery and performance of the Transaction Documents to which it is party. Each Relevant Party has duly executed and delivered each Transaction Document to which it is party and each Transaction Document to which it is party constitutes the legal, valid and binding agreement and obligation of the respective Relevant Party enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).
(C)    Government Approvals. No order, consent, authorization, approval, license, or validation of, or filing recording, registration with, or exemption by, any Governmental Authority is required to authorize or is required as a condition to: (i) the execution, delivery and performance by a Relevant Party of any Transaction Document to which it is a party or any of its obligations thereunder or (ii) the legality, validity, binding effect or enforceability of any Transaction Document to which such Relevant Party is a party.
(D)    Litigation. There are no material actions, suits or proceedings, pending or threatened in writing with respect to any Relevant Party.
(E)    Applicable Law, Contractual Obligations and Organizational Documents. Neither the execution, delivery and performance by any Relevant Party of the Transaction Documents to which it is party nor compliance with the terms and provisions thereof (i) will

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


contravene any provision of any law, statute, rule, regulation, order, writ, injunction or decree of any Governmental Authority applicable to such Relevant Party or its properties and assets, (ii) will conflict with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under or result in the creation or imposition of (or the obligation to create or impose) any Lien (other than the Liens created pursuant to the Security Agreement, the Pledge Agreement or Permitted Liens) upon any of the property or assets of the Borrower pursuant to the terms of any contract, or (iii) will breach any provision of the certificate of formation or the operating agreement of such Relevant Party and will, for each of subsection (i), (ii) and (iii), result in a Material Adverse Effect.
(F)    Use of Proceeds. Proceeds of the Class A Advances and the Class B Advances have been used only as permitted under Section 2.3. No part of the proceeds of the Class A Advances or the Class B Advances will be used directly or indirectly to purchase or carry Margin Stock, or to extend credit to others for the purpose of purchasing or carrying any Margin Stock, in violation of any of the provisions of Regulations T, U or X of the Board of Governors of the Federal Reserve System. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. At no time would more than 25% of the value of the assets of the Borrower that are subject to any “arrangement” (as such term is used in Section 221.2(g) of such Regulation U) hereunder be represented by Margin Stock.
(G)    Accounts. The names and addresses of the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, the Takeout Transaction Account, the Borrower’s Account and the TEP Collateral Account are specified on Schedule II attached hereto, as updated pursuant to Section 5.1(Q). Other than accounts on Schedule II attached hereto, the Borrower does not have any other accounts. The Borrower has directed, or has caused to be directed (i) each Financing Fund, each Managing Member and SAP to make all payments in respect of the Managing Member Distributions and the SAP Distributions, as applicable, to the Collection Account and (ii) related Hedged SREC Payments related to the Solar Assets and received by the Borrower to the Collection Account and, to the extent any Hedged SREC Payments are deposited by the relevant obligor in another account, has caused such payments to be deposited into the Collection Account no later than two (2) Business Days after receipt.
(H)    ERISA. None of the assets of the Borrower are or, prior to the repayment of all Obligations, will be subject to Title I of ERISA, Section 4975 of the Internal Revenue Code, or, by reason of any investment in the Borrower by any governmental plan, as the case may be, any other federal, state, or local provision similar to Section 406 of ERISA or Section 4975 of the Internal Revenue Code. Neither the Borrower nor any of its ERISA Affiliates has maintained, participated or had any liability in respect to any Plan during the past six (6) years which could reasonably be expected to subject the Borrower or any of its ERISA Affiliates to any tax, penalty or other liabilities. No ERISA Event has occurred or is reasonably likely to occur. With respect to any Plan which is a Multi-Employer Plan, no such Multi-Employer Plan is, or to the knowledge of the Relevant Parties reasonably like to occur, in reorganization or insolvent as defined in Title IV of ERISA Borrower and the Lenders, take any.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(I)    Taxes. Each Relevant Party has timely filed (or had filed on its behalf) all federal state, provincial, territorial, foreign and other Tax returns and reports required to be filed under applicable law, and has timely paid (or had paid on its behalf) all federal state, foreign and other Taxes levied or imposed upon it or its properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate actions diligently conducted and for which adequate reserves have been provided in accordance with GAAP. No Lien or similar adverse claim has been filed, and no claim is being asserted, with respect to any such Tax due from any Relevant Party or with respect to any Solar Assets. Any Taxes due and payable by any Relevant Party or its predecessors in interest in connection with the execution and delivery of this Agreement and the other Transaction Documents and the transfers and transactions contemplated hereby or thereby have been paid or shall have been paid if and when due. Except to the extent provided in the Tax Equity Financing Documents, no Relevant Party is liable for Taxes payable by any other Person.
(J)    Material Agreements. The Borrower has not defaulted under the Transaction Documents, any similar agreements entered into in connection with a Takeout Transaction or any other material agreement to which the Borrower is a party and to the Borrower’s knowledge, there is no breach or default by a counterparty to such Transaction Documents, similar agreements entered into in connection with the Takeout Transaction or any other material agreement to which the Borrower is a party.
(K)    Accuracy of Information. The written information (other than financial projections, forward looking statements, and information of a general economic or industry specific nature) that has been made available to the Paying Agent, the Verification Agent, the Administrative Agent or any Lender by or on behalf of the Borrower or any Affiliate thereof in connection with the transactions hereunder including any written statement or certificate of factual information, when taken as a whole, does not, when furnished, 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 in the light of the circumstances under which such statements are made (giving effect to all supplements and updates thereto).
(L)    No Material Adverse Effect. Since the date of delivery of the latest audited financial statements for a fiscal year of SEI pursuant to Section 5.1(A)(i), there has been no Material Adverse Effect.
(M)    Investment Company Act. No Relevant Party is an “investment company” or an “affiliated person” of or “promoter” or “principal underwriter” for an “investment company” as such terms are defined in the 1940 Act, nor is any Relevant Party otherwise subject to regulation thereunder and no Relevant Party relies solely on the exemption from the definition of “investment company” in Section 3(c)(1) and/or 3(c)(7) of the 1940 Act (although such exemptions may be available).
(N)    Covered Fund. No Relevant Party is a “covered fund” under Section 13 of the Bank Holding Company Act of 1956, as amended

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(O)    Properties; Security Interest. The Borrower has good title to all of its properties and assets necessary in the ordinary conduct of its business, free and clear of Liens other than Permitted Liens and Permitted Equity Liens. Once executed and delivered, the Security Agreement and the Pledge Agreement create, as security for the Obligations, a valid and enforceable and (coupled with this Agreement and the taking of all actions required thereunder and under the Security Agreement and the Pledge Agreement for perfection) perfected security interest in and Lien on all of the Collateral, in favor of the Administrative Agent, for the benefit of the Secured Parties, superior to and prior to the rights of all third persons and subject to no other Liens, except for Permitted Liens.
(P)    Subsidiaries. The Borrower does not have, and shall not have, any Subsidiaries (other than the Managing Members and SAP), and does not and shall not otherwise own or hold, directly or indirectly, any Capital Stock of any other Person (other than in the case of Capital Stock of the Managing Members and SAP).
(Q)    Valid Transfer. The Contribution Agreement creates a valid sale, transfer or assignment from the applicable Assignor to the Seller of all right, title and interest of such Assignor in and to the Conveyed Property in each case conveyed to Seller thereunder. The Sale and Contribution Agreement creates a valid sale, transfer and/or assignment from the Seller to the Borrower of all right, title and interest of the Seller in and to the Conveyed Property in each case conveyed to the Borrower thereunder. The SAP Contribution Agreement creates a valid transfer and/or assignment from the Borrower to SAP of all right title and interest of the Borrower in and to the Conveyed Property in each case conveyed to SAP thereunder.
(R)    Purchases of Solar Assets. The Borrower has given reasonably equivalent value to the Seller (which may include additional Capital Stock in the Borrower) in consideration for the transfer to the Borrower by the Seller of the Conveyed Property conveyed to the Borrower under the Sale and Contribution Agreement, and no such transfer has been made for or on account of an antecedent debt owed by the Seller to the Borrower.
(S)    OFAC and Patriot Act. Neither any Relevant Party nor, to the knowledge of any Relevant Party, any of its officers, directors or employees appears on the Specially Designated Nationals and Blocked Persons List published by the Office of Foreign Assets Control (“OFAC”) or is otherwise a person with which any U.S. person is prohibited from dealing under the laws of the United States, unless authorized by OFAC. No Relevant Party conducts business or completes transactions with the governments of, or persons within, any country under economic sanctions administered and enforced by OFAC. No Relevant Party will directly or indirectly use the proceeds from this Agreement, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person to fund any activities of or business with any person that, at the time of such funding, is the subject of economic sanctions administered or enforced by OFAC, or is in any country or territory that, at the time of such funding or facilitation, is the subject of economic sanctions administered or enforced by OFAC. No Relevant Party is in violation of Executive Order No. 13224 or the Patriot Act.
(T)    Foreign Corrupt Practices Act. Neither the Relevant Parties nor, to the knowledge of the Relevant Parties, any of its directors, officers, agents or employees, has used any

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


of the proceeds of any Advance (i) for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) to make any direct or indirect unlawful payment to any government official or employee from corporate funds, (iii) to violate any provision of the U.S. Foreign Corrupt Practices Act of 1977 or similar law of a jurisdiction in which a Relevant Party conducts its business and to which they are lawfully subject, or (iv) to make any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
(U)    Eligibility. Each Solar Asset listed on the Schedule of Solar Assets most recently delivered to the Administrative Agent was an Eligible Solar Asset as of such date of delivery of such Schedule of Solar Assets.
(V)    Beneficial Ownership Certification. The information included in any Beneficial Ownership Certification delivered by the Borrower is true and correct in all respects.
ARTICLE V

COVENANTS
Section 5.1.    Affirmative Covenants. The Borrower covenants and agrees that, until all Obligations (other than contingent obligations not then due) hereunder have been paid in full and the Commitments have been terminated:
(A)    Reporting Requirements. The Borrower will furnish to the Administrative Agent for delivery to each Lender and, in the case of subclause (v)(a) below and the Paying Agent:
(i)    within (a) the earlier of (x) one hundred eighty (180) days after the close of each fiscal year of SEI (beginning with the fiscal year ending December 31, 2019) and (y) such earlier period as required by Applicable Law, the unqualified (provided, however explanatory language added to the auditor’s standard report shall not constitute a qualification) audited financial statements for such fiscal year that include the consolidated balance sheet of SEI and its consolidated subsidiaries as of the end of such fiscal year, the related consolidated statements of income, of stockholders’ equity and of cash flows for such fiscal year, in each case, setting forth comparative figures for the preceding fiscal year (it being acknowledged that such requirement with respect to SEI may be satisfied by the filing of the appropriate report on Form 10-K with the Securities and Exchange Commission), and, beginning with the fiscal year ending December 31, 2019, the assets and liabilities of the Parent and the Borrower as of the end of such fiscal year presented in a note or schedule to such financial statements of SEI, and in each case prepared in accordance with GAAP, and audited by a Nationally Recognized Accounting Firm selected by SEI and (b) the earlier of (x) sixty (60) days after the end of each of the first three quarters of its fiscal year and (y) such earlier period as required by Applicable Law, the unaudited consolidated balance sheets and income statements for such fiscal quarter on a year-to-date basis for SEI and its consolidated subsidiaries (it being acknowledged that such requirement with respect to SEI may be satisfied by the filing of the appropriate report on Form 10-Q with the Securities and Exchange Commission);

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(ii)    if, at any time, Sunnova Management is the Facility Administrator, but is not a subsidiary of SEI, within (a) the earlier of (x) 180 days after the end of each of its fiscal years (beginning with the fiscal year ending December 31, 2019) and (y) such earlier period as required by Applicable Law, a copy of the unqualified (provided, however explanatory language added to the auditor’s standard report shall not constitute a qualification) audited consolidated financial statements for such year for Sunnova Management, containing financial statements for such year and prepared by a Nationally Recognized Accounting Firm selected by Sunnova Management and (b) the earlier of (x) sixty (60) days after the end of each of its fiscal quarters and (y) such earlier period as required by Applicable Law, the unaudited consolidated balance sheets and income statements for such fiscal quarter on a year-to-date basis for Sunnova Management;
(iii)    at any time that Sunnova Management is the Facility Administrator, within one hundred eighty (180) days after the end of each of its fiscal years (beginning with the fiscal year ending December 31, 2019), a report to the Administrative Agent prepared by a Qualified Service Provider containing such firm’s conclusions with respect to an examination of certain information relating to Sunnova Management’s compliance with its obligations under the Transaction Documents (including, without limitation, such firm’s conclusions with respect to an examination of the calculations of amounts set forth in certain of Sunnova Management’s reports delivered hereunder and pursuant to the Facility Administration Agreement during the prior calendar year and Sunnova Management’s source records for such amounts), in form and substance satisfactory to the Administrative Agent;
(iv)    as soon as possible, and in any event within five (5) Business Days, after the Borrower or any of their ERISA Affiliates knows or has reason to know that an ERISA Event has occurred, deliver to the Lenders a certificate of a responsible officer of the Borrower setting forth the details of such ERISA Event, the action that the Borrower or the ERISA Affiliate proposes to take with respect thereto, and, when known, any action taken or threatened by the Internal Revenue Service, Department of Labor or the Pension Benefit Guaranty Corporation;
(v)     (a) promptly, and in any event within five (5) Business Days, after a Responsible Officer of any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator (if it is an Affiliate of the Borrower) or the Parent obtains knowledge thereof, notice of the occurrence of any event that constitutes an Event of Default, a Potential Default, an Amortization Event or a Potential Amortization Event, which notice shall specify the nature thereof, the period of existence thereof and what action the Borrower propose to take with respect thereto and (b) promptly, and in any event within five (5) Business Days after a Responsible Officer of any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator (if it is an Affiliate of the Borrower) or the Parent obtains knowledge thereof, notice of any other development concerning any litigation, governmental or regulatory proceeding (including environmental law) or labor matter (including ERISA Event) pending or threatened in writing against the (1) Borrower or (2) Parent or SEI that, in the case of this clause (2), individually or in the aggregate, if adversely determined, would reasonably be

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


likely to have a material adverse effect on (1) the ability of the Parent to perform its obligations under the Parent Guaranty, or (2) the business, operations, financial condition, or assets of the SEI or Parent;
(vi)    promptly, and in any event within five (5) Business Days after a Responsible Officer of any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator (if it is an Affiliate of the Borrower) or the Parent obtains knowledge thereof, notice of the occurrence of any event that constitutes a default, an event of default or any event that would permit the acceleration of any obligation under a Sunnova Credit Facility; and
(vii)    promptly, and in any event within five (5) Business Days, after receipt thereof by any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator, the Managing Members, the Financing Funds, the Manager (if it is an Affiliate of the Borrower) or the Parent, copies of all material notices, requests, and other documents (excluding regular periodic reports) delivered or received by the Borrower, the Seller, Intermediate Holdco, the Facility Administrator, the Managing Members, the Financing Funds, the Manager (if it is an Affiliate of the Borrower) or the Parent under or in connection with the Sale and Contribution Agreement, the SAP Contribution Agreement, the Tax Equity Financing Documents or the SAP Financing Documents;
(viii)    promptly, and in any event within five (5) Business Days, after receipt thereof by any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator (if it is an Affiliate of the Borrower) or the Parent, copies of all notices and other documents delivered or received by the Borrower with respect to any material tax Liens on Solar Assets (either individually or in the aggregate);
(ix)    on each Funding Date and on each other day on which SAP or a Financing Fund either acquires or disposes of Solar Assets that is included in the Borrowing Base, an updated Schedule IV, an updated Schedule V, an updated Schedule VI and an updated Schedule VII, in each case, to reflect such acquisition or disposition of Solar Assets on such date;
(x)    on each Funding Date on which the Borrower acquires a Managing Member from the Seller, an updated Schedule VIII to reflect such acquisition of such Managing Member on such date; and
(xi)    subject to any confidentiality requirements of the Securities and Exchange Commission, promptly after receipt thereof by SEI or any Subsidiary, copies of each notice or other correspondence received from the Securities and Exchange Commission concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of SEI or any Subsidiary which could reasonably be expected to result in Material Adverse Effect.
(B)    Solar Asset Reporting. The Borrower shall

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(i)    enforce the provisions of each Management Agreement and Servicing Agreement which require the Manager to deliver any reports to a Financing Fund or SAP; and
(ii)    enforce the provisions of the Facility Administration Agreement which require the Facility Administrator to deliver any reports (including the Facility Administrator Report and any Borrowing Base Certificate setting forth detailed calculations of the Borrowing Base) to the Administrative Agent, each Funding Agent and the Paying Agent; and
(iii)    within 20 Business Days of the Closing Date, cause to be delivered to the Administrative Agent an A-1 Verification Agent Certification with respect to the Solar Assets relating to the initial Advance; and
(iv)    on the Scheduled Commitment Termination Date, cause to be delivered to the Administrative Agent an A-2 Verification Agent Certification with respect to all Solar Assets included in the Borrowing Base.
(C)    UCC Matters; Protection and Perfection of Security Interests. The Borrower agrees to notify the Administrative Agent in writing of any change (i) in its legal name, (ii) in its identity or type of organization or corporate structure, or (iii) in the jurisdiction of its organization, in each case, within ten (10) days of such change. The Borrower agrees that from time to time, at its sole cost and expense, it will promptly execute and deliver all further instruments and documents, and take all further action necessary or reasonably required by the Administrative Agent (a) to complete all assignments from Assignors to the Seller under the Contribution Agreement, from the Seller to the Borrower under the Sale and Contribution Agreement and from the Borrower to SAP under the SAP Contribution Agreement, (b) to perfect, protect or more fully evidence the Administrative Agent’s security interest in the Collateral, or (c) to enable the Administrative Agent to exercise or enforce any of its rights hereunder, under the Security Agreement or under any other Transaction Document. Without limiting the Borrower’s obligation to do so, the Borrower hereby irrevocably authorizes the filing of such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or reasonably required by the Administrative Agent. The Borrower hereby authorizes the Administrative Agent to file one or more financing or continuation statements, and amendments thereto and assignments thereof, naming the Borrower as debtor, relative to all or any of the Collateral now existing or hereafter arising without the signature of the Borrower where permitted by law. A carbon, photographic or other reproduction of the Security Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement.
(D)    Access to Certain Documentation and Information Regarding the Solar Assets. The Borrower shall permit (and, as applicable, shall cause the Facility Administrator, the Managing Members, SAP and the Verification Agent to permit) the Administrative Agent (and, as applicable, the Verification Agent) or its duly authorized representatives or independent contractors, upon reasonable advance notice to the Borrower (and, as applicable, the Facility Administrator, the Managing Members, SAP and the Verification Agent), (i) access to documentation that the Borrower, the Facility Administrator, the Managing Members, SAP or the Verification Agent, as applicable,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


may possess regarding the Solar Assets, (ii) to visit the Borrower, the Facility Administrator, the Managing Members, SAP or the Verification Agent, as applicable, and to discuss their respective affairs, finances and accounts (as they relate to their respective obligations under this Agreement and the other Transaction Documents) with the Borrower, the Facility Administrator, the Managing Members, SAP or the Verification Agent, as applicable, their respective officers, and independent accountants (subject to such accountants’ customary policies and procedures), and (iii) to examine the books of account and records of the Borrower, the Verification Agent, the Facility Administrator, the Managing Members, or SAP, as applicable as they relate to the Solar Assets, to make copies thereof or extracts therefrom, in each case, at such reasonable times and during regular business hours of the Borrower, the Verification Agent, the Facility Administrator, the Managing Members, or SAP as applicable; provided that, upon the existence of an Event of Default, the Class B Lenders shall have the same rights of access, inspection and examination as the Administrative Agent under this Section 5.1(D). The frequency of the granting of such access, such visits and such examinations, and the party to bear the expense thereof, shall be governed by the provisions of Section 7.13 with respect to the reviews of the Borrower’ business operations described in such Section 7.13. The Administrative Agent (and, as applicable, the Verification Agent and the Class B Lenders) shall and shall cause their representatives or independent contractors to use commercially reasonable efforts to avoid interruption of the normal business operations of the Borrower, the Verification Agent, the Facility Administrator, the Managing Members or SAP, as applicable. Notwithstanding anything to the contrary in this Section 5.1(D), (i) none of the Borrower, the Verification Agent, the Facility Administrator, the Managing Members or SAP will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (x) constitutes non-financial trade secrets or non-financial proprietary information, (y) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by law or any binding confidentiality agreement, or (z) is subject to attorney-client or similar privilege or constitutes attorney work product and (ii) the Borrower shall have the opportunity to participate in any discussions with the Borrower’s independent accountants.
(E)    Existence and Rights; Compliance with Laws. The Borrower shall preserve and keep in full force and effect each Relevant Party’s limited liability company existence, and any material rights, permits, patents, franchises, licenses and qualifications. The Borrower shall comply, and cause each other Relevant Party to, comply with all applicable laws and maintain in place all permits, licenses, approvals and qualifications required for each of them to conduct its business activities to the extent that the lack of compliance thereof would result in a Material Adverse Effect.
(F)    Books and Records. The Borrower shall maintain, and cause (if any are Affiliates of the Borrower) the Facility Administrator to maintain, proper and complete financial and accounting books and records. The Borrower shall cause the Financing Funds and SAP to maintain with respect to Solar Assets accounts and records as to each Solar Asset that are proper, complete, accurate and sufficiently detailed so as to permit (i) the reader thereof to know as of the most recently ended calendar month the status of each Solar Asset including payments made and payments owing (and whether or not such payments are past due), and (ii) reconciliation of payments on each Solar Asset and the amounts from time to time deposited in respect thereof in the Collection Account, if applicable.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(G)    Taxes. The Borrower shall pay, or cause to be paid, when due all Taxes imposed upon any Relevant Party or any of its properties or which they are required to withhold and pay over, and provide evidence of such payment to the Administrative Agent if requested; provided, that no Relevant Party shall be required to pay any such Tax that is being contested in good faith by proper actions diligently conducted if (i) they have maintained adequate reserves with respect thereto in accordance with GAAP and (ii) in the case of a Tax that has or may become a Lien against any of the Collateral, such proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax.
(H)    Maintenance of Properties. The Borrower shall ensure that each Relevant Party’s material properties and equipment used or useful in each of their business in whomsoever’s possession they may be, are kept in reasonably good repair, working order and condition, normal wear and tear excepted, and that from time to time there are made in such properties and equipment all needful and proper repairs, renewals, replacements, extensions, additions, betterments and improvements thereto, in each case, to the extent and in the manner customary for companies in similar businesses.
(I)    ERISA. The Borrower shall deliver to the Administrative Agent such certifications or other evidence from time to time prior to the repayment of all Obligations and the termination of all Commitments, as requested by the Administrative Agent in its sole discretion, that (i) no Relevant Party is an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA or a plan within the meaning of Section 4975 of the Internal Revenue Code, or a “governmental plan” within the meaning of Section 3(32) of ERISA, (ii) no Relevant Party is subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans, and (iii) assets of the Borrower do not constitute “plan assets” within the meaning of 29 C.F.R. Section 2510.3-101, as modified in application by Section 3(42) of ERISA of any “benefit plan investor” as defined in Section 3(42) of ERISA.
(J)    Use of Proceeds. The Borrower will only use the proceeds of the Class A Advances and the Class B Advances as permitted under Section 2.3.
(K)    Change of State of Organization; Collections; Names, Etc. (i) In respect of each Assignor, the Seller, the Facility Administrator, the Managing Members, the Financing Funds and SAP, the Borrower shall notify the Administrative Agent, the Paying Agent and the Verification Agent in writing of any change (a) in such entity’s legal name, (b) in such entity’s identity or type of organization or corporate structure, or (c) in the jurisdiction of such entity’s organization, in each case, within ten (10) days of such change; and (ii) in the event that the Borrower or any Affiliated Entity thereof receives any Collections directly, the Borrower shall hold, or cause such Affiliated Entity to hold, all such Collections in trust for the benefit of the Secured Parties and deposit, or cause such Affiliated Entity to deposit, such amounts into the Collection Account, as soon as practicable, but in no event later than two (2) Business Days after its receipt thereof.
(L)    Insurance. The Borrower shall maintain or cause to be maintained by the Facility Administrator pursuant to the Facility Administration Agreement and by the Manager pursuant to the Managements Agreements, at the Facility Administrator’s and the Manager’s own expenses, insurance coverage (i) by such insurers and in such forms and amounts and against such

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


risks as are generally consistent with the insurance coverage maintained by the Borrower, Facility Administrator, the Manager, the Managing Members, the Financing Funds and SAP as of the Closing Date or (ii) as is customary, reasonable and prudent in light of the size and nature of the Borrower’s, the Facility Administrator’s, the Manager’s, the Manager Member’s, the Financing Funds’ and SAP’s respective businesses as of any date after the Closing Date. The Borrower shall be deemed to have complied with this provision if one of its Affiliates has such policy coverage and, by the terms of any such policies, the coverage afforded thereunder extends to the Borrower. Upon the request of the Administrative Agent at any time subsequent to the Closing Date, the Borrower shall cause to be delivered to the Administrative Agent, a certification evidencing the Borrower’s, the Facility Administrator’s, the Manager’s, the Manager Member’s, the Financing Funds’ and SAP’s coverage under any such policies.
(M)    Maintenance of Independent Director. The Borrower shall maintain at least one individual to serve as an independent director (an “Independent Director”) of the Borrower, (i) which is not, nor at any time during the past six (6) years has been, (a) a direct or indirect beneficial owner, a partner (whether direct, indirect or beneficial), customer or supplier of the Borrower or any of its Affiliates, (b) a manager, officer, employee, member, stockholder, director, creditor, Affiliate or associate of the Borrower or any of its Affiliates (other than as an independent officer, director, member or manager acting in a capacity similar to that set forth herein), (c) a person related to, or which is an Affiliate of, any person referred to in clauses (a) or (b), or (d) a trustee, conservator or receiver for any Affiliate of the Borrower or any of its Affiliates, (ii) which shall have had prior experience as an independent director for a corporation or limited liability company whose charter documents required the unanimous consent of all independent directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy, and (iii) which shall have at least three (3) years of employment experience with one or more entities with a national reputation and presence that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities, and is currently employed by such an entity.
(N)    The Sale and Contribution Agreement. The Borrower shall make such reasonable requests for information and reports or for action under the Sale and Contribution Agreement to the Seller as the Administrative Agent may reasonably request to the extent that the Borrower is entitled to do the same thereunder.
(O)    Management Agreement/Servicing Agreement. The Borrower shall cause the Managing Members to direct the Financing Funds and SAP to keep in full force and effect each Management Agreement and Servicing Agreement or such equivalent replacement agreements such that O&M Services and Servicing Services are provided in respect of the Solar Assets in a manner consistent with the Tax Equity Financing Documents and the SAP Financing Documents and with the same degree of care that the Parent and its Affiliates use to provide similar services to Solar Assets not owned by a Financing Fund or SAP.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(P)    Maintenance of Separate Existence. The Borrower shall take all reasonable steps to continue its identity as a separate legal entity and to make it apparent to third Persons that it is an entity with assets and liabilities distinct from those of the Affiliated Entities or any other Person, and that it is not a division of any of the Affiliated Entities or any other Person. In that regard the Borrower shall:
(i)    maintain its limited liability company existence, make independent decisions with respect to its daily operations and business affairs, not amend, modify, terminate or fail to comply with the provisions of its organizational documents, not merge into or consolidate with any Person, or dissolve, terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure, and, other than pursuant to the terms of the limited liability company agreement of the Borrower, not be controlled in making such decisions by any other Affiliated Entity or any other Person;
(ii)    maintain its assets in a manner which facilitates their identification and segregation from those of any of the other Affiliated Entities;
(iii)    except as expressly otherwise permitted hereunder, conduct all intercompany transactions or enter into any contract or agreement with the other Affiliated Entities except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s length basis with unaffiliated third parties;
(iv)    not assume or guarantee any obligation of any of the other Affiliated Entities, nor have any of its obligations assumed or guaranteed by any other Affiliated Entity, pledge its assets for the benefit of any other Affiliated Entity, or hold itself out as responsible for the debts of any other Affiliated Entity or for the decisions or actions with respect to the business and affairs of any other Affiliated Entity;
(v)    except as expressly otherwise permitted hereunder or contemplated under any of the other Transaction Documents, the SAP Financing Documents or the Tax Equity Financing Documents, not permit the commingling or pooling of its funds or other assets with the assets of any other Affiliated Entity or make any loans or advances to any other Affiliated Entity;
(vi)    maintain separate deposit and other bank accounts to which no other Affiliated Entity has any access;
(vii)    compensate (either directly or through reimbursement of its allocable share of any shared expenses) all employees, consultants and agents, and Affiliated Entities, to the extent applicable, for services provided to the Borrower by such employees, consultants and agents or Affiliated Entities, in each case, either directly from the Borrower’s own funds or indirectly through documented capital contributions from Parent or any other direct or indirect parent of the Borrower;
(viii)    have agreed with each of the other relevant Affiliated Entities to allocate among themselves, through documented intercompany transactions, including documented

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


capital contributions from Parent or any other direct or indirect parent of the Borrower, shared overhead and corporate operating services and expenses which are not reflected in documentation in connection with a Takeout Transaction (including the services of shared employees, consultants and agents and reasonable legal and auditing expenses) on the basis of actual use or the value of services rendered, and otherwise on a basis reasonably related to actual use or the value of services rendered;
(ix)    pay for its own account, directly from the Borrower’s own funds or indirectly through documented capital contributions from Parent or any other direct or indirect parent of the Borrower, its own liabilities, including, without limitation, for accounting and payroll services, rent, lease and other expenses (or its allocable share of any such amounts provided by one or more other Affiliated Entity) and not have such liabilities or operating expenses (or the Borrower’s allocable share thereof) paid by any of the Affiliated Entities; provided, that Parent or another Affiliated Entity shall be permitted to pay the initial organizational expenses of the Borrower;
(x)    conduct its business (whether in writing or orally) solely in its own name through its duly authorized officers, employees and agents, including the Facility Administrator, hold itself out to the public as a legal entity separate and distinct from any other Affiliated Entity, and correct any known misunderstanding regarding its separate identity;
(xi)    maintain a sufficient number of employees in light of its contemplated business operations, and maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xii)    maintain its books, records, resolutions and agreements as official records, and shall maintain all of its books, records, financial statements and bank accounts separate from those of any other Affiliated Entity, and shall not permit its assets to be listed on the financial statement of any other Affiliated Entity; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such affiliates and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such affiliates or any other Person and (ii) such assets shall be listed on the Borrower’s own separate balance sheet;
(xiii)    except as provided in the limited liability company agreement of the Borrower, not acquire obligations or securities of any other Affiliated Entities, or identify its members or the other Affiliated Entities, as applicable, as a division or part of it;
(xiv)    its own tax returns unless prohibited by Applicable Law from doing so (except that the Borrower may file or may include its filing as part of a consolidated federal tax return, to the extent required and/or permitted by Applicable Law, provided that, there shall

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


be an appropriate notation indicating the separate existence of the Borrower and its assets and liabilities); and
(xv)    otherwise practice and adhere to corporate formalities such as complying with its organizational documents and member and Facility Administrator resolutions, the holding of regularly scheduled meetings of members and Facility Administrator, use stationery, invoices and checks separate from those of any other Affiliated Entity, and maintaining complete and correct books and records and minutes of meetings and other proceedings of its members and Facility Administrator.
(Q)    Updates to Account Schedule. Schedule II attached hereto shall be updated by the Borrower and delivered to the Administrative Agent immediately to reflect any changes as to which the notice, the opening of the TEP Collateral Account and other requirements specified in Section 5.2(K) have been satisfied.
(R)    Deposits into the Accounts. (i) The Borrower shall (a) direct, or cause to be directed, all Collections other than Collections related to SAP Solar Assets to the Collection Account and all Collections related to SAP Solar Assets to the SAP Revenue Account, (b) direct, or cause to be directed, all Eligible Hedged SREC Counterparties to make all related Hedged SREC Payments directly into the Collection Account and, to the extent any Hedged SREC Payments are deposited by the relevant obligor in another account, cause such payments to be deposited into the Collection Account no later than two (2) Business Days after receipt, and (c) deposit or cause to be deposited all net proceeds of a Takeout Transaction into the Takeout Transaction Account in accordance with Section 2.7(C).
(ii)    The Borrower shall not and shall not permit the Managing Members or SAP to deposit into or otherwise credit (or cause to be deposited or credited), or consent to or fail to object to any such deposit or credit of, cash or cash proceeds other than Collections into the Collection Account or the SAP Revenue Account.
(S)    Hedging. The Borrower shall collectively at all times satisfy the Hedge Requirements.
(T)    Update to Solar Assets. The Borrower shall notify the Facility Administrator and the Administrative Agent in writing of any additions or deletions to the Schedule of Solar Assets, no later than each Funding Date and each Payment Date (which in the case of the update delivered on any Payment Date shall be prepared as of the last day of the related Collection Period).
(U)    Notice to Seller and Parent. The Borrower shall promptly notify the Seller and the Parent of a breach of Section 4.1(U) and shall require the Seller or the Parent to cure such breach or pay the Liquidated Damages Amount for such Defective Solar Asset pursuant to and in accordance with the Sale and Contribution Agreement or the Parent Guaranty, as applicable.
(V)    Government Approvals. The Borrower shall promptly obtain all orders, consents, authorizations, approvals, licenses and validations of, or file recordings, register with, or

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


obtain exemption from, any Governmental Authority required as a condition to the performance of its obligations under any Transaction Document.
(W)    TEP Collateral Account. Within sixty (60) days of the Closing Date (i) the Borrower shall cause TEP Resources to establish and maintain an account (the “TEP Collateral Account”) to hold Distributable Collections pursuant to Section 2.7(B)(xvii) and Sunnova TEP II Developer, LLC to establish and maintain an account to hold “Distributable Collections” (as defined in the TEP II Credit Agreement) pursuant to Section 2.7(b)(xvii) of the TEP II Credit Agreement, (ii) such accounts shall be subject to an account control agreement pursuant to which the Administrative Agent shall be granted control (as defined in Section 9-104 of the UCC) in favor of Administrative Agent, in form and substance satisfactory to Administrative Agent and (iii) the Administrative Agent shall have received customary opinions from counsel to each Affiliate of the Borrower that is a party to such account control agreement regarding the Administrative’ s Agent security interest in such accounts.
(X)    Deviations from Approved Forms. The Borrower shall provide or shall cause the Seller to provide, to the Administrative Agent all proposed forms of Solar Service Agreements which deviate in any material respect from a form attached hereto as Exhibit G (each such form a “Proposed Form”) and shall provide notice to the Administrative Agent regarding the cessation of a form of Solar Service Agreement attached hereto as Exhibit G or previously delivered hereunder. The Administrative Agent shall use its best efforts to notify the Borrower in writing within ten (10) Business Days of receipt of a Proposed Form of its objection or approval of the terms of such Proposed Form. Upon the written approval of the Administrative Agent, such approval not to be unreasonably withheld or delayed, Exhibit G shall be deemed to be amended to include such Proposed Form as a Solar Service Agreement in addition to the other forms attached or previously delivered hereunder. The Borrower shall, no less frequently than once per calendar quarter, provide or shall cause the Seller to provide, to the Administrative Agent all forms of Solar Service Agreements that incorporate changes which do not deviate materially from a form attached hereto as Exhibit G. Upon receipt of such forms of Solar Service Agreements, Exhibit G shall be deemed to be amended to include such forms in addition to the other forms attached or previously delivered hereunder.
(Y)    Beneficial Owner Certification. Promptly following any request therefor, the Borrower shall provide such information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” requirements under the Patriot Act, the Beneficial Ownership Regulation or other applicable anti-money laundering laws.




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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 5.2.    Negative Covenants. The Borrower covenants and agrees that, until all Obligations (other than contingent obligations not then due) hereunder have been paid in full, the Borrower will not:
(A)    Business Activities. (x) Conduct any business other than:
(i)    the acquisition from time to time of any or all right, title and (direct or indirect) interest in and to Solar Assets and Solar Asset Owner Subsidiaries and all rights and interests thereunder or relating thereto pursuant to the Sale and Contribution Agreement;
(ii)    the conveyance from time to time of Solar Asset Owner Member Interests in connection with a Takeout Transaction and the conveyance of Solar Assets to SAP;
(iii)    the execution and delivery by the Borrower from time to time of purchase agreements, in form and substance satisfactory to the Administrative Agent, related to the sale of securities by the Borrower or any of their Affiliates in connection with a Takeout Transaction;
(iv)    the performance by the Borrower of all of its obligations under the aforementioned agreements and under this Agreement and any documentation related thereto;
(v)    the preparation, execution and delivery of any and all other documents and agreements as may be required in connection with the performance of the activities of the Borrower approved above; and
(vi)    to engage in any lawful act or activity and to exercise any powers permitted under the Delaware Limited Liability Company Act that are reasonably related, incidental, necessary, or advisable to accomplish the foregoing; or
(vii)    permit the Managing Members or SAP to conduct any business other than the transactions contemplated by the Tax Equity Financing Documents.
Notwithstanding the foregoing, after the Closing Date and at any time on or prior to the earlier of (a) the Maturity Date and (b) the date on which all Obligations (other than contingent obligations not then due) of the Borrower hereunder have been paid in full, the Borrower shall not, without the prior written consent of the Administrative Agent, the Majority Lenders and the Majority Class B Lenders (consent by the Majority Class B Lenders to not be unreasonably withheld, conditioned or delayed if otherwise approved by the Majority Lenders; provided that if the Majority Class B Lenders have not affirmatively disapproved such transaction in writing within five (5) Business Days of receiving notice of such transaction and the Majority Lenders have otherwise approved such transaction, such transaction shall be deemed approved), (1) purchase or otherwise acquire any Solar Assets or Solar Asset Owner Subsidiaries, or interests therein, except for acquisitions from the Seller pursuant to and in accordance with the Sale and Contribution Agreement, (2) convey or otherwise dispose of any Collateral or interests therein, other than permitted under Sections 5.2(A)(ii) or 5.2(E) or the SAP Contribution Agreement, or (3) establish any Subsidiaries;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


provided, that notwithstanding this paragraph, the Borrower may continue to own directly or indirectly interests in the Financing Funds, which shall purchase and acquire Solar Assets in accordance with the terms of the Tax Equity Financing Documents.
(B)    Sales, Liens, Etc. Except as permitted hereunder (i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Lien upon or with respect to, the Collateral or any portion thereof, or upon or with respect to the Collection Account or any other account owned by or in the name of the Borrower to which any Collections are sent, or assign any right to receive income in respect thereof, or (ii) create or suffer to exist any Lien upon or with respect to any of its properties, whether now owned or hereafter acquired, or assign any right to receive income, to secure or provide for the payment of any Indebtedness of any Person or for any other reason; provided that notwithstanding anything to the contrary herein, this Section 5.2(B) shall not prohibit (x) any Lien that constitutes a Permitted Lien or a Permitted Equity Lien or (y) so long as notice is given to Administrative Agent under any Facility Administrator Report of any of the following, any actions permitted under Sections 5.2(A)(ii).
(C)    Indebtedness. Incur or assume any Indebtedness, except Permitted Indebtedness.
(D)    Loans and Advances. Make any loans or advances to any Person.
(E)    Dividends, Etc. Declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any interest in Borrower, or purchase, redeem or otherwise acquire for value any interest in the Affiliated Entities or any rights or options to acquire any such interest to any Person that is not the Borrower, except:
(i)    transfers, dividends or other distributions of Marketable RECs;
(ii)    transfers, dividends or other distributions of Transferable Assets to the Seller pursuant to the Sale and Contribution Agreement and in accordance with Section 2.10; or
(iii)    distributions of cash by the Borrower to the TEP Collateral Account or the Borrower’s Account in accordance with Section 2.7(B)(xvii). provided, that the distributions described in subsection (i) of clause (E) shall not be permitted if either an Event of Default or Potential Default would result therefrom unless all outstanding Obligations (other than contingent liabilities for which no claims have been asserted) have been irrevocably paid in full with all accrued but unpaid interest thereon and any related Liquidation Fees; provided further, that nothing in this Section 5.2(E) shall prohibit or limit any Financing Fund Contributions.
(F)    Mergers, Etc. Merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets of, any Person, except in connection with the acquisition or sale of Solar Assets or Solar Asset Owner Subsidiaries and similar property pursuant to the Sale and Contribution Agreement,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


in connection with a Takeout Transaction or an acquisition or sale where all Obligations have been paid in full with all accrued but unpaid interest thereon and any related Liquidation Fees.
(G)    Investments. Make any investment of capital in any Person either by purchase of stock or securities, contributions to capital, property transfer or otherwise or acquire or agree to acquire by any manner any business of any Person except pursuant to the transactions contemplated herein and in the SAP Financing Documents or the Tax Equity Financing Documents.
(H)    Change in Organizational Documents. Amend, modify or otherwise change any of the terms or provisions in its organizational documents as in effect on the date hereof without the consent of the Administrative Agent, the Majority Lenders and, to the extent such amendment, modification or change could reasonably be expected to materially and adversely affect the Class B Lenders in a manner disproportionate to the Class A Lenders, the Majority Class B Lenders.
(I)    Transactions with Affiliates. Enter into, or be a party to, any transaction with any of its Affiliates, except (i) the transactions contemplated by the Transaction Documents, the SAP Financing Documents, the Tax Equity Financing Documents or any similar conveyance agreement entered into in connection with a Takeout Transaction, (ii) any other transactions (including the lease of office space or computer equipment or software by the Borrower from an Affiliate and the sharing of employees and employee resources and benefits) (a) in the ordinary course of business or as otherwise permitted hereunder, (b) pursuant to the reasonable requirements and purposes of the Borrower’s business, (c) upon fair and reasonable terms (and, to the extent material, pursuant to written agreements) that are consistent with market terms for any such transaction, and (d) permitted by Sections 5.2(B), (C), (E) or (F), (iii) employment and severance arrangements and health, disability and similar insurance or benefit plans between the Borrower and its directors, officers, employees in the ordinary course of business, and (iv) the payment of customary fees and reasonable out of pocket costs to, and indemnities provided on behalf of, directors, managers, consultants, officers and employees of any parent entity of the Borrower to the extent attributable to the ownership or operation of the Borrower.
(J)    Addition, Termination or Substitution of Accounts. Add, terminate or substitute, or consent to the addition, termination or substitution of, the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, the Takeout Transaction Account or the TEP Collateral Account unless the Administrative Agent, the Majority Lenders and the Majority Class B Lenders shall have consented thereto (consent by the Majority Class B Lenders to not be unreasonably withheld, conditioned or delayed if otherwise approved by the Administrative Agent; provided that if the Majority Class B Lenders have not affirmatively disapproved such addition, termination or substitution in writing within five (5) Business Days of receiving notice of such addition, termination or substitution and the Administrative Agent has otherwise approved such addition, termination or substitution, such addition, termination or substitution shall be deemed approved) after having received at least thirty (30) days’ prior written notice thereof. Notwithstanding the foregoing, the Borrower neither has nor shall have any control over the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, the Takeout Transaction Account or the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


TEP Collateral Account. For the avoidance of doubt, any Financing Fund Contributions shall not be controlled or distributed through the Paying Agent Accounts.
(K)    Collections. (i) Deposit at any time Collections into any bank account other than in accordance with Section 5.1(R), (ii) make any change to the payment instructions to a Financing Fund, a Managing Member or SAP in respect of the Solar Asset Owner Member Interests to any other destination other than the Collection Account, (iii) make any change to the payment instructions to any Eligible Hedged SREC Counterparty or direct any Eligible Hedged SREC Counterparty to make any Hedged SREC Payments to go to any destination other than the Collection Account, or (iv) permit the assets of any Person (other than the Borrower) to be deposited into the Collection Account.
(L)    Amendments to Transaction Documents. Without the consent of the Administrative Agent and subject to Section 10.2, amend, modify or otherwise change any of the terms or provisions of any Transaction Document other than (i) supplements identifying Solar Assets and/or Solar Asset Owner Subsidiaries to be transferred in in accordance with the Sale and Contribution Agreement, (ii) supplements identifying Solar Assets to be financed in connection with each Funding Date, (iii) amendments, supplements or other changes in accordance with the terms of the applicable Transaction Document, the SAP Financing Documents or Tax Equity Financing Document, and (iv) amendments, supplements or other changes with respect to exhibits and schedules to any Transaction Document, the SAP Financing Documents or Tax Equity Financing Document that would not reasonably be expected to have a material adverse effect on the value, enforceability, or collectability of the Collateral or adversely affect Collections.
(M)    Bankruptcy of Tax Equity Parties. Without the consent of the Administrative Agent, the Borrower shall not, directly or indirectly, cause the institution of bankruptcy or insolvency proceedings against a Tax Equity Party.
Section 5.3.    Covenants Regarding the Solar Asset Owner Member Interests. The Borrower covenants and agrees, that, until all Obligations (other than contingent obligations not then due) hereunder have been paid in full, the Borrower shall:
(A)    determine whether or not to exercise each Purchase Option in accordance with the Purchase Standard. The Borrower will make such determination, and if it determines to do so, will exercise such Purchase Option, no later than 60 days following the related Call Date in accordance with the terms and conditions of the related Financing Fund LLCA. Such determination will take into account whether sufficient funds are available in the Supplemental Reserve Account to pay the related Purchase Option Price, and if such funds are not then available in the Supplemental Reserve Account, the Borrower shall make a determination, in accordance with the Purchase Standard, whether to exercise such Purchase Option as soon thereafter as such funds are available in the Supplemental Reserve Account. Upon the Borrower’s exercise and completion of a Purchase Option, the Borrower shall (i) instruct the related Financing Fund to pay all distributions to be made by such Financing Fund to the Borrower in respect of the Managing Member Interests and the Tax Equity Investor Interests directly to the Collection Account and deliver to the Administrative Agent the original certificate of the related Managing Member Interests and the related Tax Equity Investor Interests together with instruments of transfer executed in blank, (ii) cause the Managing Members

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


to execute and deliver to the Administrative Agent an Accession Agreement to the Pledge Agreement covering the Tax Equity Investor Interest acquired pursuant to the Purchase Option, and (iii) cause the Managing Members to amend the related Financing Fund LLCA to require such Financing Fund to have at all times an Independent Director;
(B)     (x) cause the Managing Members (i) to cause each Financing Fund to make all Managing Member Distributions directly to the Collection Account and (ii) to deliver to the Administrative Agent for deposit into the Collection Account any Managing Member Distributions received by the Managing Members and (y) cause SAP to (i) make all SAP Distributions directly to the Collection Account and (ii) to deliver to the Administrative Agent for deposit into the Collection Account any SAP Distributions received by SAP;
(C)    cause each of the Managing Members and SAP to comply with the provisions of its operating agreement and not to take any action that would cause the Managing Members to violate the provisions of the related Financing Fund LLCA;
(D)    cause each of the Managing Members and SAP to maintain all material licenses and permits required to carry on its business as now conducted and in accordance with the provisions of the Transaction Documents, except to the extent the failure to do so could not reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;
(E)    not permit or consent to the admission of any new member of the Managing Members or SAP other than a successor independent member in accordance with the provisions of their respective operating agreements;
(F)    cause the Managing Members not to permit or consent to the admission of any new member of a Financing Fund other than pursuant to the exercise of a Purchase Option by the Managing Member;
(G)    cause the Managing Members not to make any material amendment to a Financing Fund LLCA that could reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders and cause the Managing Members and SAP not to make any material amendment to their respective operating agreements that could reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;
(H)    cause the Managing Members on its own behalf and on behalf of each Financing Fund (i) to comply with and enforce the provisions of the Tax Loss Insurance Policies and (ii) not to consent to any amendment to a Tax Loss Insurance Policy to the extent that such amendment could reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;
(I)    cause the Managing Members to cause each Financing Fund to (i) comply with the provisions of each respective Financing Fund LLCA and (ii) not take any action that would violate the provisions of such Financing Fund LLCA, and cause the Managing Members and SAP

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


to not to make any material amendment to their respective operating agreement that could reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;
(J)    cause the Managing Members to cause each Financing Fund and cause the Managing Members and SAP to maintain all material licenses and permits required to carry on its business as now conducted and in accordance with the provisions of the SAP Financing Documents and the Tax Equity Financing Documents, except to the extent the failure to do so could not reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;
(K)    cause the Managing Members to cause the related Financing Funds not to incur any indebtedness or sell, dispose of or other encumber any of its assets other than as permitted by the Transaction Documents; and
(L)    cause the Managing Members to obtain the consent of the Administrative Agent for any action taken under Section 6.2(b) of each Financing Fund LLCA or any action that could reasonably be expected to cause a Material Adverse Effect.
ARTICLE VI

EVENTS OF DEFAULT
Section 6.1.    Events of Default. The occurrence of any of the following specified events shall constitute an event of default under this Agreement (each, an “Event of Default”):
(A)    Non-Payment. (i) The Borrower shall fail to make any required payment of principal (including any payment required to be made to cure a Class A Borrowing Base Deficiency or a Class B Borrowing Base Deficiency) or interest when due hereunder and such failure shall continue unremedied for two (2) Business Days after the day such payment is due or (ii) the Borrower shall fail to pay the Aggregate Outstanding Advances by the Maturity Date, or (iii) the Borrower shall fail to make any required payment on any other Obligation when due hereunder or under any other Transaction Document and such failure under this sub-clause (iii) shall continue unremedied for five (5) Business Days after the earlier of (a) written notice of such failure shall have been given to the Borrower by the Administrative Agent or any Lender or (b) the date upon which a Responsible Officer of the Borrower obtained knowledge of such failure.
(B)    Representations. Any representation or warranty made or deemed made by the Borrower (other than pursuant to Section 4.1(U) hereof or, with respect to the Parent only, Section 4.1(L) hereof), the Seller, the Parent, the Facility Administrator, the Managing Members or SAP herein or in any other Transaction Document (after giving effect to any qualification as to materiality set forth therein, if any) shall prove to have been inaccurate in any material respect when made and such defect, to the extent it is capable of being cured, is not cured within thirty (30) days from the earlier of the date of receipt by the Borrower, the Parent, the Seller, the Facility Administrator, the Managing Members or SAP as the case may be, of written notice from the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Administrative Agent of such failure by the Borrower, the Parent, the Facility Administrator, the Seller, the Managing Members or SAP, as the case may be, of such failure.
(C)    Covenants. The Borrower, the Seller, the Facility Administrator, the Managing Members or SAP shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or in any other Transaction Document which has not been cured within thirty (30) days from the earlier of the date of receipt by the Borrower, the Facility Administrator, the Managing Members or SAP, as the case may be, of written notice from the Administrative Agent of such failure by the Borrower, the Facility Administrator, the Managing Members or SAP, as the case may be, of such failure.
(D)    Validity of Transaction Documents. This Agreement or any other Transaction Document shall (except in accordance with its terms), in whole or in part, cease to be (i) in full force and effect and/or (ii) the legally valid, binding and enforceable obligation of the Seller, the Borrower, the Parent, the Facility Administrator, a Managing Member or SAP.
(E)    Insolvency Event. An Insolvency Event shall have occurred with respect to Parent, the Seller, Borrower, the Facility Administrator, a Managing Member, SAP or a Financing Fund.
(F)    Breach of Parent Guaranty; Failure to Pay Liquidated Damages Amounts. Any failure by Parent to perform under the Parent Guaranty; provided that a breach by Parent of the Financial Covenants is not an Event of Default hereunder, or any failure of TEP Developer or TEP Resources to pay Liquidated Damages Amounts pursuant to the Sale and Contribution Agreements.
(G)    ERISA Event. Either (i) any ERISA Event shall have occurred or (ii) the assets of the Borrower become subject to Title I of ERISA, Section 4975 of the Internal Revenue Code, or, by reason of any investment in the Borrower by any governmental plan, as the case may be, any other federal, state, or local provision similar to Section 406 of ERISA or Section 4975 of the Internal Revenue Code.
(H)    Borrowing Base Deficiency. A Class A Borrowing Base Deficiency or a Class B Borrowing Base Deficiency continues for more than two (2) Business Days.
(I)    Security Interest. The Administrative Agent, for the benefit of the Lenders, ceases to have a first priority perfected security interest in Collateral having a value in excess of $150,000 and such failure shall continue unremedied for more than five (5) Business Days unless such Liens with a higher priority than Agent’s Liens are Permitted Liens or Permitted Equity Liens; provided that if such cessation in security interest is due to Agent’s actions, then no Event of Default shall be deemed to occur under this Section 6.1(I).
(J)    Judgments. There shall remain in force, undischarged, unsatisfied, and unstayed for more than thirty (30) consecutive days, any final non-appealable judgment against any Relevant Party in excess of $250,000 or the Parent in excess of $1,000,000, in each case over and

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


above the amount of insurance coverage available from a financially sound insurer that has not denied coverage.
(K)    1940 Act. Any Relevant Party becomes, or becomes controlled by, an entity required to register as an “investment company” under the 1940 Act.
(L)    Hedging. Failure of the Borrower to maintain Hedge Agreements satisfying the Hedge Requirements and such failure continues for five (5) Business Days or any Hedge Counterparty ceases to be a Qualifying Hedge Counterparty and such Hedge Counterparty is not replaced with a Qualifying Hedge Counterparty within ten Business Days.
(M)    Change of Control. The occurrence of a Change of Control.
(N)    Financing Fund Material Adverse Effect. The occurrence of any event that results in a Material Adverse Effect (as defined in the Financing Fund LLCA) with respect to a Managing Member or a Financing Fund.
(O)    Replacement of Manager. The Manager resigns, removed or is replaced under a Management Agreement or a Servicing Agreement and, in each case, a replacement Manager, acceptable to the Administrative Agent has not accepted an appointment under such agreement within 60 days of such resignation or removal.
(P)    Parent Material Adverse Effect. A representation or warranty made or deemed made by the Borrower pursuant to Section 4.1(L) hereof regarding the Parent shall prove to have been inaccurate in any material respect when made and such defect, to the extent it is capable of being cured, is not cured within ninety (90) days from the earlier of the date of receipt by the Borrower of written notice from the Administrative Agent of such failure by the Borrower.
(Q)    Resignation or Removal of Managing Member. A Managing Member resigns or is removed under a Financing Fund LLCA.
(R)    Cross Default. The occurrence of an “Event of Default” under the TEP II Credit Agreement.
Section 6.2.    Remedies. If any Event of Default shall then be continuing, the Administrative Agent (i) may, in its discretion, or (ii) shall, upon the written request of the Majority Lenders, by written notice to the Borrower and the Lenders, take any or all of the following actions, without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against the Borrower in any manner permitted under applicable law:
(A)    declare the Commitments terminated, whereupon the Commitment of each Lender shall forthwith terminate immediately without any other notice of any kind;
(B)    declare the principal of and any accrued interest in respect of the Class A Advances, the Class B Advances and all other Obligations owing hereunder and thereunder to be, whereupon the same shall become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; provided, that,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


upon the occurrence of an Insolvency Event with respect to the Borrower, the principal of and any accrued interest in respect of the Advances and all other Obligations owing hereunder shall be immediately due and payable without any notice to the Borrower or Lenders;
(C)    if the Facility Administrator is Sunnova Management, replace the Facility Administrator with a Successor Facility Administrator in accordance with the Facility Administration Agreement; and/or
(D)    foreclose on and liquidate the Collateral or to the extent permitted by the Tax Equity Financing Documents, the Solar Assets owned by a Financing Fund, and pursue all other remedies available under the Security Agreement, the Pledge Agreement, the Subsidiary Guaranty and the other Transaction Documents, subject to the terms of the Tax Equity Financing Documents.
Section 6.3.    Class B Lender Purchase Option (A) If an Event of Default other than an Event of Default described in Section 6.1(E) shall occur and be continuing and the Administrative Agent shall not have declared all Obligations under this Agreement or any of the other Transaction Documents to be immediately due and payable, the Class B Lenders shall have the option at any time to purchase all (but not less than all) of the Class A Advances then outstanding and all related Obligations owing by the Borrower to the Class A Lenders (solely in such capacity) from the Class A Lenders (the “Class B Lender Purchase Option”) with the consent of all the Class A Lenders. At any time that the Class B Lender Purchase Option is available to the Class B Lenders, any Class B Lender may request that the Class A Lenders provide such Class B Lender with a statement setting forth the aggregate amount of all the Class A Advances then outstanding and all related Obligations owed by the Borrower to the Class A Lenders (solely in such capacity). Within ten (10) Business Days after the receipt of such statement, the requesting Class B Lender shall provide written notice to the Class A Lenders whether such Class B Lender would like to exercise the Class B Lender Purchase Option. Upon receipt of a notice that a Class B Lender would like to exercise the Class B Lender Purchase Option, the Class A Lenders shall promptly notify such Class B Lender whether the Class A Lenders will consent to a sale. If any or all of the Class B Lenders shall have elected to exercise the Class B Lender Purchase Option and the Class A Lenders shall have consented to a sale, the Class A Lenders and applicable Class B Lenders shall agree to a purchase and sale date and make such purchase and sale in accordance with Section 6.3(C); provided that the Class A Lenders shall retain all rights to be indemnified or held harmless by the Borrower in accordance with the terms hereof for claims accruing prior to such sale date.
(B)    If an Event of Default shall occur and be continuing and the Majority Lenders shall have declared an Event of Default that has not been waived, the Class B Lenders shall have the option at any time to exercise the Class B Lender Purchase Option. Any or all of the Class B Lenders may exercise such Class B Lender Purchase Option upon written notice to the Class A Lenders, which notice shall be irrevocable. On the date specified by the participating Class B Lenders in such notice (which shall not be more than ten (10) Business Days after the receipt by the Class A Lenders of such notice), the Class A Lenders shall sell to the Class B Lenders, and the Class B Lenders shall purchase from the Class A Lenders, the Class A Advances then outstanding and all Obligations owed by the Borrower to the Class A Lenders (solely in such capacity) in accordance with Section 6.3(C); provided that the Class A Lenders shall retain all rights to be

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


indemnified or held harmless by the Borrower in accordance with the terms hereof for claims accruing prior to such sale date.
(C)    Upon the date of a purchase and sale pursuant to this Section 6.3, the Class B Lenders shall (i) pay to the Class A Lenders as the purchase price therefor the full amount of all the Class A Advances and all Obligations owed by the Borrower to the Class A Lenders (solely in such capacity) then outstanding and unpaid including principal, interest, fees, any Liquidation Fee as in effect on the date thereof and expenses, including attorneys’ fees and legal expenses, (ii) reimburse the Class A Lenders for any loss, cost, damage or expense (including attorneys’ fees and legal expenses) in connection with any commissions, fees, costs or expenses related to any checks or other payments provisionally credited to the Obligations owing to the Class A Lenders (solely in such capacity), and/or as to which the Class A Lenders have not yet received final payment (and, in each case, all of such payments shall be made without offset, deduction or defense), (iii) reimburse the Class A Lenders for the amount of all liabilities (without duplication) that such Class A Lenders have incurred in the nature of indemnification obligations of the Borrower hereunder which have resulted in any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) to the Class A Lenders, and (iv) agree to indemnify and hold harmless the Class A Lenders from and against any loss, liability, claim, damage or expense (including fees and expenses of legal counsel) arising out of any claim asserted by a third party as a direct result of any acts by the Class B Lenders occurring after the date of such purchase. The Class A Lenders shall provide a reasonably detailed statement of the purchase price and other sums set forth in clauses (i) through (iii) above to the Class B Lenders, and the Class B Lenders shall remit such purchase price and other sums in clauses (i) through (iii) above by wire transfer in federal funds to such bank account of the Class A Lenders as the Class A Lenders may designate in writing to the Class B Lenders for such purpose. Interest shall be calculated through the Business Day on which such purchase and sale shall occur if the amounts so paid by the Class B Lenders to the bank account designated by the Class A Lenders are received in such bank account prior to 1:00 p.m., New York time and interest shall be calculated to and include the next Business Day if the amounts so paid by the Class B Lenders to the bank account designated by the Class A Lenders are received in such bank account later than 1:00 p.m., New York time. Such purchase shall be expressly made without representation or warranty of any kind by the Class A Lenders as to the Obligations owing to the Class A Lenders (solely in such capacity) or otherwise and without recourse to the Class A Lenders, except that the Class A Lenders shall represent and warrant: (a) the amount of Obligations owing to the Class A Lenders (solely in such capacity) being purchased and that the purchase price and other sums payable by the Class B Lenders are true, correct and accurate amounts, (b) that the Class A Lenders shall convey the Obligations owing to the Class A Lenders (solely in such capacity) free and clear of any Liens or encumbrances of the Class A Lenders or created or suffered by the Class A Lenders, (c) as to all claims made or threatened in writing against the Class A Lenders related to the Obligations owing to the Class A Lenders (solely in such capacity), and (d) the Class A Lenders are duly authorized to assign the Obligations owing to the Class A Lenders (solely in such capacity).



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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 6.4.    Sale of Collateral (A) The power to effect any sale of any portion of the Collateral upon the occurrence and during the continuance of an Event of Default pursuant to this Article VI, the Security Agreement and the Pledge Agreement shall not be exhausted by any one or more sales as to any portion of the Collateral remaining unsold, but shall continue unimpaired until all Collateral shall have been sold or until all Obligations (other than contingent obligations not then due) hereunder have been paid in full. The Administrative Agent acting on its own or through an agent, may from time to time postpone any sale by public announcement made at the time and place of such sale.
(B)    Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent may, in its discretion, and shall, upon the written request of the Majority Lenders, by written notice to the Borrower and the Lenders sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Administrative Agent’s offices or elsewhere, for cash, on credit (including pursuant to a “credit sale” to a Lender or an assignee thereof) or for future delivery, and upon such other terms as the Administrative Agent may require. Notwithstanding the foregoing, prior to the consummation of any sale of the Collateral pursuant to this Article VI and any other Transaction Document (either private or public), the Administrative Agent shall first offer the Class B Lenders the opportunity to purchase the Collateral for a purchase price equal to the greater of (x) the fair market value of the Collateral and (y) the aggregate outstanding principal balance of the Class A Advances, plus accrued interest thereon and fees owed thereto (such right, the “Right of First Refusal”). If the Class B Lenders do not exercise the Right of First Refusal within two (2) Business Days of receipt thereof, then the Administrative Agent shall sell the Collateral as otherwise set forth in this Section 6.4 and pursuant to the other Transaction Documents; provided, further, that if the Class B Lenders do not exercise the Right of First Refusal and the Administrative Agent elects to sell the Collateral in a private sale to a third party, then prior to the sale thereof, the Administrative Agent shall offer the Class B Lenders the opportunity to purchase the Collateral for the purchase price being offered by such third party, and the Class B Lenders shall have two (2) Business Days to accept such offer.
ARTICLE VII

THE ADMINISTRATIVE AGENT AND FUNDING AGENTS
Section 7.1.    Appointment; Nature of Relationship. The Administrative Agent is appointed by the Funding Agents and the Lenders (and by each Qualifying Hedge Counterparty by execution of a Qualifying Hedge Counterparty Joinder, if applicable) as the Administrative Agent hereunder and under each other Transaction Document, and each of the Funding Agents and the Lenders and each Qualifying Hedge Counterparty irrevocably authorizes the Administrative Agent to act as the contractual representative of such Funding Agent and such Lender and such Qualifying Hedge Counterparty with the rights and duties expressly set forth herein and in the other Transaction Documents. The Administrative Agent agrees to act as such contractual representative upon the express conditions contained in this Article VII. Notwithstanding the use of the defined term “Administrative Agent,” it is expressly understood and agreed that the Administrative Agent shall not have any fiduciary responsibilities to any Funding Agent or Lender or any Qualifying Hedge Counterparty by reason of this Agreement and that the Administrative Agent is merely acting as the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


representative of the Funding Agents, the Lenders and each Qualifying Hedge Counterparty with only those duties as are expressly set forth in this Agreement and the other Transaction Documents. In its capacity as the Funding Agents’, the Lenders’ and each Qualifying Hedge Counterparty’s contractual representative, the Administrative Agent (A) does not assume any fiduciary duties to any of the Funding Agents, the Lenders or any Qualifying Hedge Counterparty, (B) is a “representative” of the Funding Agents, the Lenders and each Qualifying Hedge Counterparty within the meaning of Section 9-102 of the UCC as in effect in the State of New York, and (C) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Transaction Documents. Each of the Funding Agents, the Lenders and each Qualifying Hedge Counterparty agree to assert no claim against the Administrative Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Funding Agent, each Lender and each Qualifying Hedge Counterparty waives.
Section 7.2.    Powers. The Administrative Agent shall have and may exercise such powers under the Transaction Documents as are specifically delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto. The Administrative Agent shall have no implied duties or fiduciary duties to the Funding Agents, the Lenders or to any Qualifying Hedge Counterparty, or any obligation to the Funding Agents, the Lenders or any Qualifying Hedge Counterparty to take any action hereunder or under any of the other Transaction Documents except any action specifically provided by the Transaction Documents required to be taken by the Administrative Agent.
Section 7.3.    General Immunity. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower, the Funding Agents, the Lenders, or any Qualifying Hedge Counterparty for any action taken or omitted to be taken by it or them hereunder or under any other Transaction Document or in connection herewith or therewith except to the extent such action or inaction is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from (A) the gross negligence or willful misconduct of such Person or (B) breach of contract by such Person with respect to the Transaction Documents.
Section 7.4.    No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc.. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (A) any statement, warranty or representation made in connection with any Transaction Document or any borrowing hereunder, (B) the performance or observance of any of the covenants or agreements of any obligor under any Transaction Document, (C) the satisfaction of any condition specified in Article III, except receipt of items required to be delivered solely to the Administrative Agent, (D) the existence or possible existence of any Potential Default or Event of Default, or (E) the validity, effectiveness or genuineness of any Transaction Document or any other instrument or writing furnished in connection therewith. The Administrative Agent shall not be responsible to any Funding Agent, any Lender or any Qualifying Hedge Counterparty for any recitals, statements, representations or warranties herein or in any of the other Transaction Documents, for the perfection or priority of any of the Liens on any of the Collateral, or for the execution, effectiveness, genuineness, validity, legality, enforceability, collectability, or sufficiency of this Agreement or any of the other Transaction

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Documents or the transactions contemplated thereby, or for the financial condition of any guarantor of any or all of the Obligations, the Borrower or any of its respective Affiliates.
Section 7.5.    Action on Instructions of Lenders. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Transaction Document in accordance with written instructions signed by the Majority Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders and on all holders of Loan Notes. The Administrative Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Transaction Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.
Section 7.6.    Employment of Administrative Agents and Counsel. The Administrative Agent may execute any of its duties as the Administrative Agent hereunder and under any other Transaction Document by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Funding Agents, the Lenders or any Qualifying Hedge Counterparty, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Administrative Agent shall be entitled to advice of counsel concerning the contractual arrangement between the Administrative Agent and the Funding Agents, the Lenders or any Qualifying Hedge Counterparty and all matters pertaining to the Administrative Agent’s duties hereunder and under any other Transaction Document.
Section 7.7.    Reliance on Documents; Counsel. The Administrative Agent shall be entitled to rely upon any Class A Loan Note, Class B Loan Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and, in respect to legal matters, upon the opinion of counsel selected by the Administrative Agent, which counsel may be employees of the Administrative Agent.
Section 7.8.    The Administrative Agent’s Reimbursement and Indemnification. The Non-Conduit Lenders agree to reimburse and indemnify (on a pro rata basis based on the Class A Lender Group Percentages and the Class B Lender Group Percentages, as applicable) the Administrative Agent (A) for any amounts not reimbursed by the Borrower for which the Administrative Agent is entitled to reimbursement by the Borrower under the Transaction Documents, (B) for any other reasonable and documented expenses incurred by the Administrative Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Transaction Documents, and (C) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of the Transaction Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents, provided, that no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from the gross negligence or willful misconduct of the Administrative Agent.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 7.9.    Rights as a Lender. With respect to its Commitment and Advances made by it and the Loan Notes (if any) issued to it, in its capacity as a Lender, the Administrative Agent shall have the same rights and powers hereunder and under any other Transaction Document as any Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders,” as applicable, shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity. The Administrative Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Transaction Document, with the Borrower or any of its Affiliates in which such Person is not prohibited hereby from engaging with any other Person.
Section 7.10.    Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Transaction Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender 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 and the other Transaction Documents.
Section 7.11.    Successor Administrative Agent. The Administrative Agent may resign at any time by giving written notice thereof to the Lenders, the Funding Agents, each Qualifying Hedge Counterparty, the Verification Agent, the Paying Agent and the Borrower and the Administrative Agent may be removed at any time for cause by written notice received by the Administrative Agent from the Majority Lenders. Upon any such resignation or removal, the Lenders shall have the right to appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Lenders and shall have accepted such appointment within thirty (30) days after the exiting Administrative Agent’s giving notice of resignation or receipt of notice of removal, then the exiting Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent (but only if such successor is reasonably acceptable to each Lender) or petition a court of competent jurisdiction to appoint a successor Administrative Agent. Upon the acceptance of any appointment as the Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the exiting Administrative Agent, and the exiting Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents. After any exiting Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Article VII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent hereunder and under the other Transaction Documents.



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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 7.12.    Transaction Documents; Further Assurances. (A) Each Non-Conduit Lender, each Funding Agent and each Qualifying Hedge Counterparty authorizes the Administrative Agent to enter into each of the Transaction Documents to which it is a party and each Lender, each Funding Agent and each Qualifying Hedge Counterparty authorizes the Administrative Agent to take all action contemplated by such documents in its capacity as Administrative Agent. Each Lender, each Funding Agent and each Qualifying Hedge Counterparty agrees that no Lender, no Funding Agent and no Qualifying Hedge Counterparty, respectively, shall have the right individually to seek to realize upon the security granted by any Transaction Document, it being understood and agreed that such rights and remedies may be exercised solely by the Administrative Agent for the benefit of the Lenders, the Funding Agents and each Qualifying Hedge Counterparty upon the terms of the Transaction Documents.
(B)    Any Funding Agent may (in their sole discretion and expense), at any time, have their Advances rated by Moody’s, S&P, DBRS, Inc., A.M. Best or Kroll Bond Rating Agency, Inc. Any such rating shall not be a condition precedent to closing the credit facility or the making of the Advances as set forth in this Agreement. The Borrower, Sunnova Management, and the Parent shall provide reasonable assistance to obtain such rating. For the avoidance of doubt, any such rating shall not be a condition precedent to the exercise of any rights of the Borrower or Sunnova Management under this Agreement. Any costs or fees associated with the rating of the Advances shall be borne by the Funding Agent and the Lenders.
Section 7.13.    Collateral Review. (A) Prior to the occurrence of an Event of Default, the Administrative Agent and/or its designated agent may not more than one (1) time during any given twelve (12) month period (at the expense of the Borrower), upon reasonable notice, perform (i) reviews of the Facility Administrator’s and/or Borrower’s business operations and (ii) audits of the Collateral, in all cases, the scope of which shall be determined by the Administrative Agent.
(B)    After the occurrence of and during the continuance of an Event of Default, the Administrative Agent or its designated agent may, in its sole discretion regarding frequency (at the expense of the Borrower), upon reasonable notice, perform (i) reviews of the Facility Administrator’s and/or Borrower’s business operations and (ii) audits or any other review of the Collateral, in all cases, the scope of which shall be determined by the Administrative Agent.
Section 7.14.    Funding Agent Appointment; Nature of Relationship. Each Funding Agent is appointed by the Lenders in its Lender Group as their agent hereunder, and such Lenders irrevocably authorize such Funding Agent to act as the contractual representative of such Lenders with the rights and duties expressly set forth herein and in the other Transaction Documents. Each Funding Agent agrees to act as such contractual representative upon the express conditions contained in this Article VII. Notwithstanding the use of the defined term “Administrative Agent,” it is expressly understood and agreed that no Funding Agent shall have any fiduciary responsibilities to any Lender by reason of this Agreement and that each Funding Agent is merely acting as the representative of the Lenders in its Lender Group with only those duties as are expressly set forth in this Agreement and the other Transaction Documents. In its capacity as the related Lenders’ contractual representative, each Funding Agent (A) does not assume any fiduciary duties to any of the Lenders, (B) is a “representative” of the Lenders in its Lender Group within the meaning of

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 9-102 of the UCC as in effect in the State of New York and (C) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Transaction Documents. Each of the Lenders agrees to assert no claim against their Funding Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender waives.
Section 7.15.    Funding Agent Powers. Each Funding Agent shall have and may exercise such powers under the Transaction Documents as are specifically delegated to such Funding Agent by the terms thereof, together with such powers as are reasonably incidental thereto. No Funding Agent shall have any implied duties or fiduciary duties to the Lenders in its Lender Group, or any obligation to such Lenders to take any action hereunder or under any of the other Transaction Documents except any action specifically provided by the Transaction Documents required to be taken by such Funding Agent.
Section 7.16.    Funding Agent General Immunity. Neither any Funding Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower, the Lenders or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Transaction Document or in connection herewith or therewith except to the extent such action or inaction is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from (A) the gross negligence or willful misconduct of such Person or (B) breach of contract by such Person with respect to the Transaction Documents.
Section 7.17.    Funding Agent Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc. Neither any Funding Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (A) any statement, warranty or representation made in connection with any Transaction Document or any borrowing hereunder, (B) the performance or observance of any of the covenants or agreements of any obligor under any Transaction Document, (C) the satisfaction of any condition specified in Article III, except receipt of items required to be delivered solely to the Administrative Agent, (D) the existence or possible existence of any Potential Default, Event of Default, Potential Amortization Event or Amortization Event, or (E) the validity, effectiveness or genuineness of any Transaction Document or any other instrument or writing furnished in connection therewith. No Funding Agent shall be responsible to any Lender for any recitals, statements, representations or warranties herein or in any of the other Transaction Documents, for the perfection or priority of any of the Liens on any of the Collateral, or for the execution, effectiveness, genuineness, validity, legality, enforceability, collectability, or sufficiency of this Agreement or any of the other Transaction Documents or the transactions contemplated thereby, or for the financial condition of any guarantor of any or all of the Obligations, the Borrower or any of their respective Affiliates.
Section 7.18.    Funding Agent Action on Instructions of Lenders. Each Funding Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Transaction Document in accordance with written instructions signed by each of the Lenders in its Lender Group, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of such Lenders. Each Funding Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Transaction Document unless it shall first be

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


indemnified to its satisfaction by the Lenders in its Lender Group pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.
Section 7.19.    Funding Agent Employment of Agents and Counsel. Each Funding Agent may execute any of its duties as a Funding Agent hereunder by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Lenders in its Lender Group, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. Each Funding Agent, at the expense of the Non-Conduit Lenders, shall be entitled to advice of counsel concerning the contractual arrangement between such Funding Agent and the Lenders in its Lender Group and all matters pertaining to such Funding Agent’s duties hereunder and under any other Transaction Document.
Section 7.20.    Funding Agent Reliance on Documents; Counsel. Each Funding Agent shall be entitled to rely upon any Loan Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and, in respect to legal matters, upon the opinion of counsel selected by such Funding Agent, which counsel may be employees of such Funding Agent.
Section 7.21.    Funding Agent’s Reimbursement and Indemnification. The Non-Conduit Lenders in each Lender Group agree to reimburse and indemnify (on a pro rata basis based upon the applicable Lender Group Percentages) the Funding Agent in their Lender Group (A) for any amounts not reimbursed by the Borrower for which such Funding Agent is entitled to reimbursement by the Borrower under the Transaction Documents, (B) for any other reasonable and documented expenses incurred by such Funding Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Transaction Documents, and (C) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against such Funding Agent in any way relating to or arising out of the Transaction Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents, provided, that no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from the gross negligence or willful misconduct of such Funding Agent.
Section 7.22.    Funding Agent Rights as a Lender. With respect to its Commitment and Advances made by it and the Loan Notes (if any) issued to it, in its capacity as a Lender, each Funding Agent shall have the same rights and powers hereunder and under any other Transaction Document as any Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders,” as applicable, shall, unless the context otherwise indicates, include such Funding Agent in its individual capacity. Each Funding Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Transaction Document, with the Borrower or any of their Affiliates in which such Person is not prohibited hereby from engaging with any other Person.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 7.23.    Funding Agent Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon its Funding Agent or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Transaction Documents. Each Lender also acknowledges that it will, independently and without reliance upon its Funding Agent or any other Lender 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 and the other Transaction Documents.
Section 7.24.    Funding Agent Successor Funding Agent. Any Funding Agent may resign at any time by giving written notice thereof to the Lenders in its Lender Group, the Administrative Agent and the Borrower, and such Funding Agent may be removed at any time for cause by written notice received by the Lenders in its Lender Group. Upon any such resignation or removal, the Lenders in a Lender Group shall have the right to appoint a successor Funding Agent. If no successor Funding Agent shall have been so appointed by such Lenders and shall have accepted such appointment within thirty 30 days after the exiting Funding Agent’s giving notice of resignation or receipt of notice of removal, then the exiting Funding Agent may appoint, on behalf of the Lenders in its Lender Group, a successor Funding Agent (but only if such successor is reasonably acceptable to each such Lender) or petition a court of competent jurisdiction to appoint a successor Funding Agent. Upon the acceptance of any appointment as a Funding Agent hereunder by a successor Funding Agent, such successor Funding Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the exiting Funding Agent, and the exiting Funding Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents. After any exiting Funding Agent’s resignation hereunder as Funding Agent, the provisions of this Article VII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Funding Agent hereunder and under the other Transaction Documents. Notwithstanding any provision in this Section 7.24 to the contrary, any Funding Agent that has provided notice of its resignation or has been provided notice of its removal shall be required to serve as Funding Agent until its successor has assumed such role.
Section 7.25.    Funding Agent Transaction Documents; Further Assurances. Each Lender authorizes the Funding Agent in its Lender Group to enter into each of the Transaction Documents to which it is a party and each Lender authorizes the Funding Agent in its Lender Group to take all action contemplated by such documents in its capacity as Funding Agent.






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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


ARTICLE VIII

ADMINISTRATION AND SERVICING OF THE COLLATERAL
Section 8.1.    Management Agreements/Servicing Agreements/Facility Administration Agreement .
(A)    Each Management Agreement, duly executed counterparts of which have been delivered to the Administrative Agent, sets forth the covenants and obligations of the Manager with respect to the Solar Assets and other matters addressed in the Management Agreements, and reference is hereby made to the Management Agreements for a detailed statement of said covenants and obligations of the Manager thereunder. The Borrower shall cause the Manager (to the extent an Affiliate of the Borrower) and each Relevant Party that is party to a Management Agreement to (i) perform and observe all of the material terms, covenants and conditions of each Management Agreement and (ii) promptly notify the Administrative Agent of any notice to Borrower, a Managing Member or SAP of any material default under any Management Agreement.
(B)    Each Servicing Agreement, duly executed counterparts of which have been delivered to the Administrative Agent, sets forth the covenants and obligations of the Manager with respect to the Solar Assets and other matters addressed in the Servicing Agreement, and reference is hereby made to the Servicing Agreements for a detailed statement of said covenants and obligations of the Manager thereunder. The Borrower shall cause the Manager (to the extent an Affiliate of the Borrower) and each Relevant Party that is party to a Servicing Agreement to (i) perform and observe all of the material terms, covenants and conditions of each Servicing Agreement and (ii) promptly notify the Administrative Agent of any notice to Borrower, a Managing Member or SAP of any material default under any Servicing Agreement.
(C)    The Facility Administration Agreement, duly executed counterparts of which have been delivered to the Administrative Agent, sets forth the covenants and obligations of the Facility Administrator with respect to the Collateral and other matters addressed in the Facility Administration Agreement, and reference is hereby made to the Facility Administration Agreement for a detailed statement of said covenants and obligations of the Facility Administrator thereunder. The Borrower agrees that (i) the Administrative Agent, in its name or (to the extent required by law) in the name of the Borrower, may (but is not, unless so directed and indemnified by the Majority Lenders, required to) enforce all rights of the Borrower under the Facility Administration Agreement for and on behalf of the Lenders whether or not an Event of Default has occurred and is continuing and (ii) upon the occurrence and during the continuation of an Event of Default, the Majority Class B Lenders may request that the Administrative Agent, in the Administrative Agent’s name or (to the extent required by law) in the name of the Borrower, and the Administrative Agent may (but is not required to) enforce all rights of such Borrower under the Facility Administration Agreement for an on behalf of the Lenders.
(D)    Promptly following a request from the Administrative Agent (acting at the direction of the Majority Lenders or, upon the occurrence and during the continuation of an Event of Default, the Majority Class B Lenders) to do so, the Borrower shall take all such lawful action as the Administrative Agent may request to compel or secure the performance and observance by

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the Facility Administrator of each of its obligations to the Borrower and with respect to the Collateral under or in connection with the Facility Administration Agreement in accordance with the terms thereof, and in effecting such request shall exercise any and all rights, remedies, powers and privileges lawfully available to the Borrower under or in connection with the Facility Administration Agreement to the extent and in the manner directed by the Administrative Agent, including the transmission of notices of default on the part of the Facility Administrator thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Facility Administrator of each of its obligations under the Facility Administration Agreement.
(E)    The Borrower shall not waive any default by the Facility Administrator under the Facility Administration Agreement without the written consent of the Administrative Agent, the Majority Lenders and the Majority Class B Lenders (consent by the Majority Class B Lenders to not be unreasonably withheld, conditioned or delayed if otherwise approved by the Majority Lenders; provided that if the Majority Class B Lenders have not affirmatively disapproved such waiver in writing within five (5) Business Days of receiving notice of such waiver and the Majority Lenders have otherwise approved such waiver, such waiver shall be deemed approved).
(F)    The Administrative Agent does not assume any duty or obligation of the Borrower under the Facility Administration Agreement and the rights given to the Administrative Agent thereunder are subject to the provisions of Article VII.
(G)    The Borrower has not and will not provide any payment instructions to any of the Managing Members, SAP or a Financing Fund that are inconsistent with the Facility Administration Agreement or this Agreement.
(H)    With respect to the Facility Administrator’s obligations under Section 3.3 of the Facility Administration Agreement, the Administrative Agent shall not have any responsibility to the Borrower, the Facility Administrator or any party hereunder to make any inquiry or investigation as to, and shall have no obligation in respect of, the terms of any engagement of an independent accountant by the Facility Administrator; provided that the Administrative Agent shall be authorized, upon receipt of written direction from Facility Administrator directing the Administrative Agent, to execute any acknowledgment or other agreement with the independent accountant required for the Administrative Agent to receive any of the reports or instructions provided for herein, which acknowledgment or agreement may include, among other things,
(i)    acknowledgement that the Facility Administrator has agreed that the procedures to be performed by the independent accountant are sufficient for the Borrower’s purposes,
(ii)    acknowledgment that the Administrative Agent has agreed that the procedures to be performed by an independent accountant are sufficient for the Administrative Agent’s purposes and that the Administrative Agent’s purposes is limited solely to receipt of the report,
(iii)    releases by the Administrative Agent (on behalf of itself and the Lenders) of claims against the independent accountant and acknowledgement of other limitations of

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


liability in favor of the independent accountant, and (iv) restrictions or prohibitions on the disclosure of information or documents provided to it by such firm of independent accountants (including to the Lenders). Notwithstanding the foregoing, in no event shall the Administrative Agent be required to execute any agreement in respect of the independent accountant that the Administrative Agent determines adversely affects it in its individual capacity or which is in a form that is not reasonably acceptable to the Administrative Agent.
Section 8.2.    Accounts.
(A)    Establishment. The Borrower has established and shall maintain or cause to be maintained:
(i)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, the “Collection Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Borrower and the Secured Parties;
(ii)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, being the “Supplemental Reserve Account”), bearing a designation clearly indicating that the funds deposited therein as described below are held for the benefit of the Borrower and the Secured Parties;
(iii)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, being the “Liquidity Reserve Account”), bearing a designation clearly indicating that the funds deposited therein as described below are held for the benefit of the Borrower and the Secured Parties;
(iv)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, being the “SAP Revenue Account”), bearing a designation clearly indicating that the funds deposited therein as described below are held for the benefit of the Borrower and the Secured Parties; and
(v)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, being the “Takeout Transaction Account”, and together with the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account and the Takeout Transaction Account, each a “Paying Agent Account” and collectively the “Paying Agent Accounts”), bearing a designation clearly indicating that the funds deposited therein as described below are held for the benefit of the Borrower and the Secured Parties.
(B)    [Reserved].

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(C)    Deposits and Withdrawals from the Liquidity Reserve Account. Deposits into, and withdrawals from, the Liquidity Reserve Account shall, subject to Section 2.7(D), be made in the following manner:
(i)    On the Closing Date, the Borrower shall deliver to the Paying Agent for deposit into the Liquidity Reserve Account, an amount equal to the Liquidity Reserve Account Required Balance as of such date;
(ii)    From the proceeds of Advances hereunder, the Borrower shall deliver to the Paying Agent for deposit into the Liquidity Reserve Account amounts necessary to maintain on deposit therein an amount equal to or in excess of the Liquidity Reserve Account Required Balance as of the date of each such Advance, and on each Payment Date, the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to deposit into the Liquidity Reserve Account from available Collections (as set forth and in the order of priority established pursuant to Section 2.7(B)), funds in the amount required under Section 2.7(B), and the Borrower may, at its option, deposit additional funds into the Liquidity Reserve Account;
(iii)    If on any Payment Date (without giving effect to any withdrawal from the Liquidity Reserve Account) available funds on deposit in the Collection Account would be insufficient to make the payments due and payable on such Payment Date pursuant to Sections 2.7(B)(i) through (iii), the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report delivered pursuant to Section 3.1 of the Facility Administration Agreement, to withdraw from the Liquidity Reserve Account an amount equal to the lesser of such insufficiency and the amount on deposit in the Liquidity Reserve Account and deposit such amount into the Collection Account and apply such amount to payments set forth in Sections 2.7(B)(i) through (iii);
(iv)    Upon the occurrence of an Event of Default, the Administrative Agent (or the Facility Administrator with the written consent of the Administrative Agent) shall cause the Paying Agent, by providing written direction to the Paying Agent, to withdraw all amounts on deposit in the Liquidity Reserve Account and deposit such amounts into the Collection Account for distribution in accordance with Section 2.7(B);
(v)    On the earliest to occur of (a) the Maturity Date, (b) an Amortization Event (other than an Event of Default) and (c) the date on which the outstanding balance of the Advances is reduced to zero, the Administrative Agent shall cause the Paying Agent, by providing written direction to the Paying Agent, in the case of subclauses (a) and (b), and the Facility Administrator or the Borrower shall cause the Paying Agent, by providing written direction to the Paying Agent, in the case of subclause (c), to withdraw all amounts on deposit in the Liquidity Reserve Account and deposit such amounts into the Collection Account to be paid in accordance with Section 2.7(B);
(vi)    Unless an Event of Default or an Amortization Event has occurred and is continuing, on any Payment Date, if, as set forth on the Facility Administrator Report, amounts on deposit in the Liquidity Reserve Account are greater than the Liquidity Reserve

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Account Required Balance (after giving effect to all other distributions and disbursements on such Payment Date), the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to withdraw funds in excess of the Liquidity Reserve Account Required Balance from the Liquidity Reserve Account and disburse such amounts into the TEP Collateral Account; and
(vii)    On any Payment Date, if, as set forth on the Facility Administrator Report, the amount of funds in the Liquidity Reserve Account and in the Collection Account is equal to or greater than the aggregate outstanding balance of Advances (whether or not then due and payable) and all other amounts due and payable hereunder, then the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to withdraw all funds from the Liquidity Reserve Account and deposit such amounts into the Collection Account to pay all such amounts and the aggregate outstanding balance of all Advances (whether or not then due and payable).
Notwithstanding anything in this Section 8.2(C) to the contrary, in lieu of or in substitution for moneys otherwise required to be deposited to the Liquidity Reserve Account, the Borrower (or the Facility Administrator on behalf of the Borrower) may deliver or cause to be delivered to the Paying Agent a Letter of Credit; provided that any deposit into the Liquidity Reserve Account required to be made by the Borrower (or the Facility Administrator on behalf of the Borrower) after the replacement of amounts on deposit in the Liquidity Reserve Account with a Letter of Credit shall be made by the Borrower (or the Facility Administrator on behalf of the Borrower) by way of cash deposits to the Liquidity Reserve Account as provided in Section 2.7(B) or pursuant to the Borrower’s (or the Facility Administrator’s on behalf of the Borrower) causing an increase in the Letter of Credit or the delivery to the Paying Agent of an additional Letter of Credit.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Liquidity Reserve Account, and if any withdrawals from the Liquidity Reserve Account will be required under this Section 8.2(C) or otherwise, the Administrative Agent (or the Borrower with the written consent of the Administrative Agent) shall, no later than three (3) Business Days prior to the applicable Payment Date or payment date, direct the Paying Agent in writing to draw on the Letter of Credit, which direction shall provide the required draw amount. The Administrative Agent (or the Borrower with the written consent of the Administrative Agent) shall direct the Paying Agent to submit the drawing documents to the applicable Eligible Letter of Credit Bank no later than 5:00 P.M. (New York City time) on the second (2nd) Business Day after the Paying Agent receives such direction. Upon the receipt of the proceeds of any such drawing, the Paying Agent shall deposit such proceeds into the Liquidity Reserve Account. Any (A) references in the Transaction Documents to amounts on deposit in the Liquidity Reserve Account or amounts in or credited to the Liquidity Reserve Account shall include or be deemed to include the aggregate available amount of the Letters of Credit delivered to the Paying Agent pursuant to this Section 8.2(C), and (B) Letter of Credit delivered by the Borrower (or the Facility Administrator on behalf of the Borrower) to the Paying Agent pursuant to this Section 8.2(C) shall be held as an asset of the Liquidity Reserve Account and valued for purposes of determining the amount on deposit in the Liquidity Reserve Account at the amount as of any date then available to be drawn on such Letter of Credit.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


If at any time a Letter of Credit is held by the Paying Agent as an asset of the Liquidity Reserve Account, then: (i) if the Letter of Credit is scheduled to expire by its terms and ten (10) days prior to the scheduled expiration date such Letter of Credit has not been extended or replaced, then the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall on such tenth (10th) day prior to the scheduled expiration date notify the Paying Agent in writing of such failure to extend or replace the Letter of Credit, and the Paying Agent shall, submit the drawing documents delivered to it by the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent to the Eligible Letter of Credit Bank no later than 5:00 P.M. (New York City time) on the second (2nd) Business Day prior to the scheduled expiration date and draw the full amount of such Letter of Credit and deposit the proceeds of such drawing into the Liquidity Reserve Account, and (ii) if the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent notifies the Paying Agent in writing that the financial institution issuing the Letter of Credit ceases to be an Eligible Letter of Credit Bank or a Responsible Officer of the Paying Agent otherwise receives written notice that the financial institution issuing the Letter of Credit ceases to be an Eligible Letter of Credit Bank, then the Paying Agent shall, no later than the second (2nd) Business Day after receipt of any such written notice by a Responsible Officer of the Paying Agent submit the drawing documents delivered to it by the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent to draw the full amount of such Letter of Credit and deposit the proceeds of such drawing into the Liquidity Reserve Account.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Liquidity Reserve Account, the stated amount of the Letter of Credit may be reduced from time to time, to the extent of any reduction in the dollar amount of the Liquidity Reserve Account Required Balance. Each month upon receipt by the Paying Agent of the Facility Administrator Report if such Facility Administrator Report shows a reduction in the Liquidity Reserve Account Required Balance, then the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall, prior to the related Payment Date, direct the Paying Agent to send the Eligible Letter of Credit Bank a letter in the form provided in the Letter of Credit to reduce the stated amount of the Letter of Credit. The Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall ensure that the letter submitted shall provide for the reduction to be effective as of the close of business on the related Payment Date. The reduction shall be in the amount shown on the Facility Administrator Report as the Liquidity Reserve Account “reductions” and the remaining stated amount of the Letter of Credit shall be equal to the Liquidity Reserve Account Required Balance “ending required amount” as shown on the Facility Administrator Report. Any drawing on the Letter of Credit may be reimbursed by the Borrower only from amounts remitted to the Borrower pursuant to clauses (xvi) or (xvii) of Section 2.7(B) or clauses (v) or (vi) of Section 2.7(C).
Notwithstanding the foregoing or any other provision to the contrary in this Agreement or any other Transaction Document, in no event shall the Paying Agent be required to report, track, calculate or monitor the value, available amount or any other information regarding any Letter of Credit for any party hereto or beneficiary of or under the Liquidity Reserve Account, except as expressly required pursuant to this Section 8.2(C).

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(D)    Deposits and Withdrawals from the Supplemental Reserve Account. Deposits into, and withdrawals from, the Supplemental Reserve Account shall, subject to Section 2.7(D), be made in the following manner:
(i)    On each Payment Date, to the extent of Distributable Collections and in accordance with and subject to the priority of payments set forth in Section 2.7(B), the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to deposit into the Supplemental Reserve Account an amount equal to the Supplemental Reserve Account Deposit until the amount on deposit equals the Supplemental Reserve Account Required Balance.
(ii)    On each Payment Date, the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to deposit into the Supplemental Reserve Account from available Collections (as set forth and in the order of priority established pursuant to Section 2.7(B)), funds in the amount required under Section 2.7(B), if any, and the Borrower may, at its option, deposit additional funds into the Supplemental Reserve Account;
(iii)    The Paying Agent shall release funds from the Supplemental Reserve Account to pay the following amounts upon direction from the Facility Administrator set forth in an Officer’s Certificate (no more than once per calendar month) in the following order of priority:
(a)    the costs (inclusive of labor costs) of replacement of any Inverter that no longer has the benefit of a Manufacturer Warranty and for which (1) the Manager is not obligated under the related Management Agreement to cover the replacement costs of such Inverter (or if so obligated, has failed to pay such costs) and the related Financing Fund has insufficient funds to pay replacement costs for such Inverter or (2) the Facility Administrator in its role as Manager has paid under the related Management Agreement;
(b)    the amount of any deductible in connection with each claim paid by the Tax Loss Insurer under the related Tax Loss Insurance Policy plus the amount of the difference, if any, between (1) the amount of a Tax Loss Indemnity and (2) the sum of the amount of proceeds of a Tax Loss Insurance Policy received by a Financing Fund, as loss payee under such Tax Loss Insurance Policy with respect to the Tax Loss Indemnity and the amount of any deductible in connection therewith; and
(c)    each Purchase Option Price when due and payable under the terms of a Financing Fund LLCA upon exercise by the related Managing Member of the related Purchase Option.
(iv)    Unless an Event of Default or an Amortization Event has occurred and is continuing, on any Payment Date, if, as set forth on the Facility Administrator Report, amounts on deposit in the Supplemental Reserve Account are greater than the Supplemental

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Reserve Account Required Balance (after giving effect to all other distributions and disbursements and all releases and withdrawals on such Payment Date), the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to withdraw funds in excess of the Supplemental Reserve Account Required Balance from the Supplemental Reserve Account and disburse such amounts into the TEP Collateral Account;
(v)    If on any Payment Date (after giving effect to any withdrawals from the Liquidity Reserve Account) available funds on deposit in the Collection Account would be insufficient to pay the interest payments or other amounts due and payable pursuant to Sections 2.7(B)(i) through (iii) on such Payment Date, the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to withdraw from the Supplemental Reserve Account an amount equal to the lesser of such insufficiency and the amount on deposit in the Supplemental Reserve Account and deposit such amount into the Collection Account and apply such amount to payments set forth in Sections 2.7(B)(i) through (iii); and
(vi)    If on any Payment Date, the Borrower has provided notice to the Administrative Agent that (1) a Managing Member has irrevocably provided notice to the related Tax Equity Investor that it will not exercise the related Purchase Option or (2) the period in which such Purchase Option may be exercised under the related Financing Fund LLCA has expired and cannot be extended, the Borrower may direct the Paying Agent, to withdraw from the Supplemental Reserve Account any amounts on deposit therein in respect of clause (ii)(a) of the definition of “Supplemental Reserve Account Required Balance” and deposit such amounts into the Collection Account for application in accordance with Section 2.7; and
(vii)    On the date on which the Aggregate Outstanding Advances are reduced to zero, the Administrative Agent shall cause the Paying Agent, pursuant to a written direction, to withdraw all amounts on deposit in the Supplemental Reserve Account and deposit such amounts into the Collection Account to be paid in accordance with Section 2.7(B).
Notwithstanding anything in this Section 8.2(D) to the contrary, in lieu of or in substitution for moneys otherwise required to be deposited to the Supplemental Reserve Account, the Borrower (or the Facility Administrator on behalf of the Borrower) may deliver or cause to be delivered to the Paying Agent a Letter of Credit; provided that any deposit into the Supplemental Reserve Account required to be made by the Borrower (or the Facility Administrator on behalf of the Borrower) after the replacement of amounts on deposit in the Supplemental Reserve Account with a Letter of Credit shall be made by the Borrower (or the Facility Administrator on behalf of the Borrower) by way of cash deposits to the Supplemental Reserve Account as provided in Section 2.7(B) or pursuant to the Borrower’s (or the Facility Administrator’s on behalf of the Borrower) causing an increase in the Letter of Credit or the delivery to the Paying Agent of an additional Letter of Credit.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Supplemental Reserve Account, and if any withdrawals from the Supplemental Reserve Account will be required under this Section 8.2(D) or otherwise, the Administrative Agent (or the Borrower with the written consent of the Administrative Agent) shall, no later than three (3) Business Days prior to the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


applicable Payment Date or payment date, direct the Paying Agent in writing to draw on the Letter of Credit, which direction shall provide the required draw amount. The Administrative Agent (or the Borrower with the written consent of the Administrative Agent) shall direct the Paying Agent to submit the drawing documents to the applicable Eligible Letter of Credit Bank no later than 5:00 P.M. (New York City time) on the second (2nd) Business Day after the Paying Agent receives such direction. Upon the receipt of the proceeds of any such drawing, the Paying Agent shall deposit such proceeds into the Supplemental Reserve Account. Any (A) references in the Transaction Documents to amounts on deposit in the Supplemental Reserve Account or amounts in or credited to the Supplemental Reserve Account shall include or be deemed to include the aggregate available amount of the Letters of Credit delivered to the Paying Agent pursuant to this Section 8.2(D), and (B) Letter of Credit delivered by the Borrower (or the Facility Administrator on behalf of the Borrower) to the Paying Agent pursuant to this Section 8.2(D) shall be held as an asset of the Supplemental Reserve Account and valued for purposes of determining the amount on deposit in the Supplemental Reserve Account at the amount as of any date then available to be drawn on such Letter of Credit.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Supplemental Reserve Account, then: (i) if the Letter of Credit is scheduled to expire by its terms and ten (10) days prior to the scheduled expiration date such Letter of Credit has not been extended or replaced, then the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall on such tenth (10th) day prior to the scheduled expiration date notify the Paying Agent in writing of such failure to extend or replace the Letter of Credit, and the Paying Agent shall, submit the drawing documents delivered to it by the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent to the Eligible Letter of Credit Bank no later than 5:00 P.M. (New York City time) on the second (2nd) Business Day prior to the scheduled expiration date and draw the full amount of such Letter of Credit and deposit the proceeds of such drawing into the Supplemental Reserve Account, and (ii) if the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent notifies the Paying Agent in writing that the financial institution issuing the Letter of Credit ceases to be an Eligible Letter of Credit Bank or a Responsible Officer of the Paying Agent otherwise receives written notice that the financial institution issuing the Letter of Credit ceases to be an Eligible Letter of Credit Bank, then the Paying Agent shall, no later than the second (2nd) Business Day after receipt of any such written notice by a Responsible Officer of the Paying Agent submit the drawing documents delivered to it by the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent to draw the full amount of such Letter of Credit and deposit the proceeds of such drawing into the Supplemental Reserve Account.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Supplemental Reserve Account, the stated amount of the Letter of Credit may be reduced from time to time, to the extent of any reduction in the dollar amount of the Supplemental Reserve Account Required Balance. Each month upon receipt by the Paying Agent of the Facility Administrator Report if such Facility Administrator Report shows a reduction in the Supplemental Reserve Account Required Balance, then the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall, prior to the related Payment Date, direct the Paying Agent to send the Eligible Letter of Credit Bank a letter in the form provided in the Letter of Credit to reduce the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


stated amount of the Letter of Credit. The Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall ensure that the letter submitted shall provide for the reduction to be effective as of the close of business on the related Payment Date. The reduction shall be in the amount shown on the Facility Administrator Report as the Supplemental Reserve Account “reductions” and the remaining stated amount of the Letter of Credit shall be equal to the Supplemental Reserve Account Required Balance “ending required amount” as shown on the Facility Administrator Report. Any drawing on the Letter of Credit may be reimbursed by the Borrower only from amounts remitted to the Borrower pursuant to clauses (xvi) or (xvii) of Section 2.7(B) or clauses (v) or (vi) of Section 2.7(C).
Notwithstanding the foregoing or any other provision to the contrary in this Agreement or any other Transaction Document, in no event shall the Paying Agent be required to report, track, calculate or monitor the value, available amount or any other information regarding any Letter of Credit for any party hereto or beneficiary of or under the Supplemental Reserve Account, except as expressly required pursuant to this Section 8.2(D).
(E)    Deposits and Withdrawals from the SAP Revenue Account. Deposits into the SAP Revenue Account shall be made consistent with Section 5.1(R). The Paying Agent shall withdraw all amounts on deposit in the SAP Revenue Account in excess of $25,000 on the first Business Day of each calendar month and remit such amounts to the Collection Account. The Manager shall be permitted to withdraw up to $25,000 in the aggregate during each Collection Period from the SAP Revenue Account to pay Operational Amounts in accordance with the related SAP Financing Documents. On the date on which the Aggregate Outstanding Advances are reduced to zero, the Administrative Agent shall cause the Paying Agent, pursuant to a written direction, to withdraw all amounts on deposit in the SAP Revenue and deposit such amounts into the Collection Account to be paid in accordance with Section 2.7(B).
(F)    Paying Agent Account Control. (i) Each Paying Agent Account shall be established and at all times maintained with the Paying Agent which shall act as a “securities intermediary” (as defined in Section 8-102 of the UCC) and a “bank” (as defined in Section 9102 of the UCC) hereunder (in such capacities, the “Securities Intermediary”) with respect to each Paying Agent Account. The Paying Agent hereby confirms that, as of the Closing Date, the account numbers of each of the Paying Agent Accounts are as described on Schedule II attached hereto.
(ii)    Each Paying Agent Account shall be a “securities account” as defined in Section 8-501 of the UCC and shall be maintained by the Paying Agent as a securities intermediary for and in the name of the Borrower, subject to the lien of the Administrative Agent, for the benefit of the Secured Parties. The Paying Agent shall treat the Administrative Agent as the “entitlement holder” (within the meaning of Section 8-102(a)(7) of the UCC) in respect of all “financial assets” (within the meaning of Section 8-102(a)(9) of the UCC) credited to the Paying Agent Accounts.
(iii)    The Paying Agent hereby confirms and agrees that:

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(a)    the Paying Agent shall not change the name or account number of any Paying Agent Account without the prior written consent of the Administrative Agent and the Borrower;
(b)    all securities or other property underlying any financial assets (as hereinafter defined) credited to a Paying Agent Account shall be registered in the name of the Paying Agent, indorsed to the Paying Agent or indorsed in blank or credited to another securities account maintained in the name of the Paying Agent, and in no case will any financial asset credited to a Paying Agent Account be registered in the name of the Borrower or any other Person, payable to the Borrower or specially indorsed to the Borrower or any other Person, except to the extent the foregoing have been specially indorsed to the Administrative Agent, for the benefit of the Secured Parties, or in blank;
(c)    all property transferred or delivered to the Paying Agent pursuant to this Agreement will be credited to the appropriate Borrower Account in accordance with the terms of this Agreement;
(d)    each Paying Agent Account is an account to which financial assets are or may be credited, and the Paying Agent shall, subject to the terms of this Agreement, treat each of the Borrower and the Facility Administrator as entitled to exercise the rights that comprise any financial asset credited to each such Paying Agent Account; and
(e)    notwithstanding the intent of the parties hereto, to the extent that any Paying Agent Account shall be determined to constitute a “deposit account” within the meaning of Section 9-102(a)(29) of the UCC, such Paying Agent Account shall be subject to the exclusive control of the Administrative Agent, for the benefit of the Secured Parties, and the Paying Agent will comply with instructions originated by the Administrative Agent directing disposition of the funds in such Paying Agent Account, without further consent by the Borrower or the Facility Administrator; provided that, notwithstanding the foregoing, the Administrative Agent hereby authorizes the Paying Agent to honor withdrawal, payment, transfer or other instructions directing disposition of the funds in the Collection Account received from the Borrower or the Facility Administrator, on its behalf, pursuant to Section 2.7 or this Section 8.2.
(iv)    The Paying Agent hereby agrees that each item of property (including, without limitation, any investment property, financial asset, security, instrument or cash) credited to any Paying Agent Account shall be treated as a “financial asset” within the meaning of Section 8-102(a)(9) of the UCC.
(v)    If at any time the Paying Agent shall receive an “entitlement order” (as defined in Section 8-102(a)(8) of the UCC) (an “Entitlement Order”) from the Administrative Agent (i.e., an order directing a transfer or redemption of any financial asset in any Paying Agent Account), or any “instruction” (within the meaning of Section 9-104 of the UCC),

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originated by the Administrative Agent, the Paying Agent shall comply with such Entitlement Order or instruction without further consent by the Borrower, the Facility Administrator or any other Person. Neither the Facility Administrator nor the Borrower shall make any withdrawals from any Paying Agent Account, except pursuant to Section 2.7 or this Section 8.2.
(vi)    In the event that the Paying Agent has or subsequently obtains by agreement, by operation of law or otherwise a security interest in any Paying Agent Account or any financial assets, funds, cash or other property credited thereto or any security entitlement with respect thereto, the Paying Agent hereby agrees that such security interest shall be subordinate to the security interest of the Administrative Agent, for the benefit of the Secured Parties. Notwithstanding the preceding sentence, the financial assets, funds, cash or other property credited to any Paying Agent Account will not be subject to deduction, set-off, banker’s lien, or any other right in favor of any Person other than the Administrative Agent, for the benefit of the Secured Parties (except that the Paying Agent may set-off (i) all amounts due to the Paying Agent in its capacity as securities intermediary in respect of customary fees and expenses for the routine maintenance and operation of the Paying Agent Accounts, and (ii) the face amount of any checks that have been credited to the Paying Agent Accounts but are subsequently returned unpaid because of uncollected or insufficient funds).
(vii)    Regardless of any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the “bank’s jurisdiction” (within the meaning of Section 9-304 of the UCC) and the “security intermediary’s jurisdiction” (within the meaning of Section 8-110 of the UCC).
(viii)    If, at any time, the Paying Agent resigns, is removed hereunder or ceases to meet the eligibility requirements of an Eligible Institution, the Facility Administrator, for the benefit of the Administrative Agent and the Lenders, shall within thirty (30) days establish a new Collection Account, Supplemental Reserve Account, Liquidity Reserve Account, the SAP Revenue Account, and Takeout Transaction Account meeting the conditions specified above with an Eligible Institution reasonably acceptable to the Administrative Agent and transfer any cash and/or any investments held therein or with respect thereto to such new Collection Account, Supplemental Reserve Account, Liquidity Reserve Account, SAP Revenue Account, or Takeout Transaction Account, as applicable. From the date such new Collection Account, Supplemental Reserve Account, Liquidity Reserve Account, SAP Revenue Account, or Takeout Transaction Account is established, it shall be the “Collection Account,” “Supplemental Reserve Account,” “Liquidity Reserve Account,” “SAP Revenue Account,” or “Takeout Transaction Account” hereunder, as applicable.
(G)    Permitted Investments. Prior to an Event of Default, the Facility Administrator (and after an Event of Default, the Administrative Agent) may direct each banking institution at which the Collection Account, the Liquidity Reserve Account, Supplemental Reserve Account, SAP Revenue Account, or Takeout Transaction Account shall be established, in writing, to invest the funds held in such accounts in one or more Permitted Investments. Absent such written direction, such funds shall remain uninvested. All investments of funds on deposit in the Collection

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Account, the Liquidity Reserve Account, Supplemental Reserve Account, SAP Revenue Account, or Takeout Transaction Account shall be uninvested so that such funds will be available on the Business Day immediately preceding the date on which the funds are to be disbursed from such account, unless otherwise expressly set forth herein. All interest derived from such Permitted Investments shall be deemed to be “investment proceeds” and shall be deposited into such account to be distributed in accordance with the requirements hereof. The taxpayer identification number associated with the Collection Account, the Liquidity Reserve Account, Supplemental Reserve Account, SAP Revenue Account, and Takeout Transaction Account shall be that of the Borrower, and the Borrower shall report for federal, state and local income tax purposes the income, if any, earned on funds in such accounts.
Section 8.3.    Adjustments. If the Facility Administrator makes a mistake with respect to the amount of any Collection or payment and deposits, pays or causes to be deposited or paid, an amount that is less than or more than the actual amount thereof, the Facility Administrator shall appropriately adjust the amounts subsequently deposited into the applicable account or paid out to reflect such mistake for the date of such adjustment. Any Eligible Solar Asset in respect of which a dishonored check is received shall be deemed not to have been paid.
ARTICLE IX

THE PAYING AGENT
Section 9.1.    Appointment. The appointment of Wells Fargo Bank, National Association is hereby confirmed by the other parties hereto (other than the Verification Agent) as Paying Agent, and accepts such appointment subject to the terms of this Agreement.
Section 9.2.    Representations and Warranties. The Paying Agent represents to the other parties hereto as follows:
(A)    Organization; Corporate Powers. The Paying Agent is duly incorporated and validly existing under the laws of the jurisdiction of its incorporation and has all requisite power and authority to conduct its business, to own its property and to execute, deliver and perform all of its obligations under this Agreement, and no license, permit, consent or approval, is required to be obtained, effective or given by the Paying Agent to enable it to perform its obligations hereunder.
(B)    Authority. The execution, delivery and performance by the Paying Agent of this Agreement have been duly authorized by all necessary action on the part of the Paying Agent.
(C)    Enforcement. This Agreement constitutes the legal, valid and binding obligation of the Paying Agent, enforceable against the Paying Agent in accordance with its terms except as such enforcement may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and general principles of equity, regardless of whether such enforcement is sought at equity or at law.
(D)    No Conflict. The Paying Agent is not in violation of any law, rule, or regulation governing the banking or trust powers of the Paying Agent applicable to it or any

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indenture, lease, loan or other agreement to which the Paying Agent is a party or by which it or its assets may be bound or affected, except for such laws, rules or regulations or indentures, leases, loans or other agreements the violation of which would not have a material adverse effect on the Paying Agent’s abilities to perform its obligations in accordance with the terms of this Agreement.
Section 9.3.    Limitation of Liability of the Paying Agent. Notwithstanding anything contained herein to the contrary, this Agreement has been executed by Wells Fargo Bank, National Association, not in its individual capacity, but solely as the Paying Agent, and in no event shall Wells Fargo Bank, National Association have any liability for the representations, warranties, covenants, agreements or other obligations of the other parties hereto or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the party responsible therefor.
Section 9.4.    Certain Matters Affecting the Paying Agent. Notwithstanding anything herein to the contrary:
(A)    The Paying Agent undertakes to perform such duties and only such duties as are specifically set forth in this Agreement. The Paying Agent shall not have any duties or responsibilities except those expressly set forth in this Agreement.
(B)    The Paying Agent shall not be subject to any fiduciary or other implied duties, obligations or covenants regardless of whether an Event of Default has occurred and is continuing.
(C)    The Paying Agent shall not be liable for any action taken or any error of judgment made in good faith by an officer or officers of the Paying Agent, unless it shall be conclusively determined by the final judgment of a court of competent jurisdiction not subject to appeal or review that the Paying Agent was grossly negligent or acted with willful misconduct in ascertaining the pertinent facts.
(D)    The Paying Agent shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with any direction given or certificate or other document delivered to the Paying Agent under this Agreement or any other Transaction Document.
(E)    None of the provisions of this Agreement or any other Transaction Document shall require the Paying Agent to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.
(F)    The Paying Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties, and shall be under no obligation to inquire as to the adequacy, content, accuracy or sufficiency of any such information or be under any obligation to make any calculation (or re-calculation), certification, or verification in respect of any such information and shall not be liable for any loss that may be occasioned thereby. The

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Paying Agent may also, but shall not be required to, 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.
(G)    Whenever in the administration of the provisions of this Agreement or any other Transaction Document the Paying Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action to be taken hereunder, such matter may, in the absence of gross negligence, willful misconduct or bad faith on the part of the Paying Agent, be deemed to be conclusively proved and established by a certificate delivered to the Paying Agent hereunder, and such certificate, in the absence of gross negligence, willful misconduct or bad faith on the part of the Paying Agent, shall be full warrant to the Paying Agent for any action taken, suffered or omitted by it under the provisions of this Agreement or any other Transaction Document.
(H)    The Paying Agent, at the expense of the Borrower, may consult with counsel, and the advice or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or opinion of counsel; provided however that such costs of counsel are reasonable and documented. Before the Paying Agent acts or refrains from acting hereunder, it may require and shall be entitled to receive an Officer’s Certificate and/or an opinion of counsel, the costs of which (including the Paying Agent’s reasonable and documented attorney’s fees and expenses) shall be paid by the party requesting that the Paying Agent act or refrain from acting. The Paying Agent shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or opinion of counsel.
(I)    The Paying Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, entitlement order, approval or other paper or document.
(J)    Except as provided expressly in Section 8.2(G) hereof, the Paying Agent shall have no obligation to invest and reinvest any cash held in any of the accounts hereunder in the absence of a timely and specific written investment direction pursuant to the terms of this Agreement. In no event shall the Paying Agent be liable for the selection of investments or for investment losses incurred thereon. The Paying Agent shall have no liability in respect of losses incurred as a result of the liquidation of any investment prior to its stated maturity or the failure of another party to timely provide a written investment direction pursuant to the terms of this Agreement. Investments in any Permitted Investments are not obligations or recommendations of, or endorsed or guaranteed by, the Paying Agent or its Affiliates. The Paying Agent and its Affiliates may provide various services for Permitted Investments and may be paid fees for such services. Each party hereto understands and agrees that proceeds of the sale of investments of the funds in any account maintained with the Paying Agent will be deposited by the Paying Agent into the applicable accounts on the Business Day on which the Paying Agent receives appropriate instructions hereunder, if such instructions received by the Paying Agent prior to the deadline for same day sale of such investments. If the Paying Agent receives such instructions after the applicable deadline for the sale of such investments, such proceeds will be deposited by the Paying Agent into the applicable account on the next succeeding Business Day. The parties hereto agree that

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notifications after the completion of purchases and sales of investments shall not be provided by the Paying Agent hereunder, and the Paying Agent shall make available, upon request and in lieu of notifications, periodic account statements that reflect such investment activity. No statement shall be made available if no investment activity has occurred during such period.
(K)    The Paying Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any action or omission on the part of any agent, attorney, custodian or nominee so appointed.
(L)    Any corporation or entity into which the Paying Agent may be merged or converted or with which it may be consolidated, or any corporation or entity resulting from any merger, conversion or consolidation to which the Paying Agent shall be a party, or any corporation or entity succeeding to the business of the Paying Agent shall be the successor of the Paying Agent hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.
(M)    In no event shall the Paying Agent be liable for punitive, special, indirect or consequential loss or damage of any kind whatsoever (including lost profits), even if the Paying Agent has been advised of such loss or damage and regardless of the form of action.
(N)    In no event shall the Paying Agent be liable for any failure or delay in the performance of its obligations under this Agreement or any related documents because of circumstances beyond the Paying Agent’s control, including a failure, termination, or suspension of a clearing house, securities depositary, settlement system or central payment system in any applicable part of the world or acts of God, flood, war (whether declared or undeclared), civil or military disturbances or hostilities, nuclear or natural catastrophes, political unrest, explosion, severe weather or accident, earthquake, terrorism, fire, riot, labor disturbances, strikes or work stoppages for any reason, embargo, government action, including any laws, ordinances, regulations or the like (whether domestic, federal, state, county or municipal or foreign) which delay, restrict or prohibit the providing of the services contemplated by this Agreement or any other Transaction Document or any related documents, or the unavailability of communications or computer facilities, the failure of equipment or interruption of communications or computer facilities, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility, or any other causes beyond the Paying Agent’s control whether or not of the same class or kind as specified above.
(O)    Knowledge of the Paying Agent shall not be attributed or imputed to any affiliate, line of business, or other division of Wells Fargo Bank, National Association (and vice versa).
(P)    The right of the Paying Agent to perform any permissive or discretionary act enumerated in this Agreement or any other Transaction Document shall not be construed as a duty.
(Q)    Absent gross negligence, bad faith or willful misconduct (in each case as conclusively determined by a court of competent jurisdiction pursuant to a final order or verdict

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not subject to appeal) on the part of, Wells Fargo Bank, National Association in acting in each of its capacities under this Agreement and the related Transaction Documents shall not constitute impermissible self-dealing or a conflict of interest, and the parties hereto hereby waive any conflict of interest presented by such service. Wells Fargo Bank, National Association may act as agent for, provide banking, custodial, collateral agency, verification and other services to, and generally engage in any kind of business, with others to the same extent as if Wells Fargo Bank, National Association, were not a party hereto. Nothing in this Agreement or any other Transaction Document shall in any way be deemed to restrict the right of Wells Fargo Bank, National Association to perform such services for any other person or entity, and the performance of such services for others will not, in and of itself, be deemed to violate or give rise to any duty or obligation to any party hereto not specifically undertaken by Wells Fargo Bank, National Association hereunder or under any other Transaction Document.
(R)    The Paying Agent shall not be responsible for preparing or filing any reports or returns relating to federal, state or local income taxes with respect to this Agreement or any other Transaction Document other than for the Paying Agent’s compensation.
(S)    The Paying Agent shall not be deemed to have notice or knowledge of, or be required to act based on, any event or information (including any Event of Default, Amortization Event or any other default and including the sending of any notice) unless a Responsible Officer of the Paying Agent has actual knowledge or shall have received written notice thereof. In the absence of such actual knowledge or receipt of such notice, the Paying Agent may conclusively assume that none of such events have occurred and the Paying Agent shall not have any obligation or duty to determine whether any Event of Default, Amortization Event or any other default has occurred. The delivery or availability of reports or other documents to the Paying Agent (including publicly available reports or documents) shall not constitute actual or constructive knowledge or notice of information contained in or determinable from those reports or documents, except for such information provided to be delivered under this Agreement to the Paying Agent; and knowledge or information acquired by any Responsible Officer of the Paying Agent in any of its respective capacities hereunder or under any other document related to this transaction, provided that the foregoing shall not relieve the Person acting as Paying Agent, as applicable, from its obligations to perform or responsibility for the manner of performance of its duties in a separate capacity under the Transaction Documents.
(T)    Except as otherwise provided in this Article IX:
(i)    except as expressly required pursuant to the terms of this Agreement, the Paying Agent shall not be required to make any initial or periodic examination of any documents or records for the purpose of establishing the presence or absence of defects, the compliance by the Borrower or any other Person with its representations and warranties or for any other purpose except as expressly required pursuant to the terms of this Agreement;
(ii)    whether or not therein expressly so provided, every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Paying Agent shall be subject to the provisions of this Article IX;

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(iii)    the Paying Agent shall not have any liability with respect to the acts or omissions of any other Person, and may assume compliance by each of the other parties to the Transaction Documents with their obligations thereunder unless a Responsible Officer of the Paying Agent is notified of any such noncompliance in writing;
(iv)    under no circumstances shall the Paying Agent be personally liable for any representation, warranty, covenant, obligation or indebtedness of any other party to the Transaction Documents (other than Wells Fargo Bank, National Association in any of its capacities under the Transaction Documents);
(v)    the Paying Agent shall not be held responsible or liable for or in respect of, and makes no representation or warranty with respect to (A) any recording, filing or depositing of this Agreement or any agreement referred to herein or any financing statement, continuation statement or amendments to a financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any re-recording, refiling or redepositing of any thereof, or (B) the existence, genuineness, value or protection of any collateral, for the legality, enforceability, effectiveness or sufficiency of the Transaction Documents or for the monitoring, creation, maintenance, enforceability, existence, status, validity, priority or perfection of any security interest, lien or collateral or the performance of any collateral; and
(vi)    the Paying Agent shall not be required to take any action hereunder if it shall have reasonably determined, or shall have been advised by its counsel, that such action is likely to result in liability on the part of the Paying Agent or is contrary to the terms hereof or any other Transaction Document to which it is a party or is not in accordance with applicable laws.
(U)    It is expressly understood and agreed by the parties hereto that the Paying Agent (i) has not provided nor will it provide in the future, any advice, counsel or opinion regarding the tax, financial, investment, securities law or insurance implications and consequences of the consummation, funding and ongoing administration of this Agreement and the matters contemplated herein, including, but not limited to, income, gift and estate tax issues, and the initial and ongoing selection and monitoring of financing arrangements, (ii) has not made any investigation as to the accuracy of any representations, warranties or other obligations of any other party to this Agreement or the other Transaction Documents or any other document or instrument and shall not have any liability in connection therewith and (iii) has not prepared or verified, or shall be responsible or liable for, any information, disclosure or other statement in any disclosure or offering document delivered in connection with this Agreement or the other Transaction Documents.
(V)    The recitals contained herein shall not be taken as the statements of the Paying Agent, and the Paying Agent does not assume any responsibility for their correctness. The Paying Agent does not make any representation regarding the validity, sufficiency or enforceability of this Agreement or the other Transaction Documents or as to the perfection or priority of any security interest therein, except as expressly set forth in Section 9.2(C).

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(W)    In the event that (i) the Paying Agent is unsure as to the application or interpretation of any provision of this Agreement or any other Transaction Document, (ii) this Agreement is silent or is incomplete as to the course of action that the Paying Agent is required or permitted to take with respect to a particular set of facts, or (iii) more than one methodology can be used to make any determination or calculation to be performed by the Paying Agent hereunder, then the Paying Agent may give written notice to the Administrative Agent requesting written instruction and, to the extent that the Paying Agent acts or refrains from acting in good faith in accordance with any such written instruction, the Paying Agent shall not be personally liable to any Person. If the Paying Agent shall not have received such written instruction within ten (10) calendar days of delivery of notice to the Administrative Agent (or within such shorter period of time as may reasonably be specified in such notice or as may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking any action, and shall have no liability to any Person for such action or inaction.
(X)    The Paying Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement or any other Transaction Document or to institute, conduct or defend any litigation hereunder or thereunder or in relation hereto or thereto at the request, order or direction of any of any Person, unless such Person with the requisite authority shall have offered to the Paying Agent security or indemnity satisfactory to the Paying Agent against the costs, expenses and liabilities (including the reasonable and documented fees and expenses of the Paying Agent’s counsel and agents) which may be incurred therein or thereby.
(Y)    The Paying Agent shall have no duty (i) to maintain or monitor any insurance or (ii) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Collateral.
(Z)    Notwithstanding anything to the contrary in this Agreement, the Paying Agent shall not be required to take any action that is not in accordance with applicable law.









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Section 9.5.    Indemnification. The Borrower and the Facility Administrator (for so long as the Facility Administrator is an Affiliate of the Borrower) agree, jointly and severally, to reimburse and indemnify, defend and hold harmless the Paying Agent, in its individual and representative capacities, and its officers, directors, agents and employees (collectively, the “Paying Agent Indemnified Parties”) against any and all fees, costs, damages, losses, suits, claims, judgments, liabilities, obligations, penalties, actions, expenses (including the reasonable and documented fees and expenses of counsel and court costs) or disbursements of any kind and nature whatsoever, regardless of the merit, which may be imposed on, incurred by or demanded, claimed or asserted against any of them in any way directly or indirectly relating to or arising out of or in connection with this Agreement or any other Transaction Document or any other document delivered in connection herewith or therewith or the transactions contemplated hereby or thereby, or the enforcement of any of the terms hereof or thereof or of any such other documents, including in connection with any enforcement (including any action, claim or suit brought) by any Paying Agent Indemnified Party of its rights hereunder or thereunder (including rights to indemnification), provided, that none of the Borrower or the Facility Administrator shall be liable for any of the foregoing to the extent arising from the gross negligence, willful misconduct or bad faith of the Paying Agent, as determined by the final judgment of a court of competent jurisdiction, no longer subject to appeal or review. The provisions of this Section 9.5 shall survive the discharge, termination or assignment of this Agreement or any related agreement or the earlier of the resignation or removal of the Paying Agent. This Section 9.5 shall not apply with respect to Taxes other than any Taxes that represent losses, liabilities, claims and damages arising from any non-Tax Proceeding. The Paying Agent Indemnified Parties’ reasonable and documented expenses are intended as expenses of administration.
Section 9.6.    Successor Paying Agent. The Paying Agent may resign at any time by giving at least thirty (30) days’ prior written notice thereof to the other parties hereto; provided, that no such resignation shall become effective until a successor Paying Agent that is satisfactory to the Administrative Agent and, to the extent no Event of Default or Amortization Event has occurred and is continuing, the Borrower, has been appointed hereunder. The Paying Agent may be removed at any time for cause by at least thirty (30) days’ prior written notice received by the Paying Agent from the Administrative Agent. Upon any such resignation or removal, the Administrative Agent shall have the right to appoint a successor Paying Agent that is satisfactory to the Borrower (unless an Event of Default or Amortization Event has occurred and is continuing). If no successor Paying Agent shall have been so appointed and shall have accepted such appointment within thirty (30) days after the exiting Paying Agent’s giving notice of resignation or receipt of notice of removal, then the exiting Paying Agent may, at the sole expense (including all fees, costs and expenses (including attorneys’ reasonable and documented fees and expenses) incurred in connection with such petition) of the Borrower, petition a court of competent jurisdiction to appoint a successor Paying Agent. Upon the acceptance of any appointment as the Paying Agent hereunder by a successor Paying Agent, such successor Paying Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the exiting Paying Agent, and the exiting Paying Agent shall be discharged from its duties and obligations hereunder. After any exiting Paying Agent’s resignation hereunder, the provisions of this Article IX shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Paying Agent hereunder. If the Paying Agent consolidates with, merges or converts into, or transfers or sells all

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or substantially all its corporate trust business or assets to, another Person, the resulting, surviving or transferee Person without any further act shall be the successor Paying Agent.
ARTICLE X

MISCELLANEOUS
Section 10.1.    Survival. All representations and warranties made by the Borrower and the Facility Administrator herein and all indemnification obligations of the Borrower and the Facility Administrator hereunder shall survive, and shall continue in full force and effect, after the making and the repayment of the Advances hereunder and the termination of this Agreement.
Section 10.2.    Amendments, Etc. (A) No amendment to or waiver of any provision of this Agreement, nor consent to any departure therefrom by the parties hereto, shall in any event be effective unless the same shall be in writing and signed by the Administrative Agent, on behalf of the Lenders and each Funding Agent, and the Borrower; provided that no such amendment or waiver shall (i) reduce the amount of or extend the maturity of any Advance or reduce the rate or extend the time of payment of interest thereon, or reduce or alter the timing of any other amount payable to any Lender hereunder, including amending or modifying any of the definitions related to such terms, in each case without the consent of the Lenders affected thereby, (ii) reduce the percentage specified in the definition of the Majority Class B Lenders without the written consent of all Class B Lenders, (iii) reduce the percentage specified in the definition of the Majority Lenders without the written consent of all Lenders, (iv) amend, modify or waive any provision of Sections 7.14 through 7.25 hereof without the written consent of all Funding Agents, (v) modify or amend this Agreement in a manner that could reasonably be expected to materially and adversely affect the Class B Lenders in a manner (economic or otherwise) disproportionate to the Class A Lenders, without the consent of the Class B Lenders, (vi) affect the rights or duties of the Paying Agent, Verification Agent or Facility Administrator under this Agreement without the written consent of such Paying Agent, Verification Agent or Facility Administrator, respectively, or (vii) amend or modify any provision of Section 6.1 or Section 6.2 without the consent of all Lenders. The Borrower agrees to provide notice to each party hereto of any amendments to or waivers of any provision of this Agreement; provided that the Borrower shall provide the Conduit Lender with prompt written notice of any amendment to any provision of this Agreement, prior to such amendment becoming effective.
(B)    Notwithstanding the foregoing or any other provision of this Agreement or any other Transaction Document to the contrary, the Administrative Agent, on behalf of the Lenders and each Funding Agent, and the Borrower may enter into an amendment hereto for the purpose of subdividing the Advances into separate tranches or reallocating the outstanding principal balance of the Advances among the Class A Advances and the Class B Advances; provided, no such amendment may be executed without the consent of all Lenders affected thereby; provided further, that such amendment shall be at the expense of the Lender or Lenders requesting such amendment and that none of the Borrower, Paying Agent or the Administrative Agent need enter into such amendment and no Lender need consent to such amendment if it would have a Material Adverse Effect on the payments, economics or obligations of any such party. Subject to the preceding

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sentence, each of the Borrower and the Facility Administrator agree to cooperate in effecting any amendment pursuant to this Section 10.2(B).
(C)    Notwithstanding anything to the contrary set forth in this Section 10.2, the consent of the Administrative Agent shall not be required for any amendment made in accordance with Sections 5.1(A)(ix) and (x).
Section 10.3.    Notices, Etc. All notices and other communications provided for hereunder shall be in writing and mailed or delivered by courier or facsimile: (A) if to the Borrower, to the Borrower, at its address at 20 Greenway Plaza, Suite 475, Houston, TX 77046. Attention: Chief Financial Officer and Treasurer, Facsimile: (281) 985-9907, email address: treasury@sunnova.com; notices@sunnova.com; (B) if to the Facility Administrator, at its address at 20 Greenway Plaza, Suite 475, Houston, TX 77046, Attention: Chief Financial Officer and Treasurer, Facsimile: (281) 985-9907, email address: treasury@sunnova.com; notices@sunnova.com; (C) if to the Administrative Agent, the CS Funding Agent, the CS Non-Conduit Lender or the Class B Lender, at its address at Credit Suisse AG, New York Branch, 11 Madison Avenue, 4th Floor, New York, NY 10010; Conduit and Warehouse Financing (212) 538-2007; email address: list.afconduitreports@creditsuisse.com; abcp.monitoring@creditsuisse.com; (D) if to the CS Conduit Lender, at its address at Mountcliff Funding LLC, c/o 20 Gates Management LLC, 120 West 45th Street, Suite 3700, New York, NY 10036, Attention: 20 Gates Management / Mountcliff Funding, E-Mail: mountcliff@20gates.com; (E) if to the Paying Agent, at its address at 600 S. 4th Street, MAC N9300-061, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services – Asset-Backed Administration, E-mail: ctsabsservicer@wellsfargo.com; and (F) in the case of any party, at such address or other address as shall be designated by such party in a written notice to each of the other parties hereto. Notwithstanding the foregoing, each Facility Administrator Report described in Section 5.1(B) and the Borrowing Base Certificate described in Section 2.4 may be delivered by electronic mail; provided, that such electronic mail is sent by a Responsible Officer and each such Facility Administrator Report or the Borrowing Base Certificate is accompanied by an electronic reproduction of the signature of a Responsible Officer of the Borrower. All such notices and communications shall be effective, upon receipt, provided, that notice by facsimile or email shall be effective upon electronic or telephonic confirmation of receipt from the recipient.
Section 10.4.    No Waiver; Remedies. No failure on the part of the Administrative Agent or any Lender to exercise, and no delay in exercising, any right hereunder or under the Loan Notes shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.




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Section 10.5.    Indemnification. The Borrower agrees to indemnify the Administrative Agent, the Paying Agent, the Successor Facility Administrator, the Verification Agent, each Lender, and their respective Related Parties (collectively, the “Indemnitees”) from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses (including court costs and fees and expenses of counsel and of enforcing the Borrower’s indemnification obligations hereunder) to which such Indemnitee may become subject arising out of, resulting from or in connection with any claim, litigation, investigation or proceeding (each, a “Proceeding” (including any Proceedings under environmental laws)) relating to the Transaction Documents or any other agreement, document, instrument or transaction related thereto, the use of proceeds thereof and the transactions contemplated hereby, regardless of whether any Indemnitee is a party thereto and whether or not such Proceedings are brought by the Borrower, its equity holders, affiliates, creditors or any other third party, and to reimburse each Indemnitee upon written demand therefor (together with reasonable back-up documentation supporting such reimbursement request) for any reasonable and documented legal or other out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing of one law firm to all such Indemnitees, taken as a whole, and, in the case of a conflict of interest, of one additional counsel to the affected Indemnitee taken as a whole (and, if reasonably necessary, of one local counsel and/or one regulatory counsel in any material relevant jurisdiction); provided, that the foregoing indemnity and reimbursement obligation will not, as to any Indemnitee, apply to (A) losses, claims, damages, liabilities or related expenses (i) to the extent they are found in a final non-appealable judgment of a court of competent jurisdiction to arise from the willful misconduct, bad faith or gross negligence of, or with respect to Indemnitees other than the Paying Agent or the Verification Agent, material breach of the Transaction Documents by, such Indemnitee or any of its affiliates or controlling persons or any of the officers, directors, employees, advisors or agents of any of the foregoing or (ii) arising out of any claim, litigation, investigation or proceeding that does not involve an act or omission of the Borrower or any of their Affiliates and that is brought by such Indemnitee against another Indemnitee (other than an Indemnitee acting in its capacity as Paying Agent, agent, arranger or any other similar role in connection with the Transaction Documents) or (B) any settlement entered into by such Indemnitee without the Borrower’s written consent (such consent not to be unreasonably withheld or delayed). This Section 10.5 shall not apply with respect to Taxes other than any Taxes that represent losses, liabilities, claims and damages arising from any non-Tax Proceeding. The provisions of this Section 10.5 shall survive the discharge, termination or assignment of this Agreement or any related agreement or the earlier of the resignation or removal of the Paying Agent or the Verification Agent. Notwithstanding anything to the contrary in this Section 10.5, the provisions of this Section shall be applied without prejudice to, and the provisions shall not have the effect of diminishing, the rights of the Paying Agent and any Paying Agent Indemnified Parties under Section 9.5 of this Agreement or any other provision of any Transaction Document providing for the indemnification of any such Persons.
Section 10.6.    Costs, Expenses and Taxes. The Borrower agrees to pay all reasonable and documented costs and expenses in connection with the preparation, execution, delivery, filing, recording, administration, modification, amendment or waiver of this Agreement, the Loan Notes and the other documents to be delivered hereunder, including the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent and the Paying Agent with respect thereto and with respect to advising the Administrative Agent and the Paying Agent as to their respective rights

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and responsibilities under this Agreement and the other Transaction Documents. The Borrower further agrees to pay on demand all costs and expenses, if any (including reasonable and documented counsel fees and expenses) (A) in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Loan Notes and the other documents to be delivered hereunder and (B) incurred by the Administrative Agent or the Paying Agent in connection with the transactions described herein and in the other Transaction Documents, or any potential Takeout Transaction, including in any case reasonable and documented counsel fees and expenses in connection with the enforcement of rights under this Section 10.6. Without limiting the foregoing, the Borrower acknowledges and agrees that the Administrative Agent or its counsel may at any time after an Event of Default shall have occurred and be continuing, engage professional consultants selected by the Administrative Agent to conduct additional due diligence with respect to the transactions contemplated hereby, including (A) review and independently assess the existing methodology employed by the Borrower in allocating Collections with respect to the Collateral, assess the reasonableness of the methodology for the equitable allocation of those Collections and make any recommendations to amend the methodology, if appropriate, (B) review the financial forecasts submitted by the Borrower to the Administrative Agent and assess the reasonableness and feasibility of those forecasts and make any recommendations based on that review, if appropriate, and (C) verify the asset base of the Borrower and the Borrower’s valuation of their assets, as well as certain matters related thereto. The reasonable and documented fees and expenses of such professional consultants, in accordance with the provisions of this Section 10.6, shall be at the sole cost and expense of the Borrower. In addition, the Borrower shall pay any and all Other Taxes and agrees to save the Administrative Agent, the Paying Agent and each Lender harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such Other Taxes.
Section 10.7.    Right of Set-off; Ratable Payments; Relations Among Lenders. (A) Upon the occurrence and during the continuance of any Event of Default, and subject to the prior payment of Obligations owed to the Paying Agent, each of the Administrative Agent and the Lenders are hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by and other indebtedness incurred pursuant to this Agreement at any time owing to the Administrative Agent or such Lender to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and the Loan Notes, whether or not the Administrative Agent or such Lenders shall have made any demand under this Agreement or the Loan Notes and although such obligations may be unmatured. The Administrative Agent and each Lender agrees promptly to notify the Borrower after any such set-off and application; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Administrative Agent and the Lenders under this Section 10.7(A) are in addition to other rights and remedies (including other rights of set-off) which the Administrative Agent and the Lenders may have.
(B)    If any Lender, whether by setoff or otherwise, has payment made to it upon its Advances in a greater proportion than that received by any other Lender, such other Lender agrees, promptly upon demand, to purchase a portion of the Advances held by the Lenders so that after such purchase each Lender will hold its ratable share of Advances. If any Lender, whether in

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connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon written demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in proportion to the obligations owing to them. In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made.
(C)    Except with respect to the exercise of set-off rights of any Lender in accordance with Section 10.7(A), the proceeds of which are applied in accordance with this Agreement, each Lender agrees that it will not take any action, nor institute any actions or proceedings, against the Borrower or any other obligor hereunder or with respect to any Collateral or Transaction Document, without the prior written consent of the other Lenders or, as may be provided in this Agreement or the other Transaction Documents, at the direction of the Administrative Agent.
(D)    The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender.
Section 10.8.    Binding Effect; Assignment. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the Paying Agent, the Verification Agent and the Administrative Agent and each Lender, and their respective successors and assigns, except that the Borrower shall not have the right assign to their rights hereunder or any interest herein without the prior written consent of the Administrative Agent and the Lenders, and any assignment by Borrower in violation of this Section 10.8 shall be null and void. Any Lender may at any time, without the consent of the Borrower or the Administrative Agent, assign all or any portion of its rights and obligations under this Agreement and any Loan Note to a Federal Reserve Bank and each Conduit Lender may assign its rights and obligations under this Agreement to a Program Support Provider; provided, that no such assignment or pledge shall release the transferor Lender from its obligations hereunder. Each Lender may assign to one or more banks or other entities all or any part or portion of, or may grant participations to one or more banks or other entities in all or any part or portion of its rights and obligations hereunder (including, without limitation, its Commitment, its Loan Notes or its Advances); provided that during the Availability Period, no Lender may transfer or assign any portion of its rights and obligations under this Agreement or any Loan Note to a Disqualified Lender; provided further that each such assignment (A) shall be substantially in the form of Exhibit F hereto or any other form reasonably acceptable to the Administrative Agent and (B) shall either be made (i) to a Permitted Assignee or (ii) to a Person that is acceptable to the Administrative Agent in its reasonable discretion (such consent not to be unreasonably withheld or delayed) unless an Event of Default or Amortization Event shall have occurred and be continuing.
(b)    If any assignment or participation is made to a Disqualified Lender in violation of this Section 10.8, the Borrower may upon notice to the applicable Disqualified Lender and the Administrative Agent, (A) purchase or prepay the Advances held by such Disqualified Lender by paying the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Lender paid to acquire

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such Advances, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder and/or (B) require such Disqualified Lender to assign, without recourse (in accordance with and subject to the restrictions contained in this Section 10.8), all of its interest, rights and obligations under this Agreement to one or more banks or other entities at the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Lender paid to acquire such interests, rights and obligations, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder.
Disqualified Lenders (A) will not, absent an Event of Default or consent from the Borrower (x) have the right to receive financial reports that are not publicly available, Facility Administrator Reports or other reports or confidential information provided to Lenders by the Borrower or the Administrative Agent (other than Tax reporting information with respect to the Advances), (y) attend or participate in meetings with the Borrower attended by the Lenders and the Administrative Agent, or (z) access any electronic site maintained by the Borrower or Administrative Agent to provide Lenders with confidential information or confidential communications from counsel to or financial advisors of the Administrative Agent and (B) (x) for purposes of any consent to any amendment, waiver or modification of, or any action under, and for the purpose of any direction to the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) under this Agreement or any other Transaction Document, each Disqualified Lender will be deemed to have consented in the same proportion as the Lenders that are not Disqualified Lenders consented to such matter, and (y) for purposes of voting on any plan of reorganization or plan of liquidation, each Disqualified Lender party hereto hereby agrees (1) not to vote on such plan, (2) if such Disqualified Lender does vote on such plan notwithstanding the restriction in the foregoing clause (1), such vote will be deemed not to be in good faith and shall be “designated” pursuant to Section 1126(e) of the Bankruptcy Code (or any similar provision in any other debtor relief laws), and such vote shall not be counted in determining whether the applicable class has accepted or rejected such plan in accordance with Section 1126(c) of the Bankruptcy Code (or any similar provision in any other debtor relief laws) and (3) not to contest any request by any party for a determination by the a bankruptcy court (or other applicable court of competent jurisdiction) effectuating the foregoing clause (2).
(c)    Upon, and to the extent of, any assignment (unless otherwise stated therein) made by any Lender hereunder, the assignee or purchaser of such assignment shall be a Lender hereunder for all purposes of this Agreement and shall have all the rights, benefits and obligations (including the obligation to provide documentation pursuant to Section 2.17(G)) of a Lender hereunder. Each Funding Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices a register (the “Register”) for the recordation of the names and addresses of the Lenders in its Lender Group, the outstanding principal amounts (and accrued interest) of the Advances owing to each Lender in its Lender Group pursuant to the terms hereof from time to time and any assignment of such outstanding Advances. The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower, the Paying Agent and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(d)    Any Lender may, without the consent of the Borrower, sell participation interests in its Advances and obligations hereunder (each such recipient of a participation a “Participant”); provided that after giving effect to the sale of such participation, such Lender’s obligations hereunder and rights to consent to any waiver hereunder or amendment hereof shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, all amounts payable to such Lender hereunder and all rights to consent to any waiver hereunder or amendment hereof shall be determined as if such Lender had not sold such participation interest, and the Borrower and the Administrative Agent and the other parties hereto shall continue to deal solely and directly with such Lender and not be obligated to deal with such participant. The Participant shall have no right to affect such Lender’s vote or action with respect to any matter requiring such Lender’s vote or action under this Agreement. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the outstanding principal amounts (and accrued interest) of each Participant’s interest in the Advances or other obligations under the Transaction Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of 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 Transaction Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant 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 shall have no responsibility for maintaining a Participant Register. Each recipient of a participation shall, to the fullest extent permitted by law, have the same rights, benefits and obligations (including the obligation to provide documentation pursuant to Section 2.17(G)), hereunder with respect to the rights and benefits so participated as it would have if it were a Lender hereunder, except that no Participant shall be entitled to receive any greater payment under Sections 2.11 or 2.17 than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.
(e)    Notwithstanding any other provision of this Agreement to the contrary, (i) a Lender may pledge as collateral, or grant a security interest in, all or

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any portion of its rights in, to and under this Agreement to a security trustee in connection with the funding by such Lender of Advances without the consent of the Borrower; provided that no such pledge or grant shall release such Lender from its obligations under this Agreement and (ii) a Conduit Lender may at any time, without any requirement to obtain the consent of the Administrative Agent or the Borrower, pledge or grant a security interest in all or any portion of its rights (including, without limitation, rights to payment of capital and yield) under this Agreement to a collateral agent or trustee for its commercial paper program.
Section 10.9.    GOVERNING LAW. THIS AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
Section 10.10.    Jurisdiction. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK (NEW YORK COUNTY) OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
Section 10.11.    Waiver of Jury Trial. ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS AGREEMENT.



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Section 10.12.    Section Headings. All section headings are inserted for convenience of reference only and shall not affect any construction or interpretation of this Agreement.
Section 10.13.    Tax Characterization. The parties hereto intend for the transactions effected hereunder to constitute a loan for U.S. federal income tax purposes.
Section 10.14.    Execution. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed 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 a signature page to this Agreement by facsimile or by e-mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 10.15.    Limitations on Liability. None of the members, managers, general or limited partners, officers, employees, agents, shareholders, directors, Affiliates or holders of limited liability company interests of or in the Borrower shall be under any liability to the Administrative Agent or the Lenders, respectively, any of their successors or assigns, or any other Person for any action taken or for refraining from the taking of any action in such capacities or otherwise pursuant to this Agreement or for any obligation or covenant under this Agreement, it being understood that this Agreement and the obligations created hereunder shall be, to the fullest extent permitted under applicable law, with respect to the Borrower, solely the limited liability company obligations of the Borrower. The Borrower and any member, manager, partner, officer, employee, agent, shareholder, director, Affiliate or holder of a limited liability company interest of or in the Borrower may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person (other than the Borrower) respecting any matters arising hereunder.
Section 10.16.    Confidentiality. (A) Except as otherwise provided herein, the Fee Letters (including such information set forth in any engagement letter, term sheet or proposal prior to the Closing Date that contains fees similar in nature to those in the Fee Letters) (collectively, “Confidential Information”) are confidential. Each of the Borrower, the Facility Administrator, the Paying Agent and the Verification Agent agrees:
(i)    to keep all Confidential Information confidential and to disclose Confidential Information only to those Affiliates, officers, employees, agents, accountants, equity holders, legal counsel and other representatives of the Borrower or its Affiliates (collectively, “Representatives”) who have a need to know such Confidential Information for the purpose of assisting in the negotiation, completion and administration of this Facility;
(ii)    to use the Confidential Information only in connection with the Facility and not for any other purpose; and
(iii)    to maintain and keep in force procedures reasonably designed to cause its Representatives to comply with these provisions and to be responsible for any failure of any Representative to follow those procedures. The provisions of this section 10.16(A) shall not apply to Confidential Information that (a) has been approved for release by written authorization of the appropriate party, or (b) is or hereafter becomes (through a source other

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than the Borrower, the Facility Administrator, the Paying Agent, the Verification Agent or their respective Affiliates or Representatives) generally available to the public and shall not prohibit the disclosure of Confidential Information to the extent required by applicable Law or by any Governmental Authority or to the extent necessary in connection with the enforcement of any Transaction Document.
The Borrower and the Facility Administrator agree not to provide copies of the Transaction Documents to any prospective investor in, or prospective lender to, the Borrower and the Facility Administrator without the prior written consent of the Administrative Agent, which shall not be unreasonably withheld, delayed or conditioned. For the avoidance of doubt, Borrower and the Facility Administrator or any other affiliate of Parent may provide copies of the Transaction Documents to any potential investor or equity holder in Parent or its affiliates, provided that each such Person shall have been instructed to keep the same confidential in accordance with this Section 10.16.
(B)    Each Lender, each Funding Agent, and the Administrative Agent agrees to maintain the confidentiality of all nonpublic information with respect to the parties herein or any other matters furnished or delivered to it pursuant to or in connection with this Agreement or any other Transaction Document; provided, that such information may be disclosed (i) to such party’s Affiliates or such party’s or its Affiliates’ officers, directors, employees, agents, accountants, legal counsel and other representatives (collectively “Lender Representatives”), in each case, who have a need to know such information for the purpose of assisting in the negotiation, completion and administration of the Facility and on a confidential basis, (ii) to any permitted assignee of or participant in, or any prospective assignee of or participant in, the Facility or any of its rights or obligations under this Agreement, in each case on a confidential basis, (iii) to any financing source, dealer, hedge counterparty or other similar party in connection with financing or risk management activities related to the Facility, (iv) to any Commercial Paper rating agency (including by means of a password protected internet website maintained in connection with Rule 17g-5), (v) to the extent required by applicable Law or by any Governmental Authority, and (vi) to the extent necessary in connection with the enforcement of any Transaction Document.
The provisions of this Section 10.16(B) shall not apply to information that (i) is or hereafter becomes (through a source other than the applicable Lender, Funding Agent or the Administrative Agent or any Lender Representative associated with such party) generally available to the public, (ii) was rightfully known to the applicable Lender, applicable Funding Agent or the Administrative Agent or any Lender Representative or was rightfully in their possession prior to the date of its disclosure pursuant to this Agreement, (iii) becomes available to the applicable Lender, applicable Funding Agent or the Administrative Agent or any Lender Representative from a third party unless to their knowledge such third party disclosed such information in breach of an obligation of confidentiality to the applicable Lender, applicable Funding Agent or the Administrative Agent or any Lender Representative, (iv) has been approved for release by written authorization of the parties whose information is proposed to be disclosed, or (v) has been independently developed or acquired by any Lender, any Funding Agent or the Administrative Agent or any Lender Representative without violating this Agreement. The provisions of this Section 10.16 shall not prohibit any Lender, any Funding Agent or the Administrative Agent from filing with or making available to any judicial,

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governmental or regulatory agency or providing to any Person with standing any information or other documents with respect to the Facility as may be required by applicable Law or requested by such judicial, governmental or regulatory agency.
Section 10.17.    Limited Recourse. All amounts payable by the Borrower on or in respect of the Obligations shall constitute limited recourse obligations of the Borrower secured by, and payable solely from and to the extent of, the Collateral; provided that (A) the foregoing shall not limit in any manner the ability of the Administrative Agent or any other Lender to seek specific performance of any Obligation (other than the payment of a monetary obligation in excess of the amount payable solely from the Collateral), (B) the provisions of this Section 10.17 shall not limit the right of any Person to name the Borrower as party defendant in any action, suit or in the exercise of any other remedy under this Agreement or the other Transaction Documents and (C) when any portion of the Collateral is transferred in a transfer permitted under and in accordance with this Agreement, the security interest in and Lien on such Collateral shall automatically be released, and the Lenders under this Agreement will no longer have any security interest in, lien on, or claim against such Collateral. No recourse shall be sought or had for the obligations of the Borrower against any Affiliate, director, officer, shareholder, manager or agent of the Borrower other than as specified in the Transaction Documents.
Section 10.18.    Customer Identification - USA Patriot Act Notice. The Administrative Agent and each Lender hereby notifies the Borrower and the Facility Administrator that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “Patriot Act”), and the Administrative Agent’s and each Lender’s policies and practices, the Administrative Agent and the Lenders are required to obtain, verify and record certain information and documentation that identifies the Borrower and the Facility Administrator, which information includes the name and address of the Borrower and such other information that will allow the Administrative Agent or such Lender to identify the Borrower in accordance with the Patriot Act.
Section 10.19.    Paying Agent Compliance with Applicable Anti-Terrorism and Anti-Money Laundering Regulations. In order to comply with laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including, but not limited to those relating to funding of terrorist activities and money laundering, the Paying Agent is required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Paying Agent. Accordingly, each of the parties agrees to provide to the Paying Agent upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Paying Agent to comply with such laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including, but not limited to those relating to funding of terrorist activities and money laundering.
Section 10.20.    Non-Petition. 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 of any state of the United States or of any other jurisdiction prior to the date which is one year and one day after the payment in full of all outstanding indebtedness

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


of the Conduit Lender. The agreements set forth in this Section 10.20 and the parties’ respective obligations under this Section 10.20 shall survive the termination of this Agreement.
Section 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 a Conduit Lender hereunder shall be without recourse of any kind to such Conduit Lender. A Conduit Lender shall have no liability or obligation hereunder unless and until such Conduit Lender has received such amounts pursuant to this Agreement. In addition, the parties hereto hereby agree that (i) a Conduit Lender shall have no obligation to pay the parties hereto any amounts constituting fees, reimbursement for expenses or indemnities (collectively, “Expense Claims”) and such Expense Claims shall not constitute a claim (as defined in Section 101 of Title 11 of the Bankruptcy Code or similar laws of another jurisdiction) against such Conduit Lender, unless or until such Conduit Lender has received amounts sufficient to pay such Expense Claims pursuant to this Agreement and such amounts are not required to pay the outstanding indebtedness of such Conduit Lender and (ii) no recourse shall be sought or had for the obligations of a Conduit Lender hereunder against any Affiliate, director, officer, shareholders, manager or agent of such Conduit Lender.
(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.
Section 10.22.     [Reserved].
Section 10.23.    Additional Paying Agent Provisions. The parties hereto acknowledge that the Paying Agent shall not be required to act as a “commodity pool operator” as defined in the Commodity Exchange Act, as amended, or be required to undertake regulatory filings related to this Agreement in connection therewith.
Section 10.24.    Acknowledgement Regarding Any Supported QFCs. To the extent that the Transaction Documents provide support, through a guarantee or otherwise, for Hedge Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Transaction Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Transaction Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Transaction Documents were governed by the laws of the United States or a state of the United States.
[Signature Pages Follow]



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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
SUNNOVA TEP HOLDINGS, LLC, as Borrower
By:                                     
Name:
Title:
SUNNOVA TE MANAGEMENT, LLC, as Facility Administrator
By:                                         
Name:
Title:


[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



CREDIT SUISSE AG, New York Branch,
as Administrative Agent and as a Funding Agent
By:                                         
Name:
Title:
By:                                         
Name:
Title:
CREDIT SUISSE AG, Cayman Islands Branch,
as a Lender
By:                                         
Name:
Title:
By:                                         

[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Name:
Title:

[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



MOUNTCLIFF FUNDING LLC, as a Conduit Lender
By:                                         
Name:
Title:


[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity but solely as Paying Agent
By:                                         
Name:
Title:


[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



U.S. BANK NATIONAL ASSOCIATION,
as Verification Agent
By:                                         
Name:
Title:




[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT A
DEFINED TERMS
“1940 Act” shall mean the Investment Company Act of 1940, as amended.
“A-1 Verification Agent Certification” shall have the meaning set forth in Section 4(a) of the Verification Agent Agreement.
“A-2 Verification Agent Certification” shall have the meaning set forth in Section 4(b) of the Verification Agent Agreement.
“Accession Agreement” shall mean (i) a Security Agreement Supplement in the form of Exhibit B to the Security Agreement, (ii) a Pledge Agreement Joinder in the form of Exhibit A to the Pledge Agreement, (iii) a Joinder Agreement in the form of Exhibit C to the Verification Agent Agreement, (iv) Guaranty Supplement in the form of Exhibit A to the Subsidiary Guaranty and (v) an Subsidiary Supplement in the form of Exhibit A to the Parent Guaranty.
“Additional Solar Assets” shall mean each Eligible Solar Asset that is acquired by a Financing Fund or SAP after the Closing Date and during the Availability Period.
“Adjusted LIBOR Rate” shall mean a rate per annum equal to the rate (rounded upwards, if necessary, to the next higher 1/100 of 1%) obtained by dividing (i) LIBOR by (ii) a percentage equal to 100% minus the reserve percentage (rounded upward to the next 1/100th of 1%) in effect on such day and applicable to the Non-Conduit Lender for which this rate is calculated under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “eurocurrency liabilities”). The Adjusted LIBOR Rate shall be adjusted automatically as of the effective date of any change in such reserve percentage.
“Administrative Agent” shall have the meaning set forth in the introductory paragraph hereof.
“Administrative Agent’s Account” shall mean the Administrative Agent’s bank account designated by the Administrative Agent from time to time by written notice to the Borrower.
“Advance” shall mean, individually or collectively, as the context may require, a Class A Advance and/or a Class B Advance.
“Affected Party” shall have the meaning set forth in Section 2.10(B).
“Affiliate” shall mean, with respect to any Person, any other Person that (i) directly or indirectly controls, is controlled by, or is under direct or indirect common control with such Person, or, (ii) is an officer or director of such Person, and in the case of any Lender that is an investment fund, the investment advisor thereof and any investment fund having the same investment advisor. A Person shall be deemed to be “controlled by” another Person if such other Person possesses, directly or indirectly, power to (a) vote 50% or more of the securities (on a fully diluted basis)

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


having ordinary voting power for the election of directors or managing partners of such other Person, or (b) direct or cause the direction of the management and policies of such other Person whether by contract or otherwise.
“Affiliated Entity” shall mean any of the Parent, the Facility Administrator (if the Facility Administrator is an Affiliate of the Borrower), the Seller, and any of their respective direct or indirect Subsidiaries and/or Affiliates, whether now existing or hereafter created, organized or acquired.
“Aggregate Commitment” shall mean, on any date of determination, the sum of the Commitments then in effect. The Aggregate Commitment as of the Closing Date shall be equal to $100,000,000.
“Aggregate Discounted Solar Asset Balance” shall mean, on any date of determination, the sum of the Discounted Solar Asset Balances for the Managing Member Interests, the SAP Solar Assets and any Hedged SREC Solar Assets. Any Managing Member Interests, SAP Solar Assets or Hedged SREC Solar Assets that would otherwise be duplicated in computing this sum shall only be counted once.
“Aggregate Outstanding Advances” shall mean, as of any date of determination, the sum of (i) the aggregate principal balance of all Class A Advances outstanding plus (ii) the aggregate principal balance of all Class B Advances outstanding.
“Agreement” shall have the meaning set forth in the introductory paragraph hereof.
“A.M. Best” shall mean A. M. Best Company, Inc. and any successor rating agency.
“Amortization Event” shall mean the occurrence of the any of the following events:
(i)a Facility Administrator Termination Event;
(ii)    the Solar Asset Payment Level is less than 88.0%;
(iii)    the Managing Member Distributions Payment Level is less than 88.0%;
(iv)    the Default Level is greater than 0.75%;
(v)    an Event of Default (whether or not cured by a Tax Equity Investor);
(vi)    a Tax Loss Insurance Policy ceases to be of full force and effect or ceases to meet the requirements of the related Tax Equity Facility;
(vii)    if Sunnova Management is the Facility Administrator and the sum of (a) the net cash provided by operating activities of Sunnova Management, as reported in any set of quarterly financial statements delivered pursuant to Section 5(q)(ii) of the Parent Guaranty plus (b) unrestricted cash on hand held by Sunnova Management as of the date of such financial statements, shall be negative (for purposes of this clause (viii), the term

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“net cash” and “operating activities” shall have the meanings attributable to such terms under GAAP); provided, that if (x) on or prior to the date that is fifteen (15) Business Days after the date on which it is determined that such amount is negative, the Parent Guarantor's equity holders, any of their Affiliates and any other Person makes an equity investment to Sunnova Management in cash in an amount not less than such shortfall, and such cash, if so designated by Sunnova Management, be included as unrestricted cash, and (y) any such action described in subclause (x) is communicated to the Administrative Agent in writing, then no Amortization Event shall be deemed to have occurred or be continuing;
(viii)    Parent breaches any of the Financial Covenants and such breach has not been cured in accordance with Section 5(r) of the Parent Guaranty;
(ix)    the amounts on deposit in the Liquidity Reserve Account are at any time less than the Liquidity Reserve Account Required Balance and such deficit is not cured by the earlier of the next Payment Date or the next Funding Date;
(x)    the amounts on deposit in the Supplemental Reserve Account are at any time less than the Supplemental Reserve Account Required Balance and such deficit is not cured by the earlier of the next Payment Date or the next Funding Date; or
(xi)    the occurrence of a default under a Sunnova Credit Facility.
(xii)    “Amortization Period” shall mean the period commencing at the end of the Availability Period.
“Ancillary Solar Service Agreements” shall mean in respect of each Eligible Solar Asset, all agreements and documents ancillary to the Solar Service Agreement associated with such Eligible Solar Asset, which are entered into with a Host Customer in connection therewith, including any Customer Warranty Agreement.
“Applicable Law” shall mean all applicable laws of any Governmental Authority, including, without limitation, laws relating to consumer leasing and protection and any ordinances, judgments, decrees, injunctions, writs and orders or like actions of any Governmental Authority and rules and regulations of any federal, regional, state, county, municipal or other Governmental Authority.
“Approved Installer” shall mean an installer approved by the Parent to design, procure and install PV Systems on the properties of Host Customers and listed on the Parent’s list of approved installers as of the time of installation of an applicable PV System.
“Approved U.S. Territory” shall initially mean Puerto Rico, Guam and the Northern Mariana Islands and shall mean any other territory of the United States which the Administrative Agent has, in its sole discretion, approved as an Approved U.S. Territory, by providing a written notice to the Borrower regarding the same.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Approved Vendor” shall mean a manufacturer of Solar Photovoltaic Panels, Inverters or Energy Storage Systems for PV Systems that was approved by the Parent and listed on the Parent’s list of approved vendors as of the time of installation of an applicable PV System.
“Assignor” shall mean each of Parent, Intermediate Holdco, Sunnova Inventory Holdings, Sunnova Inventory Pledgor and TEP Inventory, as assignors of Solar Assets and/or Solar Asset Owner Subsidiaries pursuant to the Contribution Agreement.
“Availability Period” shall mean the period from the Closing Date until the earlier to occur of (i) the Commitment Termination Date, and (ii) an Amortization Event.
“Bank Base Rate” shall mean, with respect to any Lender for any day, a rate per annum equal to the Base Rate with respect to such Lender on such date.
“Bankruptcy Code” shall mean the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., as amended.
“Base Rate” shall mean, with respect to any Lender for any day, a rate per annum equal to the greater of (i) the prime rate of interest announced publicly by a Funding Agent with respect to its Lender Group (or the Affiliate of such Lender or Funding Agent, as applicable, that announces such rate) as in effect at its principal office from time to time, changing when and as said prime rate changes (such rate not necessarily being the lowest or best rate charged by such Person) or, if such Lender, Funding Agent or Affiliate thereof does not publicly announce the prime rate of interest, as quoted in The Wall Street Journal on such day and (ii) the sum of (a) 0.50% and (b) the rate 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, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by such Funding Agent with respect to such Lender Group from three Federal funds brokers of recognized standing selected by it.
“Base Case Model” shall mean a computer model agreed to by a Managing Member and the related Tax Equity Investor showing the expected economic results from ownership of the PV Systems owned by the related Financing Fund and the assumptions to be used in calculating when the such Tax Equity Investor has reached its target internal rate of return, which is attached as an exhibit to the related Financing Fund LLCA.
“Base Reference Banks” shall mean the principal London offices of Standard Chartered Bank, Lloyds TSB Bank, Royal Bank of Scotland, Deutsche Bank and the investment banking division of Barclays Bank PLC or such other banks as may be appointed by the Administrative Agent with the approval of the Borrower.
“Basel III” shall mean Basel III: A global regulatory framework for more resilient banks and banking systems prepared by the Basel Committee on Banking Supervision, and all national implementations thereof.

A-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation, which certification shall be substantially similar in form and substance to the form of Certification Regarding Beneficial Owners of Legal Entity Customers published jointly, in May 2018, by the Loan Syndications and Trading Association and Securities Industry and Financial Markets Association.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“BHC Act Affiliate” has the meaning assigned to the term "affiliate" in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Borrower” shall have the meaning set forth in the introductory paragraph hereof.
“Borrower’s Account” shall mean (i) the bank account of the Borrower, described on Schedule II attached hereto, for the benefit of the Borrower or (ii) such other account as may be designated by the Borrower from time to time by at least ten (10) Business Days’ prior written notice to the Administrative Agent and the Lenders, so long as such other account is acceptable to the Administrative Agent in its sole and absolute discretion.
“Borrowing Base” shall mean the Class A Borrowing Base and/or the Class B Borrowing Base, as applicable.
“Borrowing Base Certificate” shall mean the certificate in the form of Exhibit B-1 attached hereto.
“Borrowing Base Deficiency” shall have the meaning set forth in Section 2.9.
“Borrowing Base Step-up Period” shall mean the period from and including December 2, 2019 to and excluding the earlier or (x) the date on which a Takeout Transaction is first effected after December 2, 2019 and (y) March 31, 2020.
“Breakage Costs” shall mean, with respect to a failure by the Borrower, for any reason resulting from Borrower’s failure (but excluding any failures to borrow resulting from a Lender default under this Agreement), to borrow any proposed Advance on the date specified in the applicable Notice of Borrowing (including without limitation, as a result of the Borrower’s failure to satisfy any conditions precedent to such borrowing) after providing such Notice of Borrowing, the resulting loss, cost, expense or liability incurred by reason of the liquidation or reemployment of deposits, actually sustained by the Administrative Agent, any Lender or any Funding Agent; provided, however, that the Administrative Agent, such Lender or such Funding Agent shall use commercially reasonable efforts to minimize such loss or expense and shall have delivered to the Borrower a certificate as to the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error. For the avoidance of doubt, if a Lender does not make an advance and the Borrower has met all conditions precedent required under Article III or Lender has breached this Agreement, then any Breakage Costs shall be borne by Lender.

A-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Business Day” shall mean any day other than Saturday, Sunday and any other day on which commercial banks in New York, New York, Minnesota or California are authorized or required by law to close.
“Calculation Date” shall mean with respect to a Payment Date, the close of business on the last day of the related Collection Period.
“Call Date” shall mean, with respect to a Purchase Option, the earliest date on which such Purchase Option may be exercised.
“Capital Stock” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents, including membership interests (however designated, whether voting or non-voting) of equity of such Person, including, if such Person is a partnership, partnership interests (whether general or limited) or any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership, but in no event will Capital Stock include any debt securities convertible or exchangeable into equity unless and until actually converted or exchanged.
“Carrying Cost” shall mean, as of any date of determination, the sum of (i) the weighted average Swap Rate as of such date of determination, (ii) the weighted average Class A Usage Fee Rate and Class B Usage Fee Rate as of such date of determination and (iii) 0.10%.
“Change in Law” shall mean (i) the adoption or taking effect of any Law after the date of this Agreement, (ii) any change in Law or in the administration, interpretation, application or implementation thereof by any Governmental Authority after the date of this Agreement, (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority after the date of this Agreement or (iv) compliance by any Affected Party, by any lending office of such Affected Party or by such Affected Party’s holding company, if any, with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided, that notwithstanding anything herein to the contrary, (a) the Dodd-Frank Act, (b) Basel III and (c) all requests, rules, guidelines and directives under either of the Dodd-Frank Act or Basel III or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date implemented, enacted, adopted or issued.
“Change of Control” shall mean, the occurrence of one or more of the following events:
(i)    any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of SEI or Parent to any Person or group of related Persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (a “Group”), other than, in each case, any such sale, lease, exchange or transfer to a Person or Group that is, prior to such, lease, exchange or transfer, an Affiliate of SEI and is controlled (as that term is used in the definition of Affiliate) by SEI;

A-6

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(ii)    the approval by the holders of Capital Stock of SEI, Parent, Intermediate Holdco, Sunnova Inventory Pledgor, TEP Inventory, the Seller, TEP Resources, the Borrower or any Subsidiary of the Borrower of any plan or proposal for the liquidation or dissolution of such Person;
(iii)    any Person or Group shall become the owner, directly or indirectly, beneficially or of record, of shares representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of SEI, other than any Person that is a Permitted Investor or Group that is controlled by a Permitted Investor provided that any transfers or issuances of equity of SEI on or after the Closing Date to, among or between a Permitted Investor or any Affiliate thereof, shall not constitute a “Change of Control” for purposes of this clause (iii);
(iv)    SEI shall cease to directly own all of the Capital Stock in Parent;
(v)    Parent shall cease to directly own all of the Capital Stock in Intermediate Holdco;
(vi)    Intermediate Holdco shall cease to directly own all of the Capital Stock in Sunnova Inventory Pledgor;
(vii)    Sunnova Inventory Pledgor shall cease to directly own all of the Capital Stock in TEP Inventory;
(viii)    TEP Inventory shall cease to directly own all of the Capital Stock in Seller;
(ix)    Seller shall cease to directly own all of the Capital Stock in TEP Resources;
(x)    TEP Resources shall cease to directly own all of the Capital Stock in the Borrower; or
(xi)    the Borrower shall cease to own all of the Capital Stock in a Managing Member or SAP other than in connection with a Takeout Transaction pursuant to which 100% of the outstanding Capital Stock of such Managing Member or SAP is sold.
“Class A Advance” shall have the meaning set forth in Section 2.2.
“Class A Aggregate Commitment” shall mean, on any date of determination, the sum of the Class A Commitments then in effect. The Class A Aggregate Commitment as of the Closing Date shall be equal to $87,500,000. For the avoidance of doubt, any Class A Advance approved or funded

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


pursuant to Section 2.18 herein shall be deemed to increase the Commitment of the Non-Conduit Lender approving such Class A Advance.
“Class A Borrowing Base” shall mean, as of any date of determination, the product of (x)(a) the Aggregate Discounted Solar Asset Balance minus (b) the Excess Concentration Amount times (y)(a) with respect to Solar Assets other than Puerto Rico Solar Assets or Substantial Stage Solar Assets included in clause (x), [***]%, (b) with respect to Puerto Rico Solar Assets other than Substantial Stage Solar Assets included in clause (x), [***]%, and (c) with respect to Substantial Stage Solar Assets included in clause (x), (i) during the Borrowing Base Step-up Period, [***]% and (ii) at all times after the Borrowing Base Step-up Period, [***]%.
“Class A Borrowing Base Deficiency” shall have the meaning set forth in Section 2.9.
“Class A Commitment” shall mean the obligation of a Non-Conduit Lender to fund a Class A Advance on the Closing Date, as set forth on Exhibit E attached hereto.
“Class A Funding Agent” shall mean a Person appointed as a Class A Funding Agent for a Class A Lender Group pursuant to Section 7.14.
“Class A Interest Distribution Amount” shall mean, with respect to the Class A Advances on any date of determination, an amount equal to the sum of (i) the product of (a) the daily average outstanding principal balance of all Class A Advances during the related period (including any related Interest Accrual Period), (b) the actual number of days in such period (including any related Interest Accrual Period), divided by 360, 365 or 366, as applicable, and (c) the Class A Usage Fee Rate and (ii) any unpaid Class A Interest Distribution Amounts from prior Payment Dates plus, to the extent permitted by law, interest thereon at the Class A Usage Fee Rate for the related Interest Accrual Period. For the avoidance of doubt, the Class A Interest Distribution Amount shall not constitute “Confidential Information.”
“Class A Lender” shall mean a Lender that has funded a Class A Advance.
“Class A Lender Group” shall mean with respect to any Class A Advances, any group consisting of related Conduit Lenders, Non-Conduit Lenders and Funding Agents.
“Class A Lender Group Percentage” shall mean, for any Class A Lender Group, the percentage equivalent of a fraction (expressed out to five decimal places), the numerator of which is, with respect to each Class A Lender Group, the Class A Commitment of all Non-Conduit Lenders in such Class A Lender Group, and the denominator of which is the Class A Aggregate Commitment.
“Class A Loan Note” shall mean each Class A Loan Note of the Borrower in the form of Exhibit D-1 attached hereto, payable to a Class A Funding Agent for the benefit of the Class A Lenders in such Class A Funding Agent’s Class A Lender Group, in the aggregate face amount of up to such Class A Lender Group’s portion of the Class A Maximum Facility Amount, evidencing the aggregate indebtedness of the Borrower to the Class A Lenders in such Funding Agent’s Class A Lender Group, as the same be amended, restated, supplemented or otherwise modified from time to time.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Class A Maximum Facility Amount” shall mean $131,250,000.
“Class A Unused Portion of the Commitments” shall mean, with respect to the Class A Lenders on any day, the excess of (x) the Class A Aggregate Commitment as of such day as of 5:00 P.M. (New York City time) on such day, over (y) the sum of the aggregate outstanding principal balance of the Class A Advances as of 5:00 P.M. (New York City time) on such day.
“Class A Usage Fee Rate” shall mean the greater of (x) zero and (y) sum of (i) the Cost of Funds and (ii) the Class A Usage Fee Margin.
“Class A Usage Fee Margin” shall have the meaning set forth in the Fee Letter referred to in clause (i) of the definition thereof.
“Class B Advance” shall have the meaning set forth in Section 2.2
“Class B Aggregate Commitment” shall mean, on any date of determination, the sum of the Class B Commitments then in effect. The Class B Aggregate Commitment as of the Closing Date shall be equal to $12,500,000. For the avoidance of doubt, any Class B Advance approved or funded pursuant to Section 2.18 herein shall be deemed to increase the Commitment of the Non-Conduit Lender approving such Class B Advance.
“Class B Borrowing Base” shall mean, as of any date of determination, the product of (x)(a) the Aggregate Discounted Solar Asset Balance minus (b) the Excess Concentration Amount times (y)(a) with respect to Solar Assets other than Puerto Rico Solar Assets or Substantial Stage Solar Assets included in clause (x), [***]%, (b) with respect to Puerto Rico Solar Assets other than Substantial Stage Solar Assets included in clause (x), [***]%, and (c) with respect to Substantial Stage Solar Assets included in clause (x), (i) during the Borrowing Base Step-up Period, [***]% and (ii) at all times after the Borrowing Base Step-up Period, [***]%.
“Class B Borrowing Base Deficiency” shall have the meaning set forth in Section 2.9.
“Class B Commitment” shall mean the obligation of a Non-Conduit Lender to fund a Class B Advance on the Closing Date, as set forth on Exhibit E attached hereto.
“Class B Funding Agent” shall mean a Person appointed as a Class B Funding Agent for a Class B Lender Group pursuant to Section 7.14.
“Class B Interest Distribution Amount” shall mean, with respect to the Class B Advances on any date of determination, an amount equal to the sum of (i) the product of (a) the daily average outstanding principal balance of all Class B Advances during the related period (including any related Interest Accrual Period), (b) the actual number of days in such period (including any related Interest Accrual Period), divided by 360, 365 or 366, as applicable, and (c) the Class B Usage Fee Rate and (ii) any unpaid Class B Interest Distribution Amounts from prior Payment Dates plus, to the extent permitted by law, interest thereon at the Class B Usage Fee Rate for the related Interest Accrual Period. For the avoidance of doubt, the Class B Interest Distribution Amount shall not constitute “Confidential Information.”

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Class B Lender” shall mean a Lender that has funded a Class B Advance.
“Class B Lender Group” shall mean with respect to any Class B Advances, any group consisting of related Conduit Lenders, Non-Conduit Lenders and Funding Agents.
“Class B Lender Group Percentage” shall mean, for any Class B Lender Group, the percentage equivalent of a fraction (expressed out to five decimal places), the numerator of which is, with respect to each Class B Lender Group, the Class B Commitment of all Non-Conduit Lenders in such Class B Lender Group, and the denominator of which is the Class B Aggregate Commitment.
“Class B Loan Note” shall mean each Class B Loan Note of the Borrower in the form of Exhibit D-2 attached hereto, payable to a Class B Funding Agent for the benefit of the Class B Lenders in such Class B Funding Agent’s Class B Lender Group, in the aggregate face amount of up to such Class B Lender Group’s portion of the Class B Maximum Facility Amount, evidencing the aggregate indebtedness of the Borrower to the Class B Lenders in such Class B Funding Agent’s Class B Lender Group, as the same be amended, restated, supplemented or otherwise modified from time to time.
“Class B Maximum Facility Amount” shall mean $18,750,000.
“Class B Unused Portion of the Commitments” shall mean, with respect to the Class B Lenders on any day, the excess of (x) the Class B Aggregate Commitment as of such day as of 5:00 P.M. (New York City time) on such day, over (y) the sum of the aggregate outstanding principal balance of the Class B Advances as of 5:00 P.M. (New York City time) on such day.
“Class B Usage Fee Margin” shall have the meaning set forth in the Fee Letter referred to in clause (i) of the definition thereof.
“Class B Usage Fee Rate” shall mean the sum of (i) the Cost of Funds and (ii) the Class B Usage Fee Margin.
“Closing Date” shall mean September 6, 2019.
“Closing Date Verification Agent Certification” shall have the meaning set forth in Section 4(c) of the Verification Agent Agreement.
“Collateral” shall mean the Pledged Collateral (as defined in the Pledge Agreement) and have the meaning set forth in the Security Agreement, as applicable.
“Collection Account” shall have the meaning set forth in Section 8.2(A)(i).
“Collection Period” shall mean, with respect to a Payment Date, the three calendar months preceding the month in which such Payment Date occurs; provided that with respect to the first Payment Date, the Collection Period will be the period from and including the Closing Date to the end of the calendar quarter preceding such Payment Date.

A-10

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Collections” shall mean, all distributions and payments received in respect of the Solar Asset Owner Member Interests and other cash proceeds thereof. Without limiting the foregoing, “Collections” shall include any amounts payable to the Borrower with respect to the Eligible Solar Assets (i) under any Hedge Agreement entered into in connection with this Agreement or (ii) in connection with the disposition of any Collateral.
“Commercial Paper” shall mean commercial paper, money market notes and other promissory notes and senior indebtedness issued by or on behalf of a Conduit Lender.
“Commitment” shall mean, individually or collectively, as the context may require, the Class A Commitments and the Class B Commitments, as applicable.
“Commitment Termination Date” shall mean the earliest to occur of (i) the Scheduled Commitment Termination Date and (ii) the date of any voluntary termination of the facility by the Borrower.
“Conduit Lender” shall mean the CS Conduit Lender and each financial institution identified as such that may become a party hereto.
“Confidential Information” shall have the meaning set forth in Section 10.16(A).
“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Contribution Agreement” shall mean, collectively, that Contribution Agreement, dated as of the Closing Date, by and among the Assignors and the Seller, and that certain Contribution and Assignment Agreement, dated as of the Closing Date, by and among Parent, TEP Inventory and the Seller.
“Conveyed Property” shall have the meaning set forth in the Sale and Contribution Agreement.
“Corporate Trust Office” shall mean, with respect to the Paying Agent, the corporate trust office thereof at which at any particular time its corporate trust business with respect to the Transaction Documents is conducted, which office at the date of the execution of this instrument is located at 600 S. 4th Street, MAC N9300-061, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services – Asset-Backed Administration, or at such other address as such party may designate from time to time by notice to the other parties to this Agreement.
“Cost of Funds” shall mean, (i) with respect to the Class A Advances for any Interest Accrual Period, interest accrued on such Class A Advances during such Interest Accrual Period at the Adjusted LIBOR Rate for such Interest Accrual Period or, if the Adjusted LIBOR Rate is not available, the Base Rate and (ii) with respect to the Class B Advances for any Interest Accrual Period, interest accrued on such Class B Advances during such Interest Accrual Period at the Adjusted LIBOR Rate for such Interest Accrual Period or, if the Adjusted LIBOR Rate is not available, the Base Rate.

A-11

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Covered Entity” means any of the following: (i) a "covered entity" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a "covered bank" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a "covered FSI" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Covered Party” shall have the meaning set forth in Section 10.24 hereof.
“Credit Card Receivable” shall mean Host Customer Payments that are made via credit card.
“CS Conduit Lender” shall mean Mountcliff Funding LLC.
“CS Lender Group” shall mean a group consisting of the CS Conduit Lender, the CS Non-Conduit Lender and CSNY, as a Funding Agent for such Lenders.
“CS Non-Conduit Lender” shall mean Credit Suisse AG, Cayman Islands Branch. “CSNY” shall have the meaning set forth in the introductory paragraph hereof.
“Customer Collection Policy” shall mean the initial Manager’s internal collection policy as described in each Management Agreement; provided that from and after the appointment of a Successor Manager pursuant to such Management Agreement, the “Customer Collection Policy” shall mean the collection policy of such Successor Manager for servicing assets comparable to the Borrower Solar Assets (as defined in such Management Agreement).
“Customer Warranty Agreement” shall mean any separate warranty agreement provided by Parent to a Host Customer (which may be an exhibit to a Solar Service Agreement) in connection with the performance and installation of the related PV System (which may include a Performance Guaranty).
“Cut-off Date” shall mean, (i) for each Solar Asset acquired on the Closing Date, the date that is three (3) Business Days prior to the Closing Date, and (ii) for any Additional Solar Asset, the date specified as such in the related Schedule of Solar Assets.
“Default Level” shall mean, for any Collection Period, the quotient (expressed as a percentage) of (i) the sum of the Discounted Solar Asset Balances of all Eligible Solar Assets that became Defaulted Solar Assets during such Collection Period and that did not repay all past due portions of a contractual payment due under the related Solar Service Agreement by the end of such Collection Period, divided by (ii) the Aggregate Discounted Solar Asset Balance on the first day of such Collection Period.
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“Defaulted Solar Asset” shall mean a Solar Asset for which the related Host Customer is more than 120 days past due on any portion of a contractual payment due under the related Solar Service Agreement; provided, however, once such amounts are paid in full by the Host Customer such Solar Asset shall no longer be a “Defaulted Solar Asset”. For the avoidance of doubt, any past due amounts owed by an original Host Customer after reassignment to or execution of a replacement

A-12

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Solar Service Agreement with a new Host Customer shall not cause the Solar Asset to be deemed to be a Defaulted Solar Asset.
“Defective Solar Asset” shall mean a Solar Asset with respect to which it is determined by the Administrative Agent (acting at the written direction of the Majority Lenders, such direction not to be unreasonably withheld, condition or delayed) or the Facility Administrator, at any time, that the Borrower breached as of the Transfer Date for such Solar Asset the representation in Section 4.1(U), unless such breach has been waived, in writing, by the Administrative Agent, acting at the direction of the Majority Lenders.
“Delayed Amount” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Date” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Lender” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Notice” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Reimbursement Amount” shall have the meaning set forth in Section 2.4(G).
“Delinquent Solar Asset” shall mean a Solar Asset for which the related Host Customer is more than 90 days past due on any portion of a contractual payment due under the related Solar Service Agreement; provided, however, once such amounts are paid in full by the Host Customer such Solar Asset shall no longer be a “Delinquent Solar Asset”.
“Discount Rate” shall mean, as of any date of determination, the greater of (i) 6.00% per annum and (ii) the Carrying Cost, in each case, determined as of such date of determination.
“Discounted Solar Asset Balance” shall mean, as of any date of determination (x)(i) with respect to the Managing Member Interests or the SAP Solar Assets (other than a Substantial Stage Solar Asset), the present value of the remaining and unpaid stream of Net Cash Flow on or after such date of determination, based upon discounting such Net Cash Flow to such date of determination at an annual rate equal to the Discount Rate, (ii) with respect to a Hedged SREC Solar Asset, the present value of the remaining and unpaid stream of Scheduled Hedged SREC Payments for such Hedged SREC Solar Asset on or after such date of determination, based upon discounting such Scheduled Hedged SREC Payments to such date of determination at an annual rate equal to the Discount Rate, and (iii) with respect to a Substantial Stage Solar Asset, the amount actually disbursed to channel partners for services rendered in respect of such Substantial Stage Solar Asset; provided, however, that in the case of either (i) or (ii), any Transferable Solar Asset will be deemed to have a Discounted Solar Asset Balance equal to [***], and (y) for purposes of determining the Default Level respect to a Host Customer Solar Asset, the present value of the remaining and unpaid stream of Net Scheduled Payments for such Host Customer Solar Asset for the period beginning on such date of determination and ending on the date of the last Net Scheduled Payment for such Host Customer Solar Asset shall be based upon discounting such Net Scheduled Payments to such date of determination at an annual rate equal to the Discount Rate.

A-13

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Disqualified Entity” shall have the meaning set forth in the Tax Equity Financing Documents.
“Disqualified Lender” shall mean any financial institution or other Persons identified in writing, prior to the Closing Date, by the Borrower to the Administrative Agent and any known Affiliate thereof clearly identifiable on the basis of its name (in each case, other than any Affiliate that is primarily engaged in, or that advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course and with respect to which such financial institution or other Person does not, directly or indirectly, possess the power to direct or cause the direction of the investment policies of such entity); provided that in no event shall a Lender designated under this Agreement as of the Closing Date be designated as a Disqualified Lender. The Borrower may from time to time update the list of Disqualified Lenders provided to the Administrative Agent prior to the Closing Date to (x) include identified Affiliates of financial institutions or other Persons identified pursuant to the preceding sentence; provided that such updates shall not apply retroactively to disqualify parties that have previously acquired an assignment or participation interest in the Commitment or (y) remove one or more Persons as Disqualified Lenders (in which case such removed Person or Persons shall no longer constitute Disqualified Lenders).
“Distributable Collections” shall have the meaning set forth in Section 2.7(B).
“Dodd-Frank Act” shall mean the Dodd-Frank Wall Street Reform and Consumer Protection Act.
“Dollar,” “Dollars,” “U.S. Dollars” and the symbol “$” shall mean the lawful currency of the United States.
“East Region” shall mean the states of New York, New Jersey, Massachusetts, Connecticut, Pennsylvania, Rhode Island, Maryland, Florida, and South Carolina and any other territory of the United States consented to in writing by the Administrative Agent.
“East Region Substantial Stage Date Solar Asset Reserve Amount” shall mean, as of any date of determination, the product of (i) 9/3 times (ii) the sum of the Class A Interest Distribution Amount and the Class B Interest Distribution Amount due and payable on the immediately succeeding Payment Date times (iii) the ratio of (x) the aggregate principal balance of all Advances related to Substantial Stage Solar Assets the Obligor of which is located in the East Region as of such date divided by (y) the Aggregate Outstanding Advances as of such date; provided, however, that solely for the purpose of determining the East Region Substantial Stage Date Solar Asset Reserve Amount as of the Closing Date, the East Region Substantial Stage Date Solar Asset Reserve Amount shall be an amount reasonably calculated by the Administrative Agent and provided to the Borrower prior to the Closing Date.
“Effective Advance Rate” shall mean, as of any date of determination, the ratio of the Aggregate Outstanding Advances to the Aggregate Discounted Solar Asset Balance.

A-14

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Eligible Facility Administrator” shall mean Sunnova Management or any other operating entity which, at the time of its appointment as Facility Administrator, (i) is legally qualified and has the capacity to service the Solar Assets or provide administrative services to the Borrower, and (ii) prior to such appointment, is approved in writing by the Administrative Agent as having demonstrated the ability to professionally and competently service the Collateral and/or a portfolio of assets of a nature similar to the Eligible Solar Assets in accordance with high standards of skill and care.
“Eligible Hedged SREC Counterparty” shall mean (i) [reserved], (ii) any entity rated, or guaranteed (such guaranty to be acceptable to the Administrative Agent in its sole discretion) by an entity rated, investment grade by any of Moody’s, Standard & Poor’s, Fitch, Inc., DBRS, Inc. or Kroll Bond Rating Agency, Inc. and (iii) such other parties which are agreed to in writing by the Administrative Agent to be Eligible Hedged SREC Counterparties.
“Eligible Institution” shall mean a commercial bank or trust company having capital and surplus of not less than $[***] in the case of U.S. banks and $[***] (or the U.S. dollar equivalent as of the date of determination) in the case of foreign banks; provided that a commercial bank which does not satisfy the requirements set forth above shall nonetheless be deemed to be an Eligible Institution for purposes of holding any deposit account or any other account so long as such commercial bank is a federally or state chartered depository institution subject to regulations regarding fiduciary funds on deposit substantially similar to 12 C.F.R. § 9.10(b) and such account is maintained as a segregated trust account with the corporate trust department of such bank.
“Eligible Letter of Credit Bank” means a financial institution (a) organized in the United States, (b) having total assets in excess of $[***] and with a long term rating of at least “A-” by S&P or “A3” by Moody’s and a short term rating of at least “A-1” by S&P or “P-1” by Moody’s, and (c) approved by the Administrative Agent acting on the instructions of the Majority Lenders (such approval not to be unreasonably delayed withheld or delayed).
“Eligible Solar Asset” shall mean, on any date of determination, a Solar Asset:
(i)    which meets all of the criteria specified in Schedule I;
(ii)    for which the legal title to the Host Customer Payments, PBI Payments, Energy Storage System Incentives, and Hedged SREC Payments related thereto is vested solely in a Financing Fund or SAP; and
(iii)    was acquired by a Financing Fund or SAP pursuant to the related Tax Equity Financing Documents or the SAP Contribution Agreement, as applicable, and has not been sold or encumbered by the related Financing Fund or SAP except as permitted hereunder (with respect to Permitted Liens and Permitted Equity Liens) and under the applicable SAP Financing Documents or Tax Equity Financing Documents.

A-15

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Energy Storage System” shall mean an energy storage system to be used in connection with a PV System, including all equipment related thereto (including any battery management system, wiring, conduits and any replacement or additional parts included from time to time).
“Energy Storage System Incentives” shall mean payments paid by a state or local Governmental Authority, based in whole or in part on the size of an Energy Storage System, made as an inducement to the owner thereof.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA, as in effect at the Closing Date and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.
“ERISA Affiliate” shall mean each Person (as defined in Section 3(9) of ERISA), which together with the Borrower, would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Internal Revenue Code or Section 4001(a)(14) or 4001(b)(1) of ERISA.
“ERISA Event” shall mean (i) that a Reportable Event has occurred with respect to any Single-Employer Plan; (ii) the institution of any steps by the Borrower or any ERISA Affiliate, the Pension Benefit Guaranty Corporation or any other Person to terminate any Single-Employer Plan or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, a Single-Employer Plan; (iii) the institution of any steps by the Borrower or any ERISA Affiliate to withdraw from any Multi-Employer Plan or Multiple Employer Plan or written notification of the Borrower or any ERISA Affiliate concerning the imposition of withdrawal liability; (iv) a non-exempt “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code in connection with any Plan; (v) the cessation of operations at a facility of the Borrower or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (vi) with respect to a Single-Employer Plan, a failure to satisfy the minimum funding standard under Section 412 of the Internal Revenue Code or Section 302 of ERISA, whether or not waived; (vii) the conditions for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to a Single-Employer Plan; (viii) a determination that a Single-Employer Plan is or is expected to be in “at-risk” status (within the meaning of Section 430(i)(4) of the Internal Revenue Code or Section 303(i)(4) of ERISA); (ix) the insolvency of or commencement of reorganization proceeding with respect to a Multi Employer Plan or written notification that a Multi-Employer Plan is in “endangered” or “critical” status (within the meaning of Section 432 of the Internal Revenue Code or Section 305 of ERISA); or (x) the taking of any action by, or the threatening of the taking of any action by, the Internal Revenue Service, the Department of Labor or the Pension Benefit Guaranty Corporation with respect to any of the foregoing.
“Event of Default” shall mean any of the Events of Default described in Section 6.1.
“Event of Loss” shall mean the occurrence of an event with respect to a PV System if such PV System is damaged or destroyed by fire, theft or other casualty and such PV System has become inoperable because of such event.

A-16

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Excess Concentration Amount” shall mean the dollar amount specified as such on Schedule III of a Borrowing Base Certificate; provided, that for the periods (i) commencing on the Closing date Date and ending ninety one hundred eighty (90180) days thereafter and (ii) commencing on the effective date of a Takeout Transaction and ending ninety (90) days thereafter, lines 34, 37 and 40 thereof shall not be included in the calculation of the Excess Concentration Amount.
“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (a) 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 applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) that are Other Connection Taxes, (ii) 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 pursuant to a Law in effect on the date on which (a) such Lender acquires such interest in the Loan or (b) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, 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, (iii) Taxes attributable to such Recipient’s failure to comply with Section 2.17(G) and (iv) any U.S. federal withholding Taxes imposed under FATCA.
“Expected Amortization Profile” shall mean the expected amortization schedule of any outstanding Advance or any Advance that has been requested pursuant to Section 2.4, as the context may require, as of the applicable date of determination as determined by the Administrative Agent using its proprietary model and in consultation with the Borrower.
“Expense Claim” shall have the meaning set forth in Section 10.21.
“Facility” shall mean this Agreement together with all other Transaction Documents.
“Facility Administration Agreement” shall mean the Facility Administration Agreement, dated as of the Closing Date, by and among the Borrower, the Facility Administrator and the Administrative Agent, as amended, restated, modified and/or supplemented from time to time in accordance with its terms.
“Facility Administrator” shall have the meaning set forth in the introductory paragraph hereof.
“Facility Administrator Fee” shall have the meaning set forth in Section 2.1(b) of the Facility Administration Agreement.
“Facility Administrator Report” shall have the meaning set forth in the Facility Administration Agreement.
“Facility Administrator Termination Event” shall have the meaning set forth in Section 7.1 of the Facility Administration Agreement.

A-17

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Facility Maturity Date” shall mean November 21, 2022.
“FATCA” shall mean Sections 1471 through 1474 of the Internal Revenue 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 interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code, and any intergovernmental agreements between the United States and another country which modify the provisions of the foregoing.
“FATCA Withholding Tax” means any withholding or deduction required pursuant to FATCA.
“Fee Letters” shall mean (i) that certain fee letter agreement, dated as of the Closing Date, entered into by and among the Administrative Agent and the Borrower, as the same be amended, restated, supplemented or otherwise modified from time to time, and (ii) any other fee letter between the Borrower and any other Lender or other Person, as the same be amended, restated, supplemented or otherwise modified from time to time.
“Final Stage Solar Asset” shall mean a Solar Asset for which the related PV System is fully installed but has not received Permission to Operate.
“Final Stage Solar Asset Reserve Amount” shall mean, as of any date of determination, the product of (i) 5/3 times (ii) the sum of the Class A Interest Distribution Amount and the Class B Interest Distribution Amount due and payable on the immediately succeeding Payment Date times (iii) the ratio of (x) the aggregate principal balance of all Advances related to Final Stage Solar Assets as of such date divided by (y) the Aggregate Outstanding Advances as of such date; provided, however, that solely for the purpose of determining the Final Stage Solar Asset Reserve Amount as of the Closing Date, the Final Stage Solar Asset Reserve Amount shall be an amount reasonably calculated by the Administrative Agent and provided to the Borrower prior to the Closing Date.
“Financial Covenants” shall have the meaning set forth in the Parent Guaranty.
“Financing Fund” shall mean, collectively, each entity set forth under the heading “Financing Funds” on Schedule VIII hereto.
“Financing Fund Contributions” shall mean any capital contributions from Parent or its Affiliates to Borrower or a Managing Member for contribution to a Financing Fund.
“Financing Fund LLCA” shall mean, collectively, each document set forth under the heading “Financing Fund LLCAs” on Schedule VIII hereto.
“First Payment Date Reserve Amount” shall mean, as of any date of determination, the product of (i) 1/3 times (ii) the sum of the Class A Interest Distribution Amount and the Class B Interest Distribution Amount due and payable on the immediately succeeding Payment Date times (iii) the ratio of (x) the aggregate principal balance of all Advances related to Solar Assets which have received Permission to Operate but have not yet made a payment under the related Solar

A-18

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Service Agreement as of such date divided by (y) the Aggregate Outstanding Advances as of such date.
“Funding Agent” shall mean, individually or collectively as the context may require, each Class A Funding Agent and each Class B Funding Agent, as applicable.
“Funding Date” shall mean any Business Day on which an Advance is made at the request of the Borrower in accordance with provisions of this Agreement.
“GAAP” shall mean generally accepted accounting principles as are in effect from time to time and applied on a consistent basis (except for changes in application in which the Borrower’s independent certified public accountants and the Administrative Agent reasonably agree) both as to classification of items and amounts.
“Governmental Authority” shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Hedge Agreement” shall mean, collectively, (i) the ISDA Master Agreement, the related Schedule to the ISDA Master Agreement, and the related Confirmation or (ii) a long form confirmation, in each case in form and substance reasonably acceptable to the Administrative Agent.
“Hedge Counterparty” shall mean the initial counterparty under a Hedge Agreement, and any Qualifying Hedge Counterparty to such Hedge Agreement thereafter.
“Hedge Requirements” shall mean the requirements of the Borrower (i) within two (2) Business Days of the Closing Date and on each Funding Date to enter into forward-starting interest rate swap agreements with a forward start date no later than the Facility Maturity Date to an aggregate DV01 exposure of within +/- 5.0% of the then present value of such forward-starting interest rate swap agreement according to the aggregate Expected Amortization Profile of the Aggregate Outstanding Advances and, to the extent the expected notional balance of the Aggregate Outstanding Advances is equal to or greater than $5,000,000, with an amortizing notional balance schedule which, after giving effect to such interest rate swap agreement, will cause not greater than 125.0% and not less than 75.0% of the aggregate Expected Amortization Profile of the Aggregate Outstanding Advances to be subject to a fixed interest rate, with each such interest rate swap agreement being entered into at the market fixed versus LIBOR swap rate as at the date of the execution thereof and (ii) upon the election of the Borrower or no later than five (5) Business Days following the occurrence of a Hedge Trigger Event and each Funding Date thereafter enter into one or more interest rate swap or cap agreements with a Hedge Counterparty, under which the Borrower will expect to, at all times until the Facility Maturity Date, receive on or about each Payment Date, an amount required to maintain a fixed interest rate or interest rate protection at then current market interest rates on not greater than 110.0% and not less than 90.0% of the expected notional balance of the Aggregate Outstanding Advances through the Facility Maturity Date (determined after giving

A-19

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


effect to Advances and payments made on the applicable Funding Date) (it being understood that an interest rate swap agreement entered into under clause (i) of this definition of “Hedge Requirements” (to the extent the effective date thereof is earlier than the Facility Maturity Date) may be taken into account in determining whether the Borrower satisfies the requirements of this clause (ii)).
“Hedge Trigger Event” shall mean the occurrence of either of the following (i) LIBOR for any Interest Accrual Period is greater than or equal to 2.75% or (ii) the end of the Availability Period.
“Hedged SREC” shall mean a solar renewable energy certificate representing any and all environmental credits, benefits, emissions reductions, offsets and allowances, howsoever entitled, that are created or otherwise arise from a PV System’s generation of electricity, including a solar renewable energy certificate issued to comply with a State’s renewable portfolio standard, which is subject to a Hedged SREC Agreement.
“Hedged SREC Agreement” shall mean, with respect to a PV System, the agreement evidencing all conditions to the payment of Hedged SREC Payments by the Eligible Hedged SREC Counterparty and the rate and timing of such Hedged SREC Payments.
“Hedged SREC Credit Support Obligations” shall mean that Indebtedness constituting credit support for Hedged SRECs in favor of Eligible Hedged SREC Counterparties in the form of guarantees, letters of credit and similar reimbursement and credit support obligations.
“Hedged SREC Payments” shall mean, with respect to a PV System and the related Hedged SREC Agreement, all payments due by the related Eligible Hedged SREC Counterparty under or in respect of such Hedged SREC Agreement.
“Hedged SREC Solar Asset” shall mean (i) a Hedged SREC Agreement and all rights and remedies of the Borrower thereunder, including all Hedged SREC Payments due on and after the related Cut-Off Date and any related security therefor, (ii) the related Hedged SRECs subject to such Hedged SREC Agreement, and (iii) all documentation in the Solar Asset File and other documents held by the Verification Agent related to such Hedged SREC Agreement and related Hedged SRECs.
“Host Customer” shall mean the customer under a Solar Service Agreement.
“Host Customer Payments” shall mean with respect to a PV System and a Solar Service Agreement, all payments due from the related Host Customer under or in respect of such Solar Service Agreement, including any amounts payable by such Host Customer that are attributable to sales, use or property taxes.
“Host Customer Security Deposit” shall mean any security deposit that a Host Customer must provide in accordance with such Host Customer’s Solar Service Agreement or the Facility Administrator’s credit and collections policy.

A-20

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Host Customer Solar Asset” shall mean (i) a PV System installed on a residential property, (ii) all related real property rights, Permits and Manufacturer Warranties (in each case, to the extent transferable), (iii) all rights and remedies of the lessor/seller under the related Solar Service Agreement, including all Host Customer Payments on and after the related Cut-Off Date and any related security therefor (other than Host Customer Security Deposits) and all Energy Storage System Incentives, (iv) all related PBI Solar Assets on and after the related Cut-Off Date, and (v) all documentation in the Solar Asset File and other documents held by the Verification Agent related to such PV System, the Solar Service Agreement and PBI Documents, if any.
“Indebtedness” shall mean as to any Person at any time, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (i) borrowed money; (ii) obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (iii) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility; (iv) reimbursement obligations under any letter of credit, currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device (other than in connection with this Agreement); (v) obligations of such Person to pay the deferred purchase price of property or services; (vi) obligations of such Person as lessee under leases which have been or should be in accordance with GAAP recorded as capital leases; (vii) any other transaction (including without limitation forward sale or purchase agreements, capitalized leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements, and whether structured as a borrowing, sale and leaseback or a sale of assets for accounting purposes; (viii) any guaranty or endorsement of, or responsibility for, any Indebtedness of the types described in this definition; (ix) liabilities secured by any Lien on property owned or acquired, whether or not such a liability shall have been assumed (other than any Permitted Liens or Permitted Equity Liens); or (x) unvested pension obligations.
“Indemnified Taxes” shall mean (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Transaction Document and (ii) to the extent not otherwise described in clause (i), Other Taxes.
“Indemnitees” shall have the meaning set forth in Section 10.5.
“Independent Accountant” shall have the meaning set forth in the Facility Administration Agreement.
“Independent Director” shall have the meaning set forth in Section 5.1(M).
“Initial Solar Asset” shall mean each Solar Asset listed on the Schedule of Solar Assets as of the Closing Date.
“Insolvency Event” shall mean, with respect to any Person:
(i)    the commencement of: (a) a voluntary case by such Person under the Bankruptcy Code or (b) the seeking of relief by such Person under other debtor relief Laws in any jurisdiction outside of the United States;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(ii)    the commencement of an involuntary case against such Person under the Bankruptcy Code (or other debtor relief Laws) and the petition is not controverted or dismissed within sixty (60) days after commencement of the case;
(iii)    a custodian (as defined in the Bankruptcy Code) (or equal term under any other debtor relief Law) is appointed for, or takes charge of, all or substantially all of the property of such Person;
(iv)    such Person commences (including by way of applying for or consenting to the appointment of, or the taking of possession by, a rehabilitator, receiver, custodian, trustee, conservator or liquidator (or any equal term under any other debtor relief Laws) (collectively, a “conservator”) of such Person or all or any substantial portion of its property) any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency, liquidation, rehabilitation, conservatorship or similar law of any jurisdiction whether now or hereafter in effect relating to such Person;
(v)    such Person is adjudicated by a court of competent jurisdiction to be
insolvent or bankrupt;
(vi)    any order of relief or other order approving any such case or proceeding referred to in clauses (i) or (ii) above is entered;
(vii)    such Person suffers any appointment of any conservator or the like for it or any substantial part of its property that continues undischarged or unstayed for a period of sixty (60) days; or
(viii)    such Person makes a compromise, arrangement or assignment for the benefit of creditors or generally does not pay its debts as such debts become due.
(ix)    “Interconnection Agreement” shall mean, with respect to a PV System, a contractual obligation between a utility and a Host Customer that allows the Host Customer to interconnect such PV System to the utility electrical grid.
“Interest Accrual Period” shall mean for each Payment Date, the period from and including the immediately preceding Payment Date to but excluding such Payment Date except that the Interest Accrual Period for the initial Payment Date shall be the actual number of days from and including the Closing Date to, but excluding, the initial Payment Date; provided, however, that with respect to any application of Distributable Collections pursuant to Section 2.7(C) on a Business Day other than a Payment Date, the “Interest Accrual Period” shall mean the period from and including the immediately preceding Payment Date to but excluding such Business Day.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Interest Distribution Amount” shall mean, individually or collectively as the context may require, the Class A Interest Distribution Amount and the Class B Interest Distribution Amount. For the avoidance of doubt, the Interest Distribution Amount shall not constitute “Confidential Information.”
“Intermediate Holdco” shall mean Sunnova Intermediate Holdings, LLC, a Delaware limited liability company.
“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, or any successor statute, and the rules and regulations thereunder, as the same are from time to time in effect.
“Inverter” shall mean, with respect to a PV System, the necessary device required to convert the variable direct electrical current (DC) output from a Solar Photovoltaic Panel into a utility frequency alternating electrical current (AC) that can be used by a Host Customer’s home or property, or that can be fed back into a utility electrical grid pursuant to an Interconnection Agreement.
“Law” shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, guideline, judgment, injunction, writ, decree or award of any Governmental Authority.
“Lease Agreement” shall mean an agreement between the owner of the PV System and a Host Customer whereby the Host Customer leases a PV System from such owner for fixed or escalating monthly payments.
“Lender Group” shall mean, individually or collectively as the context may require, each Class A Lender Group and each Class B Lender Group, as applicable.
“Lender Group Percentage” shall mean, individually or collectively as the context may require, each Class A Lender Group Percentage and each Class B Lender Group Percentage, as applicable.
“Lender Representative” shall have the meaning set forth in Section 10.16(B)(i).
“Lenders” shall have the meaning set forth in the introductory paragraph hereof.
“Letter of Credit” means any letter of credit issued by an Eligible Letter of Credit Bank and provided by the Borrower to the Administrative Agent in lieu of or in substitution for moneys otherwise required to be deposited in the Liquidity Reserve Account or the Supplemental Reserve Account, as applicable, which Letter of Credit is to be held as an asset of the Liquidity Reserve Account or the Supplemental Reserve Account, as applicable, and which satisfies each of the following criteria: (i) the related account party of which is not the Borrower, (ii) is issued for the benefit of the Paying Agent, (iii) has a stated expiration date of at least 180 days from the date of determination (taking into account any automatic renewal rights), (iv) is payable in Dollars in immediately available funds to the Paying Agent upon the delivery of a draw certificate duly executed by the Paying Agent stating that (A) such draw is required pursuant to Section 8.2(C) or (D), as

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


applicable, or (B) the issuing bank ceased to be an Eligible Letter of Credit Bank and the Letter of Credit has not been extended or replaced with a Letter of Credit issued by an Eligible Letter of Credit Bank within ten (10) Business Days such issuing bank ceasing to be an Eligible Letter of Credit Bank, (v) the funds of any draw request submitted by the Paying Agent in accordance with Sections 8.2(C) and (D) will be made available in cash no later than two (2) Business Days after the Paying Agent submits the applicable drawing documents to the related Eligible Letter of Credit Bank, and (vi) that has been reviewed by the Administrative Agent and otherwise contains terms and conditions that are acceptable to the Administrative Agent. For purposes of determining the amount on deposit in the Liquidity Reserve Account or the Supplemental Reserve Account, as applicable, the Letter of Credit shall be valued at the amount as of any date then available to be drawn under such Letter of Credit.
“LIBOR” shall mean (a) an interest rate per annum equal to the rate appearing on the applicable Screen Rate; or (b) (if no Screen Rate is available for U.S. Dollars or the Interest Accrual Period or such Screen Rate ceases to be available), the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Administrative Agent at its request quoted by the Base Reference Banks, in each case at approximately 11:00 A.M., London time, two (2) Business Days prior to the commencement of such Interest Accrual Period for the offering of deposits in U.S. Dollars in the principal amount of the Advances and for a three (3) month period. Notwithstanding the foregoing, if LIBOR as determined herein would be less than zero (0.00), such rate shall be deemed to be zero percent (0.00%) for purposes of this Agreement. Notwithstanding the foregoing, if at any time while any Advances are outstanding, the applicable London interbank offered rate described in the definition of Screen Rate ceases to exist or be reported on the Screen Rate, the Administrative Agent may select (with notice to the Borrower and any other Lenders) an alternative rate, including any applicable spread adjustments thereto (the "Alternative Rate") that in its commercially reasonable judgment is consistent with the successor for the London interbank offered rate, including any applicable spread adjustments thereto, generally being used in the new issue collateralized loan obligation market and all references herein to "LIBOR" will mean such Alternative Rate selected by the Administrative Agent.
“Lien” shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing).
“Liquidated Damages Amount” shall have the meaning set forth in the Sale and Contribution Agreement.
“Liquidation Fee” shall mean for any Interest Accrual Period for which a reduction of the principal balance of the relevant Advance is made for any reason, on any day other than the last day of such Interest Accrual Period, the amount, if any, by which (A) the additional interest (calculated without taking into account any Liquidation Fee or any shortened duration of such Interest Accrual Period) which would have accrued during the portion of such Interest Accrual

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Period for which the cost of funding had been established prior to such reduction of the principal balance on the portion of the principal balance so reduced, exceeds (B) the income, if any, received by the Conduit Lender or the Non-Conduit Lender which holds such Advance from the investment of the proceeds of such reductions of principal balance for the portion of such Interest Accrual Period for which the cost of funding had been established prior to such reduction of the principal balance. A statement as to the amount of any Liquidation Fee (including the computation of such amount) shall be submitted by the affected Conduit Lender or the Non-Conduit Lender to the Borrower and shall be prima facie evidence of the matters to which it relates for the purpose of any litigation or arbitration proceedings, absent manifest error or fraud. Such statement shall be submitted five (5) Business Days prior to such amount being due.
“Liquidity Reserve Account” shall have the meaning set forth in Section 8.2(A)(iii).
“Liquidity Reserve Account Required Balance” shall mean on any date of determination, an amount equal to the sum of (i) the product of (a) six, (b) one-twelfth, (c) the Aggregate Outstanding Advances and (d) the weighted average effective per annum rate used to calculate the Class A Interest Distribution Amounts and the Class B Interest Distribution Amounts for the immediately preceding Payment Date or, with respect to the initial Payment Date hereunder, 5.58%, (ii) the Final Stage Solar Asset Reserve Amount, (iii) the East Region Substantial Stage Date Solar Asset Reserve Amount and , (iv) the Non-East Region Substantial Stage Date Solar Asset Reserve Amount and (v) the First Payment Date Reserve Amount.
“Loan Note” shall mean, individually or collectively as the context may require, each Class A Loan Note and each Class B Loan Note, as applicable.
“Majority Class B Lenders” shall mean, as of any date of determination, Class B Lenders having Class B Advances exceeding fifty percent (50%) of all outstanding Class B Advances.
“Majority Lenders” shall mean, as of any date of determination, (i) unless and until all Obligations owing to any Class A Lender solely in its capacity as a Class A Lender have been reduced to zero, Class A Lenders having Class A Advances exceeding fifty percent (50%) of all outstanding Class A Advances, and (ii) at any time on and after all Obligations owing to each Class A Lender solely in its capacity as Class A Lender have been reduced to zero, Class B Lenders having Class B Advances exceeding fifty percent (50%) of all outstanding Class B Advances; provided, that (w) in the event that no Advances are outstanding as of such date, “Majority Lenders” shall mean Administrative Agent, (x) so long as CSNY, its Affiliates or any related Conduit Lender with respect to CSNY or its Affiliates (the foregoing collectively referred to herein as the “Credit Suisse Related Parties”) holds at least twenty-five percent (25%) of Class A Advances or, if no Obligations are owing to any Class A Lender, Class B Advances or, if no Obligations are owing to any Lender, “Majority Lenders” shall include such Credit Suisse Related Party holding such Advances hereunder and (y) at any time there are two or less Class A Lenders, the term “Majority Lenders” shall mean all Class A Lenders holding at least ten percent (10%) of Class A Advances. For the purposes of determining the number of Lenders in the foregoing proviso, Affiliates of a Lender shall constitute the same Lender.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Management Agreement” shall mean, collectively, each document set forth under the heading “Management Agreements” on Schedule VIII hereto.
“Manager” shall mean, collectively, each entity set forth under the heading “Managers” on Schedule VIII hereto.
“Manager Fee” shall mean the fees, expenses and other amounts owed to the Manager pursuant to the Management Agreements.
“Managing Member” shall mean, collectively, each entity set forth under the heading “Managing Members” on Schedule VIII hereto.
“Managing Member Distributions” shall mean all distributions and payments in any form made, or due to be made, to the Managing Members or the Borrower in connection with its ownership interest in the Managing Member Interests, including Hedged SREC Payments.
“Managing Member Distributions Payment Level” shall mean, for any Collection Period, the quotient (expressed as a percentage) of (i) the sum of all Managing Member Distributions actually received in the Collection Account during such Collection Period, divided by (ii) the Scheduled Managing Member Distributions during such Collection Period.
“Managing Member Interests” shall mean, collectively, the Managing Members’ interest in 100% of the interests listed under the heading “Managing Member Interests” on Schedule VIII hereto.
“Manufacturer’s Warranty” shall mean any warranty given by a manufacturer of a PV System relating to such PV System or any part or component thereof.
“Margin Stock” shall have the meaning set forth in Regulation U.
“Marketable REC” shall mean a renewable energy certificate representing any and all environmental credits, benefits, emissions reductions, offsets and allowances, howsoever entitled, that are created or otherwise arise from a PV System’s generation of electricity, including a solar renewable energy certificate issued to comply with a State’s renewable portfolio standard and in each case resulting from the avoidance of the emission of any gas, chemical, or other substance attributable to the generation of solar energy by a PV System. For the avoidance of doubt, Marketable RECs do not include any renewable energy certificates that are the basis for PBI Payments or to which a PBI Obligor is given title to under a performance based incentive program or the basis for any Hedged SREC Payments.
“Master Purchase Agreement” shall mean, collectively, each document set forth under the heading “Master Purchase Agreements” on Schedule VIII hereto.
“Material Adverse Effect” shall mean, any event or circumstance having a material adverse effect on any of the following: (i) the business, property, operations or financial condition of the Borrower, the Facility Administrator, the Parent, a Financing Fund, a Managing Member or SAP, (ii) the ability of the Borrower or the Facility Administrator to perform its respective obligations

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


under the Transaction Documents (including the obligation to pay interest that is due and payable), (iii) the validity or enforceability of, or the legal right to collect amounts due under or with respect to, a material portion of the Eligible Solar Assets, or (iv) the priority or enforceability of any liens in favor of the Administrative Agent.
“Maturity Date” shall mean the earliest to occur of (i) the Facility Maturity Date, (ii) the occurrence of an Event of Default and declaration of all amounts due in accordance with Section 6.2(B) and (iii) the date of any voluntary termination of the Facility by the Borrower; provided that the Maturity Date may be extended in accordance with Section 2.16.
“Maximum Facility Amount” shall mean $150,000,000.
“Minimum Payoff Amount” shall mean, with respect to a Takeout Transaction, an amount of proceeds equal to the sum of (i) the product of the aggregate Discounted Solar Asset Balance or the Collateral subject to such Takeout Transaction times the Effective Advance Rate then in effect plus (ii) any accrued interest with respect to the amount of principal of Advances being prepaid in connection with such Takeout Transaction, plus (iii) any fees due and payable to any Lender or the Administrative Agent with respect to such Takeout Transaction; provided that if such Takeout Transaction is being undertaken to cure an Event of Default, then the Minimum Payoff Amount shall include such additional proceeds as are necessary to cure such Event of Default, if any.
“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor rating agency.
“Multi-Employer Plan” shall mean a multi-employer plan, as defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making or accruing an obligation to make contributions or has within any of the preceding five plan years made or accrued an obligation to make contributions or had liability with respect to.
“Multiple Employer Plan” shall mean a Single Employer Plan, to which the Borrower or any ERISA Affiliate, and one or more employers other than the Borrower or an ERISA Affiliate, is making or accruing an obligation to make contributions or, in the event that any such plan has been terminated, to which the Borrower or an ERISA Affiliate made or accrued an obligation to make contributions during any of the five plan years preceding the date of termination of such plan.
“Nationally Recognized Accounting Firm” shall mean (A) PricewaterhouseCoopers LLP, Ernst & Young LLP, KPMG LLC, Deloitte LLP and any successors to any such firm and (B) any other public accounting firm designated by the Parent and approved by the Administrative Agent, such approval not to be unreasonably withheld or delayed.
“Net Cash Flow” shall mean for any Collection Period (i) with respect to the Managing Member Interests (A) the Scheduled Managing Member Distributions minus (B) the sum of (x) the Tax Equity Investor Distribution Reduction Amount for such Collection period and (y) amounts attributable to (1) Solar Assets that were Transferable Solar Assets as of the last day of such Collection Period, and (2) SRECs related to the Solar Assets that are not Hedged SRECs, and (ii) with respect to a SAP Solar Asset (other than a Substantial Stage Solar Asset), an amount equal to (A) the sum of (x) the Scheduled Host Customer Payment for such SAP Solar Asset during such

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Collection Period, plus (y) the Scheduled PBI Payments for such SAP Solar Asset during such Collection Period minus (B) the Operational Amounts for such Collection Period.
“Net Scheduled Payment” shall mean, with respect to a Host Customer Solar Asset and PBI Solar Asset and any Collection Period an amount equal to (i) the sum of (A) the Scheduled Host Customer Payment for such Host Customer Solar Asset during such Collection Period, plus (B) the Scheduled PBI Payments for such Host Customer Solar Asset during such Collection Period, minus (ii) the Manager Fee and the Servicing Fee allocated with respect to such Host Customer Solar Asset during such Collection Period.
“Non-Conduit Lender” shall mean each Lender that is not a Conduit Lender.
“Non-East Region” means any state or territory of the United States that is not an East Region state or territory.
“Non-East Region Substantial Stage Date Solar Asset Reserve Amount” shall mean, as of any date of determination, the product of (i) 8/3 times (ii) the sum of the Class A Interest Distribution Amount and the Class B Interest Distribution Amount due and payable on the immediately succeeding Payment Date times (iii) the ratio of (x) the aggregate principal balance of all Advances related to Substantial Stage Solar Assets the Obligor of which is located in a Non‑East Region as of such date divided by (y) the Aggregate Outstanding Advances as of such date; provided, however, that solely for the purpose of determining the Non-East Region Substantial Stage Date Solar Asset Reserve Amount as of the Closing Date, the Non-East Region Substantial Stage Date Solar Asset Reserve Amount shall be an amount reasonably calculated by the Administrative Agent and provided to the Borrower prior to the Closing Date.
“Notice of Borrowing” shall have the meaning set forth in Section 2.4.
“Obligations” shall mean and include, with respect to each of the Borrower, SAP, the Managing Members or Parent, respectively, all loans, advances, debts, liabilities, obligations, covenants and duties owing by such Person to the Administrative Agent, the Paying Agent or any Lender of any kind or nature, present or future, arising under this Agreement, the Loan Notes, the Security Agreement, the Pledge Agreement, the Subsidiary Guaranty, any of the other Transaction Documents or any other instruments, documents or agreements executed and/or delivered in connection with any of the foregoing, but, in the case of Parent, solely to the extent Parent is a party thereto, whether or not for the payment of money, whether arising by reason of an extension of credit, the issuance of a letter of credit, a loan, guaranty, indemnification or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising. The term includes the principal amount of all Advances, together with interest, charges, expenses, fees, attorneys’ and paralegals’ fees and expenses, any other sums chargeable to the Borrower or Parent, as the case may be, under this Agreement or any other Transaction Document pursuant to which it arose but, in the case of Parent, solely to the extent Parent is a party thereto.
“OFAC” shall have the meaning set forth in Section 4.1(S).

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Officer’s Certificate” shall mean a certificate signed by an authorized officer of an entity.
“Operational Amounts” shall mean amounts necessary for SAP to pay the Manager for O&M Services and Servicing Services related to Solar Assets owned by SAP.
“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Transaction Document, or sold or assigned an interest in any Solar Asset or Transaction Document).
“Other Taxes” shall mean 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 Transaction Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.
“O&M Services” shall mean the services required to be performance by the Manager pursuant to the terms of each Management Agreement, including all administrative, operations, maintenance, collection and other management services with respect to the related Solar Assets, maintaining required insurance and collecting sales and use taxes payable by Host Customers under their Solar Service Agreements.
“Parent” shall mean Sunnova Energy Corporation, a Delaware corporation.
“Parent Guaranty” shall mean the Limited Performance Guaranty, dated as of the Closing Date, by the Parent in favor of the Borrower and the Administrative Agent.
“Participant” shall have the meaning set forth in Section 10.8.
“Participant Register” shall have the meaning set forth in Section 10.8.
“Parts” shall mean components of a PV System.
“Patriot Act” shall have the meaning set forth in Section 10.18.
“Paying Agent” shall have the meaning set forth in the introductory paragraph hereof.
“Paying Agent Account” shall have the meaning set forth in Section 8.2(A)(v).
“Paying Agent Fee” shall mean a fee payable by the Borrower to the Paying Agent as set forth in the Paying Agent Fee Letter.
“Paying Agent Fee Letter” shall mean that certain letter agreement, dated as of August 22, 2019, between the Borrower and the Paying Agent.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Paying Agent Indemnified Parties” shall have the meaning set forth in Section 9.5.
“Payment Date” shall mean the 30th day of each October, January, April and July or, if such 30th day is not a Business Day, the next succeeding Business Day, commencing October 2019.
“Payment Facilitation Agreement” shall mean each modification, waiver or amendment agreement (including a replacement Solar Service Agreement) entered into by the Manager in accordance with a Servicing Agreement relating to a Solar Service Agreement.
“PBI Documents” shall mean, with respect to a PV System, (i) all applications, forms and other filings required to be submitted to a PBI Obligor in connection with the performance based incentive program maintained by such PBI Obligor and the procurement of PBI Payments, and (ii) all approvals, agreements and other writings evidencing (a) that all conditions to the payment of PBI Payments by the PBI Obligor have been met, (b) that the PBI Obligor is obligated to pay PBI Payments and (c) the rate and timing of such PBI Payments.
“PBI Liquidated Damages” shall mean any liquidated damages due and payable to a PBI Obligor in respect of a Solar Asset.
“PBI Obligor” shall mean a utility or Governmental Authority that maintains or administers a renewable energy program designed to incentivize the installation of PV Systems and use of solar generated electricity that has approved and is obligated to make PBI Payments to the owner of the related PV System.
“PBI Payments” shall mean, with respect to a PV System and the related PBI Documents, all payments due by the related PBI Obligor under or in respect of such PBI Documents; provided, that PBI Payments do not include Rebates or Hedged SRECs or amounts received, if any, in respect of Hedged SRECs.
“PBI Solar Assets” shall mean (i) all rights and remedies of the payee under any PBI Documents related to such PV System, including all PBI Payments on and after the related Transfer Date and (ii) all documentation in the Solar Asset File and other documents held by the Verification Agent related to such than PBI Documents.
“Performance Guaranty” shall mean, with respect to a PV System, an agreement in the form of a production warranty between the Host Customer and Parent (or in some cases, between the Host Customer and the owner of the Solar Asset), which the Facility Administrator has agreed to perform on behalf of the Borrower that specifies a minimum level of solar energy production, as measured in kWh, for a specified time period. Such guarantees stipulate the terms and conditions under which the Host Customer could be compensated if their PV System does not meet the electricity production guarantees.
“Permission to Operate” shall mean, with respect to any PV System, receipt of a letter or functional equivalent from the connecting utility authorizing such PV System to be operated.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Permits” shall mean, with respect to any PV System, the applicable permits, franchises, leases, orders, licenses, notices, certifications, approvals, exemptions, qualifications, rights or authorizations from or registration, notice or filing with any Governmental Authority required to operate such PV System.
“Permitted Assignee” shall mean (a) a Lender or any of its Affiliates, (b) any Person managed by a Lender or any of its Affiliates, and (c) any Program Support Provider for any Conduit Lender, an Affiliate of any Program Support Provider, or any commercial paper conduit administered, sponsored or managed by a Lender or to which a Non-Conduit Lender provides liquidity support, an Affiliate of a Lender or an Affiliate of an entity that administers or manages a Lender or with respect to which the related Program Support Provider of such commercial paper conduit is a Lender.
“Permitted Equity Liens” shall mean the ownership interest of the related Tax Equity Investor in the related Tax Equity Facility and in each case arising under the related Financing Fund LLCA.
“Permitted Indebtedness” shall mean (i) Indebtedness under the Transaction Documents, and (ii) to the extent constituting Indebtedness, reimbursement obligations of the Borrower owed to the Borrower in connection with the payment of expenses incurred in the ordinary course of business in connection with the financing, management, operation or maintenance of the Solar Assets or the Transaction Documents.
“Permitted Investments” shall mean any one or more of the following obligations or securities: (i) (a) direct interest bearing obligations of, and interest-bearing obligations guaranteed as to payment of principal and interest by, the United States or any agency or instrumentality of the United States the obligations of which are backed by the full faith and credit of the United States; (b) direct interest-bearing obligations of, and interest-bearing obligations guaranteed as to payment of principal and interest by, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, but only if, at the time of investment, such obligations are assigned the highest credit rating by S&P; and (c) evidence of ownership of a proportionate interest in specified obligations described in (a) and/or (b) above; (ii) demand, time deposits, money market deposit accounts, certificates of deposit of and federal funds sold by, depository institutions or trust companies incorporated under the laws of the United States of America or any state thereof (or domestic branches of foreign banks), subject to supervision and examination by federal or state banking or depository institution authorities, and having, at the time of a relevant Borrower’s investment or contractual commitment to invest therein, a short term unsecured debt rating of “A‑1” by S&P; (iii) securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States of America or any state thereof which have a rating of no less than “A-1+” by S&P and a maturity of no more than 365 days; (iv) commercial paper (including both non-interest bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the closing date thereof) of any corporation (other than the Parent), incorporated under the laws of the United States of America or any state thereof, that, at the time of the investment or contractual commitment to invest therein, a rating of “A-1” by S&P; (v) money market mutual funds, or any other mutual funds registered under the 1940 Act which invest only in other Permitted Investments, having a rating, at the time of such investment, in the highest rating category by S&P; (vi) money market deposit accounts, demand deposits, time

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal or state banking or depository institution authorities; provided, however, that at the time of the investment or contractual commitment to invest therein, the commercial paper or other short-term unsecured debt obligations (other than such obligations the rating of which is based on the credit of a Person other than such depository institution or trust company) thereof will be rated “A-1+” by S&P, including proprietary money market funds offered or managed by the Paying Agent or an Affiliate thereof; (vii) repurchase agreements with respect to obligations of, or guaranteed as to principal and interest by, the United States of America or any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States of America; provided, however, that the unsecured obligations of the party agreeing to repurchase such obligations at the time have a credit rating of no less than the A-1 by S&P; and (viii) any investment agreement (including guaranteed investment certificates, forward delivery agreements, repurchase agreements or similar obligations) with an entity which on the date of acquisition has a credit rating of no less than the A-1 by S&P, in each case denominated in or redeemable in Dollars.
“Permitted Investor” shall mean collectively, Energy Capital Partners III, LP, Energy Capital Partners III-A, LP, Energy Capital Partners III-B, LP, Energy Capital Partners III-C, LP and Energy Capital Partners-D, LP, Quantum Strategic Partners, and each of their Permitted Transferees (as defined in the Investors Agreement, dated as of March 29, 2018, by and among the Parent and the other signatories thereto).
“Permitted Liens” shall mean (i) any lien for taxes, assessments and governmental charges or levies owed by the applicable asset owner and not yet due and payable or which are being contested in good faith, (ii) Liens in favor of the Administrative Agent (or in favor of the Borrower and created pursuant to the Transaction Documents), (iii) solely in the case of Substantial Stage Solar Assets and Final Stage Solar Assets, workmen’s, mechanic’s, or similar statutory Liens securing obligations owing to approved channel partners (or subcontractors of channel partners) which are not yet due or for which reserves in accordance with GAAP have been established; provided that any such Solar Asset shall be classified as a Defective Solar Asset if not resolved within sixty (60) days of such Solar Asset receiving Permission to Operate from the applicable Governmental Authority, (iv) Liens on cash collateral or other liquid assets in favor of Eligible Hedged SREC Counterparties securing Hedged SREC Credit Support Obligations that constitute Permitted Indebtedness, (v) to the extent a PV System constitutes a fixture, any conflicting interest of an encumbrancer or owner of the real property that has or would have priority over the applicable UCC fixture filing (or jurisdictional equivalent) so long as any such lien does not adversely affect the rights of the Borrower of the Administrative Agent and (vi) any rights of customers under Host Customers Agreements.
“Person” shall mean any individual, corporation (including a business trust), partnership, limited liability company, joint-stock company, trust, unincorporated organization or association, joint venture, government or political subdivision or agency thereof, or any other entity.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Plan” shall mean an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code as to which the Borrower or any Affiliate may have any liability.
“Pledge Agreement” shall mean the Pledge Agreement, dated as of the Closing Date, by TEP Resources, the Borrower and the Managing Members in favor of the Administrative Agent, as amended, restated, modified and/or supplemented from time to time in accordance with its terms.
“Potential Amortization Event” shall mean any occurrence or event that, with notice, passage of time or both, would constitute an Amortization Event.
“Potential Default” shall mean any occurrence or event that, with notice, passage of time or both, would constitute an Event of Default.
“Power Purchase Agreement” shall mean an agreement between the owner of the PV System and a Host Customer whereby the Host Customer agrees to purchase electricity produced by such PV System for a fixed fee per kWh.
“Prepaid Solar Asset” shall mean a Solar Asset for which the related Host Customer has prepaid all amounts under the related Solar Service Agreement.
“Projected Purchase Option Price” shall mean, with respect to a Purchase Option, an amount estimated by the related Managing Member and agreed upon by the Administrative Agent on or before the Scheduled Commitment Termination Date. Should the Availability Period expire before the Scheduled Commitment Termination Date, the Administrative Agent may use its reasonable judgment to estimate the Projected Purchase Option Price.
“Program Support Provider” shall mean and include any Person now or hereafter extending liquidity or credit or having a commitment to extend liquidity or credit to or for the account of, or to make purchases from, a Conduit Lender (or any related commercial paper issuer that finances such Conduit Lender) in support of commercial paper issued, directly or indirectly, by such Conduit Lender in order to fund Advances made by such Conduit Lender hereunder.
“Projected SREC Hedge Ratio” shall mean, with respect to a state and SREC Year, the quotient (expressed as a percentage) of (i) the sum of all SRECs to be delivered for such SREC Year (or portion of an SREC Year remaining) under Hedged SREC Agreements for such state, divided by (ii) SRECs that are available for delivery in such SREC Year (or portion of an SREC Year remaining) in such state, as calculated by the Administrative Agent. For the avoidance of doubt, only PV Systems that have been certified for SREC production will be included in the calculation of SRECs available for delivery.
“Puerto Rico Solar Asset” shall mean a Host Customer Solar Asset for which the related PV System is installed on a residence in Puerto Rico.
“Purchase Option” shall mean, collectively, each purchase option set forth under the heading “Purchase Options” on Schedule VIII hereto.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Purchase Option Price” shall have the meaning set forth in the Tax Equity Financing Documents.
“Purchase Standard” shall mean (i) the terms of the related Financing Fund LLCA and the terms of the Transaction Documents to which the Borrower is a party, (ii) the availability of funds in the Supplemental Reserve Account to pay the Purchase Option Price as then projected by the Facility Administrator and (iii) the same degree of analysis that the Borrower and its Affiliates use in determining whether or not to exercise similar purchase options for comparable assets owned by the Borrower and its Affiliates, taking into consideration the best interests of all parties to the Transaction Documents.
“PV System” shall mean, with respect to a Solar Asset, a photovoltaic system, including Solar Photovoltaic Panels, Inverters, Racking Systems, any Energy Storage Systems installed in connection therewith, wiring and other electrical devices, as applicable, conduits, weatherproof housings, hardware, remote monitoring equipment, connectors, meters, disconnects and over current devices (including any replacement or additional parts included from time to time).
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
“QFC Credit Support” shall have the meaning set forth in Section 10.24 hereof.
“Qualified Service Provider” shall mean one or more Independent Accountants or, subject to the approval of Administrative Agent, other service providers.
“Qualifying Hedge Counterparty” shall mean (i) a counterparty which at all times satisfies all then applicable counterparty criteria of S&P or Moody’s for eligibility to serve as counterparty under a structured finance transaction rated “A+”, in the case of S&P or “A1”, in the case of Moody’s or (ii) an affiliate of any Funding Agent (in which case rating agency counterparty criteria shall not be applicable).
“Qualifying Hedge Counterparty Joinder” shall mean that certain Joinder Agreement executed by a Qualifying Hedge Counterparty and acknowledged by the Administrative Agent, a copy of which shall be provided to all Parties to this Agreement.
“Racking System” shall mean, with respect to a PV System, the hardware required to mount and securely fasten a Solar Photovoltaic Panel onto the Host Customer site where the PV System is located.
“Rebate” shall mean any rebate by a PBI Obligor, electric distribution company, or state or local governmental authority or quasi-governmental agency as an inducement to install or use a PV System, paid upon such PV System receiving Permission to Operate.
“Recipient” shall mean the Administrative Agent, the Lenders or any other recipient of any payment to be made by or on account of any obligation of the Borrower under this Agreement or any other Transaction Document.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Register” shall have the meaning set forth in Section 10.8.
“Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Relevant Parties” shall mean the Borrower, the Managing Members and SAP.
“Reportable Event” shall mean a reportable event as defined in Section 4043 of ERISA and the regulations issued under such Section, with respect to a Plan, excluding, however, such events as to which the Pension Benefit Guaranty Corporation by regulation or by public notice waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event, provided, that a failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waivers in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Internal Revenue Code.
“Required Tax Loss Insurance Coverage Period” shall mean the period beginning on the date on which a Tax Loss Insurance Policy is issued to, if prior to the scheduled expiration of a Tax Loss Insurance Policy, the Internal Revenue Service commenced an investigation of a Financing Fund that could result in a Tax Loss Indemnity with respect to such Financing Fund, the date of either (a) the termination of such investigation without a determination by the Internal Revenue Service that results in a Tax Loss Indemnity or (b) a final determination with respect to such investigation and payment of any Tax Loss Indemnity resulting from such final determination.
“Responsible Officer” shall mean (x) with respect to the Paying Agent, any President, Vice President, Assistant Vice President, Assistant Secretary, Assistant Treasurer or Corporate Trust Officer, or any other officer in the Corporate Trust Office customarily performing functions similar to those performed by any of the above designated officers, in each case having direct responsibility for the administration of this Agreement or the Facility Administration Agreement, as applicable, and (y) with respect to any other party hereto, any corporation, limited liability company or partnership, the chairman of the board, the president, any vice president, the secretary, the treasurer, any assistant secretary, any assistant treasurer, managing member and each other officer of such corporation or limited liability company or the general partner of such partnership specifically authorized in resolutions of the board of directors of such corporation or managing member of such limited liability company to sign agreements, instruments or other documents in connection with the Transaction Documents on behalf of such corporation, limited liability company or partnership, as the case may be, and who is authorized to act therefor.
“S&P” shall mean S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, or any successor rating agency.
“Sale and Contribution Agreement” shall mean that certain Sale and Contribution Agreement, dated as of the Closing Date, by and among the Seller, TEP Resources and the Borrower.
“SAP” shall mean Sunnova SAP IV, LLC, a Delaware limited liability company.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“SAP Contribution Agreement” shall mean that certain Contribution Agreement, dated as of the Closing Date, between the Borrower and SAP.
“SAP Distributions” shall mean all distributions and payments in any form made, or due to be made, to the Borrower in connection with its ownership interest in SAP.
“SAP Financing Documents” shall mean the documents listed on Schedule IX hereto
“SAP Revenue Account” shall have the meaning set forth in Section 8.2(A)(iv).
“SAP Solar Asset” shall mean a Solar Asset owned by SAP.
“Schedule of Solar Assets” shall mean, as the context may require, the Schedule of Solar Assets owned by the Financing Funds and SAP, as such schedule may be amended from time to time in connection with the delivery of a Notice of Borrowing.
“Scheduled Commitment Termination Date” shall mean May 20, 2022, unless otherwise extended pursuant to and in accordance with Section 2.16.
“Scheduled Hedged SREC Payments” shall mean the payments scheduled to be paid by an Eligible Hedged SREC Counterparty during each Collection Period, if any, as set forth on Schedule IV hereto, as the same may be updated from time to time.
“Scheduled Host Customer Payments” shall mean for each Solar Asset, the payments scheduled to be paid by a Host Customer during each Collection Period in respect of the initial term of the related Solar Services Agreement, as set forth on Schedule V hereto, as the same may be updated from time to time and may be adjusted by the Facility Administrator to reflect that such Solar Asset has become a Defaulted Solar Asset, a Defective Solar Asset or if a Payment Facilitation Agreement has been executed in connection with such Solar Asset. The Scheduled Customer Payments exclude any amounts attributable to sales, use or property taxes to be collected from Host Customers.
“Scheduled Managing Member Distributions” shall mean forecasted Managing Member Distributions set as set forth on Schedule VII hereto.
“Scheduled PBI Payments” shall mean for each Solar Asset, the payments scheduled to be paid by a PBI Obligor during each Collection Period, if any, as set forth on Schedule VI hereto, as the same may be updated from time to time and may be adjusted by the Facility Administrator to reflect that such Solar Asset has become a Defaulted Solar Asset, a Defective Solar Asset or if a Payment Facilitation Agreement has been executed in connection with such Solar Asset.
“Screen Rate” shall mean the London interbank offer rate administered by ICE Benchmark Administration Limited for the relevant currency and period displayed on the appropriate page of the Thomson Reuters screen. If the agreed page is replaced or service ceases to be available, the Administrative Agent may specify another page or service displaying the same rate after consultation with the Borrower and the Majority Lenders.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Secured Parties” shall mean the Administrative Agent, each Lender and each Qualifying Hedge Counterparty.
“Security Agreement” shall mean the Security Agreement, dated as of the Closing Date, executed and delivered by the Borrower, SAP and the Managing Members in favor of the Administrative Agent, for the benefit of the Secured Parties, as amended, restated, modified and/or supplemented from time to time in accordance with its terms.
“SEI” shall mean Sunnova Energy International Inc., a Delaware corporation.
“Seller” shall mean TEP Developer.
“Servicing Agreement” shall mean, collectively, each document set forth under the heading “Servicing Agreements” on Schedule VIII hereto.
“Servicing Fee” shall mean the fees, expenses and other amounts owed to the Manager pursuant to the Servicing Agreements.
“Servicing Services” shall mean the services required to be performed by the Manager pursuant to the terms of each Servicing Agreement, including all billing and collection services with respect to the related Solar Assets.
“Single Employer Plan” shall mean any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multi-Employer Plan, that is subject to Title IV of ERISA or Section 412 of the Internal Revenue Code and is sponsored or maintained by the Borrower or any ERISA Affiliate or for which the Borrower or any ERISA Affiliate may have liability by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.
“Solar Asset” shall mean a Host Customer Solar Asset, PBI Solar Asset or a Hedged SREC Solar Asset, in each case owned by a Financing Fund or SAP, as applicable.
“Solar Asset File” shall have the meaning set forth in the Verification Agent Agreement.
“Solar Asset Owner Member Interests” shall mean, collectively, the 100.00% equity interests in the Managing Members and SAP.
“Solar Asset Payment Level” shall mean, for any Collection Period, the quotient (expressed as a percentage) of (i) the sum of all Host Customer Payments, PBI Payments, Hedged SREC Payments actually received by the Financing Fund or SAP, as applicable, during such Collection Period, divided by (ii) the sum of all Scheduled Host Customer Payments, Scheduled PBI Payments and Scheduled Hedged SREC Payments during such Collection Period.
“Solar Photovoltaic Panel” shall mean, with respect to a PV System, the necessary hardware component that uses wafers made of silicon, cadmium telluride, or any other suitable material, to generate a direct electrical current (DC) output using energy from the sun’s light.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Solar Service Agreement” shall mean in respect of a PV System, a Lease Agreement or a Power Purchase Agreement entered into with a Host Customer and all related Ancillary Solar Service Agreements, including any related Payment Facilitation Agreements, but excluding any Performance Guaranty or Customer Warranty Agreement.
“Solvent” shall mean, with respect the Borrower, that as of the date of determination, both (a) (i) the sum of such entity’s debt (including contingent liabilities) does not exceed the present fair saleable value of such entity’s present assets; (ii) such entity’s capital is not unreasonably small in relation to its business as contemplated on the Closing Date; and (iii) such entity 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 (b) such entity is “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).
“SREC” shall mean a solar renewable energy certificate representing any and all environmental credits, benefits, emissions reductions, offsets and allowances, howsoever entitled, that are created or otherwise arise from a PV System’s generation of electricity, including, but not limited to, a solar renewable energy certificate issued to comply with a State’s renewable portfolio standard.
“SREC Year” shall mean (i) with respect to New Jersey, the twelve-month period beginning on June 1 and ending on May 31 and numbered in accordance with the calendar year in which such twelve-month period ends and (ii) with respect to Massachusetts, a calendar year.
“Subsidiary” shall mean, with respect to any Person at any time, (i) any corporation or trust of which 50% or more (by number of shares or number of votes) of the outstanding Capital Stock or shares of beneficial interest normally entitled to vote for the election of one or more directors, managers or trustees (regardless of any contingency which does or may suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person’s subsidiaries, or any partnership of which such Person or any of such Peron’s Subsidiaries is a general partner or of which 50% or more of the partnership interests is at the time directly or indirectly owned by such Person or one or more of such Person’s subsidiaries, and (ii) any corporation, trust, partnership or other entity which is controlled or capable of being controlled by such Person or one or more of such Person’s subsidiaries.
“Subsidiary Guaranty” shall mean the Guaranty, dated as of the Closing Date, by SAP, the Managing Members and each other party joined thereto as a guarantor in favor of the Administrative Agent.
“Substantial Stage Solar Asset” shall mean a Solar Asset that has not yet been installed but for which the Parent or an Affiliate thereof has been issued a “notice to proceed” confirming that the Host Customer has signed a Solar Service Agreement, and a channel partner has submitted a

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


final design proposal and such proposal has been approved by the Parent or an Affiliate thereof, as of a Funding Date.
“Successor Facility Administrator” shall mean a successor Facility Administrator appointed pursuant to the Facility Administration Agreement.
“Sunnova Credit Facility” shall mean any financing agreement providing extensions of credit to the Parent or its Subsidiaries in which the Administrative Agent or its affiliates is a lender, agent or noteholder thereunder.
“Sunnova Inventory Holdings” shall mean Sunnova Inventory Holdings, LLC, a Delaware limited liability company.
“Sunnova Inventory Pledgor” shall mean Sunnova Inventory Pledgor, LLC, a Delaware limited liability company.
“Sunnova Management” shall mean Sunnova TE Management, LLC, a Delaware limited liability company.
“Supplemental Reserve Account” shall have the meaning set forth in Section 8.2(A)(ii).
“Supplemental Reserve Account Deposit” shall mean, for any Payment Date after Availability Period, an amount equal to the sum of (i) any Supplemental Reserve Account Deposit amounts from Payment Dates not deposited into the Supplemental Reserve Account, and (ii) the lesser of (a) the product of (1) one-fourth of $[***] and (2) the aggregate DC nameplate capacity (measured in kW) of all PV Systems owned by the Financing Funds and SAP which are operational (excluding Transferable Solar Assets) and that have related Solar Service Agreements with remaining terms that exceed the remaining terms of the related manufacturer warranty for the Inverter associated with such PV System and (b) the Supplemental Reserve Account Required Balance as of the related Calculation Date minus the sum of (1) the amount on deposit in the Supplemental Reserve Account as of the related Calculation Date, and (2) the amount, if any, being deposited into the Supplemental Reserve Account on such Payment Date pursuant to clause (i). Notwithstanding the foregoing, the Supplemental Reserve Account Deposit shall be $0 for any Payment Date on which the sum of Distributable Collections is greater than or equal to the sum of (i) the payments and distributions required under clauses (i) through (iii) of Section 2.7(B) and (ii) the Aggregate Outstanding Advances as of such Payment Date prior to any distributions made on such Payment Date.
“Supplemental Reserve Account Required Balance” shall mean, as of any date of determination, (i) prior to the end of the Availability Period, $[***] or (ii) after the Availability Period, an amount equal to the sum of (a) for any Payment Date prior to the date on which a Managing Member has acquired the related Tax Equity Investor Interests in the related Financing Fund pursuant to the related Purchase Option, the sum of the Projected Purchase Option Prices under each Financing Fund, (b) for any Payment Date during a Required Tax Loss Insurance Coverage Period, the Tax Loss Insurance Deductibles and (c) the product of (1) $[***] and (2) the aggregate DC nameplate capacity (measured in kW) of all PV Systems owned by the Financing Funds and SAP which are

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


operational (excluding Transferable Solar Assets) and that have related Solar Service Agreements with remaining terms that exceed the remaining terms of the related manufacturer warranty for the Inverter associated with such PV System.
“Supported QFC” shall have the meaning set forth in Section 10.24 hereof.
“Swap Rate” shall mean, as of any date of determination, the then current weighted average of (i) the fixed interest rates under the swap agreements entered into in accordance with clause (i) of the definition of Hedge Requirements and (ii) with respect to any Advance not yet hedged in accordance with such clause (i) the then current fixed versus LIBOR swap rate associated with the Expected Amortization Profile of such Advance, as determined by the Administrative Agent in consultation with the Borrower.
“Takeout Agreements” shall mean agreements, instruments, documents and other records entered into in connection with a Takeout Transaction.
“Takeout Transaction” shall mean (i) any sale, assignment or other transfer of the Solar Asset Owner Member Interests and related Collateral (either directly or through the sale, assignment or other transfer of all the Capital Stock of the Borrower) by the Borrower to any of its Affiliates (including a special purpose bankruptcy remote subsidiary of Parent) or to a third party, in each case, in an arms’ length transaction, which Collateral is used to secure or provide for the payment of amounts owing (or to be owing) or expected as a result of the issuance of equity or debt securities or other Indebtedness by a Person other than the Borrower that are backed by such Collateral (a “Financing Transaction”); provided, that there is no Borrowing Base Deficiency, then the Borrower may only enter into a Takeout Transaction if immediately after giving effect to such Financing Transaction, (w) no Event of Default exists (unless such Event of Default would be cured by application of the net proceeds of such Financing Transaction), (x) an amount equal to the greater of $[***] or the Minimum Payoff Amount for the Collateral removed from the Borrower in the Financing Transaction shall be deposited into the Takeout Transaction Account for distribution in accordance with Section 2.8(C), (y) there are no selection procedures utilized which are materially adverse to the Lenders with respect to those items of the Collateral assigned by the Borrower in the Financing Transaction and (z) such Financing Transaction is not guaranteed by and has no material recourse to the Borrower (except that such assets are being sold and assigned by it free and clear of all Liens), (ii) a financing arrangement, securitization, sale or other disposition of such Collateral (either directly or through the sale or other disposition of all the Capital Stock of the Borrower, a Managing Member, a Financing Fund or SAP) entered into by Borrower or any of its Affiliates other than under this Agreement so long as (1) all proceeds of such transaction shall have been deposited into the Takeout Transaction Account and (2) such proceeds are sufficient, together with any equity contributions of the Parent, to repay the Obligations prorated to the reduction in the Borrowing Base as a result of such transaction, or (iii) any other financing arrangement, securitization, sale or other disposition of items of Collateral (either directly or through the sale or other disposition of the Capital Stock of the Borrower, a Managing Member, a Financing Fund, or SAP) entered into by Borrower or any of its Affiliates other than under this Agreement that is not a Financing Transaction and that has been consented to in writing by the Administrative Agent and the Majority Lenders.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Takeout Transaction Account” shall have the meaning set forth in Section 8.2(A)(v).
“Tax Credit” shall mean an investment tax credit under Section 48(a)(3)(A)(i) of the Code or any successor provision.
“Tax Equity Facility” shall mean each transaction contemplated by the Tax Equity Financing Documents.
“Tax Equity Financing Documents” shall mean, collectively, each document set forth under the heading “Tax Equity Financing Documents” on Schedule VIII hereto.
“Tax Equity Investor” shall mean, collectively, each entity set forth under the heading “Tax Equity Investors” on Schedule VIII hereto.
“Tax Equity Investor Consent” shall mean the consent of a Tax Equity Investor of the related Tax Equity Financing Documents, as applicable relating to the transactions contemplated by this Facility.
“Tax Equity Investor Distribution Reduction Amount” shall mean, for any Collection Period, amounts required to be paid by the Financing Funds to the Tax Equity Investors, in each case, which reduce Scheduled Managing Member Distributions for such Collection Period.
“Tax Equity Investor Interests” shall mean the Tax Equity Investors’ interest in 100% of the Class A Interest in the related Financing Fund.
“Tax Equity Party” shall mean each of the Financing Funds, the Managing Members and SAP.
“Tax Loss” shall mean the amount a Tax Credit and other federal tax benefits assumed in the Base Case Model that the respective Financing Fund, the respective Managing Member or the respective Tax Equity Investor (or their respective affiliates) shall lose the benefit of, shall not have the right to claim, shall suffer the disallowance or reduction of, shall be required to recapture or shall not claim (as a result of a final determination in accordance with the terms of such Financing Fund LLCA.
“Tax Loss Claim” shall mean the assertion by the Internal Revenue Service of a position that would result in a Tax Loss Indemnity if not reversed through administrative action or litigation.
“Tax Loss Indemnity” shall mean a Managing Member’s obligation, pursuant to the terms of the related Financing Fund LLCA, to pay the related Tax Equity Investor the amount of any Tax Loss, reduced by any Tax Savings and grossed up for any U.S. federal interest, penalties, fines or additions to tax payable by a Managing Member or the related Tax Equity Investor (or their respective affiliates) as a result thereof and for the net amount of any additional U.S. federal income taxes payable by a Managing Member or the related Tax Equity Investor (or their respective affiliates) as a result of including any Tax Loss Indemnity payment in its income, in each case as a result of the breach or inaccuracy of certain representations, warranties and covenants of a Managing Member set forth in such Financing Fund LLCA or the failure by Managing Member to comply with

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


applicable law in connection with its acts or omissions pursuant to, or the performance of any covenant or obligation under, such Financing Fund LLCA.
“Tax Loss Insurance Deductible” shall mean, with respect to a Tax Loss Insurance Policy, the deductible due under such Tax Loss Insurance Policy. Should the Availability Period expire before a Tax Loss Insurance Policy is entered into, the Administrative Agent may use reasonable judgment to estimate the Tax Loss Insurance Deductible.
“Tax Loss Insurance Policy” shall mean the policy of insurance issued by a Tax Loss Insurer with respect to a Financing Fund naming such Financing Fund and the related Managing Member as insureds and such Financing Fund as loss payee, in form and substance (including, but not limited to, amounts and coverage period) approved by the Administrative Agent in its sole discretion.
“Tax Loss Insurer” shall mean the insurance company party to any Tax Loss Insurance Policy.
“Tax Savings” shall mean, with respect to a Tax Loss, any federal income tax savings realized by a Managing Member or the related Tax Equity Investor (or their respective affiliates) as a result of the Tax Loss, using an assumed tax rate equal to the maximum allowable U.S. federal corporate income tax rate applicable to corporations as of a given date of determination.
“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, and including any interest, additions to tax or penalties applicable thereto.
“TEP Collateral Account” shall have the meaning set forth in Section 5.1(W).
“TEP Developer” shall mean Sunnova TEP Developer, LLC, a Delaware limited liability company.
“TEP II Credit Agreement” shall mean that certain Amended and Restated Credit Agreement, dated as of March 29, 2019, by and among Sunnova TEP II Holdings, LLC, a Delaware limited liability company, as borrower, Sunnova TE Management II, LLC, a Delaware limited liability company, as facility administrator, the financial institutions from time to time parties thereto, as lenders, each funding agent representing a group of lenders thereunder, Credit Suisse AG, New York Branch, as administrative agent for the lenders thereunder, Wells Fargo Bank, National Association, not in its individual capacity, but solely as paying agent, and U.S. Bank National Association, as verification agent, as amended, restated, modified and/or supplemented.
“TEP II Transaction Documents” shall mean the “Transaction Documents” referred to in the TEP II Credit Agreement.
“TEP Inventory” shall mean Sunnova TEP Inventory, a Delaware limited liability company.
“TEP Resources” shall mean Sunnova TEP Resources, a Delaware limited liability company.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Terminated Solar Asset” shall mean a Solar Asset for which the related PV System has experienced an Event of Loss and (i) is not repaired, restored, replaced or rebuilt to substantially the same condition as it existed immediately prior to the Event of Loss within 120 days of such Event of Loss or (ii) is deemed to be a “Cancelled Project” in accordance with the related Master Purchase Agreement.
“Transaction Documents” shall mean this Agreement, the Loan Notes, the Security Agreement, the Pledge Agreement each Fee Letter, the Paying Agent Fee Letter, the Verification Agent Fee Letter, the Facility Administration Agreement, the Verification Agent Agreement, the Contribution Agreements, the Sale and Contribution Agreement, the SAP Contribution Agreement, the Parent Guaranty, the Tax Equity Investor Consents, each Hedge Agreement, and any other agreements, instruments, certificates or documents delivered hereunder or thereunder or in connection herewith or therewith, and “Transaction Document” shall mean any of the Transaction Documents.
“Transfer Date” shall mean (i) with respect to Initial Solar Assets, the Closing Date and (ii) (x) with respect to any Additional Solar Asset that is not a SAP Solar Asset, the date on which such Additional Solar Asset is included in the definition of Borrowing Base and the Lenders make an Advance against such Additional Solar Asset and (y) with respect to any Additional Solar Asset that is a SAP Solar Asset, the date set forth in the relevant Additional Solar Asset Supplement (as defined in the Sale and Contribution Agreement).
“Transferable Solar Asset” shall mean (i) any Solar Asset that constitutes a Defaulted Solar Asset, Defective Solar Asset, Delinquent Solar Asset, or Terminated Solar Asset and (ii) any other Solar Asset that is not an Eligible Solar Asset hereunder.
“UCC” shall mean the Uniform Commercial Code as from time to time in effect in any applicable jurisdiction.
“Underwriting and Reassignment Credit Policy” shall mean the internal underwriting and reassignment policy of TEP Developer attached as Exhibit J hereto.
“United States” shall mean the United States of America.
“Unused Line Fee” shall have the meaning set forth in Section 2.5(D).
“Unused Line Fee Percentage” shall have the meaning set forth in the Fee Letter referred to in clause (i) of the definition thereof.
“Unused Portion of the Commitments” shall mean, as of any date of determination, the sum of the Class A Unused Portion of the Commitments plus the Class B Unused Portion of the Commitments as of such date of determination.
“Usage Percentage” shall mean, as of such date of determination, a percentage equal to (i) the Aggregate Outstanding Advances divided by (ii) the Aggregate Commitment as of such date.

A-43

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“U.S. Person” shall mean any Person who is a U.S. person within the meaning of Section 7701(a)(30) of the Internal Revenue Code.
“U.S. Special Resolution Regime” shall have the meaning set forth in Section 10.24 hereof.
“U.S. Tax Compliance Certificate” shall have the meaning set forth in Section 2.17(G)(ii)(b)(3).
“Verification Agent” shall have the meaning set forth in the introductory paragraph hereof.
“Verification Agent Agreement” shall mean the Verification Agent Agreement dated as of or about the Closing Date, by and among the Verification Agent, the Borrower, the Facility Administrator and the Administrative Agent, as amended, restated, modified and/or supplemented from time to time in accordance with its terms.
“Verification Agent Fee” shall mean a fee payable by the Borrower to the Verification Agent as set forth in the Verification Agent Fee Letter.
“Verification Agent Fee Letter” shall mean the Verification Agent Fee Letter, dated as of the date hereof, among the Borrower and the Verification Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.




A-44

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT B-1
FORM OF BORROWING BASE CERTIFICATE
BORROWING BASE CERTIFICATE
SUNNOVA TEP HOLDINGS, LLC
[DATE]
In connection with that certain Credit Agreement, dated as of September 6, 2019 (as may be amended from time to time, the “Credit Agreement”), by and among SUNNOVA TEP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA TE MANAGEMENT, LLC, a Delaware limited liability company, as Facility Administrator (in such capacity, the “Facility Administrator”), CREDIT SUISSE AG, NEW YORK BRANCH, as Administrative Agent for the financial institutions that may become parties thereto as Lenders, the Lenders, WELLS FARGO BANK, NATIONAL ASSOCIATION, as Paying Agent, and U.S. BANK NATIONAL ASSOCIATION, as Verification Agent, the Borrower hereby certifies that
1.The attached Schedule I sets forth the borrowing base calculations with respect to Class A Advances on the proposed Funding Date (the “Class A Borrowing Base Calculation”) and provides all data used, in Excel format, to calculate the foregoing as of the date set forth above and the computations reflected in the Class A Borrowing Base Calculation are true, correct and complete.
2.    The attached Schedule II sets forth the borrowing base calculations with respect to Class B Advances on the proposed Funding Date (the “Class B Borrowing Base Calculation”) and provides all data used, in Excel format, to calculate the foregoing as of the date set forth above and the computations reflected in the Class B Borrowing Base Calculation are true, correct and complete.
3.    The attached Schedule III sets forth the Excess Concentration Amount calculations on the Funding Date (the “Excess Concentration Amount Calculation”) and provides all data used, in Excel format, to calculate the foregoing as of the date set forth above and the computations reflected in the Excess Concentration Amount Calculation are true, correct and complete.
4.    Each Solar Asset included in the Class A Borrowing Base Calculations and in the Class B Borrowing Base Calculations constitutes an Eligible Solar Asset as of the date hereof and the Excess Concentration Amount Calculation has been computed based on the information known to the Borrower or Facility Administrator as of the date hereof.

B-1-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Capitalized terms used but not defined herein shall have the meanings specified in the Credit Agreement.

B-1-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first written above.
SUNNOVA TEP HOLDINGS, LLC, as Borrower
By:

Name:
Title:


B-1-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



SCHEDULE I
Class A Borrowing Base Calculation
1. Aggregate Discounted Solar Asset Balance
$_____________
2. Excess Concentration Amount (see Line 45 of Schedule III)
$_____________
3. Line 1 minus Line 2
$_____________
4. Solar Assets other than Puerto Rico Solar Assets or Substantial Stage Solar Assets included in Line 3 times 70.00%
$_____________
5. Puerto Rico Solar Assets other than Substantial Stage Solar Assets included in Line 3 times 63.00%
$_____________
6. Substantial Stage Solar Assets included in Line 3 times (x) during the Borrowing Base Step-up Period, 61.25% and (y) at all times after the Borrowing Base Step-up included in Line 3 times Period, 52.50%
 
$ ____________
 
7. Line 4 plus Line 5 plus Line 6 (the “Class A Borrowing Base”)
$_____________
8. The Class A Aggregate Commitment
$87,500,00
9. The lesser of Line 7 or Line 8
$_____________



B-1-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



SCHEDULE II
Class B Borrowing Base Calculation
1. Aggregate Discounted Solar Asset Balance
$_____________

2. Excess Concentration Amount (see Line 45 of Schedule III)
$_____________

3. Line 1 minus Line 2
$_____________

4. Solar Assets other than Puerto Rico Solar Assets or Substantial Stage Solar Assets included in Line 3 times 10.00%
$_____________

5. Puerto Rico Solar Assets other than Substantial Stage Solar Assets included in Line 3 times 9.00%
$_____________

6. Substantial Stage Solar Assets included in Line 3 times (x) during the Borrowing Base Step-up Period, 8.75% and (y) at all times after the Borrowing Base Step-up included in Line 3 times Period, 7.50%
 
$ ____________
 
7. Line 4 plus Line 5 plus Line 6 (the “Class B Borrowing Base”)
$_____________

8. The Class B Aggregate Commitment

$12,500,000

9. The lesser of Line 7 or Line 8
$_____________




B-1-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



SCHEDULE III
Excess Concentration Amount Calculation 1 
1.    Aggregate Discounted Solar Asset Balance
$_____________
2.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer had a FICO score of less than [***] at the time of origination
$_____________
3.    Line 1 times 35.0%
$_____________
4.    Line 2 minus 3 (enter $0 if less than $0)
$_____________
 
 
5.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer had a FICO score of less than [***] at the time of origination
$_____________
6.    Line 1 times 28.0%
$_____________
7.    Line 5 minus Line 6 (enter $0 if less than $0)
$_____________
 
 
8.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer reside in the state in the United States with the highest concentration of Host Customers measured by the aggregate Discounted Solar Asset Balance in each state and the Aggregate Discounted Solar Asset Balance
$_____________
9.    Line 1 times 50.0%
$_____________
10.    Line 8 minus Line 9 (enter $0 if less than $0)
$_____________
 
 
11.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer reside in any one of the two states in the United States with either the highest or the second highest concentrations of Host Customers measured by the aggregate Discounted Solar Asset Balance in each state and the Aggregate Discounted Solar Asset Balance
$_____________
12.    Line 1 times 75.0%
$_____________
13.    Line 11 minus Line 12 (enter $0 if less than $0)
$_____________
 
 
14.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer reside in any one of the three states in the United States with either the highest, second highest or third highest concentrations of Host Customers measured by the aggregate Discounted Solar Asset Balance in each state and the Aggregate Discounted Solar Asset Balance
$_____________
15.    Line 1 times 85.0%
$_____________
16.    Line 14 minus Line 15 (enter $0 if less than $0)
$_____________
17.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer was a resident of Puerto Rico, Guam or the Northern Mariana Islands at the time of origination
$_____________
18.    Line 1 times 20.0%
$_____________

B-1-6

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


19.    Line 17 minus Line 18 (enter $0 if less than $0)
$_____________
20.    [Reserved]The aggregate Discounted Solar Asset Balance for Eligible Solar Assets that have been placed in service in which the related Host Customer’s first payment under the related Solar Service Agreement has not been made as of the related Transfer Date but will be due in the calendar month no later than the first full calendar month immediately following the related Transfer Date20. 
 
$_____________
 
21.    [Reserved]Line 1 times 10.0% 
 
$_____________
 
22.    [Reserved]Line 20 minus Line 21 (enter $0 if less than $0)
$_____________
23.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer was a resident of Guam at the time of origination
$_____________
24.    Line 1 times 7.5%
$_____________
25.    Line 23 minus Line 24 (enter $0 if less than $0)
$_____________
26.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer was a resident of the Northern Mariana Islands at the time of origination
$_____________
27.    Line 1 times 1.5%
$_____________
28.    Line 26 minus Line 27 (enter $0 if less than $0)
$_____________
29.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets with Credit Card Receivables
$_____________
30.    Line 1 times 2.5%
$_____________
31.    Line 29 minus Line 30 (enter $0 if less than $0)
$_____________
32.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets that are Final Stage Solar Assets
$_____________
33.    Line 1 times 20.0%
$_____________
34.    Line 32 minus Line 33 (enter $0 if less than $0)
$_____________
35.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets that are Substantial Stage Solar Assets
$_____________
36.    Line 1 times 20.0%
$_____________
37.    Line 35 minus Line 36 (enter $0 if less than $0)
$_____________
38.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets that are Final Stage Solar Assets or Substantial Stage Solar Assets
$_____________
39.    Line 1 times 35.0%
$_____________
40.    Line 38 minus Line 39 (enter $0 if less than $0)
$_____________
41.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets for which the related PV System includes an Energy Storage System
$_____________
42.    Line 1 times 50.0%
$_____________
43.    Line 41 minus Line 42 (enter $0 if less than $0)
$_____________

B-1-7

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


44.    The aggregate Discounted Solar Asset Balance of all Eligible Solar Assets relating to any one Host Customer which exceeds the lesser of (i) one percent (1.00%) the Maximum Facility Amount and (ii) the U.S. Dollar equivalent of 1.5 million Swiss Francs (calculated at the rate of exchange at which, in accordance with normal banking procedures, the Administrative Agent could purchase with U.S. Dollars, Swiss Francs in New York City, New York, at the close of business on the day prior to such date of determination)
$_____________
45.    The sum of Line 4 plus Line 7 plus Line 10 plus Line 13 plus Line 16 plus Line 19 plus Line 22 plus Line 25 plus Line 28 plus Line 31 [plus Line 34 plus Line 37]2 plus Line 40 plus Line 43 plus Line 44 (the “Excess Concentration Amount”)
$_____________


























__________________
1 For the purpose of calculating the Excess Concentration Amount, Prepaid Solar Assets shall be deemed to have a Discounted Solar Asset Balance equal to [***].
2 For the purpose of calculating the Excess Concentration Amount, Lines 34, 37 and 40 shall not be included during the period commencing on the Closing Date or the effective date of a Takeout Transaction and ending ninety (90) days thereafter.

B-1-8

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT B-2
FORM OF NOTICE OF BORROWING
_________ ___, 20__
To:    Credit Suisse AG, New York Branch, as Administrative Agent Class A Funding Agent and Class B Funding Agent
11 Madison Avenue, 3rd Floor
New York, NY 10010
Attention:    Patrick Duggan
    Patrick Hart
Wells Fargo Bank, National Association, as Paying Agent
600 S. 4th Street, MAC N9300-061
Minneapolis, MN 55479
Attention: Corporate Trust Services – Asset Backed Administration,
E-mail: ctsabsservicer@wellsfargo.com
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of September 6, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Sunnova TEP Holdings, LLC (the “Borrower”), Credit Suisse AG, New York Branch, as Administrative Agent for the financial institutions that may from time to time become parties thereto as Lenders (in such capacity, the “Administrative Agent”), the Lenders, Wells Fargo Bank, National Association, as Paying Agent and U.S. Bank National Association, as Verification Agent. Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.
A: In accordance with Section 2.4 of the Credit Agreement, the Borrower hereby requests that the Class A Lenders provide Class A Advances based on the following criteria:
1.    Aggregate principal amount of Class A Advances requested: $[____________]
2.    Allocated amount of such Class A Advances to be paid by the Class A Lenders in each Class A Lender Group:
CS Lender Group    $[_______________]
[_______________]    $_______________
3.    $_______________ should be transferred to the Liquidity Reserve Account
4.    $_______________ should be transferred to the Supplemental Reserve Account

B-2-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Account(s) to which Class A Funding Agents should wire the balance of the requested funds:
Bank Name: [_______________]
ABA No.: [_______________]
Account Name: [_______________]
Account No.: [_______________]
Reference: [_______________]
5.    Attached to this notice as Exhibit A is the Borrowing Base Certificate in connection with these Class A Advances and a related Schedule of Solar Assets.
B: In accordance with Section 2.4 of the Credit Agreement, the Borrower hereby requests that the Class B Lenders provide Class B Advances based on the following criteria:
1.    Aggregate principal amount of Class B Advances requested: $[____________]
2.    Allocated amount of such Class B Advances to be paid by the Class B Lenders in each Class B Lender Group:
CS Lender Group    $[_______________]
[_____________]     $_______________
3.    $_______________ should be transferred to the Liquidity Reserve Account
4.    $_______________ should be transferred to the Supplemental Reserve Account
Account(s) to which Class B Funding Agents should wire the balance of the requested funds:
Bank Name: [_______________]
ABA No.: [_______________]
Account Name: [_______________]
Account No.: [_______________]
Reference: [_______________]
5.    Attached to this notice as Exhibit B is the Borrowing Base Certificate in connection with these Class B Advances and a related Schedule of Solar Assets.

B-2-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


C: In accordance with Section 3.2 of the Credit Agreement, the Borrower hereby certifies that no Amortization Event, Event of Default, Potential Amortization Event or Potential Default has occurred and is continuing or would result from any borrowing of any Advance or from the application of the proceeds therefrom.
Very truly yours,
SUNNOVA TEP HOLDINGS, LLC, as Borrower
By:

Name:
Title:




B-2-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT A
Borrowing Base Certificate
[see attached]




B-2-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT B
Borrowing Base Certificate
[see attached]


B-2-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT C
[RESERVED]




C-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT D-1
FORM OF CLASS A LOAN NOTE
CLASS A LOAN NOTE
Up to $[***]    [•], 2019
New York, New York
Reference is made to that certain Credit Agreement, dated as of September 6, 2019 (as may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among SUNNOVA TEP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA TE MANAGEMENT, LLC, a Delaware limited liability company, as Facility Administrator, CREDIT SUISSE AG, NEW YORK BRANCH, as Administrative Agent for the Lenders (including any Conduit Lender) that may become parties thereto, the Lenders, Wells Fargo Bank, National Association, as Paying Agent, and U.S. Bank National Association, as Verification Agent. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.
FOR VALUE RECEIVED, the Borrower hereby promises to pay CREDIT SUISSE AG, NEW YORK BRANCH, as Class A Funding Agent, for the benefit of the Class A Lenders in its Class A Lender Group (the “Class A Loan Note Holder”) on the Maturity Date or such earlier date as provided in the Credit Agreement, in immediately available funds in lawful money of the United States the principal amount of up to [***] DOLLARS ($[***]) or, if less, the aggregate unpaid principal amount of all Class A Advances made by the Class A Lenders in the Class A Loan Note Holder’s Class A Lender Group to the Borrower pursuant to the Credit Agreement together with all accrued but unpaid interest thereon.
The Borrower also agrees to pay interest in like money to the Class A Loan Note Holder, for the benefit of the Class A Lenders in its Class A Lender Group, on the unpaid principal amount of each such Class A Advance from time to time from the date hereof until payment in full thereof at the rate or rates and on the dates set forth in the Credit Agreement.
This Class A Loan Note is one of the Loan Notes referred to in, and is entitled to the benefits of, the Credit Agreement, which, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein and is secured by the Collateral.
In the event of any inconsistency between the provisions of this Class A Loan Note and the provisions of the Credit Agreement, the Credit Agreement will prevail.
THIS CLASS A LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).

D-1-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS CLASS A LOAN NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS CLASS A LOAN NOTE, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS CLASS A LOAN NOTE OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS CLASS A LOAN NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS CLASS A LOAN NOTE.
This Class A Loan Note may be transferred or assigned by the holder hereof at any time, subject to compliance with the Credit Agreement and any applicable law. This Class A Loan Note shall be binding upon the Borrower and shall inure to the benefit of the holder hereof and its successors and assigns. The obligations and liabilities of the Borrower hereunder may not be assigned to any Person without the prior written consent of the holder hereof. Any such assignment in violation of this paragraph shall be void and of no force or effect.
Demand, presentment, protest and notice of nonpayment and protest are hereby waived by the Borrower.
[Signature page follows.]


D-1-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



IN WITNESS WHEREOF, this Class A Loan Note has been duly executed and delivered on behalf of the Borrower by its duly authorized officer on the date and year first written above.
SUNNOVA TEP HOLDINGS, LLC, as Borrower
By:        
Name:
Title:




D-1-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT D-2
FORM OF CLASS B LOAN NOTE
CLASS B LOAN NOTE
Up to $[***]    [•], 2019
New York, New York
Reference is made to that certain Credit Agreement, dated as of September 6, 2019 (as may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among SUNNOVA TEP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA TE MANAGEMENT, LLC, a Delaware limited liability company, as Facility Administrator, CREDIT SUISSE AG, NEW YORK BRANCH, as Administrative Agent for the Lenders (including any Conduit Lender) that may become parties thereto, the Lenders, Wells Fargo Bank, National Association, as Paying Agent, and U.S. Bank National Association, as Verification Agent. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.
FOR VALUE RECEIVED, the Borrower hereby promises to pay CREDIT SUISSE AG, NEW YORK BRANCH, as Class B Funding Agent, for the benefit of the Class B Lenders in its Class B Lender Group (the “Class B Loan Note Holder”) on the Maturity Date or such earlier date as provided in the Credit Agreement, in immediately available funds in lawful money of the United States the principal amount of up to [***] DOLLARS ($[***]) or, if less, the aggregate unpaid principal amount of all Class B Advances made by the Class B Lenders in the Class B Loan Note Holder’s Class B Lender Group to the Borrower pursuant to the Credit Agreement together with all accrued but unpaid interest thereon.
The Borrower also agrees to pay interest in like money to the Class B Loan Note Holder, for the benefit of the Class B Lenders in its Class B Lender Group, on the unpaid principal amount of each such Class B Advance from time to time from the date hereof until payment in full thereof at the rate or rates and on the dates set forth in the Credit Agreement.
This Class B Loan Note is one of the Loan Notes referred to in, and is entitled to the benefits of, the Credit Agreement, which, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein and is secured by the Collateral.
In the event of any inconsistency between the provisions of this Class B Loan Note and the provisions of the Credit Agreement, the Credit Agreement will prevail.
THIS CLASS B LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).

D-2-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS CLASS B LOAN NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS CLASS B LOAN NOTE, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS CLASS B LOAN NOTE OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS CLASS B LOAN NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS CLASS B LOAN NOTE.
This Class B Loan Note may be transferred or assigned by the holder hereof at any time, subject to compliance with the Credit Agreement and any applicable law. This Class B Loan Note shall be binding upon the Borrower and shall inure to the benefit of the holder hereof and its successors and assigns. The obligations and liabilities of the Borrower hereunder may not be assigned to any Person without the prior written consent of the holder hereof. Any such assignment in violation of this paragraph shall be void and of no force or effect.
Demand, presentment, protest and notice of nonpayment and protest are hereby waived by the Borrower.
[Signature page follows.]



D-2-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



IN WITNESS WHEREOF, this Class B Loan Note has been duly executed and delivered on behalf of the Borrower by its duly authorized officer on the date and year first written above.
SUNNOVA TEP HOLDINGS, LLC, as Borrower
By:        
Name:
Title:




D-2-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT E
COMMITMENTS
Class A Commitments:
 
 
The Class A Aggregate Commitment
Credit Suisse AG, Cayman Islands Branch
$[***]
Total:
$87,500,000
Class B Commitments:
 
 
The Class B Aggregate Commitment
Credit Suisse AG, Cayman Islands Branch
$[***]
Total:
$12,500,000




E-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT F
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (the “Assignment Agreement”) is dated as of the Effective Date set forth below and is entered into by and between the Assignor identified in item 1 below (the “Assignor”) and the Assignee identified in item 2 below (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit 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 Agreement as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a [Class A][Class B] Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor 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 [Class A][Class B] Lender) against any Person, whether known or unknown, arising under or in connection with the Credit 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 Assignor to the Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Each such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment Agreement, without representation or warranty by the Assignor.
1.
Assignor:        
2.
Assignee:         
3.
Administrative Agent: Credit Suisse AG, New York Branch
4.
Credit Agreement: Credit Agreement, dated as of September 6, 2019, by and among Sunnova TEP Holdings, LLC, a Delaware limited liability company, Sunnova TE Management, LLC, a Delaware limited liability company, Credit Suisse AG, New York Branch, as Administrative Agent for the Lenders (including any Conduit Lender) that may become parties thereto, the Lenders, Wells Fargo Bank, National Association, as Paying Agent, and U.S. Bank National Association, as Verification Agent

F-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


6.
Assigned Interest:
Assignor
Assignee
Type Of Loans Assigned (Class A Or Class B)
Aggregate Amount Of Loans For All Lenders
Amount Of Loans Assigned
Percentage Assigned Of Loans
 
 
 
$
$
   %

[Signature pages follow]




F-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Effective Date: ____________________, 20__
The terms set forth in this Assignment Agreement are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By
    
Name    
Title    
ASSIGNOR
[NAME OF ASSIGNOR]
By
    
Name    
Title    
Accepted:
CREDIT SUISSE AG, New York Branch,
as Administrative Agent
By
    
Name    
Title    
By
    
Name    
Title    




F-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AGREEMENT
SECTION 1.    REPRESENTATIONS AND WARRANTIES.
Section 1.1.    Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment Agreement and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Transaction Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Transaction Documents or any collateral thereunder, (iii) the financial condition of the Borrower or any other Person obligated in respect of any Transaction Document, or (iv) the performance or observance by the Borrower or any other Person of any of their respective obligations under any Transaction Document.
Section 1.2.    Assignee. The 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 Agreement and to consummate the transactions contemplated hereby and to become a [Class A][Class B]Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 10.8 of the Credit Agreement (subject to such consents, if any, as may be required under Section 10.8 of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a [Class A][Class B]Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a [Class A][Class B] Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to the Credit Agreement, 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 Agreement and to purchase the 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 Agreement and to purchase the Assigned Interest, and (vii) attached to the Assignment Agreement is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other

F-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Lender, 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 Transaction Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Transaction Documents are required to be performed by it as a Lender.
SECTION 2.    PAYMENTS.
From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to, on or after the Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves. 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 Assignee.
SECTION 3.    GENERAL PROVISIONS.
This Assignment Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment Agreement 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 Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment Agreement. This Assignment Agreement shall be governed by, and construed in accordance with, the law of the State of New York.




F-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT G
FORM OF SOLAR SERVICE AGREEMENT
[SEE ATTACHED]




G-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT H
FORM OF NOTICE OF DELAYED FUNDING
Sunnova TEP Holdings, LLC
20 Greenway Plaza, Suite 475
Houston, TX 77046
Re:    Notice of Potential For Delayed Funding
Reference is made to the Credit Agreement, dated as of September 6, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Sunnova TEP Holdings, LLC (the “Borrower”), Credit Suisse AG, New York Branch, as Administrative Agent for the financial institutions that may from time to time become parties thereto as Lenders (in such capacity, the “Administrative Agent”), the Lenders, Wells Fargo Bank, National Association, as Paying Agent and U.S. Bank National Association, as Verification Agent. Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.
Pursuant to Section 2.4(E) of the Credit Agreement, [ ], as a Non-Conduit Lender, hereby notifies the Borrower that it has incurred external costs, fees or expenses directly related to and as a result of the “liquidity coverage ratio” under Basel III in respect of its Commitments under the Credit Agreement and/or its interests in the Loan Notes.
Sincerely,
[____]
By:     
Name:
Title:




I-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT I
DELAYED FUNDING NOTICE
Sunnova TEP Holdings, LLC
20 Greenway Plaza, Suite 475
Houston, TX 77046
Re:    Notice of Potential For Delayed Funding
Reference is made to the Credit Agreement, dated as of September 6, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Sunnova TEP Holdings, LLC (the “Borrower”), Credit Suisse AG, New York Branch, as Administrative Agent for the financial institutions that may from time to time become parties thereto as Lenders (in such capacity, the “Administrative Agent”), the Lenders, Wells Fargo Bank, National Association, as Paying Agent and U.S. Bank National Association, as Verification Agent. Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.
Pursuant to Section 2.4(E) of the Credit Agreement, [_____], as a Non-Conduit Lender, hereby notifies the Borrower of its intent to fund its amount of the Advance related to the Notice of Borrowing delivered by the Borrower on [_____], on a Business Day that is before [_____]3, rather than on the date specified in such Notice of Borrowing.
Sincerely,
[____]
By:     
Name:
Title:







__________________
3 Thirty-five days following the date of delivery by such Non-Conduit Lender of this Delayed Funding Notice.

I-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT J
UNDERWRITING AND REASSIGNMENT CREDIT POLICY
[SEE ATTACHED]




J-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE I
ELIGIBILITY CRITERIA -
REPRESENTATIONS AND WARRANTIES AS TO SOLAR ASSETS
1.
Accuracy of Schedule of Solar Assets. Each entry with respect to the Solar Asset set forth on the Schedule of Solar Assets is complete, accurate, true and correct in all material respects and does not omit any necessary information that makes such entry misleading, including, if such Solar Asset is a Substantial Stage Solar Asset, the amount disbursed to channel partners for services rendered in respect of Substantial Stage Solar Asset.
2.
Form of Solar Service Agreement. The related Solar Service Agreement is substantially in the form of one of the Parent’s standard forms of Solar Service Agreement attached as Exhibit G to this Agreement (as such Exhibit may be modified after the Closing Date in accordance with Section 5.1(X) of the Agreement). The related Solar Service Agreement provides that an Approved Installer has designed, procured and installed, or will design, procure and install, a PV System at the property specified in such Solar Service Agreement and the Host Customer agrees to purchase electric energy produced by such PV System or lease such PV System. At the time of installation, such Approved Installer was properly licensed and had the required expertise to design, procure and install the related PV System.
3.
Modifications to Solar Service Agreement. The terms of the related Solar Service Agreement have not been amended, waived, extended, or modified in any manner inconsistent with the Customer Collection Policy.
4.
Host Customer Payments in U.S. Dollars. The related Host Customer is obligated per the terms of the related Solar Service Agreement to make payments in U.S. dollars to the owner of the related Solar Service Agreement or its designee.
5.
Host Customer FICO Score. As of the date of the Solar Service Agreement, the related Host Customer has a FICO of at least [***].
6.
Weighted Average FICO Score. After giving effect to the Solar Asset’s inclusion in the Collateral, the weighted average FICO score (determined as of the dates of the related Solar Service Agreements) for Eligible Solar Assets will be at least [***].
7.
Absolute and Unconditional Obligation. The related Solar Service Agreement is by its terms an absolute and unconditional obligation of the Host Customer to pay for electricity generated and delivered or that will be generated and delivered by the related PV System to such Host Customer after the related PV System has received Permission to Operate, and the payment obligations under the related Solar Service Agreement do not provide for offset for any reason, including without limitation non-payment or non-performance by the Parent or any assignee thereof under any Customer Warranty Agreement or Performance Guaranty.
8.
Non-cancelable; Prepayable. The related Solar Service Agreement is non-cancelable and prepayable by the Host Customer, if at all, only with a mandatory prepayment amount equal

Schedule I-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


to or greater than an amount determined by the discounting of all remaining projected Host Customer Payments at a pre-determined discount rate of not more than 6% per annum.
9
Freely Assignable. (a) Ownership of the related PV System is freely assignable to a Financing Fund or SAP, as applicable, and a security interest in such PV System may be granted by SAP, without the consent of any Person, except any such consent as has already been obtained.
(b) The related Solar Service Agreement and the rights with respect to the related Solar Assets (other than the PV System) are freely assignable to a Financing Fund or SAP, as applicable, and a security interest in such Solar Assets may be granted by SAP, without the consent of any Person, except any such consent as has already been obtained.
10.
Legal Compliance. The origination of the related Solar Service Agreement and related PV Systems, as installed, was in compliance (or in the case of a Substantial Stage Solar Asset, will be in compliance) in all material respects with respect to the applicable federal, state and local laws and regulations including those relating to usury, truth-in-lending, consumer credit protection and disclosure laws at the time such Solar Service Agreement was originated or such PV System was installed (or in the case of a Substantial Stage Solar Asset, will be installed), as applicable.
11.
Legal, Valid and Binding Agreement. The related Solar Service Agreement is the legal, valid and binding payment obligation of the related Host Customer, enforceable against such related Host Customer in accordance with its terms, except as such enforceability may be limited in the future by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally, and except as such enforceability may be limited in the future by general principles of equity (whether considered in a suit at law or in equity).
12.
No Delinquencies, Defaults or Terminations. The related Solar Service Agreement is not a Delinquent Solar Asset or a Defaulted Solar Asset and the related PV System is not a Terminated Solar Asset. Furthermore, the Host Customer associated with the related Solar Service Agreement is not a Host Customer for any other Solar Service Agreement that was originated, acquired and/or serviced by the Parent or any Affiliate thereof that would meet the definition of either Delinquent Solar Asset or Defaulted Solar Asset.
13.
Minimum Payments Made. (i) Except in the case of a Substantial Stage Solar Asset or a Final Stage Solar Asset, either a minimum of one payment due under the related Solar Service Agreement has been made or the related Host Customer’s first payment under the related Solar Service Agreement has not been made because such payment is not yet due but such payment is due in the calendar month no later than the first full calendar month immediately following the later of (a) the related Transfer Date or (b) the date that such Solar Asset receives Permission to Operate and (ii) solely in the case of a Substantial Stage Solar Asset or a Final Stage Solar Asset, the related Host Customer’s first payment under the related Solar Service Agreement has not been made because such payment is not yet due but such payment is due in the calendar month that is no later than one hundred twenty (120) days

Schedule I-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


after the Transfer Date with respect to such Substantial Stage Solar Asset or Final Stage Solar Asset or no later than thirty (30) days after such Transfer Date.
14.
PV System and Solar Service Agreement Status. The related PV System has not been turned off due to a Host Customer delinquency under the Solar Service Agreement.
15.
Affiliate Host Customers. Solar Service Agreements comprising no more than 0.25% of the Aggregate Discounted Solar Asset Balance as of the Closing Date (with respect to the Initial Solar Assets) and as of the most recent Transfer Date (as to all Eligible Solar Assets then owned by a Financing Fund or SAP) are related to Host Customers that are Persons who are employees of the Parent, the Borrower or any of their respective Affiliates.
16.
No Adverse Selection. No selection procedures reasonably believed by the Parent or Borrower to be adverse to the Lenders were utilized in selecting such Solar Asset and the related Solar Service Agreement from among the Eligible Solar Assets directly owned by the Parent or its Affiliates.
17.
Full Force and Effect. The related Solar Service Agreement is in full force and effect in accordance with its respective terms, except as may be limited in the future by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally, and except as such enforceability may be limited in the future by general principles of equity (whether considered in a suit at law or in equity).
18.
Ordinary Course of Business. The related Solar Service Agreement relates to the sale of power from or the leasing of a PV System, and such Solar Service Agreement was originated or acquired consistent with the ordinary course of business of the Parent.
19.
PV System. Except in the case of a Substantial Stage Solar Asset, the related PV System was properly delivered to and installed for the related Host Customer in good repair, without defects and in satisfactory order. Except in the case of a Substantial Stage Solar Asset, the related Host Customer has accepted the related PV System, and no related Host Customer has notified the Parent or any Affiliate thereof of any existing defects therein which is not in the process of being investigated, addressed or repaired by the Parent or any Affiliate thereof. Except in the case of a Substantial Stage Solar Asset, the Solar Photovoltaic Panels, Inverters and Energy Storage Systems with respect to the related PV System were manufactured by an Approved Vendor at the time of installation.
20.
No Defenses Asserted. The related Solar Service Agreement has not been satisfied, subordinated or rescinded and no lawsuit is pending with respect to such related Solar Service Agreement.
21.
Insurance. With respect to the related PV System (other than if such PV System is related to a Substantial Stage Solar Asset), the Parent has obtained and does maintain insurance in amounts and coverage consistent with the Parent’s policies. The Parent’s policies in respect of amounts, coverage and monitoring compliance thereof are consistent with insurance broker recommendations based on probable maximum loss projections and with the Parent’s

Schedule I-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


historic loss experience, taking into account what is commercially reasonable and available in the market on commercially reasonable terms. All such required insurance is in full force and effect.
22.
Taxes and Governmental Charges. The transfer, assignment and the pledge of the Collateral by the Borrower and SAP pursuant to the Security Agreement and the Pledge Agreement is not subject to and will not result in any Tax payable by the Borrower to any federal, state or local government except as has been paid or provided for. No Tax is owed in connection with any period prior to the applicable Cut-Off Date or with respect to the sale, contribution or assignment of Conveyed Property by the applicable Assignor to the Seller, by the Seller to the Borrower or by the Borrower to SAP, except as has been paid or provided for.
23.
Governing Law of Solar Service Agreement. The related Solar Service Agreement is governed by the laws of a state or territory 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, pledge or assignment of the related Solar Service Agreement under any of the Transaction Documents, including any exchange for refund in accordance with the Transaction Documents.
24.
No Unpaid Fees. Except in the case of a Substantial Stage Solar Asset or a Final Stage Solar Asset, there are no unpaid fees owed to third parties relating to the origination of the related Solar Service Agreement and installation of the related PV System.
25.
Payment Terms of Solar Service Agreement. The related Solar Service 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 Solar Service Agreement.
26.
PBI Payments.
a.
All applications, forms and other filings required to be submitted in connection with the procurement of PBI Payments have been properly made in all material respects under applicable law, rules and regulations and the related PBI Obligor 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.
b.
All conditions to the payment of PBI Payments by the related PBI Obligor (including but not limited to the size of the PV Systems, final site visits, provision of data, installation of metering, proof of project completion, production data and execution and delivery of final forms and related agreements (including all applications, forms and other filings and any written reservation approvals, Interconnection Agreements and REC purchase agreements, if required, each, a “Performance Based Incentive Agreement”)) have been satisfied or approved, as applicable, and the PBI Obligor’s payment obligation is an absolute and unconditional obligation of the PBI Obligor that is not, by the terms of the related Performance Based Incentive Agreement, subject to offset for any reason.

Schedule I-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


c.
Copies of all PBI Documents and the Performance Based Incentive Agreement, if any, for PBI Payments have been delivered to the Verification Agent as of the Closing Date (as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset).
d.
To the extent the rights to receive PBI Payments and the related Performance Based Incentive Agreement, if any, are not freely assignable without the consent of the related PBI Obligor, or if consent or notice to any Person is required for the grant of a security interest, such consent will have been obtained or notice will have been given as of the Closing Date (as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset). The PBI Payments are not subject to any law, rule or regulation which would make unlawful the sale, transfer, pledge or assignment of any rights to the PBI Payments within the regulations set forth with respect to such PBI Payments. Immediately prior to the transfer of the rights to the PBI Payments and the related Performance Based Incentive Agreement, if any, to a Financing Fund or the Borrower, TEP Developer or the Seller, as applicable, had full legal and equitable title to such rights, free and clear of all Liens except for Permitted Liens and a Financing Fund or SAP, as applicable, acquired full legal and equitable title to such PBI Payments and the related Performance Based Incentive Agreement, free and clear of all Liens, except for Permitted Liens or Permitted Equity Liens. To the extent that notice is required, upon completion of the assignment of a Performance Based Incentive Agreement to a Financing Fund or SAP, as applicable, the Parent or an affiliate thereof delivered notice to the PBI Obligor indicating that such Financing Fund or SAP, as applicable, is the owner of the related PV System and the payee of the PBI Payment.
e.
If a Performance Based Incentive Agreement is required by the laws, rules or regulations governing the obligations of the PBI Obligor to pay the PBI Payments, such Performance Based Incentive Agreement is, to the best of the knowledge of the Parent, 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).
f.
The transfer, assignment and pledge of the rights to the PBI Payments is not subject to and will not result in any tax, fee or governmental charge payable by the Borrower to any federal, state or local government, except as paid.
27.
Host Customer. The related Solar Services Agreement was either originated or acquired by the Parent in the ordinary course of business and in accordance with its Underwriting and Reassignment Credit Policy.
28.
Warranties. All Manufacturer Warranties relating to the related Solar Service Agreement and the related PV System are in full force and effect and can be enforced by a Financing

Schedule I-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Fund, SAP or the Manager (other than with respect to those Manufacturer Warranties that are no longer being honored by the relevant manufacturer with respect to all customers generally, and except as such enforceability may be limited in the future by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally, and except as such enforceability may be limited in the future by general principles of equity (whether considered in a suit at law or in equity).
29.
True Lease. The related Solar Service Agreement in the form of a Lease Agreement is a “true” lease, as defined in Article 2-A of the UCC.
30.
UCC. The related Solar Service Agreement and rights to PBI Payments constitute “general intangibles”, “accounts” or “chattel paper” within the meaning of the applicable UCC and no paper originals with respect to any “chattel paper” or single authoritative copy with respect to “electronic chattel paper” exists. The PV Systems constitute “Equipment” within the meaning of the applicable UCC. Upon the filing of all appropriate financing statements in the proper filing offices in the appropriate jurisdictions, the Administrative Agent will have a first priority perfected security interest in and to the Solar Service Agreements, the rights to PBI Payments and the PV Systems, subject to Permitted Liens and in each case related solely to the SAP Solar Assets.
31.
Fixture Filing. The terms of the related Solar Service Agreement provide that the parties thereto agree that the related PV System is not a fixture. The Parent or an Affiliate thereof has filed (or in the case of a Substantial Stage Solar Asset, will file) a protective UCC fixture filing or, with respect to Guam, its jurisdictional equivalent, in respect of the related PV System; provided, that (i) certain of such UCC fixture filings or such equivalent filings have been temporarily released in order to assist the applicable Host Customer in a pending refinancing of such Host Customer’s mortgage loan or sale of the related property and (ii) as a result, such UCC fixture filings or equivalent filings may not have been filed or maintained in a manner that would provide priority under the UCC over a conflicting interest of an encumbrancer or owner of the real property subject to such UCC fixture filing or equivalent filing.
32.
Host Customer Residency. The related Host Customer is a resident of one of the 50 states of the United States, the District of Columbia or an Approved U.S. Territory.
33.
PV System. The related PV System was installed (or in the case of a Substantial Stage Solar Asset, will be installed) on a single-family residential property and one or more of the Host Customers (i) that is an individual that is not deceased and is not a governmental entity, a business, a corporation, institution or other legal entity (a “natural person”); provided, that 5.00% of the Aggregate Discounted Solar Asset Balance may relate to Host Customers that are a limited liability company, corporation, trust, partnership or other legal entity if (A) the Parent has determined that the controlling member of the limited liability company, controlling stockholder of the corporation, trustee of the trust, general partner of the partnership or other equivalent controlling person the legal entity is a natural person and (B) the Parent has performed the same underwriting process in connection with such natural person as it applies to Host Customers that are natural persons; (ii) that voluntarily entered

Schedule I-6

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


into such Solar Service Agreement and not as a result of fraud or identity theft, and (iii) who owns the real property on which the PV System is installed in one of the 50 states of the United States, the District of Columbia or an Approved U.S. Territory; provided that in the case where the Host Customer is a natural person, the residence may be owned by a limited liability company, corporation, trust, partnership or other legal entity for which the Parent has determined that the Host Customer is the controlling member, controlling stockholder, trustee, general partner or other equivalent controlling person). No related Host Customer has notified the Parent or any Affiliate thereof of any damage or other casualty affecting the PV system or home and neither the Parent nor any Affiliate thereof is aware of any other event that has occurred, in each case, that would affect the value or performance of the Solar Asset or the PV System. All parts and materials furnished in connection with the related PV System which are material to the solar energy production performance of such PV System, including but not limited to the Solar Photovoltaic Panels and Inverters, are (or in the case of a Substantial Stage Solar Asset, will be) newly manufactured with a manufacturer date no more than 12 months prior to the date the Solar Asset was originated.
34.
Hedged SRECs. With respect to all Solar Assets for which the related Host Customer is a resident of either New Jersey or Massachusetts, as of the date that is 120 days from the Closing Date, the Projected SREC Hedge Ratio determined for the SREC Years 2019, 2020, 2021 and 2022 does not exceed 85%.
35.
Maximum Solar Asset Tenor. The original term to maturity of the Solar Asset does not exceed 300 months.
36.
Host Customer Solvency: (i) The Host Customer is not a debtor in a bankruptcy case as of the Closing Date (in the case of the Initial Solar Assets) or the related Transfer Date (in the case of Additional Solar Assets), and (ii) the Host Customer has not commenced any litigation or asserted any claim in writing challenging the validity or enforceability of the related Solar Service Agreement.
37.
No Impairment. Neither the Parent nor any of its Affiliates has done anything to impair the rights of the Borrower, the Administrative Agent or the Lenders in the Collateral or payments with respect thereto.
38.
Ownership. A Financing Fund or SAP, as applicable, has full legal and equitable title to the related PV System and related Solar Service Agreement, in each case free and clear of all Liens except for Permitted Liens and Permitted Equity Liens.
39.
Final Stage Solar Asset. If such Solar Asset is a Final Stage Solar Asset, such Solar Asset will not be a Final Stage Solar Asset for more than 150 days since the date such Solar Asset first constituted a Final Stage Solar Asset.
40.
Substantial Stage Solar Asset. If such Solar Asset is a Substantial Stage Solar Asset, (i) such Solar Asset will not be a Substantial Stage Solar Asset for more than 90 days (or 120 days if the related Host Customer is located in the East Region) since the Parent or an Affiliate thereof has issued a “notice to proceed” confirming the related Host Customer signed the

Schedule I-7

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


related Solar Service Agreement, a channel partner submitted a final design proposal and such proposal was approved by the Parent or an Affiliate thereof and (ii) the related Host Customer has not cancelled the installation of the Solar Asset notwithstanding receipt of the related “notice to proceed.”
41.
Puerto Rico Solar Asset. If such Solar Asset is a Puerto Rico Solar Asset, the related PV System relies on one or more Energy Storage Systems and does not rely on the operation of the utility grid in order to operate.
42.
Hedged SREC Payments.
a.
All applications, forms and other filings required to be submitted in connection with the procurement of Hedged SREC Payments have been properly made in all material respects under applicable law, rules and regulations and the related Eligible Hedged SREC Counterparty has provided a written reservation approval (which may be in the form of electronic mail from the related Eligible Hedged SREC Counterparty) for the payment of Hedged SREC Payments.
b.
All conditions to the payment of Hedged SREC Payments by the related Eligible Hedged SREC Counterparty have been satisfied or approved, as applicable, and the Eligible Hedged SREC Counterparty’s payment obligation is an absolute and unconditional obligation of the Eligible Hedged SREC Counterparty that is not, by the terms of the related Hedged SREC Agreement, subject to offset for any reason.
c.
Copies of all Hedged SREC Agreements with respect to Hedged SREC Payments have been delivered to the Verification Agent as of the Closing Date (as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset).
d.
To the extent that the rights to receive Hedged SREC Payments and the related Hedged SREC Agreement, if any, are not freely assignable without the consent of the Eligible Hedged SREC Counterparty, or if consent of or notice to any Person is required for the grant of a security interest, such consent will have been obtained or notice will have been given as of the Closing Date (as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset). The Hedged SREC Payments are not subject to any law, rule or regulation which would make unlawful the sale, transfer, pledge or assignment of any rights to the Hedged SREC Payments within the regulations set forth with respect to such Hedged SREC Payments. Immediately prior to the transfer of the rights to the Hedged SREC Payments and the related Hedged SREC Agreement to the Borrower, TEP Developer had full legal and equitable title to such rights, free and clear of all Liens except for Permitted Liens and the Borrower acquired full legal and equitable title to such Hedged SREC Payments and the related Hedged SREC Agreement, free and clear of all Liens, except for Permitted Liens, Permitted Equity Liens and security interest granted to the Administrative Agent. To the extent notice is required, upon completion of the assignment of a Hedged SREC Agreement to the Borrower, TEP Developer delivered

Schedule I-8

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


notice to the Eligible Hedged SREC Counterparty indicating that the Borrower is the owner of the related PV System and the payee of the Hedged SREC Payment.
e.
If a Hedged SREC Agreement is required by the laws, rules or regulations governing the obligations of the Eligible Hedged SREC Counterparty to pay the Hedged SREC Payments, such Hedged SREC Agreement is, to the best of the knowledge of the Parent, the legal valid and binding payment obligation of the Eligible Hedged SREC Counterparty, enforceable against such Eligible Hedged SREC Counterparty 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).
f.
The transfer, assignment and pledge of the rights to the Hedged SREC Payments is not subject to and will not result in any tax, fee or governmental charge payable by the Borrower to any federal, state or local government, except as paid.
43.
Delivery of Solar Service Agreement. The related Solar Service Agreement and any amendments or modifications have been converted into an electronic (.pdf) form (an “Electronic Copy”) and delivered to the Verification Agent. The related original (or “authoritative copy” for purposes of the UCC) of the Solar Service Agreement and any amendments or modifications have been destroyed on or before the Closing Date (as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset) in compliance with the Parent’s document storage policies or, if not destroyed, no other Person has or could obtain possession or control thereof in a manner that would enable such Person to claim priority over the lien of the Administrative Agent.
44.
Financing Funds/SAP.
a.
Each Tax Equity Facility Document to which any Tax Equity Party is a party is a legal, valid and binding obligation of such Tax Equity Party, enforceable against such Tax Equity Party in accordance with its terms, except as such enforceability may be limited in the future by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally, and except as such enforceability may be limited in the future by general principles of equity (whether considered in a suit at law or in equity). None of the Tax Equity Facility Documents to which a Tax Equity Party is a party has been amended or modified since the effective date of such Tax Equity Facility Documents other than as set forth on Schedule VIII. No Tax Equity Party is party to any material contract, agreement or other undertaking except the Tax Equity Facility Documents and any other contract, agreement or undertaking previously disclosed in writing to the Administrative Agent.
b.
All Tax Equity Facility Documents 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

Schedule I-9

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


default could not reasonably be expected to have a Material Adverse Effect or that could have a material adverse effect on the PV Systems owned by a Financing Fund or the PV Systems owned by SAP or on the legality, validity or enforceability of the Tax Equity Facility Documents.
c.
None of the Managing Members, the Financing Funds or SAP has any indebtedness or other obligations or liabilities, direct or contingent other than as permitted under the Transaction Documents. The Managing Members have full legal and equitable title to the Managing Member Interests free and clear of all Liens.
d.
No loan to the Managing Members, the Financing Funds or SAP made or indebtedness incurred prior to the related Closing Date remains outstanding.
e.
Each of the Managing Members and SAP is a limited liability company that is disregarded for federal income tax purposes.
f.
None of the Managing Members, the Financing Funds or SAP is in breach or default under or with respect to any contractual obligation.
g.
None of the Managing Members, the Financing Funds or SAP has conducted any business other than the business contemplated by the Tax Equity Facility Documents.
h.
No event has occurred under the Tax Equity Facility Documents that would allow a Tax Equity Investor or another member to remove, or give notice of removal of, the related Managing Member, nor has a Managing Member given or received notice of an action, claim or threat of removal.
i.
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 of the Managing Member Distributions.
j.
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 a Financing Fund, SAP or a Managing Member, or against any of their 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 Solar Assets or on the legality, validity or enforceability of any of the Transaction Documents or any of the Tax Equity Facility Documents.
k.
No notice or action challenging the tax structure, tax basis validity, tax characterization or tax-related legal compliance of the Tax Equity Facility or the tax benefits associated with the Tax Equity Facility is ongoing or has been resolved in a manner adverse to the Tax Equity Facility or a Managing Member, in each case, that would reasonably be expected to have a material adverse effect on the Tax Equity Facility or a Managing Member.

Schedule I-10

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


l.
The only holders of equity interests in the Financing Funds are the Managing Members and Tax Equity Investors and other than the Purchase Options there are no outstanding obligations of the Managing Members or a Tax Equity Investor to repurchase, redeem, or otherwise acquire any membership or other equity interests in the Managing Members and a Tax Equity Investor, as applicable, 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 Managing Members and a Tax Equity Investor, as applicable. The class or classes of membership interests that a Financing Fund is authorized to issue and has issued are expressly set forth in its Financing Fund LLCA.
m.
Each of the Financing Funds and SAP 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 each of the Financing Funds and SAP 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 Financing Funds and SAP, as applicable, are in good faith contesting the same, so long as such contest is pursued in accordance with the requirements of each applicable Tax Equity Facility Document. There is no action, suit, proceeding, investigation, audit or claim now pending by a taxing authority regarding any taxes relating to the Financing Funds or SAP that could, if made, individually or in the aggregate have a Material Adverse Effect.
n.
The Borrower has delivered to the Administrative Agent the most recent financial statements (including the notes thereto) prepared in respect of the Financing Funds and SAP pursuant to the requirements of the Tax Equity Facility Documents, and such financial statements (if any) (a) fairly present in all material respects the financial condition of the Financing Funds and SAP, as applicable, as of the date thereof and (b) have been prepared in accordance with the requirements of Tax Equity Facility Documents. Such financial statements and notes thereto disclose all direct or contingent material liabilities of the Financing Funds and SAP as of the dates thereof, including liabilities for taxes, material commitments and debt.
o.
The Financing Funds or SAP, as applicable, is party to each Solar Service Agreement in respect of each PV System owned by it.
45.
Savings Product. If such Solar Asset is a Host Customer Solar Asset, the related Solar Service Agreement is a “savings product” (as such term is defined in the Underwriting and Reassignment Credit Policy).



Schedule I-11

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE II
THE COLLECTION ACCOUNT, THE SUPPLEMENTAL RESERVE ACCOUNT, THE LIQUIDITY RESERVE ACCOUNT, THE SAP REVENUE ACCOUNT, THE TAKEOUT TRANSACTION ACCOUNT, THE BORROWER’S ACCOUNT AND THE TEP COLLATERAL ACCOUNT
Collection Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Account No.:    [***]
Account Name:    [***]
FFC:    [***]
Supplemental Reserve Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Account No.:    [***]
Account Name:    [***]
FFC:    [***]
Liquidity Reserve Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Acct:    [***]
Account Name:    [***]
FFC:    [***]
SAP Revenue Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Account No.:    [***]
Account Name:    [***]
FFC:    [***]
Takeout Transaction Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Account No.:    [***]
Account Name:    [***]
FFC:    [***]

Schedule II-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Borrower’s Account
Bank Name:    Texas Capital Bank
ABA No.:    [***]
Account No.:    [***]
Account Name:    [***]
Reference:    [***]
TEP Collateral Account4 






























__________________
4 To be completed upon opening of the TEP Collateral Account.

Schedule II-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE III
[RESERVED]




Schedule III-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE IV
SCHEDULED HEDGED SREC PAYMENTS
[On file with the Administrative Agent]




Schedule IV-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE V
SCHEDULED HOST CUSTOMER PAYMENTS
[On file with the Administrative Agent]




Schedule V-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE VI
SCHEDULED PBI PAYMENTS
[On file with the Administrative Agent]




Schedule VI-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE VII
SCHEDULED MANAGING MEMBER DISTRIBUTIONS
[On file with the Administrative Agent]




Schedule VII-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE VIII
TAX EQUITY DEFINITIONS
Financing Funds
1.
Sunnova TEP IV-A, LLC, a Delaware limited liability company (“TEP IV-A”)
Financing Fund LLCAs
1.
With respect to TEP IV-A, the Amended and Restated Limited Liability Company Agreement, dated as of August 16, 2019, entered into between the applicable Managing Member and the applicable Tax Equity Investor (the “TEP IV-A LLCA”)
Management Agreements
1.
Management Agreement, dated as of August 16, 2019, by and between the related Manager and TEP IV-A (“TEP IV-A Management Agreement”)
Managers
1.
Sunnova TE Management, LLC, a Delaware limited liability company
Managing Members
2.
Sunnova TEP IV-A Manager, LLC, a Delaware limited liability company
Managing Member Interests
1.
The Class B Interest in TEP IV-A
2.
To the extent the TEP IV-A Purchase Option is exercised, the Class A Interest in TEP IV‑A
Master Purchase Agreements
1.
Master Purchase Agreement, dated as of August 16, 2019, between Sunnova TEP Developer, LLC and TEP IV-A (“TEP IV-A MPA”)
Purchase Options
1.
“TEP IV-A Purchase Option” means the right of the applicable Managing Member or its designated Affiliate to purchase the related Tax Equity Investor’s interest in TEP IV-A
Servicing Agreements
1.
Servicing Agreement, dated as of August 16, 2019, by and among the Manager, TEP IV‑A and GreatAmerica Portfolio Services Group LLC (“TEP IV-A Servicing Agreement”)

Schedule VIII-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Tax Equity Financing Documents
TEP II
1.
Guaranty, dated as of August 16, 2019, by Parent for the benefit of the applicable Tax Equity Investor
2.
TEP IV-A Management Agreement
3.
TEP IV-A Servicing Agreement
4.
TEP IV-A MPA
5.
TEP IV-A LLCA
6.
Deposit Account Control Agreement, dated as of August 16, 2019, by and between TEP IV-A, the applicable Tax Equity Investor, and Texas Capital Bank, N.A., a national banking association
Tax Equity Investors
1.
With respect to TEP IV-A, JPM Capital Corporation, a Delaware corporation




Schedule VIII-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE IX
SAP FINANCING DOCUMENTS
1.
Management Agreement, dated as of September 6, 2019, by and between Manager and SAP.
2.
Servicing Agreement, dated as of September 6, 2019, by and among GreatAmerica Portfolio Services Group LLC, Manager and SA



Schedule IX-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.
Exhibit 10.33

THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made as of this 31st day of January, 2020 (the “Effective Date”), by and among SUNNOVA TEP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA TE MANAGEMENT, LLC, a Delaware limited liability company, in its capacity as Facility Administrator (the “Facility Administrator”), CREDIT SUISSE AG, NEW YORK BRANCH, in its capacity as Administrative Agent for the Lenders (the “Administrative Agent”), the Lenders and the Funding Agents representing a group of Lenders party to the Credit Agreement (defined below) (together with the Borrower, the Administrative Agent, the Lenders and the Facility Administrator, the “Parties”), and amends that certain Credit Agreement, dated as of September 6, 2019, as amended by that certain First Amendment to Credit Agreement, dated as of December 2, 2019, and as further amended by that certain Consent and Second Amendment to Credit Agreement dated as of December 31, 2019 (as may be further amended, modified, restated, supplemented or extended prior to the date hereof, the “Credit Agreement”), by and among the Borrower, the Facility Administrator, the Administrative Agent, the Lenders and the Funding Agents representing a group of Lenders party thereto, Wells Fargo Bank, National Association, in its capacity as Paying Agent, and U.S. Bank National Association, in its capacity as Verification Agent. Capitalized terms used herein have the meanings set forth in the Credit Agreement.
RECITALS
WHEREAS, the Parties hereto desire to amend the Credit Agreement in accordance with Section 10.2(A) thereof as set forth in Sections 1 and 2 hereof.
NOW, THEREFORE, in consideration of the foregoing, the terms and conditions set forth in this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1.Effective Date Amendments to the Credit Agreement.
(i)    On the Effective Date, the Credit Agreement in effect immediately prior to the date hereof is hereby amended to delete the red, stricken text (indicated textually in the same manner as the following example: stricken text) and to add the blue, double underlined text (indicated in the same manner as the following example: underlined text) as set forth on Exhibit A hereto.
(ii)    On the Effective Date, Exhibit J to the Credit Agreement is hereby replaced in its entirety with Exhibit B hereto.
2.TEP II Payoff Date Amendments to the Credit Agreement. Upon the repayment in full of the Obligations (under and as defined in the TEP II Credit Agreement), other than contingent obligations which by their express terms survive termination of the TEP II Transaction Documents and for which no claim has yet been made, the Credit Agreement in effect immediately prior to such repayment is hereby further amended to delete the red, stricken text (indicated textually in the same manner as the following example: stricken text) and to add the blue, double underlined text

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

(indicated in the same manner as the following example: underlined text) as set forth on Exhibit C hereto.
3.Representations and Warranties. Each of the Borrower and the Facility Administrator represents and warrants as of the date of this Amendment as follows:
(i)this Amendment has been duly and validly executed and delivered by such party and constitutes its valid and binding obligation, legally enforceable against such party in accordance with its terms, except as enforceability may be limited by applicable insolvency laws and general principles of equity (whether considered in a proceeding at law or in equity);
(ii)the execution, delivery and performance by it of this Amendment are within its powers, and do not conflict with, and will not result in a violation of, or constitute or give rise to an event of default under (i) any of its organizational documents, (ii) any agreement or other instrument which may be binding upon it, or (iii) any law, governmental regulation, court decree or order applicable to it or its properties, except, in each case, where such conflict, violation or event of default could not reasonably be expected to result in a Material Adverse Effect;
(iii)it has all powers and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted except where the failure to obtain such licenses, authorizations, consents and approvals would not result in a Material Adverse Effect; and
(iv)the representations and warranties of such party set forth in the Transaction Documents to which it is a party are true and correct in all material respects (except to the extent there are already materiality qualifiers therein) as of the date hereof.
Each of the Borrower and the Facility Administrator represents and warrants that (i) immediately prior to this Amendment, no Potential Default, Event of Default, Potential Amortization Event or Amortization Event has occurred and is continuing and (ii) no Potential Default, Event of Default, Potential Amortization Event or Amortization Event will occur as a result of the execution of this Amendment.
4.Effect of Amendment. This Amendment shall not in any manner constitute or be construed to constitute a novation, discharge, forgiveness, extinguishment or release of any obligation under the Credit Agreement or the other Transaction Documents or to keep and perform any of the terms, conditions, agreements contained in therein. Except as expressly amended and modified by this Amendment, all provisions of the Credit Agreement shall remain in full force and effect and each reference to the Credit Agreement and words of similar import in the Transaction Documents shall be a reference to the Credit Agreement as amended hereby and as the same may be further amended, supplemented and otherwise modified and in effect from time to time. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Credit Agreement other than as set forth herein. This Amendment is a Transaction Document.

2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

5.No Release or Novation; Ratification of Related Documents; Binding Effect. Nothing contained herein and nothing done pursuant hereto shall affect or be construed to affect or to release the liability of any party or parties whomsoever who may now or hereafter be liable under or on account of the Indebtedness under the Credit Agreement and the other Transaction Documents. Except as expressly provided herein, (i) nothing herein shall limit in any way the rights and remedies of the Secured Parties under the Credit Agreement and the other Transaction Documents, and (ii) the terms and conditions of the Credit Agreement and the other Transaction Documents remain in full force and effect and are hereby ratified and affirmed. The Borrower hereby ratifies and affirms all of its promises, covenants and obligations to promptly and properly pay any and all sums due under the Credit Agreement and the other Transaction Documents, as amended by this Amendment and to promptly and properly perform and comply with any and all of its obligations, duties and agreements pursuant thereto, as modified hereby or in connection herewith. This Amendment shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.
6.Entire Agreement; Effectiveness. This Amendment constitutes the entire agreement among the Parties with respect to the matters dealt with herein. All previous documents, undertakings and agreements, whether verbal, written or otherwise, among the Parties with respect to the subject matter of this Amendment, are hereby cancelled and superseded and shall not affect or modify any of the terms or obligations set forth in this Amendment. Upon the execution of this Amendment, this Amendment shall be binding upon and inure to the benefit of the Parties.
7.Severability. Any provision hereof which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and without affecting the validity or enforceability of any provision in any other jurisdiction.
8.Incorporation By Reference. Sections 10.9 (Governing Law), 10.10 (Jurisdiction), 10.11 (Waiver of Jury Trial), 10.20 (Non-Petition) and 10.21 (Non-Recourse) of the Credit Agreement hereby are incorporated by reference as if fully set forth in this Amendment mutatis mutandis.
9.Counterparts. This Amendment may be executed in any number of counterparts and by different Parties hereto in separate counterparts, each of which when so executed 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 a signature page to this Amendment by facsimile or by e‑mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Amendment.
[Signature Pages Follow]


3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written above.
SUNNOVA TEP HOLDINGS, LLC, as Borrower
By:
_/s/ Robert Lane___________________
Name: Robert Lane
Title: Executive Vice President, Chief
Financial Officer

SUNNOVA TE MANAGEMENT, LLC
By:
_/s/ Robert Lane___________________
Name: Robert Lane
Title: Executive Vice President, Chief
Financial Officer

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


CREDIT SUISSE AG, NEW YORK BRANCH,
as Administrative Agent and as a Funding Agent
By:
_/s/ Patrick Duggan___________________
Name: Patrick Duggan
Title: Vice President
By:
_/s/ Jeffrey Traola ___________________
Name: Jeffrey Traola
Title: Director

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
as a Lender
By:
_/s/ Patrick Duggan___________________
Name: Patrick Duggan
Title: Authorized Signatory
By:
_/s/ Jeffrey Traola ___________________
Name: Jeffrey Traola
Title: Authorized Signatory


[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


MOUNTCLIFF FUNDING LLC, AS A CONDUIT LENDER
By:
_/s/ Josh Borg ___________________
Name: Josh Borg
Title: Authorized Signatory

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Exhibit A

Effective Date Amendments

[see attached]



[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.
EXHIBIT A
FINAL VERSION




CREDIT AGREEMENT
dated as of September 6, 2019
among
SUNNOVA TEP HOLDINGS, LLC,
as Borrower
SUNNOVA TE MANAGEMENT, LLC,
as Facility Administrator
CREDIT SUISSE AG, NEW YORK BRANCH,
as Administrative Agent for the financial institutions
that may from time to time become parties hereto as Lenders
LENDERS
from time to time party hereto
FUNDING AGENTS
from time to time party hereto
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Paying Agent
and
U.S. BANK NATIONAL ASSOCIATION,
as Verification Agent



[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


TABLE OF CONTENTS
SECTION    HEADING    PAGE
ARTICLE I
CERTAIN DEFINITIONS    1
Section 1.1.
Certain Definitions    1
Section 1.2.
Computation of Time Periods    1
Section 1.3.
Construction    1
Section 1.4.
Accounting Terms    2
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES    2
Section 2.1.
Establishment of the Credit Facility    2
Section 2.2.
The Advances    2
Section 2.3.
Use of Proceeds    3
Section 2.4.
Making the Advances    3
Section 2.5.
Fees    6
Section 2.6.
Reduction/Increase of the Commitments    6
Section 2.7.
Repayment of the Advances    7
Section 2.8.
Certain Prepayments    13
Section 2.9.
Mandatory Prepayments of Advances    14
Section 2.10.
[Reserved]    14

.-i-

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 2.11.
Interest    14
Section 2.12.
Breakage Costs; Increased Costs; Capital Adequacy; Illegality; Additional Indemnifications    14
Section 2.13.
Payments and Computations    16
Section 2.14.
Payment on Non‑Business Days    16
Section 2.15.
[Reserved]    16
Section 2.16.
Extension of the Scheduled Commitment Termination Date    17
Section 2.17.
Taxes    17
Section 2.18.
Request for Borrowing Exceeding Aggregate Commitment    21
ARTICLE III
CONDITIONS OF LENDING AND CLOSING    22
Section 3.1.
Conditions Precedent to Closing    22
Section 3.2.
Conditions Precedent to the Advances    25
Section 3.3.
Conditions Precedent to Acquisition of Additional Managing Members    2627
ARTICLE IV
REPRESENTATIONS AND WARRANTIES    27
Section 4.1.
Representations and Warranties of the Borrower    27
ARTICLE V
COVENANTS    3132

-ii-

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 5.1.
Affirmative Covenants    3132
Section 5.2.
Negative Covenants    4243
Section 5.3.
Covenants Regarding the Solar Asset Owner Membership Interests    4647
ARTICLE VI
EVENTS OF DEFAULT    4849
Section 6.1.
Events of Default    4849
Section 6.2.
Remedies    5051
Section 6.3.
Class B Lender Purchase Option    5152
Section 6.4.
Sale of Collateral    53
ARTICLE VII
THE ADMINISTRATIVE AGENT AND FUNDING AGENTS    5354
Section 7.1.
Appointment; Nature of Relationship    5354
Section 7.2.
Powers    5455
Section 7.3.
General Immunity    5455
Section 7.4.
No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc.    5455
Section 7.5.
Action on Instructions of Lenders    55
Section 7.6.
Employment of Administrative Agents and Counsel    5556
Section 7.7.
Reliance on Documents; Counsel    5556

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 7.8.
The Administrative Agent’s Reimbursement and Indemnification    5556
Section 7.9.
Rights as a Lender    56
Section 7.10.
Lender Credit Decision    5657
Section 7.11.
Successor Administrative Agent    5657
Section 7.12.
Transaction Documents; Further Assurances    57
Section 7.13.
Collateral Review    5758
Section 7.14.
Funding Agent Appointment; Nature of Relationship    5758
Section 7.15.
Funding Agent Powers    58
Section 7.16.
Funding Agent General Immunity    5859
Section 7.17.
Funding Agent Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc.    5859
Section 7.18.
Funding Agent Action on Instructions of Lenders    5859
Section 7.19.
Funding Agent Employment of Administrative Agents and Counsel    59
Section 7.20.
Funding Agent Reliance on Documents; Counsel    5960
Section 7.21.
Funding Agent’s Reimbursement and Indemnification    5960
Section 7.22.
Funding Agent Rights as a Lender    5960
Section 7.23.
Funding Agent Lender Credit Decision    60
Section 7.24.
Funding Agent Successor Funding Agent    6061

-iv-

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 7.25.
Funding Agent Transaction Documents; Further Assurances    6061
ARTICLE VIII
ADMINISTRATION AND SERVICING OF THE COLLATERAL    6061
Section 8.1.
Facility Administration Agreement    6061
Section 8.2.
Accounts    63
Section 8.3.
Adjustments    73
ARTICLE IX
THE PAYING AGENT    7374
Section 9.1.
Appointment    7374
Section 9.2.
Representations and Warranties    7374
Section 9.3.
Limitation of Liability of the Paying Agent    74
Section 9.4.
Certain Matters Affecting the Paying Agent    7475
Section 9.5.
Indemnification    80
Section 9.6.
Successor Paying Agent    8081
ARTICLE X
MISCELLANEOUS    8182
Section 10.1.
Survival    8182
Section 10.2.
Amendments, Etc.    8182
Section 10.3.
Notices, Etc.    8283

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 10.4.
No Waiver; Remedies    8283
Section 10.5.
Indemnification    83
Section 10.6.
Costs, Expenses and Taxes    8384
Section 10.7.
Right of Set‑off; Ratable Payments; Relations Among Lenders    8485
Section 10.8.
Binding Effect; Assignment    8586
Section 10.9.
GOVERNING LAW    8788
Section 10.10.
Jurisdiction    88
Section 10.11.
Waiver of Jury Trial    8889
Section 10.12.
Section Headings    8889
Section 10.13.
Tax Characterization    8889
Section 10.14.
Execution    8889
Section 10.15.
Limitations on Liability    8889
Section 10.16.
Confidentiality    89
Section 10.17.
Limited Recourse    9091
Section 10.18.
Customer Identification ‑ USA Patriot Act Notice    9091
Section 10.19.
Paying Agent Compliance with Applicable Anti‑Terrorism and Anti‑Money Laundering Regulations    9192
Section 10.20.
Non‑Petition    9192
Section 10.21.
No Recourse    9192

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 10.22.
[Reserved]    9192
Section 10.23.
Additional Paying Agent Provisions    9192
Section 10.24.
Acknowledgement Regarding Any Supported QFCs    92


SCHEDULE I
—    Eligibility Criteria
SCHEDULE II
—    The Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, the Takeout Transaction Account, the Borrower’s Account and the TEP Collateral Account
SCHEDULE III
—    [Reserved]
SCHEDULE IV
—    Scheduled Hedged SREC Payments
SCHEDULE V
—    Scheduled Host Customer Payments
SCHEDULE VI
—    Scheduled PBI Payments
SCHEDULE VII
—    Scheduled Managing Member Distributions
SCHEDULE VIII
—    Tax Equity Financing Documents
SCHEDULE IX
—    SAP Financing Documents
SCHEDULE X
—    SAP NTP Financing Documents


EXHIBIT A
—    Defined Terms
EXHIBIT B‑1
—    Form of Borrowing Base Certificate
EXHIBIT B‑2
—    Form of Notice of Borrowing
EXHIBIT C
—    [Reserved]
EXHIBIT D-1
—    Form of Class A Loan Note
EXHIBIT D-2
—    Form of Class B Loan Note
EXHIBIT E
—    Commitments
EXHIBIT F
—    Form of Assignment Agreement
EXHIBIT G
—    Form of Solar Service Agreement
EXHIBIT H
—    Form of Notice of Delayed Funding
EXHIBIT I
—    Delayed Funding Notice
EXHIBIT J
—    Form of Underwriting and Reassignment Credit Policy


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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this “Agreement”) is entered into as of September 6, 2019, by and among SUNNOVA TEP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA TE MANAGEMENT, LLC, a Delaware limited liability company, as Facility Administrator (in such capacity, the “Facility Administrator”), the financial institutions from time to time parties hereto (each such financial institution (including any Conduit Lender), a “Lender” and collectively, the “Lenders”), each Funding Agent representing a group of Lenders, CREDIT SUISSE AG, NEW YORK BRANCH (“CSNY”), as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders, WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Paying Agent (as defined below), and U.S. BANK NATIONAL ASSOCIATION, as Verification Agent (as defined below).

RECITALS

WHEREAS, the Borrower has requested that the Lenders provide loans to Borrower in connection with its ownership interest in the Solar Asset Owner Member Interests; and

WHEREAS, the Lenders are willing to provide such loans upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

Section 1.1.    Certain Definitions. Capitalized terms used but not otherwise defined herein have the meanings given to them in Exhibit A attached hereto.

Section 1.2.    Computation of Time Periods. In this Agreement, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each means “to but excluding” and the word “through” means “through and including.” Any references to completing an action on a non-Business Day (including any payments), shall be automatically extended to the next Business Day

Section 1.3.    Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (A) any definition of or reference to any agreement, instrument or other

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein), (B) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (C) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (D) all references herein to Sections, Schedules and Exhibits shall be construed to refer to Sections of, and Schedules and Exhibits to, this Agreement, (E) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all real property, tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and interests in any of the foregoing, (F) any reference to a statute, rule or regulation is to that statute, rule or regulation as now enacted or as the same may from time to time be amended, re‑enacted or expressly replaced and (G) “or” is not exclusive. References to “Managing Member” in this Agreement shall be deemed to include all entities comprising such defined term unless the context requires otherwise. “References to “Manager” in this Agreement shall be deemed to include all entities comprising such defined term unless the context requires otherwise.

Section 1.4.    Accounting Terms. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited financial statements, except as otherwise specifically prescribed herein.

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

Section 2.1.    Establishment of the Credit Facility. On the Closing Date, and subject to and upon the terms and conditions set forth in this Agreement and the other Transaction Documents, the Administrative Agent and the Lenders agreed to establish the credit facility set forth in this Agreement for the benefit of the Borrower.

Section 2.2.    The Advances. (A) Subject to the terms and conditions set forth herein, each Non-Conduit Lender in a Class A Lender Group agrees, severally and not jointly, to make one or more loans (each such loan, a “Class A Advance”) to the Borrower, from time to time during the Availability Period, in an amount, for each Class A Lender Group, equal to its Class A Lender Group Percentage of the aggregate Class A Advances requested by the Borrower pursuant to Section 2.4; provided that the Class A Advances made by any Class A Lender Group shall not exceed its Class A Lender Group Percentage of the lesser of (i) the Class A Aggregate Commitment effective at such time and (ii) the Class A Borrowing Base at such time; provided, further, that a Non-Conduit Lender in a Class A Lender Group shall be deemed to have satisfied its obligation to make a Class A Advance hereunder (solely with respect to such Class A Advance) to the extent any Conduit Lender in such Lender Group funds such Class A Advance in place of such Non-Conduit Lender in accordance with this Agreement, it being understood that such Conduit Lender may fund a Class A Advance in its sole discretion.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



(B)    Subject to the terms and conditions set forth herein, each Non-Conduit Lender in a Class B Lender Group agrees, severally and not jointly, to make one or more loans (each such loan, a “Class B Advance”) to the Borrower, from time to time during the Availability Period, in an amount, for each Class B Lender Group, equal to its Class B Lender Group Percentage of the aggregate Class B Advances requested by the Borrower pursuant to Section 2.4; provided that the Class B Advances made by any Class B Lender Group shall not exceed its Class B Lender Group Percentage of the lesser of (i) the Class B Aggregate Commitment effective at such time and (ii) the Class B Borrowing Base at such time; provided, further, that a Non-Conduit Lender in a Class B Lender Group shall be deemed to have satisfied its obligation to make a Class B Advance hereunder (solely with respect to such Class B Advance) to the extent any Conduit Lender in such Lender Group funds such Class B Advance in place of such Non-Conduit Lender in accordance with this Agreement, it being understood that such Conduit Lender may fund a Class B Advance in its sole discretion.

Section 2.3.    Use of Proceeds. Proceeds of the Advances shall only be used by the Borrower to (i) purchase Solar Assets and/or Solar Asset Owner Member Interests from the Seller under the Sale and Contribution Agreement, (ii)  make deposits into the Liquidity Reserve Account (up to the Liquidity Reserve Account Required Balance), (iii) make deposits into the Supplemental Reserve Account (up to the Supplemental Reserve Account Required Balance), (iv) make distributions to the Parent and (v) pay certain fees and expenses incurred in connection with establishment of the credit facility set forth in this Agreement.

Section 2.4.    Making the Advances. (A) Except as otherwise provided herein, the Borrower may request that the Lenders make Advances to the Borrower by the delivery to the Administrative Agent, each Funding Agent, the Paying Agent and, so long as it remains a Lender hereunder, the CS Conduit Lender, not later than 1:00 P.M. (New York City time) two (2) Business Days prior to the proposed Funding Date of a written notice of such request substantially in the form of Exhibit B-2 attached hereto (each such notice, a “Notice of Borrowing”) together with a duly completed Borrowing Base Certificate signed by a Responsible Officer of the Borrower. Any Notice of Borrowing or Borrowing Base Certificate received by the Administrative Agent, the Funding Agents and the Paying Agent after the time specified in the immediately preceding sentence shall be deemed to have been received by the Administrative Agent, the Funding Agents and the Paying Agent on the next Business Day, and to the extent that results in the proposed Funding Date being earlier than two (2) Business Days after the date of delivery of such Notice of Borrowing, then the date specified in such Notice of Borrowing as the proposed Funding Date of an Advance shall be deemed to be the Business Day immediately succeeding the proposed Funding Date of such Advance specified in such Notice of Borrowing. The proposed Funding Date specified in a Notice of Borrowing shall be no earlier than two (2) Business Days after the date of delivery of such Notice of Borrowing and may be up to a maximum of thirty (30) days after the date of delivery of such Notice of Borrowing. Unless otherwise provided herein, each Notice of Borrowing shall be irrevocable. The aggregate principal amount of the Class A Advance and Class B Advance requested by the Borrower for any Funding Date shall not be less than the lesser of (x) $1,000,000 and (y) the remaining amount necessary in order for the Borrower to fully utilize all available Commitments. If the Administrative Agent delivers a written notice (including by electronic mail) to the Borrower contesting the Borrower’s calculations or any statement within such Notice of Borrowing, it shall promptly inform

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


the Borrower. The Borrower may then deliver an amended Notice of Borrowing to the Administrative Agent, the Funding Agents and the Paying Agent or, by written notice, rescind the Notice of Borrowing.

(B)     The Notice of Borrowing shall specify (i) the aggregate amount of Class A Advances requested together with the allocated amount of Class A Advances to be paid by each Class A Lender Group based on its respective Class A Lender Group Percentage, (ii) the aggregate amount of Class B Advances requested together with the allocated amount of Class B Advances to be paid by each Class B Lender Group based on its respective Class B Lender Group Percentage and (iii) the Funding Date; provided that the amount of Class A Advances to Class B Advances requested shall be determined on a pro rata basis based on the Class A Aggregate Commitment and Class B Aggregate Commitment as of the proposed Funding Date.

(C)    With respect to the Advances to be made on the Closing Date, each Lender shall pay the amount of its Advance by wire transfer of such funds to the Borrower’s Account no later than 4:00 P.M. (New York City time) on the Closing Date.

(D)     With respect to the Advances to be made on any Funding Date, other than the initial Advance to be made on the Closing Date, upon a determination by the Administrative Agent that all conditions precedent to the Advances to be made on such Funding Date set forth in Article III have been satisfied or otherwise waived, each Lender shall fund the amount of its Advance by wire transfer of such funds in accordance with the Borrower’s written instructions initiated no later than 2:00 P.M. (New York City time) on such Funding Date.

(E)    Notwithstanding the foregoing, if any Non-Conduit Lender who shall have previously notified the Borrower in writing, in substantially the form of Exhibit H hereto, that it has incurred any external cost, fee or expense directly related to and as a result of the “liquidity coverage ratio” under Basel III in respect of its Commitment hereunder or any liquidity agreement between such Non-Conduit Lender and the Conduit Lender, or its interest in the Advances, such Non-Conduit Lender may, upon receipt of a Notice of Borrowing pursuant to Section 2.4(A), notify the Borrower in writing by 5:00 P.M. (New York City time) two (2) Business Days prior to the Funding Date specified in such Notice of Borrowing, in substantially the form of Exhibit I hereto (a “Delayed Funding Notice”), of its intent to fund (or, if applicable and if such Conduit Lender so agrees in its sole discretion, have its Conduit Lender, if applicable, fund all or part of) its allocated amount of the related Advance in an amount that would, if combined with all other requested Advances within the past thirty-five (35) days, exceed $20,000,000 (such amount, the “Delayed Amount”) on a Business Day that is on or before the thirty-fifth (35th) day following the date of delivery of such Non-Conduit Lender of such Delayed Funding Notice (the “Delayed Funding Date”) rather than on the date specified in such Notice of Borrowing. If any Non-Conduit Lender provides a Delayed Funding Notice to the Borrower following the delivery by the Borrower of a Notice of Borrowing, the Borrower may revoke such Notice of Borrowing by delivering written notice of the same to the Administrative Agent and the Funding Agents by 12:00 P.M. (New York city time) on the Business Day preceding the related Funding Date. No Non-Conduit Lender that has provided a Delayed Funding Notice in respect of an Advance (a “Delayed Funding Lender”) shall be considered to be in default of its obligation to fund its Delayed Amount pursuant to Section 2.4(D) hereunder unless and until it has failed to fund the Delayed Amount on or before the Delayed

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Funding Date. A Delayed Funding Lender is not obliged to fund until thirty-five (35) days have elapsed since the funding request. For the avoidance of doubt, a Delayed Funding Lender shall be required to fund its Delayed Amount regardless of the occurrence of an Amortization Event, Event of Default, Potential Amortization Event or Potential Default which occurs during the period from and including the related Funding Date to and including the related Delayed Funding Date, unless such Amortization Event, Event of Default, Potential Amortization Event or Potential Default relates to an Insolvency Event with respect to the Borrower.

(F)    If (i) one or more Delayed Funding Lenders provide a Delayed Funding Notice to the Borrower in respect of a Notice of Borrowing and (ii) the Borrower shall not have revoked the Notice of Borrowing prior to the Business Day preceding such Funding Date, the Administrative Agent shall, by no later than 12:00 P.M. (New York City time) on the Business Day preceding such Funding Date, direct each Lender Group and each Non-Conduit Lender that is not a Delayed Funding Lender with respect to such Funding Date (each a “Non-Delayed Funding Lender”) to fund an additional portion of such Advance on such Funding Date equal to such Non-Delayed Funding Lender’s proportionate share (based upon such Non-Delayed Funding Lender’s Commitment relative to the sum of the Commitments of all Non-Delayed Funding Lenders) of the aggregate Delayed Amounts with respect to such Funding Date; provided, that in no event shall a Non-Delayed Funding Lender be required to fund any amounts in excess of its Commitment. Subject to Section 2.4(D), in the case of a Non-Delayed Funding Lender that is a Non-Conduit Lender, such Non-Conduit Lender hereby agrees, or, in the case of a Non-Delayed Funding Lender that is a Lender Group, the Conduit Lender in such Lender Group may agree, in its sole discretion, and the Non-Conduit Lenders in such Lender Group hereby agree, to fund such portion of the Advance on such Funding Date.

(G)    After the Non-Delayed Funding Lenders fund a Delayed Amount on any Funding Date in accordance with Section 2.4(F), the Delayed Funding Lender in respect of such Delayed Amount will be obligated to fund an amount equal to the excess, if any, of (a) such Delayed Amount over (b) the amount, if any, by which the portion of any principal distribution amount paid to such Non-Delayed Funding Lenders pursuant to Section 2.7 or any decrease to the outstanding principal balance made in accordance with Section 2.8, on any date during the period from and including such Funding Date to but excluding the Delayed Funding Date for such Delayed Amount, was greater than what it would have been had such Delayed Amount been funded by such Delayed Funding Lender on such Funding Date (the “Delayed Funding Reimbursement Amount”) with respect to such Delayed Amount on or before its Delayed Funding Date, irrespective of whether the Borrower would be able to satisfy the conditions set forth in Section 3.2(A) to an Advance, in an amount equal to such Delayed Funding Reimbursement Amount on such Delayed Funding Date. Such Delayed Funding Lender shall fund such Delayed Funding Reimbursement Amount on such Delayed Funding Date by paying such amount to the Administrative Agent in immediately available funds, and the Administrative Agent shall distribute such funds to each such Non-Delayed Funding Lender, pro rata based on the relative amount of such Delayed Amount funded by such Non-Delayed Funding Lender on such Funding Date pursuant to Section 2.4(F).


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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 2.5.    Fees.

(A)    Facility Administrator Fee. Subject to the terms and conditions of the Facility Administration Agreement, the Borrower shall pay the Facility Administrator Fee to the initial Facility Administrator and after the resignation or replacement of the initial Facility Administrator, the Borrower shall pay the Facility Administrator Fee to a Successor Facility Administrator appointed in accordance with the Facility Administration Agreement.

(B)    Verification Agent Fee. Subject to the terms and conditions of the Verification Agent Agreement, the Borrower shall pay to the Verification Agent the Verification Agent Fee.

(C)    Paying Agent Fee. Subject to the terms and conditions of the Paying Agent Fee Letter, the Borrower shall pay to the Paying Agent the Paying Agent Fee.

(D)    Unused Line Fees. Solely during the Availability Period, the Borrower agrees to pay to each Funding Agent, for the benefit of the Non-Conduit Lender in its Lender Group and as consideration for the Commitment of such Non-Conduit Lender in such Lender Group unused line fees in Dollars (the “Unused Line Fee”) for the period from the Closing Date to the last day of the Availability Period, computed as (a) the Unused Line Fee Percentage multiplied by (b) the average Unused Portion of the Commitments with respect to such Lender Group during a calendar quarter. Accrued Unused Line Fees shall be due and payable in arrears (from available Collections as set forth and in the order of priority established pursuant to Section 2.7) on the Payment Date immediately following the last day of the applicable calendar quarter for which such fee was calculated and on the last day of the Availability Period.

(E)    Payment of Fees. The fees set forth in Section 2.5(A), (B), (C) and (D) shall be payable on each Payment Date by the Borrower from Distributable Collections as set forth in and in the order of priority established pursuant to Section 2.7(B). Notwithstanding anything to the contrary herein or in any Transaction Document, the fees referred to in this Section 2.5 shall not constitute “Confidential Information.”

(F)    Amendment Fee.     Commencing on the Amendment Closing Date and thereafter, the Borrower shall pay to the Administrative Agent a fee of $10,000 in connection with each amendment (or group of related amendments effective of the same date) to the Transaction Documents requested by it, which fee shall be in addition to the reimbursement of costs and expenses associated therewith that is provided for in Section 10.6 hereof. For the avoidance of doubt, any consent to a Proposed Form delivered by the Administrative Agent pursuant to Section 5.1(X) shall not give rise to the obligation to pay the amendment fee set forth in this Section 2.5(F) so long as no amendment to any Transaction Document is required in connection with such Proposed Form as determined by the Administrative Agent in its sole discretion.







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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 2.6.    Reduction/Increase of the Commitments.

(A)    The Borrower may, on any Business Day, upon written notice given to the Administrative Agent and each of the Funding Agents not later than ten (10) Business Days prior to the date of the proposed action (which notice may be conditioned upon any event), terminate in whole or reduce in part, on a pro rata basis based on its Lender Group Percentage, the Unused Portion of the Commitments with respect to each Lender Group (and on a pro rata basis with respect to each Non-Conduit Lender in such Lender Group); provided, that (i) any partial reduction shall be in the amount of $1,000,000 or an integral multiple thereof and (ii) any Unused Portion of the Commitments so reduced may not be increased again without the written consent of the related Non-Conduit Lenders in such Lender Group.

(B)    The Borrower may, on any Business Day upon written notice given to the Administrative Agent and each of the Funding Agents, request an increase, on a pro rata basis based on its Lender Group Percentage, of the Commitments of the Non-Conduit Lender(s) in each Lender Group; provided, that any increase shall be at least equal to $5,000,000 or an integral multiple thereof but shall in no event cause the Aggregate Commitment to exceed the Maximum Facility Amount, the Class A Aggregate Commitment to exceed the Class A Maximum Facility Amount or the Class B Aggregate Commitment to exceed the Class B Maximum Facility Amount. Each Non-Conduit Lender shall, within five (5) Business Days of receipt of such request, notify the Administrative Agent and the Administrative Agent shall in turn notify the Borrower in writing (with copies to the other members of the applicable Lender Group) whether or not each Non-Conduit Lender has, in its sole discretion, agreed to increase its Commitment. If a Non-Conduit Lender does not send any notification to the Administrative Agent within such five (5) Business Day period, such Non-Conduit Lender shall be deemed to have declined to increase its Commitment. Any increase in Commitments agreed to pursuant to this Section 2.6(B) may be reduced by a Non-Conduit Lender, at any time, upon five Business Days’ written notice to the Borrower from the Administrative Agent (with copies to the other members of the applicable Lender Group) setting forth the amount of such reduction; provided, however, that such Commitment may not be reduced to an amount less than such Non-Conduit Lender’s initial Commitment on the Closing Date (if such reduction is prior to a Takeout Transaction) or to an amount less than such Non-Conduit Lender’s Commitment on or after a Takeout Transaction (if such reduction is on or after a Takeout Transaction), but may be reduced to an amount that is less than the then Aggregate Outstanding Advances.

Section 2.7.    Repayment of the Advances. (A) Notwithstanding any other provision to the contrary, the outstanding principal balance of the Advances and the other Obligations owing under this Agreement, together with all accrued but unpaid interest thereon, shall be due and payable in full, if not due and payable earlier, on the Maturity Date. For the avoidance of doubt, amounts borrowed and repaid hereunder may be reborrowed in accordance with the terms hereof.

(B)    On any Business Day, the Borrower may direct the Paying Agent to, and on each Payment Date, the Borrower shall direct the Paying Agent to, subject to Section 2.7(D), apply all amounts on deposit in the Collection Account (including (x)(1)(a) Collections deposited therein during the related Collection Period and (b) any amounts due during the related Collection Period but deposited into the Collection Account within ten (10) Business Days after the end of such

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Collection Period that the Facility Administrator (at its option) has determined (with written notice thereof to the Paying Agent (with a copy to the Administrative Agent and the Borrower)) to be treated as if such amounts were on deposit in the Collection Account at the end of such Collection Period, (2) amounts deposited therein from the Liquidity Reserve Account or the Supplemental Reserve Account, in each case in accordance with Section 8.2 or (3) any amounts deposited therein by the Seller or the Parent pursuant to the Sale and Contribution Agreement or the Parent Guaranty, respectively, but (y) excluding Collections deposited therein in the current Collection Period except as necessary to make distributions pursuant to clauses (i) through (iii) of this Section or as otherwise determined by the Facility Administrator pursuant to clause (x)(1)(a) above) (the “Distributable Collections”), to the Obligations in the following order of priority based solely on information contained in (I) with respect to any Payment Date, the Facility Administrator Report for such related Collection Period or, if no Facility Administrator Report is available, solely as directed in writing by the Administrative Agent or (II) with respect to any other Business Day, including the date of closing for a Takeout Transaction, on which the Borrower requests an application and distribution of funds in the Collection Account (and/or Takeout Transaction Account, if applicable), an interim Facility Administrator Report or such other report in form and substance reasonably satisfactory to the Administrative Agent (as confirmed by the Administrative Agent via an email sent to the Paying Agent) and the Paying Agent relating to the Distributable Collections and proceeds of a Takeout Transaction, if applicable, that is delivered by the Facility Administrator (which the Facility Administrator hereby agrees to deliver at the request of the Administrative Agent):

(i)first (Service Providers), ratably, (a) to the Paying Agent (1) the Paying Agent Fee and (2)(x) any accrued and unpaid Paying Agent Fees with respect to prior Payment Dates plus (y) out-of-pocket expenses and indemnities of the Paying Agent incurred and not reimbursed in connection with its obligations and duties under this Agreement; provided that the aggregate payments to the Paying Agent reimbursement for clauses (2)(y) will be limited to $50,000 per calendar year so long as no Event of Default or Amortization Event has occurred pursuant to this Agreement (unless otherwise approved by the Majority Lenders and, if such reimbursement amount is to be increased, the Majority Class B Lenders (the approval of the Majority Class B Lenders not to be unreasonably withheld, conditioned or delayed if otherwise approved by the Majority Lenders); provided that if the Majority Class B Lenders have not affirmatively disapproved such increase in writing within five (5) Business Days of receiving notice of such increase and the Majority Lenders have otherwise approved such increase, such increase shall be deemed approved); (b) to the Facility Administrator, the Facility Administrator Fee, and (c) to the Verification Agent, the Verification Agent Fee;

(ii)    second (Hedge Agreement Payments and Class A Interest Distribution Amount), on a pari passu basis (a) to the Qualifying Hedge Counterparty under each Hedge Agreement, the payment of all amounts which are due and payable by the Borrower to such Qualifying Hedge Counterparty on such date (other than fees, expenses, termination payments, indemnification payments, tax payments or other similar amounts), pursuant to the terms of the applicable Hedge Agreement (net of all amounts which are due and payable by such Qualifying Hedge Counterparty to the Borrower on such date pursuant to the terms of such Hedge Agreement) and (b) to each Class A Funding Agent, for the benefit of and on behalf of the Class A Lenders in its Class A Lender Group, the Class A Interest Distribution

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Amount then due (allocated among the Class A Lender Groups based on their Class A Lender Group Percentages) until paid in full;

(iii)    third (Class B Interest Distribution Amount (Non-Event of Default)), so long as no Event of Default has occurred and is continuing, to each Class B Funding Agent, for the benefit of and on behalf of the Class B Lenders in its Class B Lender Group, the Class B Interest Distribution Amount then due (allocated among the Class B Lender Groups based on their Class B Lender Group Percentages) until paid in full;

(iv)    fourth (Unused Line Fee), first, to each Class A Funding Agent, for the benefit of and on behalf of the related Non-Conduit Lender(s) in its Lender Group, the payment of the Unused Line Fee then due (allocated among the Lender Groups based on their Lender Group Percentages) until paid in full and second, to each Class B Funding Agent, for the benefit of and on behalf of the related Non-Conduit Lender(s) in its Lender Group, the payment of the Unused Line Fee then due (allocated among the Lender Groups based on their Lender Group Percentages) until paid in full;

(v)    fifth (Liquidity Reserve Account), if the amount on deposit in the Liquidity Reserve Account is less than the Liquidity Reserve Account Required Balance and no Amortization Event has occurred and is continuing, to the Liquidity Reserve Account until the amount on deposit in the Liquidity Reserve Account shall equal the Liquidity Reserve Account Required Balance;

(vi)    sixth (Supplemental Reserve Account), to the Supplemental Reserve Account, the Supplemental Reserve Account Deposit, if any;

(vii)seventh (Class A Borrowing Base Deficiency), to the extent required under Section 2.9 in connection with a Class A Borrowing Base Deficiency, to each Class A Funding Agent, on behalf of the Class A Lenders in its Class A Lender Group, for the prepayment and reduction of the outstanding principal amount of any Class A Advances, an amount equal to the amount necessary to cure such Class A Borrowing Base Deficiency (allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages) plus, to the extent not paid as provided above, accrued and unpaid interest on the Class A Advances prepaid until paid in full;

(viii)eighth (Class B Interest Distribution Amount (Event of Default)), if an Event of Default has occurred and is continuing, to each Class B Funding Agent, for the benefit of and on behalf of the Class B Lenders in its Class B Lender Group, the Class B Interest Distribution Amount then due (allocated among the Class B Lender Groups based on their Class B Lender Group Percentages) until paid in full;

(ix)    ninth (Class B Borrowing Base Deficiency), to the extent required under Section 2.9 in connection with a Class B Borrowing Base Deficiency, to each Class B Funding Agent, on behalf of the Class B Lenders in its Class B Lender Group, for the prepayment and reduction of the outstanding principal amount of any Class B Advances, an amount equal to the amount necessary to cure such Class B Borrowing Base Deficiency (allocated

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


ratably among the Class B Lender Groups based on their Class B Lender Group Percentages) plus, to the extent not paid as provided above, accrued and unpaid interest on the Class B Advances prepaid until paid in full;

(x)    tenth (Qualifying Hedge Counterparty Breakage and Amortization Period Class A Lender Obligations), on a pari passu basis (a) to the Administrative Agent for the account of the Hedge Counterparty under each Hedge Agreement, all payments which arose due to a default by the Borrower or due to any prepayments of amounts under such Hedge Agreement and all fees, expenses, indemnification payments, tax payments or other amounts (to the extent not previously paid hereunder) which are due and payable by the Borrower to such Hedge Counterparty on such date, pursuant to the terms of the applicable Hedge Agreement (net of all amounts which are due and payable by such Qualifying Hedge Counterparty to the Borrower on such date pursuant to the terms of such Hedge Agreement) and (b) during the Amortization Period, to the Administrative Agent and each Class A Funding Agent on behalf of itself and the Class A Lenders in its related Class A Lender Group, all remaining amounts, for application to the principal balance of the outstanding Class A Advances and the aggregate amount of all Obligations then due from the Borrower to the Administrative Agent, such Class A Funding Agent and each such Class A Lender in the Class A Lender Group (allocated among such Obligations as selected by the Administrative Agent; provided that payment of the principal balance of outstanding Class A Advances shall be allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages) until paid in full;

(xi)    eleventh (Amortization Period Class B Lender Obligations), during the Amortization Period, to the Administrative Agent and each Class B Funding Agent on behalf of itself and the Class B Lenders in its related Class B Lender Group, all remaining amounts, for application to the payment of the principal balance of the outstanding Class B Advances and the aggregate amount of all Obligations then due from the Borrower to the Administrative Agent, such Class B Funding Agent and each such Class B Lender in the Class B Lender Group (allocated among such Obligations as selected by the Administrative Agent; provided that payment of the principal balance of outstanding Class B Advances shall be allocated ratably among the Class B Lender Groups based on their Class B Lender Group Percentages) until paid in full;

(xii)twelfth (Lender Fees and Expenses), first, to the Administrative Agent and each Class A Funding Agent on behalf of itself and the Class A Lenders in its related Class A Lender Group, the payment of all Breakage Costs, all Liquidation Fees and all other amounts (other than those already provided for above) due and payable by the Borrower to the Administrative Agent, such Class A Funding Agent and such Class A Lenders (solely in their capacity as a Class A Lender) hereunder or under any other Transaction Document until paid in full and second, to each Class B Funding Agent on behalf of itself and the Class B Lenders in its related Class B Lender Group, the payment of all Breakage Costs, all Liquidation Fees and all other amounts (other than those already provided for above) due and payable by the Borrower to such Class B Funding Agent and such Class B Lenders (solely in their capacity as a Class B Lender) hereunder or under any other Transaction Document until paid in full;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(xiii)thirteenth (All Other Obligations), to the Administrative Agent on behalf of any applicable party, the ratable payment of all other Obligations that are past due and/or payable on such date;

(xiv)fourteenth (Service Provider Indemnities), ratably, to the Paying Agent, the Verification Agent and/or the Facility Administrator, any indemnification, expenses, fees or other obligations owed to the Paying Agent, the Verification Agent and/or the Facility Administrator, respectively (including out-of-pocket expenses and indemnities of the Paying Agent and the Verification Agent not paid pursuant to clause (i) above and any Facility Administrator Fees, Paying Agent Fees or Verification Agent Fees not paid pursuant to clause (i) above), pursuant to the Transaction Documents;

(xv)fifteenth (Class A Principal Prepayments; Class B Principal Prepayments), ratably, unless an Event of Default or Amortization Event has occurred and is continuing, then, sequentially, as specified in Section 2.8(A), (a) to each Class A Funding Agent on behalf of its related Class A Lender Group, to the prepayment of Class A Advances in accordance with Sections 2.8(A), 2.11, 2.12(A) and 2.13 (allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages), and (b) to each Class B Funding Agent on behalf of its related Class B Lender Group, to the prepayment of Class B Advances in accordance with Sections 2.8(A), 2.11, 2.12(A) and 2.13 (allocated ratably among the Class B Lender Groups based on their Class B Lender Group Percentages);

(xvi)sixteenth (Eligible Letter of Credit Bank), to each Eligible Letter of Credit Bank or other party as directed by the Facility Administrator (a) any fees and expenses related to a Letter of Credit and (b) any amounts which have been drawn under a Letter of Credit and any interest due thereon; and

(xvii)seventeenth (Remainder), all Distributable Collections remaining in the Collection Account after giving effect to the preceding distributions in this Section 2.7(B), to the Borrower’s Account (to cover any other expenses of the Borrower) and (x) prior to the satisfaction of the covenant set forth in Section 5.1(W), otherwise to the Collection Account and (y) after satisfaction of the covenant set forth in Section 5.1(W), otherwise to the TEP Collateral Account.

(C)    After giving effect to the application of Distributable Collections in accordance with Section 2.7(B) on any Business Day, if any, the Paying Agent shall, subject to Sections 2.7(D) and 2.8(B), apply all amounts on deposit in the Takeout Transaction Account on such Business Day representing net proceeds of any Takeout Transaction to the Obligations in the following order of priority:

(i)first (Interest), (a) first, to each Class A Funding Agent, on behalf of the Class A Lenders in its Class A Lender Group, the excess, if any, of the Class A Interest Distribution Amount accrued with respect to the amount of Class A Advances prepaid on such day (allocated among the Class A Lender Groups based on their Class A Lender Group Percentages) with respect to the related Interest Accrual Period over the amount distributed (or distributable) to the Class A Funding Agent on such day pursuant to Section 2.7(B)(ii)(b) and (b) second, to each Class B Funding Agent, for the benefit of and on behalf of the Class B Lenders in its Class B Lender Group, the excess, if any, of the Class B Interest Distribution Amount accrued with respect to the amount of Class B Advances

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


prepaid on such day (allocated among the Class B Lender Groups based on their Class B Lender Group Percentages) with respect to the related Interest Accrual Period over the amount distributed (or distributable) to the Class B Funding Agent on such day pursuant to Section 2.7(B)(iii);

(ii)    second (Liquidation Fees and Other Obligations Owing to Administrative Agents, Lenders and Funding Agents), (a) first, to each Funding Agent on behalf of the Lenders in its related Lender Group, for application to the aggregate amount of all Liquidation Fees accrued with respect to the amount of Advances prepaid on such day (other than those already provided for pursuant to this Section 2.7(C)) then due and payable by the Borrower (allocated ratably among the Class A Lender Groups and the Class B Lender Groups based on the percentage of the Aggregate Outstanding Advances funded by each such Lender Group and within each Lender Group based on their applicable Lender Group Percentages) until paid in full, (b) second, ratably, to the Administrative Agent and each Class A Funding Agent, on behalf of itself and the Class A Lenders in its related Class A Lender Group, the aggregate amount of all Obligations accrued with respect to the amount of Class A Advances prepaid on such day (other than those provided for in other clauses of this Section 2.7(C)) then due and payable by the Borrower to the Administrative Agent, such Class A Funding Agent and such Class A Lenders (solely in its capacity as a Class A Lender) hereunder or under any other Transaction Document until paid in full, and (c) third, to each Class B Funding Agent, on behalf of itself and the Class B Lenders in its related Class B Lender Group, the aggregate amount of all Obligations accrued with respect to the amount of Class B Advances prepaid on such day (other than those provided for in other clauses of this Section 2.7(C)) then due and payable by the Borrower to such Class B Funding Agent or such Class B Lenders (solely in its capacity as a Class B Lender) hereunder or under any other Transaction Document until paid in full;

(iii)    third (Principal), so long as no Event of Default or Amortization Event has occurred and is continuing, pro rata based on amounts then due to the Class A Lenders and the Class B Lenders, and if an Event of Default or Amortization Event has occurred and is continuing, sequentially, (a) to each Class A Funding Agent on behalf of its related Class A Lender Group, to the prepayment of Class A Advances in accordance with Sections 2.8(A), 2.11, 2.12(A) and 2.13 (allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages) and (b) to each Class B Funding Agent on behalf of its related Class B Lender Group, to the prepayment of Class B Advances in accordance with Sections 2.8(A), 2.11, 2.12(A) and 2.13 (allocated ratably among the Class B Lender Groups based on their Class B Lender Group Percentages);

(iv)    fourth (Qualifying Hedge Counterparty and Eligible Hedged SREC Counterparty Payments), ratably to (a) to the Administrative Agent for the account of the Qualifying Hedge Counterparty under each Hedge Agreement, all payments that are due and payable by the Borrower to such Qualifying Hedge Counterparty on such date arising as a result of the prepayment of Advances in connection with such Takeout Transaction (including all fees, expenses, indemnification payments, tax payments, termination payments and other amounts), pursuant to the terms of the applicable Hedge Agreement (net of all amounts which are due and payable by such Qualifying Hedge Counterparty to the Borrower on such date pursuant to the terms of such Hedge Agreement) and (b) to the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Eligible Hedged SREC Counterparty under each Hedged SREC Agreement, all payments that are due and payable by the Borrower under such Hedged SREC Agreement on such date arising as a result of the prepayment of Advances in connection with such Takeout Transaction (including all fees, expenses, indemnification payments, tax payments, termination payments and other amounts), pursuant to the terms of the applicable Hedged SREC Agreement;

(v)fifth (Eligible Letter of Credit Bank), to the Eligible Letter of Credit Bank or other party as directed by the Facility Administrator (a) any fees and expenses related to a Letter of Credit and (b) any amounts which have been drawn under a Letter of Credit and any interest due thereon; and

(vi)sixth (Remainder), to the Collection Account, all proceeds of such Takeout Transaction remaining in the Takeout Transaction Account for application in accordance with Section 2.7(B).

(D)    Notwithstanding anything to the contrary set forth in this Section 2.7 or Section 8.2, the Paying Agent shall not be obligated to make any determination or calculation with respect to the payments or allocations to be made pursuant to either of such Sections, and in making the payments and allocations required under such Sections, the Paying Agent shall be entitled to rely exclusively and conclusively upon the information in the latest Facility Administrator Report (or such other report or direction signed by the Administrative Agent) received by the Paying Agent pursuant to either such Section prior to the applicable payment date. Any payment direction to be acted upon by the Paying Agent pursuant to either such Section on a payment date other than a Payment Date shall be delivered to the Paying Agent at least two (2) Business Days prior to the date on which any payment is to be made.




















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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 2.8.    Certain Prepayments. (A)    The Borrower (through the Paying Agent pursuant to Section 2.7(B) and as otherwise permitted in this Agreement) may at any time upon written notice to the Administrative Agent, the Funding Agents and the Paying Agent, and subject to the priority of payments set forth in Section 2.7(B), prepay all or any portion of the balance of the principal amount of the Class A Advances or the Class B Advances based on the outstanding principal amounts thereof, which notice shall be given at least three (3) Business Days prior to the proposed date of such prepayment. Each such prepayment (which need not be on a Payment Date) shall be accompanied by (a) the payment of all accrued but unpaid interest on the amounts to be so prepaid and (b) any Liquidation Fee in connection with such prepayment if such prepayment is not made on a Payment Date. Prepayments made in accordance with this Section shall be applied to the outstanding principal amount of Class A Advances and Class B Advances (i) in the absence of an Event of Default or Amortization Event, ratably and (ii) otherwise, sequentially.

(B)    The Borrower shall deposit all proceeds of any Takeout Transaction (net of reasonable fees, taxes, commissions, premiums and expenses incurred by the Borrower in connection with such Takeout Transaction so long as such deposit is greater than or equal to the Minimum Payoff Amount) into the Takeout Transaction Account, and the Administrative Agent shall apply such proceeds to prepay the applicable Class A Advances and Class B Advances made in respect of the Collateral that is subject to such Takeout Transaction and make other related payments in accordance with Sections 2.7(B) and 2.7(C), including any such payments due to the Paying Agent.

Section 2.9.    Mandatory Prepayments of Advances. On any date that the Borrower either (a) obtains knowledge that (i) as of any prior Funding Date, any prior Payment Date or date on which a prepayment was made in accordance with Section 2.8 or (ii) in connection with the delivery of a Borrowing Base Certificate for an upcoming Funding Date, Payment Date or date on which a prepayment is to made in accordance with Section 2.8, or (b) receives notice from the Administrative Agent (with calculations set forth in reasonable detail), that as of any Funding Date, Payment Date or date on which a prepayment is made in accordance with Section 2.8, (i) the aggregate outstanding principal amount of all Class A Advances exceeds the lesser of (x) the amount of the Class A Aggregate Commitment in effect as of such date (without giving effect to or treating as outstanding any Advance that was approved pursuant to Section 2.18) and (y) the Class A Borrowing Base (the occurrence of any such excess being referred to herein as a “Class A Borrowing Base Deficiency”), or (ii) the aggregate outstanding principal amount of all Class B Advances exceeds the lesser of (x) the amount of the Class B Aggregate Commitment in effect as of such date (without giving effect to or treating as outstanding any Advance that was approved pursuant to Section 2.18) and (y) the Class B Borrowing Base (the occurrence of any such excess being referred to herein as a “Class B Borrowing Base Deficiency” and together with the Class A Borrowing Base Deficiency, a “Borrowing Base Deficiency”), the Borrower shall pay to the Class A Funding Agent and/or Class B Funding Agent, as applicable, for the account of its Lender Group the amount of any such excess (to be applied to the reduction of the applicable Advances ratably among all applicable Lender Groups based on their Lender Group Percentages to the extent necessary to cure such Borrowing Base Deficiency), together with accrued but unpaid interest on the amount required to be so prepaid to the date of such prepayment and any Liquidation Fee in connection with such prepayment if such prepayment is not made on a Payment Date.


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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 2.10.    [Reserved].

Section 2.11.    Interest. The makers of the Advances shall be entitled to the applicable Interest Distribution Amount payable on each Payment Date in accordance with Sections 2.7(B) and 2.7(C).

Section 2.12.    Breakage Costs; Liquidation Fees; Increased Costs; Capital Adequacy; Illegality; Additional Indemnifications    .

(A)    Breakage Costs and Liquidation Fees. (i) If any Advance is not made on the date specified by the Borrower for any reason other than default by the Lenders, the Borrower hereby agrees to pay Breakage Costs, if any, and (ii) the Borrower agrees to pay all Liquidation Fees associated with a reduction of the principal balance of a Class A Advance or Class B Advance at any time. The Borrower shall not be responsible for any Liquidation Fees or any other loss, cost, or expenses arising at the time of, and arising solely as a result of, any assignment made pursuant to Section 10.8 and the reallocation of any portion of a Class A Advance or Class B Advance of the applicable Lender making such assignment unless, in each case, such assignment is requested by the Borrower.

(B)    Increased Costs. If any Change in Law (a) shall subject any Lender, the Administrative Agent or any Affiliate thereof (each of which, an “Affected Party”) to any Taxes (other than (x) Indemnified Taxes, (y) Taxes described in clauses (ii) through (iv) of the definition of Excluded Taxes and (z) Connection Income Taxes) on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, (b) shall impose, modify or deem applicable any reserve requirement (including any reserve requirement imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Affected Party, or (c) shall impose any other condition affecting the Collateral or the rights of any Lender and the Administrative Agent hereunder, the result of which is to increase the cost to any Affected Party under this Agreement or to reduce the amount of any sum received or receivable by an Affected Party under this Agreement, then on the next Payment Date after written demand by such Affected Party, such Affected Party shall receive such additional amount or amounts as will compensate such Affected Party for such additional or increased cost incurred or such reduction suffered to the extent such additional or increased costs or reduction are incurred or suffered in connection with the Collateral, any obligation to make Advances hereunder, any of the rights of such Lender or the Administrative Agent hereunder, or any payment made hereunder in accordance with Section 2.7(B); provided, that the Borrower shall not be required to compensate such Affected Party for any portion of such additional or increased cost or such reduction that is incurred more than one hundred eighty (180) days prior to any such demand (except that, if the event giving rise to such additional or increased cost or such reduction is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof).

(C)    Capital Adequacy. If any Change in Law has or would have the effect of reducing the rate of return on the capital of any Affected Party as a consequence of its obligations hereunder or arising in connection herewith to a level below that which any such Affected Party could have achieved but for such Change in Law (taking into consideration the policies of such Affected Party with respect to capital adequacy) by an amount deemed by such Affected Party to be material, then

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


from time to time, then on the next Payment Date after written demand by such Affected Party (which demand shall be accompanied by a statement setting forth the basis for such demand), such Affected Party shall receive such additional amount or amounts as will compensate such Affected Party for such reduction in accordance with Section 2.7(B); provided, that the Borrower shall not be required to compensate such Affected Party for any portion of such additional amount or amounts that are incurred more than one hundred eighty (180) days prior to any such demand (except that, if the event giving rise to such additional amount or amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof).

(D)    Compensation. If as a result of any event or circumstance similar to those described in Section 2.12(A), 2.12(B), or 2.12(C), any Affected Party is required to compensate a bank or other financial institution providing liquidity support, credit enhancement or other similar support to such Affected Party in connection with this Agreement or the funding or maintenance of Advances hereunder, then on the next Payment Date after written demand by such Affected Party, such Affected Party shall receive such additional amount or amounts as may be necessary to reimburse such Affected Party for any amounts paid by it; provided, that the Borrower shall not be required to compensate such Affected Party for any portion of such additional amount or amounts that are incurred more than one hundred eighty (180) days prior to any such demand (except that, if the event giving rise to such additional amount or amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof).

(E)    Calculation. In determining any amount provided for in this Section 2.12, the Affected Party may use any reasonable averaging and attribution methods. Any Affected Party making a claim under this Section 2.12 shall submit to the Borrower a certificate as to such additional or increased cost or reduction, which certificate shall be conclusive absent manifest error.

Section 2.13.    Payments and Computations. (A) The Borrower (through the Paying Agent pursuant to Sections 2.7(B) and 2.7(C) and as otherwise permitted in this Agreement) shall make each payment and prepayment hereunder and under the Advances in respect of principal, interest, expenses, indemnities, fees or other Obligations due from the Borrower not later than 4:00 P.M. (New York City time) on the day when due in U.S. Dollars to the related Funding Agent at its address referred to in Section 10.3 or to such account provided by such Funding Agent in immediately available, same‑day funds. Payments on Obligations may also be made by application of funds in the Collection Account or the Takeout Transaction Account as provided in Section 2.7(B) or 2.7(C), as applicable, or the TEP Collateral Account. All computations of interest for Advances made under the Base Rate shall be made by the applicable Funding Agent on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed (including the first day but excluding the last day) occurring in the period for which such interest is payable. All other computations of fees and interest provided hereunder shall be made on the basis of a 360-day year and actual days elapsed (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by a Funding Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.

(B)    All payments to be made in respect of fees, if any, due to the Administrative Agent from the Borrower hereunder shall be made on the date when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without

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setoff, counterclaim or other deduction of any nature (other than with respect to Taxes pursuant to Section 2.17), and an action therefor shall immediately accrue. The Borrower agrees that, to the extent there are insufficient funds in the Administrative Agent’s Account, to make any payment under this clause (B) when due, the Borrower shall immediately pay to the Administrative Agent all amounts due that remain unpaid.

Section 2.14.    Payment on Non‑Business Days‑. Whenever any payment hereunder or under the Advances shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest.

Section 2.15.    [Reserved]    .

Section 2.16.    Extension of the Scheduled Commitment Termination Date     . No earlier than ninety (90) days, and no later than sixty (60) days, prior to the then Scheduled Commitment Termination Date, the Borrower may deliver written notice to the Administrative Agent and each Funding Agent requesting an extension of such Scheduled Commitment Termination Date. The Administrative Agent shall respond to such request no later than thirty (30) days following the date of its receipt of such request, indicating whether it is considering such request and preliminary conditions precedent to any extension of the Scheduled Commitment Termination Date as the Administrative Agent determines to include in such response. The Administrative Agent’s failure to respond to a request delivered by the Borrower pursuant to this Section 2.16 shall not be deemed to constitute any agreement by the Administrative Agent to any such extension. The granting of any extension of the Scheduled Commitment Termination Date requested by the Borrower shall be in the mutual discretion of the Borrower and the Administrative Agent (on behalf of the Lenders with the consent of all Lender Groups).

Section 2.17.    Taxes.

(A)    Defined Terms. For purposes of this Section 2.17 the term “applicable Law” includes FATCA.

(B)    Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower under any Transaction Document shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(C)    Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of a Funding Agent timely reimburse it for the payment of, any Other Taxes.

(D)    Indemnification by the Borrower. The Borrower shall indemnify each Recipient, within ten days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified 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 the Borrower by a Recipient (with a copy to each Funding Agent), or by a Funding Agent on its own behalf or on behalf of a Recipient, shall be conclusive absent manifest error.

(E)    Indemnification by the Lenders. Each Non-Conduit Lender shall severally indemnify each Funding Agent, within ten days after demand therefor, for (i) any Indemnified Taxes attributable to such Non-Conduit Lender (but only to the extent that the Borrower has not already indemnified such Funding Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), and (ii) any Excluded Taxes attributable to such Non-Conduit Lender, in each case, that are payable or paid by a Funding Agent in connection with any Transaction 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 Non-Conduit Lender by its Funding Agent shall be conclusive absent manifest error. Each Non-Conduit Lender hereby authorizes its Funding Agent to set off and apply any and all amounts at any time owing to such Non-Conduit Lender under any Transaction Document or otherwise payable by such Funding Agent to the Non-Conduit Lender from any other source against any amount due to such Funding Agent under this paragraph (E).

(F)    Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section 2.17, the Borrower shall deliver to each Funding Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to such Funding Agent.

(G)    Status of Recipients. (i) Any Recipient that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall deliver to the Borrower, the Paying Agent and the related Funding Agent, at the time or times reasonably requested by the Borrower, the Paying Agent or such Funding Agent, such properly completed and executed documentation reasonably requested by the Borrower, the Paying Agent or such Funding Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Recipient, if reasonably requested by the Borrower, the Paying Agent or the related Funding Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower, the Paying Agent or such Funding Agent as will enable the Borrower, the Paying Agent or such Funding Agent to determine whether or not such Recipient is subject to backup withholding or information reporting requirements. Notwithstanding anything

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to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in clauses (ii)(a), (ii)(b) and (ii)(d) below) shall not be required if in the Recipient’s reasonable judgment such completion, execution or submission would subject such Recipient to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Recipient.

(ii)    Without limiting the generality of the foregoing,

(a)    any Recipient that is a U.S. Person shall deliver to the Borrower, the Paying Agent and the related Funding Agent on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower, the Paying Agent or such Funding Agent), executed originals of Internal Revenue Service Form W‑9 certifying that such Recipient is exempt from U.S. federal backup withholding tax;

(b)    any Recipient that is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Borrower, the Paying Agent and the related Funding Agent (in such number of copies as shall be requested by the Borrower, the Paying Agent or such Funding Agent) on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower, the Paying Agent or such Funding Agent), whichever of the following is applicable:

(1)    in the case of a Recipient 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 Transaction Document, executed originals of Internal Revenue Service Form W‑8BEN or W‑8BEN‑E 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 Transaction Document, Internal Revenue Service Form W‑8BEN or W‑8BEN‑E 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;

(2)    executed copies of Internal Revenue Service Form W‑8ECI;

(3)    in the case of a Recipient claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Internal Revenue Code, (x) a certificate to the effect that such Recipient is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of Internal Revenue Service Form W‑8BEN or W‑8BEN‑E; or

(4)    to the extent a Recipient is not the beneficial owner, executed originals of Internal Revenue Service Form W‑8IMY, accompanied by Internal Revenue

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Service Form W‑8ECI, Internal Revenue Service Form W‑8BEN or W‑8BEN‑E, a U.S. Tax Compliance Certificate, Internal Revenue Service Form W‑9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Recipient is a partnership and one or more direct or indirect partners of such Recipient are claiming the portfolio interest exemption, such Recipient may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner;

(c)    any Recipient which is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Borrower, the Paying Agent and the related Funding Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower, the Paying Agent or such Funding 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, the Paying Agent or such Funding Agent to determine the withholding or deduction required to be made; and

(d)    if a payment made to a Recipient under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Recipient were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Recipient shall deliver to the Borrower, the Paying Agent and the related Funding Agent at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower, the Paying Agent or such Funding Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower, the Paying Agent or such Funding Agent as may be necessary for the Borrower, the Paying Agent and such Funding Agent to comply with their obligations under FATCA and to determine that such Recipient has complied with such Recipient’s obligations under FATCA or to determine the amount, if any, 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.

Each Recipient agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower, the Paying Agent and the related Funding Agent in writing of its legal inability to do so.

(H)    Forms for Paying Agent. The Administrative Agent and each Funding Agent shall deliver to the Paying Agent on or before the first Payment Date, executed originals of Internal Revenue Service Form W‑9 or W‑8, as applicable, certifying that the Administrative Agent or such Funding Agent is exempt from U.S. federal backup withholding tax. The Administrative Agent and each Funding Agent agrees that if such Internal Revenue Service Form previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or promptly notify the Paying Agent and the Borrower in writing of its legal inability to do so.

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(I)    Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.17 (including by the payment of additional amounts pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out‑of‑pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (I) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (I), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (I) the payment of which would place the indemnified party in a less favorable net after‑Tax position than the indemnified party 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 indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(J)    Survival. Each party’s obligations under this Section 2.17 shall survive the resignation or replacement of a Funding Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Transaction Document.






















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Section 2.18.    Request for Borrowing Exceeding Aggregate Commitment    .

(A)     Notice. The Borrower may, from time to time during the Availability Period, prior to the issuance of a Notice of Borrowing, send a written notice to the Administrative Agent (who shall promptly forward the same to each Lender Group) setting forth the Borrower’s intent to request a borrowing that will cause the Aggregate Outstanding Advances to exceed the Aggregate Commitment (but not the Maximum Facility Amount) then in effect. Such notice shall be sent no later than five (5) Business Days prior to the date on which the Borrower intends to send the related Notice of Borrowing and shall set forth the amount by which the sum of the Aggregate Outstanding Advances (after giving effect to such borrowing) will exceed the Aggregate Commitment and the related Funding Date.

(B)     Approval/Disapproval. Upon receipt of the notice described in Section 2.18(A) by the Administrative Agent, the Administrative Agent shall, no later than five (5) Business Days after receipt thereof, obtain the written approval or disapproval of each Non-Conduit Lender regarding the requested Advances, which approval shall be granted or not granted in the sole discretion of the Non-Conduit Lenders. If the making of the requested Advances is approved, the Borrower shall, in accordance with procedures set forth in Section 2.4, send the related Notice of Borrowing. Any approved Advances to be made by the Lenders in the related Lender Group shall be funded within such Lender Group pursuant to any allocation as agreed to by all of the members of such Lender Group. If the making of the requested Advances is not approved, then the Borrower shall, prior to sending its Notice of Borrowing, modify the same in a manner sufficient to ensure that the requested borrowing does not cause the Aggregate Outstanding Advances to exceed the Aggregate Commitment then in effect, as applicable.

(C)     Commitment. For the avoidance of doubt, if the making of an Advance by a Lender Group that would cause the Aggregate Outstanding Advances to exceed the Aggregate Commitment, as applicable, is approved, each Non-Conduit Lender’s Commitment shall be increased solely to the extent such Non-Conduit Lender approved the Advance. Each Non-Conduit Lender’s Commitment shall otherwise remain as set forth on Exhibit E unless increased and/or reduced from time to time in accordance with Section 2.6 or amended in connection with assignments made by a Non-Conduit Lender pursuant to Section 10.8. Moreover, the Borrower must go through the procedures described in Sections 2.18(A) and (B) each time a request for an Advance is made which would cause the sum of all outstanding Advances to exceed the Aggregate Commitment, as applicable.

(D)     Nothing set forth in this Section 2.18 requires a Conduit Lender to make any Advance; provided, however, a Conduit Lender may, in its sole discretion, make the Advance requested pursuant to this Section 2.18 for its Lender Group. Any Advance approved pursuant to this Section 2.18 shall be made pursuant to and in accordance with Sections 2.2 and 2.4.













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ARTICLE III

CONDITIONS OF LENDING AND CLOSING

Section 3.1.    Conditions Precedent to Closing. The following conditions shall be satisfied on or before the Closing Date:

(A)    Closing Documents. The Administrative Agent shall have received each of the following documents, in form and substance satisfactory to Administrative Agent, duly executed, and each such document shall be in full force and effect, and all consents, waivers and approvals necessary for the consummation of the transactions contemplated thereby shall have been obtained:

(i)
this Agreement;
(ii)
a Loan Note for each Lender Group that has requested the same;
(iii)
the Contribution Agreement;
(iv)
the Sale and Contribution Agreement;
(v)
the SAP Contribution Agreement;
(vi)
the Security Agreement;
(vii)
the Pledge Agreement;
(viii)
the Subsidiary Guaranty;
(ix)
the Facility Administration Agreement;
(x)
the Verification Agent Agreement;
(xi)
the Parent Guaranty;
(xii)
the Tax Equity Investor Consents;
(xiii)
each Fee Letter;
(xiv)
the Verification Agent Fee Letter; and
(xv)
the Paying Agent Fee Letter.

(B)    Secretary’s Certificates. The Administrative Agent shall have received: (i) a certificate from the Assistant Secretary of the Verification Agent, and the Paying Agent, (ii) a certificate from the Secretary of each of the Parent, Intermediate Holdco, the Seller, the Facility Administrator, the Managing Members, SAP, the Borrower and each Affiliate thereof that is party to a Transaction Document (a) attesting to the resolutions of such Person’s members, managers or other governing body authorizing its execution, delivery, and performance of this Agreement and the other Transaction Documents to which it is a party, (b) authorizing specific Responsible Officers for such Person to execute the same, and (c) attesting to the incumbency and signatures of such specific Responsible Officers; (iii) copies of governing documents, as amended, modified, or supplemented prior to the Closing Date of each of the Parent, Intermediate Holdco, the Seller, the Facility Administrator, the Managing Members, SAP, the Borrower and each Affiliate thereof that is party to a Transaction Document, in each case certified by a Responsible Officer of such Person; and (iv) a certificate of status with respect to each of the Parent, Intermediate Holdco, the Seller, the Facility Administrator, the Managing Members, SAP, the Borrower and each Affiliate thereof that is party to a Transaction Document dated within fifteen (15) days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction

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of organization of such entity, which certificate shall indicate that such entity is in good standing in such jurisdiction.

(C)    Legal Opinions. The Administrative Agent shall have received customary opinions from (i) counsel (which may be in-house counsel) to Paying Agent and Verification Agent addressing authorization and enforceability of the Transaction Documents and other corporate matters and (ii) counsel to the Parent, Intermediate Holdco, the Seller, the Facility Administrator, the Managing Members, SAP, the Borrower and each Affiliate thereof that is party to a Transaction Document addressing (a) authorization and enforceability of the Transaction Documents and other corporate matters, (b) security interest and UCC matters, (c) substantive consolidation matters and (d) true sale matters.

(D)    No Material Adverse Effect. Since December 31, 2018 there has been no Material Adverse Effect.

(E)    Know Your Customer Information. The Administrative Agent and the Paying Agent shall have received all documentation and other information required by regulatory authorities under applicable “Know Your Customer” and anti‑money laundering rules and regulations, including the Patriot Act.

(F)    Payment of Fees. The Borrower shall have paid all fees previously agreed in writing to be paid on or prior to the Closing Date.

(G)    Evidence of Insurance. The Administrative Agent shall have received certification evidencing coverage under the insurance policies referred to in Section 5.1(L).

(H)    TEP II Transaction Documents and Opinions. The Administrative Agent shall have received (i) an amendment to the TEP II Credit Agreement and other TEP II Transaction Documents, in each case, in form and substance satisfactory to the Administrative Agent and (ii) customary opinions from counsel to the Parent and its Affiliates addressing substantive consolidation matters related to amendments referred to in clause (i).

(I)    [Reserved].

(J)    Taxes. The Administrative Agent shall have received a certificate from the Borrower that all sales, use and property taxes, and any other taxes in connection with any period prior to the Closing Date, that are due and owing with respect to each Solar Asset and/or Solar Asset Owner Member Interest have been paid or provided for by the Parent.

(K)    Closing Date Certificate of the Borrower. The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower (in his or her capacity as such) in form satisfactory to Administrative Agent certifying that its representations and warranties set forth in the Transaction Documents to which it is a party are true and correct in all material respects as of the Closing Date (except to the extent such representations and

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warranties expressly relate to any earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date).

(L)    UCC Search Results. Administrative Agent shall have received the results of a recent search of all effective UCC financing statements (or equivalent filings) made with respect to the Assignors, the Seller, the Borrower, SAP, the Managing Members and the Financing Funds in all appropriate jurisdictions together with copies of all such filings disclosed by such search.

(M)    UCC Financing Statements. The Borrower shall have duly filed proper financing statements (or the equivalent thereof in any applicable foreign jurisdiction, as applicable), on or before the Closing Date, under the UCC with the Delaware Secretary of State and any other applicable filing office in any applicable jurisdiction that the Administrative Agent deems necessary or desirable in order to perfect the Administrative Agent’s interests in the Collateral. The Borrower shall have filed proper financing statement amendments (or the equivalent thereof in any applicable foreign jurisdiction, as applicable), if any, necessary to release all security interests and other rights of any Person in the Collateral previously granted by the Borrower or any of its affiliates;

(N)    Accounts. The Administrative Agent shall have received evidence reasonably satisfactory to it that the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, the Takeout Transaction Account and the Borrower’s Account have been established.

(O)    Tax Equity Facility Due Diligence. The Administrative Agent shall be satisfied with the results of any due diligence of the Financing Funds, the SAP Financing Documents, the Tax Equity Financing Documents and the transactions contemplated by the SAP Financing Documents and Tax Equity Financing Documents, including receipt of fully executed Tax Equity Financing Documents and any related Tax Loss Insurance Policy, in its sole discretion.












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Section 3.2.    Conditions Precedent to All Advances. (A) Except as otherwise expressly provided below, the obligation of each Non-Conduit Lender to make or participate in each Advance (including the initial Advances made on the Closing Date) shall be subject, at the time thereof, to the satisfaction of the following conditions:

(i)    Funding Documents. The Administrative Agent shall have received, no later than two (2) Business Days prior to the Funding Date, a completed Notice of Borrowing and a Borrowing Base Certificate, each in form and substance satisfactory to the Administrative Agent.

(ii)    Solar Assets. All conditions to the acquisition of Solar Assets by the respective Financing Fund under the applicable Tax Equity Financing Documents have been satisfied and all conditions to the acquisition of Solar Assets by the Seller, the Borrower and SAP under the Contribution Agreement, the Sale and Contribution Agreement and, the SAP Contribution Agreement, and the SAP NTP Financing Documents, as applicable, have been satisfied.

(iii)    Managing Members. All conditions to the acquisition of Managing Members by the Seller and the Borrower under the Contribution Agreement, the Sale and Contribution Agreement and Section 3.3 shall have been satisfied.

(iv)    Representations and Warranties. All of the representations and warranties of the Borrower, the Seller, Intermediate Holdco, the Parent and the initial Facility Administrator contained in this Agreement or any other Transaction Document that relate to the eligibility of the Solar Assets shall be true and correct as of the Funding Date and all other representations and warranties of the Borrower, the Seller, Intermediate Holdco, the Parent, the Managing Members, SAP and the initial Facility Administrator contained in this Agreement or any other Transaction Document shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality, in which case such representations and warranties shall be true and correct in all respects) as of the Funding Date (or such earlier date or period specifically stated in such representation or warranty).

(v)    No Defaults; Solvency. The Administrative Agent shall have received a certification that no Amortization Event, Event of Default, Potential Amortization Event or Potential Default has occurred and is continuing or would result from any borrowing of any Advance or from the application of the proceeds therefrom and after giving effect to such Advance or from the application of the proceeds therefrom, the Borrower will be Solvent.

(vi)    Verification Agent Certificate. The Administrative Agent shall have received the A-1 Verification Agent Certification (or, in respect of the initial Advance, the Closing Date Verification Agent Certification) in respect of the Solar Assets from the Verification Agent pursuant to the Verification Agent Agreement.

(vii)    Hedge Requirements. The Borrower shall be in compliance with all applicable Hedge Requirements.

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(viii)    Liquidity Reserve. The amount on deposit in the Liquidity Reserve Account shall not be less than the Liquidity Reserve Account Required Balance, taking into account the application of the proceeds of the Advances on the Funding Date.

(ix)        Aggregate Commitment/No Borrowing Base Deficiency. After giving effect to such Advance, the Aggregate Outstanding Advances shall not exceed the Aggregate Commitment in effect as of such Funding Date unless the Borrower shall have, pursuant to the procedures set forth in Section 2.18, received the written approval of the Non-Conduit Lenders with respect to such Advance, such approval to be granted by each Non-Conduit Lender in its sole discretion. After giving effect to such Advance, there should not exist a Class A Borrowing Base Deficiency or a Class B Borrowing Base Deficiency.

(x)     Availability Period. The Commitment Termination Date shall not have occurred, nor shall it occur as a result of making such Advance, nor has the Availability Period ended.

(xi)        Updated Schedules. The Borrower shall have provided the Administrative Agent an updated Schedule IV, an updated Schedule V, an updated Schedule VI and an updated Schedule VII to reflect the Scheduled Hedged SREC Payments, Scheduled Host Customer Payments, Scheduled PBI Payments and Scheduled Managing Member Distributions as of such Funding Date.

(xii)    Other Documents. The Borrower shall have provided the Administrative Agent with all documents reasonably requested by the Administrative Agent related to the Solar Assets being financed by the Borrower (indirectly through its ownership of the Solar Asset Owner Member Interests) on such Funding Date.

(B)    Each Notice of Borrowing submitted by the Borrower after the Closing Date shall be deemed to be a representation and warranty that the conditions specified in this Section 3.2 have been satisfied on and as of the date of the applicable Notice of Borrowing.

Section 3.3.    Conditions Precedent to Acquisition of Additional Managing Members. As a condition to the acquisition of a Managing Member after the Closing Date, the Borrower shall have provided the Administrative Agent with all documents reasonably requested by the Administrative Agent related to the such Managing Member and the related Financing Fund.










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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Section 4.1.    Representations and Warranties of the Borrower. The Borrower represents and warrants to the Administrative Agent and each Lender as of the Closing Date, as of each Funding Date, and with respect to paragraphs (A), (B), (F), (G), (I), (K), and (L) through (S) as of each Payment Date, as follows:

(A)    Organization; Corporate Powers. Each Relevant Party (i) is a duly organized and validly existing limited liability company, in good standing under the laws of the State of Delaware, (ii) has the limited liability company power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage, and (iii) is duly qualified and is authorized to do business in all jurisdictions where it is required to be so qualified or authorized.

(B)    Authority and Enforceability. Each Relevant Party has the limited liability company or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Transaction Documents to which it is party and has taken all necessary company or other organizational action to authorize the execution, delivery and performance of the Transaction Documents to which it is party. Each Relevant Party has duly executed and delivered each Transaction Document to which it is party and each Transaction Document to which it is party constitutes the legal, valid and binding agreement and obligation of the respective Relevant Party enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).

(C)    Government Approvals. No order, consent, authorization, approval, license, or validation of, or filing recording, registration with, or exemption by, any Governmental Authority is required to authorize or is required as a condition to: (i) the execution, delivery and performance by a Relevant Party of any Transaction Document to which it is a party or any of its obligations thereunder or (ii) the legality, validity, binding effect or enforceability of any Transaction Document to which such Relevant Party is a party.

(D)    Litigation. There are no material actions, suits or proceedings, pending or threatened in writing with respect to any Relevant Party.

(E)    Applicable Law, Contractual Obligations and Organizational Documents. Neither the execution, delivery and performance by any Relevant Party of the Transaction Documents to which it is party nor compliance with the terms and provisions thereof (i) will contravene any provision of any law, statute, rule, regulation, order, writ, injunction or decree of any Governmental Authority applicable to such Relevant Party or its properties and assets, (ii) will conflict with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under or result in the creation or imposition of (or the

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obligation to create or impose) any Lien (other than the Liens created pursuant to the Security Agreement, the Pledge Agreement or Permitted Liens) upon any of the property or assets of the Borrower pursuant to the terms of any contract, or (iii) will breach any provision of the certificate of formation or the operating agreement of such Relevant Party and will, for each of subsection (i), (ii) and (iii), result in a Material Adverse Effect.

(F)    Use of Proceeds. Proceeds of the Class A Advances and the Class B Advances have been used only as permitted under Section 2.3. No part of the proceeds of the Class A Advances or the Class B Advances will be used directly or indirectly to purchase or carry Margin Stock, or to extend credit to others for the purpose of purchasing or carrying any Margin Stock, in violation of any of the provisions of Regulations T, U or X of the Board of Governors of the Federal Reserve System. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. At no time would more than 25% of the value of the assets of the Borrower that are subject to any “arrangement” (as such term is used in Section 221.2(g) of such Regulation U) hereunder be represented by Margin Stock.

(G)    Accounts. The names and addresses of the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, the Takeout Transaction Account, the Borrower’s Account and the TEP Collateral Account are specified on Schedule II attached hereto, as updated pursuant to Section 5.1(Q). Other than accounts on Schedule II attached hereto, the Borrower does not have any other accounts. The Borrower has directed, or has caused to be directed (i) each Financing Fund, each Managing Member and SAP to make all payments in respect of the Managing Member Distributions and the SAP Distributions, as applicable, to the Collection Account and (ii) related Hedged SREC Payments related to the Solar Assets and received by the Borrower to the Collection Account and, to the extent any Hedged SREC Payments are deposited by the relevant obligor in another account, has caused such payments to be deposited into the Collection Account no later than two (2) Business Days after receipt.

(H)    ERISA. None of the assets of the Borrower are or, prior to the repayment of all Obligations, will be subject to Title I of ERISA, Section 4975 of the Internal Revenue Code, or, by reason of any investment in the Borrower by any governmental plan, as the case may be, any other federal, state, or local provision similar to Section 406 of ERISA or Section 4975 of the Internal Revenue Code. Neither the Borrower nor any of its ERISA Affiliates has maintained, participated or had any liability in respect to any Plan during the past six (6) years which could reasonably be expected to subject the Borrower or any of its ERISA Affiliates to any tax, penalty or other liabilities. No ERISA Event has occurred or is reasonably likely to occur. With respect to any Plan which is a Multi-Employer Plan, no such Multi-Employer Plan is, or to the knowledge of the Relevant Parties reasonably like to occur, in reorganization or insolvent as defined in Title IV of ERISA Borrower and the Lenders, take any.

(I)    Taxes. Each Relevant Party has timely filed (or had filed on its behalf) all federal state, provincial, territorial, foreign and other Tax returns and reports required to be filed under applicable law, and has timely paid (or had paid on its behalf) all federal state,

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foreign and other Taxes levied or imposed upon it or its properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate actions diligently conducted and for which adequate reserves have been provided in accordance with GAAP. No Lien or similar adverse claim has been filed, and no claim is being asserted, with respect to any such Tax due from any Relevant Party or with respect to any Solar Assets. Any Taxes due and payable by any Relevant Party or its predecessors in interest in connection with the execution and delivery of this Agreement and the other Transaction Documents and the transfers and transactions contemplated hereby or thereby have been paid or shall have been paid if and when due. Except to the extent provided in the Tax Equity Financing Documents, no Relevant Party is liable for Taxes payable by any other Person.

(J)    Material Agreements. The Borrower has not defaulted under the Transaction Documents, any similar agreements entered into in connection with a Takeout Transaction or any other material agreement to which the Borrower is a party and to the Borrower’s knowledge, there is no breach or default by a counterparty to such Transaction Documents, similar agreements entered into in connection with the Takeout Transaction or any other material agreement to which the Borrower is a party.

(K)    Accuracy of Information. The written information (other than financial projections, forward looking statements, and information of a general economic or industry specific nature) that has been made available to the Paying Agent, the Verification Agent, the Administrative Agent or any Lender by or on behalf of the Borrower or any Affiliate thereof in connection with the transactions hereunder including any written statement or certificate of factual information, when taken as a whole, does not, when furnished, 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 in the light of the circumstances under which such statements are made (giving effect to all supplements and updates thereto).

(L)    No Material Adverse Effect. Since the date of delivery of the latest audited financial statements for a fiscal year of SEI pursuant to Section 5.1(A)(i), there has been no Material Adverse Effect.

(M)    Investment Company Act. No Relevant Party is an “investment company” or an “affiliated person” of or “promoter” or “principal underwriter” for an “investment company” as such terms are defined in the 1940 Act, nor is any Relevant Party otherwise subject to regulation thereunder and no Relevant Party relies solely on the exemption from the definition of “investment company” in Section 3(c)(1) and/or 3(c)(7) of the 1940 Act (although such exemptions may be available).

(N)    Covered Fund. No Relevant Party is a “covered fund” under Section 13 of the Bank Holding Company Act of 1956, as amended

(O)    Properties; Security Interest. The Borrower has good title to all of its properties and assets necessary in the ordinary conduct of its business, free and clear of Liens other than Permitted Liens and Permitted Equity Liens. Once executed and delivered,

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the Security Agreement and the Pledge Agreement create, as security for the Obligations, a valid and enforceable and (coupled with this Agreement and the taking of all actions required thereunder and under the Security Agreement and the Pledge Agreement for perfection) perfected security interest in and Lien on all of the Collateral, in favor of the Administrative Agent, for the benefit of the Secured Parties, superior to and prior to the rights of all third persons and subject to no other Liens, except for Permitted Liens.

(P)    Subsidiaries. The Borrower does not have, and shall not have, any Subsidiaries (other than the Managing Members and SAP), and does not and shall not otherwise own or hold, directly or indirectly, any Capital Stock of any other Person (other than in the case of Capital Stock of the Managing Members and SAP).

(Q)    Valid Transfer. The Contribution Agreement creates a valid sale, transfer or assignment from the applicable Assignor to the Seller of all right, title and interest of such Assignor in and to the Conveyed Property in each case conveyed to Seller thereunder. The Sale and Contribution Agreement creates a valid sale, transfer and/or assignment from the Seller to the Borrower of all right, title and interest of the Seller in and to the Conveyed Property in each case conveyed to the Borrower thereunder. The SAP Contribution Agreement creates a valid transfer and/or assignment from the Borrower to SAP of all right title and interest of the Borrower in and to the Conveyed Property in each case conveyed to SAP thereunder.

(R)    Purchases of Solar Assets. The Borrower has given reasonably equivalent value to the Seller (which may include additional Capital Stock in the Borrower) in consideration for the transfer to the Borrower by the Seller of the Conveyed Property conveyed to the Borrower under the Sale and Contribution Agreement, and no such transfer has been made for or on account of an antecedent debt owed by the Seller to the Borrower.

(S)    OFAC and Patriot Act. Neither any Relevant Party nor, to the knowledge of any Relevant Party, any of its officers, directors or employees appears on the Specially Designated Nationals and Blocked Persons List published by the Office of Foreign Assets Control (“OFAC”) or is otherwise a person with which any U.S. person is prohibited from dealing under the laws of the United States, unless authorized by OFAC. No Relevant Party conducts business or completes transactions with the governments of, or persons within, any country under economic sanctions administered and enforced by OFAC. No Relevant Party will directly or indirectly use the proceeds from this Agreement, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person to fund any activities of or business with any person that, at the time of such funding, is the subject of economic sanctions administered or enforced by OFAC, or is in any country or territory that, at the time of such funding or facilitation, is the subject of economic sanctions administered or enforced by OFAC. No Relevant Party is in violation of Executive Order No. 13224 or the Patriot Act.

(T)    Foreign Corrupt Practices Act. Neither the Relevant Parties nor, to the knowledge of the Relevant Parties, any of its directors, officers, agents or employees, has used any of the proceeds of any Advance (i) for any unlawful contribution, gift, entertainment

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or other unlawful expense relating to political activity, (ii) to make any direct or indirect unlawful payment to any government official or employee from corporate funds, (iii) to violate any provision of the U.S. Foreign Corrupt Practices Act of 1977 or similar law of a jurisdiction in which a Relevant Party conducts its business and to which they are lawfully subject, or (iv) to make any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

(U)    Eligibility. Each Solar Asset listed on the Schedule of Solar Assets most recently delivered to the Administrative Agent was an Eligible Solar Asset as of such date of delivery of such Schedule of Solar Assets.

(V)    Beneficial Ownership Certification. The information included in any Beneficial Ownership Certification delivered by the Borrower is true and correct in all respects.































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ARTICLE V

COVENANTS

Section 5.1.    Affirmative Covenants. The Borrower covenants and agrees that, until all Obligations (other than contingent obligations not then due) hereunder have been paid in full and the Commitments have been terminated:

(A)    Reporting Requirements. The Borrower will furnish to the Administrative Agent for delivery to each Lender and, in the case of subclause (v)(a) below and the Paying Agent:

(i)    within (a) the earlier of (x) one hundred eighty (180) days after the close of each fiscal year of SEI (beginning with the fiscal year ending December 31, 2019) and (y) such earlier period as required by Applicable Law, the unqualified (provided, however explanatory language added to the auditor’s standard report shall not constitute a qualification) audited financial statements for such fiscal year that include the consolidated balance sheet of SEI and its consolidated subsidiaries as of the end of such fiscal year, the related consolidated statements of income, of stockholders’ equity and of cash flows for such fiscal year, in each case, setting forth comparative figures for the preceding fiscal year (it being acknowledged that such requirement with respect to SEI may be satisfied by the filing of the appropriate report on Form 10-K with the Securities and Exchange Commission), and, beginning with the fiscal year ending December 31, 2019, the assets and liabilities of the Parent and the Borrower as of the end of such fiscal year presented in a note or schedule to such financial statements of SEI, and in each case prepared in accordance with GAAP, and audited by a Nationally Recognized Accounting Firm selected by SEI and (b) the earlier of (x) sixty (60) days after the end of each of the first three quarters of its fiscal year and (y) such earlier period as required by Applicable Law, the unaudited consolidated balance sheets and income statements for such fiscal quarter on a year‑to‑date basis for SEI and its consolidated subsidiaries (it being acknowledged that such requirement with respect to SEI may be satisfied by the filing of the appropriate report on Form 10-Q with the Securities and Exchange Commission);

(ii)    if, at any time, Sunnova Management is the Facility Administrator, but is not a subsidiary of SEI, within (a) the earlier of (x) 180 days after the end of each of its fiscal years (beginning with the fiscal year ending December 31, 2019) and (y) such earlier period as required by Applicable Law, a copy of the unqualified (provided, however explanatory language added to the auditor’s standard report shall not constitute a qualification) audited consolidated financial statements for such year for Sunnova Management, containing financial statements for such year and prepared by a Nationally Recognized Accounting Firm selected by Sunnova Management and (b) the earlier of (x) sixty (60) days after the end of each of its fiscal quarters and (y) such earlier period as required by Applicable Law, the unaudited consolidated balance sheets and income statements for such fiscal quarter on a year‑to‑date basis for Sunnova Management;

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(iii)    at any time that Sunnova Management is the Facility Administrator, within one hundred eighty (180) days after the end of each of its fiscal years (beginning with the fiscal year ending December 31, 2019), a report to the Administrative Agent prepared by a Qualified Service Provider containing such firm’s conclusions with respect to an examination of certain information relating to Sunnova Management’s compliance with its obligations under the Transaction Documents (including, without limitation, such firm’s conclusions with respect to an examination of the calculations of amounts set forth in certain of Sunnova Management’s reports delivered hereunder and pursuant to the Facility Administration Agreement during the prior calendar year and Sunnova Management’s source records for such amounts), in form and substance satisfactory to the Administrative Agent;

(iv)    as soon as possible, and in any event within five (5) Business Days, after the Borrower or any of their ERISA Affiliates knows or has reason to know that an ERISA Event has occurred, deliver to the Lenders a certificate of a responsible officer of the Borrower setting forth the details of such ERISA Event, the action that the Borrower or the ERISA Affiliate proposes to take with respect thereto, and, when known, any action taken or threatened by the Internal Revenue Service, Department of Labor or the Pension Benefit Guaranty Corporation;

(v)    (a) promptly, and in any event within five (5) Business Days, after a Responsible Officer of any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator (if it is an Affiliate of the Borrower) or the Parent obtains knowledge thereof, notice of the occurrence of any event that constitutes an Event of Default, a Potential Default, an Amortization Event or a Potential Amortization Event, which notice shall specify the nature thereof, the period of existence thereof and what action the Borrower propose to take with respect thereto and (b) promptly, and in any event within five (5) Business Days after a Responsible Officer of any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator (if it is an Affiliate of the Borrower) or the Parent obtains knowledge thereof, notice of any other development concerning any litigation, governmental or regulatory proceeding (including environmental law) or labor matter (including ERISA Event) pending or threatened in writing against the (1) Borrower or (2) Parent or SEI that, in the case of this clause (2), individually or in the aggregate, if adversely determined, would reasonably be likely to have a material adverse effect on (1) the ability of the Parent to perform its obligations under the Parent Guaranty, or (2) the business, operations, financial condition, or assets of the SEI or Parent;

(vi)    promptly, and in any event within five (5) Business Days after a Responsible Officer of any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator (if it is an Affiliate of the Borrower) or the Parent obtains knowledge thereof, notice of the occurrence of any event that constitutes a default, an event of default or any event that would permit the acceleration of any obligation under a Sunnova Credit Facility; and


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(vii)    promptly, and in any event within five (5) Business Days, after receipt thereof by any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator, the Managing Members, the Financing Funds, the Manager (if it is an Affiliate of the Borrower) or the Parent, copies of all material notices, requests, and other documents (excluding regular periodic reports) delivered or received by the Borrower, the Seller, Intermediate Holdco, the Facility Administrator, the Managing Members, the Financing Funds, the Manager (if it is an Affiliate of the Borrower) or the Parent under or in connection with the Sale and Contribution Agreement, the SAP Contribution Agreement, the Tax Equity Financing Documents, the SAP NTP Financing Documents or the SAP Financing Documents;

(viii)    promptly, and in any event within five (5) Business Days, after receipt thereof by any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator (if it is an Affiliate of the Borrower) or the Parent, copies of all notices and other documents delivered or received by the Borrower with respect to any material tax Liens on Solar Assets (either individually or in the aggregate);

(ix)    on each Funding Date and on each other day on which SAP or a Financing Fund either acquires or disposes of Solar Assets that is included in the Borrowing Base, an updated Schedule IV, an updated Schedule V, an updated Schedule VI and an updated Schedule VII, in each case, to reflect such acquisition or disposition of Solar Assets on such date;

(x)    on each Funding Date on which the Borrower acquires a Managing Member from the Seller, an updated Schedule VIII to reflect such acquisition of such Managing Member on such date; and

(xi)    subject to any confidentiality requirements of the Securities and Exchange Commission, promptly after receipt thereof by SEI or any Subsidiary, copies of each notice or other correspondence received from the Securities and Exchange Commission concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of SEI or any Subsidiary which could reasonably be expected to result in Material Adverse Effect.

(B)    Solar Asset Reporting. The Borrower shall

(i)    enforce the provisions of each Management Agreement and Servicing Agreement which require the Manager to deliver any reports to a Financing Fund or SAP; and

(ii)    enforce the provisions of the Facility Administration Agreement which require the Facility Administrator to deliver any reports (including the Facility Administrator Report and any Borrowing Base Certificate setting forth detailed calculations of the Borrowing Base) to the Administrative Agent, each Funding Agent and the Paying Agent; and

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(iii)    within 20 Business Days of the Closing Date, cause to be delivered to the Administrative Agent an A-1 Verification Agent Certification with respect to the Solar Assets relating to the initial Advance; and

(iv)    on the Scheduled Commitment Termination Date, cause to be delivered to the Administrative Agent an A-2 Verification Agent Certification with respect to all Solar Assets included in the Borrowing Base.

(C)    UCC Matters; Protection and Perfection of Security Interests. The Borrower agrees to notify the Administrative Agent in writing of any change (i) in its legal name, (ii) in its identity or type of organization or corporate structure, or (iii) in the jurisdiction of its organization, in each case, within ten (10) days of such change. The Borrower agrees that from time to time, at its sole cost and expense, it will promptly execute and deliver all further instruments and documents, and take all further action necessary or reasonably required by the Administrative Agent (a)  to complete all assignments from Assignors to the Seller under the Contribution Agreement, from the Seller to the Borrower under the Sale and Contribution Agreement and from the Borrower to SAP under the SAP Contribution Agreement, (b) to perfect, protect or more fully evidence the Administrative Agent’s security interest in the Collateral, or (c) to enable the Administrative Agent to exercise or enforce any of its rights hereunder, under the Security Agreement or under any other Transaction Document. Without limiting the Borrower’s obligation to do so, the Borrower hereby irrevocably authorizes the filing of such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or reasonably required by the Administrative Agent. The Borrower hereby authorizes the Administrative Agent to file one or more financing or continuation statements, and amendments thereto and assignments thereof, naming the Borrower as debtor, relative to all or any of the Collateral now existing or hereafter arising without the signature of the Borrower where permitted by law. A carbon, photographic or other reproduction of the Security Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement.

(D)    Access to Certain Documentation and Information Regarding the Solar Assets. The Borrower shall permit (and, as applicable, shall cause the Facility Administrator, the Managing Members, SAP and the Verification Agent to permit) the Administrative Agent (and, as applicable, the Verification Agent) or its duly authorized representatives or independent contractors, upon reasonable advance notice to the Borrower (and, as applicable, the Facility Administrator, the Managing Members, SAP and the Verification Agent), (i) access to documentation that the Borrower, the Facility Administrator, the Managing Members, SAP or the Verification Agent, as applicable, may possess regarding the Solar Assets, (ii) to visit the Borrower, the Facility Administrator, the Managing Members, SAP or the Verification Agent, as applicable, and to discuss their respective affairs, finances and accounts (as they relate to their respective obligations under this Agreement and the other Transaction Documents) with the Borrower, the Facility Administrator, the Managing Members, SAP or the Verification Agent, as applicable, their respective officers, and independent accountants (subject to such accountants’ customary policies and procedures), and (iii) to examine the books of account and records of the Borrower, the Verification Agent, the Facility Administrator, the Managing Members, or SAP, as applicable as they relate to

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the Solar Assets, to make copies thereof or extracts therefrom, in each case, at such reasonable times and during regular business hours of the Borrower, the Verification Agent, the Facility Administrator, the Managing Members, or SAP as applicable; provided that, upon the existence of an Event of Default, the Class B Lenders shall have the same rights of access, inspection and examination as the Administrative Agent under this Section 5.1(D). The frequency of the granting of such access, such visits and such examinations, and the party to bear the expense thereof, shall be governed by the provisions of Section 7.13 with respect to the reviews of the Borrower’ business operations described in such Section 7.13. The Administrative Agent (and, as applicable, the Verification Agent and the Class B Lenders) shall and shall cause their representatives or independent contractors to use commercially reasonable efforts to avoid interruption of the normal business operations of the Borrower, the Verification Agent, the Facility Administrator, the Managing Members or SAP, as applicable. Notwithstanding anything to the contrary in this Section 5.1(D), (i) none of the Borrower, the Verification Agent, the Facility Administrator, the Managing Members or SAP will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (x) constitutes non‑financial trade secrets or non‑financial proprietary information, (y) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by law or any binding confidentiality agreement, or (z) is subject to attorney‑client or similar privilege or constitutes attorney work product and (ii) the Borrower shall have the opportunity to participate in any discussions with the Borrower’s independent accountants.

(E)    Existence and Rights; Compliance with Laws. The Borrower shall preserve and keep in full force and effect each Relevant Party’s limited liability company existence, and any material rights, permits, patents, franchises, licenses and qualifications. The Borrower shall comply, and cause each other Relevant Party to, comply with all applicable laws and maintain in place all permits, licenses, approvals and qualifications required for each of them to conduct its business activities to the extent that the lack of compliance thereof would result in a Material Adverse Effect.

(F)    Books and Records. The Borrower shall maintain, and cause (if any are Affiliates of the Borrower) the Facility Administrator to maintain, proper and complete financial and accounting books and records. The Borrower shall cause the Financing Funds and SAP to maintain with respect to Solar Assets accounts and records as to each Solar Asset that are proper, complete, accurate and sufficiently detailed so as to permit (i) the reader thereof to know as of the most recently ended calendar month the status of each Solar Asset including payments made and payments owing (and whether or not such payments are past due), and (ii) reconciliation of payments on each Solar Asset and the amounts from time to time deposited in respect thereof in the Collection Account, if applicable.

(G)    Taxes. The Borrower shall pay, or cause to be paid, when due all Taxes imposed upon any Relevant Party or any of its properties or which they are required to withhold and pay over, and provide evidence of such payment to the Administrative Agent if requested; provided, that no Relevant Party shall be required to pay any such Tax that is being contested in good faith by proper actions diligently conducted if (i) they have

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maintained adequate reserves with respect thereto in accordance with GAAP and (ii) in the case of a Tax that has or may become a Lien against any of the Collateral, such proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax.

(H)    Maintenance of Properties. The Borrower shall ensure that each Relevant Party’s material properties and equipment used or useful in each of their business in whomsoever’s possession they may be, are kept in reasonably good repair, working order and condition, normal wear and tear excepted, and that from time to time there are made in such properties and equipment all needful and proper repairs, renewals, replacements, extensions, additions, betterments and improvements thereto, in each case, to the extent and in the manner customary for companies in similar businesses.

(I)    ERISA. The Borrower shall deliver to the Administrative Agent such certifications or other evidence from time to time prior to the repayment of all Obligations and the termination of all Commitments, as requested by the Administrative Agent in its sole discretion, that (i) no Relevant Party is an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA or a plan within the meaning of Section 4975 of the Internal Revenue Code, or a “governmental plan” within the meaning of Section 3(32) of ERISA, (ii) no Relevant Party is subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans, and (iii)  assets of the Borrower do not constitute “plan assets” within the meaning of 29 C.F.R. Section 2510.3‑101, as modified in application by Section 3(42) of ERISA of any “benefit plan investor” as defined in Section 3(42) of ERISA.

(J)    Use of Proceeds. The Borrower will only use the proceeds of the Class A Advances and the Class B Advances as permitted under Section 2.3.

(K)    Change of State of Organization; Collections; Names, Etc. (i) In respect of each Assignor, the Seller, the Facility Administrator, the Managing Members, the Financing Funds and SAP, the Borrower shall notify the Administrative Agent, the Paying Agent and the Verification Agent in writing of any change (a) in such entity’s legal name, (b) in such entity’s identity or type of organization or corporate structure, or (c) in the jurisdiction of such entity’s organization, in each case, within ten (10) days of such change; and

(ii)    in the event that the Borrower or any Affiliated Entity thereof receives any Collections directly, the Borrower shall hold, or cause such Affiliated Entity to hold, all such Collections in trust for the benefit of the Secured Parties and deposit, or cause such Affiliated Entity to deposit, such amounts into the Collection Account, as soon as practicable, but in no event later than two (2) Business Days after its receipt thereof.

(L)    Insurance. The Borrower shall maintain or cause to be maintained by the Facility Administrator pursuant to the Facility Administration Agreement and by the Manager pursuant to the Managements Agreements, at the Facility Administrator's and the Manager's own expenses, insurance coverage (i) by such insurers and in such forms and amounts and against such risks as are generally consistent with the insurance coverage maintained by the Borrower, Facility Administrator, the Manager, the Managing Members,

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the Financing Funds and SAP as of the Closing Date or (ii) as is customary, reasonable and prudent in light of the size and nature of the Borrower’s, the Facility Administrator’s, the Manager’s, the Manager Member’s, the Financing Funds’ and SAP’s respective businesses as of any date after the Closing Date. The Borrower shall be deemed to have complied with this provision if one of its Affiliates has such policy coverage and, by the terms of any such policies, the coverage afforded thereunder extends to the Borrower. Upon the request of the Administrative Agent at any time subsequent to the Closing Date, the Borrower shall cause to be delivered to the Administrative Agent, a certification evidencing the Borrower’s, the Facility Administrator’s, the Manager’s, the Manager Member’s, the Financing Funds’ and SAP’s coverage under any such policies.

(M)    Maintenance of Independent Director. The Borrower shall maintain at least one individual to serve as an independent director (an “Independent Director”) of the Borrower, (i) which is not, nor at any time during the past six (6) years has been, (a) a direct or indirect beneficial owner, a partner (whether direct, indirect or beneficial), customer or supplier of the Borrower or any of its Affiliates, (b) a manager, officer, employee, member, stockholder, director, creditor, Affiliate or associate of the Borrower or any of its Affiliates (other than as an independent officer, director, member or manager acting in a capacity similar to that set forth herein), (c) a person related to, or which is an Affiliate of, any person referred to in clauses (a) or (b), or (d) a trustee, conservator or receiver for any Affiliate of the Borrower or any of its Affiliates, (ii) which shall have had prior experience as an independent director for a corporation or limited liability company whose charter documents required the unanimous consent of all independent directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy, and (iii) which shall have at least three (3) years of employment experience with one or more entities with a national reputation and presence that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities, and is currently employed by such an entity.

(N)    The Sale and Contribution Agreement. The Borrower shall make such reasonable requests for information and reports or for action under the Sale and Contribution Agreement to the Seller as the Administrative Agent may reasonably request to the extent that the Borrower is entitled to do the same thereunder.

(O)    Management Agreement/Servicing Agreement. The Borrower shall cause the Managing Members to direct the Financing Funds and SAP to keep in full force and effect each Management Agreement and Servicing Agreement or such equivalent replacement agreements such that O&M Services and Servicing Services are provided in respect of the Solar Assets in a manner consistent with the Tax Equity Financing Documents and the SAP Financing Documents and with the same degree of care that the Parent and its Affiliates use to provide similar services to Solar Assets not owned by a Financing Fund or SAP.

(P)    Maintenance of Separate Existence. The Borrower shall take all reasonable steps to continue its identity as a separate legal entity and to make it apparent to third Persons

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that it is an entity with assets and liabilities distinct from those of the Affiliated Entities or any other Person, and that it is not a division of any of the Affiliated Entities or any other Person. In that regard the Borrower shall:

(i)    maintain its limited liability company existence, make independent decisions with respect to its daily operations and business affairs, not amend, modify, terminate or fail to comply with the provisions of its organizational documents, not merge into or consolidate with any Person, or dissolve, terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure, and, other than pursuant to the terms of the limited liability company agreement of the Borrower, not be controlled in making such decisions by any other Affiliated Entity or any other Person;

(ii)    maintain its assets in a manner which facilitates their identification and segregation from those of any of the other Affiliated Entities;

(iii)    except as expressly otherwise permitted hereunder, conduct all intercompany transactions or enter into any contract or agreement with the other Affiliated Entities except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s length basis with unaffiliated third parties;

(iv)    not assume or guarantee any obligation of any of the other Affiliated Entities, nor have any of its obligations assumed or guaranteed by any other Affiliated Entity, pledge its assets for the benefit of any other Affiliated Entity, or hold itself out as responsible for the debts of any other Affiliated Entity or for the decisions or actions with respect to the business and affairs of any other Affiliated Entity;

(v)    except as expressly otherwise permitted hereunder or contemplated under any of the other Transaction Documents, the SAP Financing Documents, the SAP NTP Financing Documents or the Tax Equity Financing Documents, not permit the commingling or pooling of its funds or other assets with the assets of any other Affiliated Entity or make any loans or advances to any other Affiliated Entity;

(vi)    maintain separate deposit and other bank accounts to which no other Affiliated Entity has any access;

(vii)    compensate (either directly or through reimbursement of its allocable share of any shared expenses) all employees, consultants and agents, and Affiliated Entities, to the extent applicable, for services provided to the Borrower by such employees, consultants and agents or Affiliated Entities, in each case, either directly from the Borrower’s own funds or indirectly through documented capital contributions from Parent or any other direct or indirect parent of the Borrower;

(viii)    have agreed with each of the other relevant Affiliated Entities to allocate among themselves, through documented intercompany transactions,

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including documented capital contributions from Parent or any other direct or indirect parent of the Borrower, shared overhead and corporate operating services and expenses which are not reflected in documentation in connection with a Takeout Transaction (including the services of shared employees, consultants and agents and reasonable legal and auditing expenses) on the basis of actual use or the value of services rendered, and otherwise on a basis reasonably related to actual use or the value of services rendered;

(ix)    pay for its own account, directly from the Borrower’s own funds or indirectly through documented capital contributions from Parent or any other direct or indirect parent of the Borrower, its own liabilities, including, without limitation, for accounting and payroll services, rent, lease and other expenses (or its allocable share of any such amounts provided by one or more other Affiliated Entity) and not have such liabilities or operating expenses (or the Borrower’s allocable share thereof) paid by any of the Affiliated Entities; provided, that Parent or another Affiliated Entity shall be permitted to pay the initial organizational expenses of the Borrower;

(x)    conduct its business (whether in writing or orally) solely in its own name through its duly authorized officers, employees and agents, including the Facility Administrator, hold itself out to the public as a legal entity separate and distinct from any other Affiliated Entity, and correct any known misunderstanding regarding its separate identity;

(xi)    maintain a sufficient number of employees in light of its contemplated business operations, and maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;

(xii)    maintain its books, records, resolutions and agreements as official records, and shall maintain all of its books, records, financial statements and bank accounts separate from those of any other Affiliated Entity, and shall not permit its assets to be listed on the financial statement of any other Affiliated Entity; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such affiliates and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such affiliates or any other Person and (ii) such assets shall be listed on the Borrower’s own separate balance sheet;

(xiii)    except as provided in the limited liability company agreement of the Borrower, not acquire obligations or securities of any other Affiliated Entities, or identify its members or the other Affiliated Entities, as applicable, as a division or part of it;

(xiv)    file its own tax returns unless prohibited by Applicable Law from doing so (except that the Borrower may file or may include its filing as part of a

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consolidated federal tax return, to the extent required and/or permitted by Applicable Law, provided that, there shall be an appropriate notation indicating the separate existence of the Borrower and its assets and liabilities); and

(xv)    otherwise practice and adhere to corporate formalities such as complying with its organizational documents and member and Facility Administrator resolutions, the holding of regularly scheduled meetings of members and Facility Administrator, use stationery, invoices and checks separate from those of any other Affiliated Entity, and maintaining complete and correct books and records and minutes of meetings and other proceedings of its members and Facility Administrator.

(Q)    Updates to Account Schedule. Schedule II attached hereto shall be updated by the Borrower and delivered to the Administrative Agent immediately to reflect any changes as to which the notice, the opening of the TEP Collateral Account and other requirements specified in Section 5.2(K) have been satisfied.

(R)    Deposits into the Accounts. (i) The Borrower shall (a) direct, or cause to be directed, all Collections other than Collections related to SAP Solar Assets to the Collection Account and all Collections related to SAP Solar Assets to the SAP Revenue Account, (b) direct, or cause to be directed, all Eligible Hedged SREC Counterparties to make all related Hedged SREC Payments directly into the Collection Account and, to the extent any Hedged SREC Payments are deposited by the relevant obligor in another account, cause such payments to be deposited into the Collection Account no later than two (2) Business Days after receipt, and (c) deposit or cause to be deposited all net proceeds of a Takeout Transaction into the Takeout Transaction Account in accordance with Section 2.7(C).

(ii)    The Borrower shall not and shall not permit the Managing Members or SAP to deposit into or otherwise credit (or cause to be deposited or credited), or consent to or fail to object to any such deposit or credit of, cash or cash proceeds other than Collections into the Collection Account or the SAP Revenue Account.

(S)    Hedging. The Borrower shall collectively at all times satisfy the Hedge Requirements.

(T)    Update to Solar Assets. The Borrower shall notify the Facility Administrator and the Administrative Agent in writing of any additions or deletions to the Schedule of Solar Assets, no later than each Funding Date and each Payment Date (which in the case of the update delivered on any Payment Date shall be prepared as of the last day of the related Collection Period).

(U)    Notice to Seller and Parent. The Borrower shall promptly notify the Seller and the Parent of a breach of Section 4.1(U) and shall require the Seller or the Parent to cure such breach or pay the Liquidated Damages Amount for such Defective Solar Asset pursuant to and in accordance with the Sale and Contribution Agreement or the Parent Guaranty, as applicable.

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(V)    Government Approvals. The Borrower shall promptly obtain all orders, consents, authorizations, approvals, licenses and validations of, or file recordings, register with, or obtain exemption from, any Governmental Authority required as a condition to the performance of its obligations under any Transaction Document.

(W)     TEP Collateral Account. Within sixty (60) days of the Closing Date (i) the Borrower shall cause TEP Resources to establish and maintain an account (the “TEP Collateral Account”) to hold Distributable Collections pursuant to Section 2.7(B)(xvii) and Sunnova TEP II Developer, LLC to establish and maintain an account to hold "Distributable Collections" (as defined in the TEP II Credit Agreement) pursuant to Section 2.7(b)(xvii) of the TEP II Credit Agreement, (ii) such accounts shall be subject to an account control agreement pursuant to which the Administrative Agent shall be granted control (as defined in Section 9‑104 of the UCC) in favor of Administrative Agent, in form and substance satisfactory to Administrative Agent and (iii) the Administrative Agent shall have received customary opinions from counsel to each Affiliate of the Borrower that is a party to such account control agreement regarding the Administrative' s Agent security interest in such accounts.




























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(X)        Deviations from Approved Forms. The Borrower shall provide or shall cause the Seller to provide, to the Administrative Agent all proposed forms of Solar Service Agreements which deviate in any material respect from a form attached hereto as Exhibit G (each such form a “Proposed Form”) and shall provide notice to the Administrative Agent regarding the cessation of a form of Solar Service Agreement attached hereto as Exhibit G or previously delivered hereunder. The Administrative Agent shall use its best efforts to notify the Borrower in writing within ten (10) Business Days of receipt of a Proposed Form of its objection or approval of the terms of such Proposed Form. Upon the written approval of the Administrative Agent, such approval not to be unreasonably withheld or delayed, Exhibit G shall be deemed to be amended to include such Proposed Form as a Solar Service Agreement in addition to the other forms attached or previously delivered hereunder. The Borrower shall, no less frequently than once per calendar quarter, provide or shall cause the Seller to provide, to the Administrative Agent all forms of Solar Service Agreements that incorporate changes which do not deviate materially from a form attached hereto as Exhibit G. Upon receipt of such forms of Solar Service Agreements, Exhibit G shall be deemed to be amended to include such forms in addition to the other forms attached or previously delivered hereunder.

(Y)        Beneficial Owner Certification. Promptly following any request therefor, the Borrower shall provide such information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” requirements under the Patriot Act, the Beneficial Ownership Regulation or other applicable anti-money laundering laws.



















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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 5.2.    Negative Covenants. The Borrower covenants and agrees that, until all Obligations (other than contingent obligations not then due) hereunder have been paid in full, the Borrower will not:

(A)    Business Activities. (x) Conduct any business other than:

(i)    the acquisition from time to time of any or all right, title and (direct or indirect) interest in and to Solar Assets and Solar Asset Owner Subsidiaries and all rights and interests thereunder or relating thereto pursuant to the Sale and Contribution Agreement;

(ii)    the conveyance from time to time of Solar Asset Owner Member Interests in connection with a Takeout Transaction and the conveyance of Solar Assets to SAP;

(iii)    the execution and delivery by the Borrower from time to time of purchase agreements, in form and substance satisfactory to the Administrative Agent, related to the sale of securities by the Borrower or any of their Affiliates in connection with a Takeout Transaction;

(iv)    the performance by the Borrower of all of its obligations under the aforementioned agreements and under this Agreement and any documentation related thereto;

(v)    the preparation, execution and delivery of any and all other documents and agreements as may be required in connection with the performance of the activities of the Borrower approved above; and

(vi)    to engage in any lawful act or activity and to exercise any powers permitted under the Delaware Limited Liability Company Act that are reasonably related, incidental, necessary, or advisable to accomplish the foregoing; or

(y)     permit the Managing Members or SAP to conduct any business other than the transactions contemplated by the Tax Equity Financing Documents.

Notwithstanding the foregoing, after the Closing Date and at any time on or prior to the earlier of (a) the Maturity Date and (b) the date on which all Obligations (other than contingent obligations not then due) of the Borrower hereunder have been paid in full, the Borrower shall not, without the prior written consent of the Administrative Agent, the Majority Lenders and the Majority Class B Lenders (consent by the Majority Class B Lenders to not be unreasonably withheld, conditioned or delayed if otherwise approved by the Majority Lenders; provided that if the Majority Class B Lenders have not affirmatively disapproved such transaction in writing within five (5) Business Days of receiving notice of such transaction and the Majority Lenders have otherwise approved such transaction, such transaction shall be deemed approved), (1) purchase or otherwise acquire any Solar Assets or Solar Asset Owner Subsidiaries, or interests therein, except for acquisitions from

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the Seller pursuant to and in accordance with the Sale and Contribution Agreement, (2) convey or otherwise dispose of any Collateral or interests therein, other than permitted under Sections 5.2(A)(ii) or 5.2(E) or the SAP Contribution Agreement, or (3) establish any Subsidiaries; provided, that notwithstanding this paragraph, the Borrower may continue to own directly or indirectly interests in the Financing Funds and SAP, which shall purchase and acquire Solar Assets in accordance with the terms of the SAP Financing Documents, the SAP NTP Financing Documents or the Tax Equity Financing Documents, as applicable.

(B)    Sales, Liens, Etc. Except as permitted hereunder (i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Lien upon or with respect to, the Collateral or any portion thereof, or upon or with respect to the Collection Account or any other account owned by or in the name of the Borrower to which any Collections are sent, or assign any right to receive income in respect thereof, or (ii) create or suffer to exist any Lien upon or with respect to any of its properties, whether now owned or hereafter acquired, or assign any right to receive income, to secure or provide for the payment of any Indebtedness of any Person or for any other reason; provided that notwithstanding anything to the contrary herein, this Section 5.2(B) shall not prohibit (x) any Lien that constitutes a Permitted Lien or a Permitted Equity Lien or, (y) a SAP Transfer or (z) so long as notice is given to Administrative Agent under any Facility Administrator Report of any of the following, any actions permitted under Sections 5.2(A)(ii).

(C)    Indebtedness. Incur or assume any Indebtedness, except Permitted Indebtedness.

(D)    Loans and Advances. Make any loans or advances to any Person.

(E)    Dividends, Etc. Declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any interest in Borrower, or purchase, redeem or otherwise acquire for value any interest in the Affiliated Entities or any rights or options to acquire any such interest to any Person that is not the Borrower, except:

(i)    transfers, dividends or other distributions of Marketable RECs;

(ii)    transfers, dividends or other distributions of Transferable Assets to the Seller pursuant to the Sale and Contribution Agreement and in accordance with Section 2.10; or

(iii)    distributions of cash by the Borrower to the TEP Collateral Account or the Borrower's Account in accordance with Section 2.7(B)(xvii); or

(iv)     distributions of Solar Assets that were Substantial Stage Solar Assets or Final Stage Solar Assets in accordance with a SAP Transfer.

provided, that the distributions described in subsection (i) of clause (E) shall not be permitted if either an Event of Default or Potential Default would result therefrom unless all outstanding

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Obligations (other than contingent liabilities for which no claims have been asserted) have been irrevocably paid in full with all accrued but unpaid interest thereon and any related Liquidation Fees; provided further, that nothing in this Section 5.2(E) shall prohibit or limit any Financing Fund Contributions.

(F)    Mergers, Etc. Merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets of, any Person, except in connection with the acquisition or sale of Solar Assets or Solar Asset Owner Subsidiaries and similar property pursuant to the Sale and Contribution Agreement, in connection with a Takeout Transaction or an acquisition or sale where all Obligations have been paid in full with all accrued but unpaid interest thereon and any related Liquidation Fees.

(G)    Investments. Make any investment of capital in any Person either by purchase of stock or securities, contributions to capital, property transfer or otherwise or acquire or agree to acquire by any manner any business of any Person except pursuant to the transactions contemplated herein and in the SAP Financing Documents, the SAP NTP Financing Documents or the Tax Equity Financing Documents.

(H)    Change in Organizational Documents. Amend, modify or otherwise change any of the terms or provisions in its organizational documents as in effect on the date hereof without the consent of the Administrative Agent, the Majority Lenders and, to the extent such amendment, modification or change could reasonably be expected to materially and adversely affect the Class B Lenders in a manner disproportionate to the Class A Lenders, the Majority Class B Lenders.

(I)    Transactions with Affiliates. Enter into, or be a party to, any transaction with any of its Affiliates, except (i) the transactions contemplated by the Transaction Documents, the SAP Financing Documents, the SAP NTP Financing Documents, the Tax Equity Financing Documents or any similar conveyance agreement entered into in connection with a Takeout Transaction or SAP Transfer, (ii) any other transactions (including the lease of office space or computer equipment or software by the Borrower from an Affiliate and the sharing of employees and employee resources and benefits) (a) in the ordinary course of business or as otherwise permitted hereunder, (b) pursuant to the reasonable requirements and purposes of the Borrower’s business, (c) upon fair and reasonable terms (and, to the extent material, pursuant to written agreements) that are consistent with market terms for any such transaction, and (d) permitted by Sections 5.2(B), (C), (E) or (F), (iii) employment and severance arrangements and health, disability and similar insurance or benefit plans between the Borrower and its directors, officers, employees in the ordinary course of business, and (iv) the payment of customary fees and reasonable out of pocket costs to, and indemnities provided on behalf of, directors, managers, consultants, officers and employees of any parent entity of the Borrower to the extent attributable to the ownership or operation of the Borrower.


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(J)    Addition, Termination or Substitution of Accounts. Add, terminate or substitute, or consent to the addition, termination or substitution of, the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, the Takeout Transaction Account or the TEP Collateral Account unless the Administrative Agent, the Majority Lenders and the Majority Class B Lenders shall have consented thereto (consent by the Majority Class B Lenders to not be unreasonably withheld, conditioned or delayed if otherwise approved by the Administrative Agent; provided that if the Majority Class B Lenders have not affirmatively disapproved such addition, termination or substitution in writing within five (5) Business Days of receiving notice of such addition, termination or substitution and the Administrative Agent has otherwise approved such addition, termination or substitution, such addition, termination or substitution shall be deemed approved) after having received at least thirty (30) days’ prior written notice thereof. Notwithstanding the foregoing, the Borrower neither has nor shall have any control over the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, the Takeout Transaction Account or the TEP Collateral Account. For the avoidance of doubt, any Financing Fund Contributions shall not be controlled or distributed through the Paying Agent Accounts.

(K)    Collections. (i) Deposit at any time Collections into any bank account other than in accordance with Section 5.1(R), (ii) make any change to the payment instructions to a Financing Fund, a Managing Member or SAP in respect of the Solar Asset Owner Member Interests to any other destination other than the Collection Account, (iii)  make any change to the payment instructions to any Eligible Hedged SREC Counterparty or direct any Eligible Hedged SREC Counterparty to make any Hedged SREC Payments to go to any destination other than the Collection Account, or (iv) permit the assets of any Person (other than the Borrower) to be deposited into the Collection Account.

(L)    Amendments to Transaction Documents. Without the consent of the Administrative Agent and subject to Section 10.2, amend, modify or otherwise change any of the terms or provisions of any Transaction Document other than (i) supplements identifying Solar Assets and/or Solar Asset Owner Subsidiaries to be transferred in in accordance with the Sale and Contribution Agreement, (ii) supplements identifying Solar Assets to be financed in connection with each Funding Date, (iii) amendments, supplements or other changes in accordance with the terms of the applicable Transaction Document, the SAP Financing Documents, the SAP NTP Financing Documents or Tax Equity Financing Document, and (iv) amendments, supplements or other changes with respect to exhibits and schedules to any Transaction Document, the SAP Financing Documents, the SAP NTP Financing Documents or Tax Equity Financing Document that would not reasonably be expected to have a material adverse effect on the value, enforceability, or collectability of the Collateral or adversely affect Collections.

(M)    Bankruptcy of Tax Equity Parties. Without the consent of the Administrative Agent, the Borrower shall not, directly or indirectly, cause the institution of bankruptcy or insolvency proceedings against a Tax Equity Party.

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Section 5.3.    Covenants Regarding the Solar Asset Owner Member Interests    . The Borrower covenants and agrees, that, until all Obligations (other than contingent obligations not then due) hereunder have been paid in full, the Borrower shall:

(A)determine whether or not to exercise each Purchase Option in accordance with the Purchase Standard. The Borrower will make such determination, and if it determines to do so, will exercise such Purchase Option, no later than 60 days following the related Call Date in accordance with the terms and conditions of the related Financing Fund LLCA. Such determination will take into account whether sufficient funds are available in the Supplemental Reserve Account to pay the related Purchase Option Price, and if such funds are not then available in the Supplemental Reserve Account, the Borrower shall make a determination, in accordance with the Purchase Standard, whether to exercise such Purchase Option as soon thereafter as such funds are available in the Supplemental Reserve Account. Upon the Borrower’s exercise and completion of a Purchase Option, the Borrower shall (i) instruct the related Financing Fund to pay all distributions to be made by such Financing Fund to the Borrower in respect of the Managing Member Interests and the Tax Equity Investor Interests directly to the Collection Account and deliver to the Administrative Agent the original certificate of the related Managing Member Interests and the related Tax Equity Investor Interests together with instruments of transfer executed in blank, (ii) cause the Managing Members to execute and deliver to the Administrative Agent an Accession Agreement to the Pledge Agreement covering the Tax Equity Investor Interest acquired pursuant to the Purchase Option, and (iii) cause the Managing Members to amend the related Financing Fund LLCA to require such Financing Fund to have at all times an Independent Director;

(B)(x) cause the Managing Members (i) to cause each Financing Fund to make all Managing Member Distributions directly to the Collection Account and (ii) to deliver to the Administrative Agent for deposit into the Collection Account any Managing Member Distributions received by the Managing Members and (y) cause SAP to (i) make all SAP Distributions directly to the Collection Account and (ii) to deliver to the Administrative Agent for deposit into the Collection Account any SAP Distributions received by SAP;

(C)cause each of the Managing Members and SAP to comply with the provisions of its operating agreement and not to take any action that would cause the Managing Members to violate the provisions of the related Financing Fund LLCA;

(D)cause each of the Managing Members and SAP to maintain all material licenses and permits required to carry on its business as now conducted and in accordance with the provisions of the Transaction Documents, except to the extent the failure to do so could not reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;

(E)not permit or consent to the admission of any new member of the Managing Members or SAP other than a successor independent member in accordance with the provisions of their respective operating agreements;


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(F)cause the Managing Members not to permit or consent to the admission of any new member of a Financing Fund other than pursuant to the exercise of a Purchase Option by the Managing Member;

(G)cause the Managing Members not to make any material amendment to a Financing Fund LLCA that could reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders and cause the Managing Members and SAP not to make any material amendment to their respective operating agreements that could reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;

(H)cause the Managing Members on its own behalf and on behalf of each Financing Fund (i) to comply with and enforce the provisions of the Tax Loss Insurance Policies and (ii) not to consent to any amendment to a Tax Loss Insurance Policy to the extent that such amendment could reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;

(I)cause the Managing Members to cause each Financing Fund to (i) comply with the provisions of each respective Financing Fund LLCA and (ii) not take any action that would violate the provisions of such Financing Fund LLCA, and cause the Managing Members and SAP to not to make any material amendment to their respective operating agreement that could reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;

(J)    cause the Managing Members to cause each Financing Fund and cause the Managing Members and SAP to maintain all material licenses and permits required to carry on its business as now conducted and in accordance with the provisions of the SAP Financing Documents, the SAP NTP Financing Documents and the Tax Equity Financing Documents, except to the extent the failure to do so could not reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;

(K)cause the Managing Members to cause the related Financing Funds not to incur any indebtedness or sell, dispose of or other encumber any of its assets other than as permitted by the Transaction Documents; and

(L)cause the Managing Members to obtain the consent of the Administrative Agent for any action taken under Section 6.2(b) of each Financing Fund LLCA or any action that could reasonably be expected to cause a Material Adverse Effect.







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ARTICLE VI

EVENTS OF DEFAULT

Section 6.1.    Events of Default. The occurrence of any of the following specified events shall constitute an event of default under this Agreement (each, an “Event of Default”):

(A)    Non‑Payment. (i) The Borrower shall fail to make any required payment of principal (including any payment required to be made to cure a Class A Borrowing Base Deficiency or a Class B Borrowing Base Deficiency) or interest when due hereunder and such failure shall continue unremedied for two (2) Business Days after the day such payment is due or (ii) the Borrower shall fail to pay the Aggregate Outstanding Advances by the Maturity Date, or (iii) the Borrower shall fail to make any required payment on any other Obligation when due hereunder or under any other Transaction Document and such failure under this sub‑clause (iii) shall continue unremedied for five (5) Business Days after the earlier of (a) written notice of such failure shall have been given to the Borrower by the Administrative Agent or any Lender or (b) the date upon which a Responsible Officer of the Borrower obtained knowledge of such failure.

(B)    Representations. Any representation or warranty made or deemed made by the Borrower (other than pursuant to Section 4.1(U) hereof or, with respect to the Parent only, Section 4.1(L) hereof), the Seller, the Parent, the Facility Administrator, the Managing Members or SAP herein or in any other Transaction Document (after giving effect to any qualification as to materiality set forth therein, if any) shall prove to have been inaccurate in any material respect when made and such defect, to the extent it is capable of being cured, is not cured within thirty (30) days from the earlier of the date of receipt by the Borrower, the Parent, the Seller, the Facility Administrator, the Managing Members or SAP as the case may be, of written notice from the Administrative Agent of such failure by the Borrower, the Parent, the Facility Administrator, the Seller, the Managing Members or SAP, as the case may be, of such failure.

(C)    Covenants. The Borrower, the Seller, the Facility Administrator, the Managing Members or SAP shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or in any other Transaction Document which has not been cured within thirty (30) days from the earlier of the date of receipt by the Borrower, the Facility Administrator, the Managing Members or SAP, as the case may be, of written notice from the Administrative Agent of such failure by the Borrower, the Facility Administrator, the Managing Members or SAP, as the case may be, of such failure.

(D)    Validity of Transaction Documents. This Agreement or any other Transaction Document shall (except in accordance with its terms), in whole or in part, cease to be (i) in full force and effect and/or (ii) the legally valid, binding and enforceable obligation of the Seller, the Borrower, the Parent, the Facility Administrator, a Managing Member or SAP.


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(E)    Insolvency Event. An Insolvency Event shall have occurred with respect to Parent, the Seller, Borrower, the Facility Administrator, a Managing Member, SAP or a Financing Fund.

(F)    Breach of Parent Guaranty; Failure to Pay Liquidated Damages Amounts. Any failure by Parent to perform under the Parent Guaranty; provided that a breach by Parent of the Financial Covenants is not an Event of Default hereunder, or any failure of TEP Developer or TEP Resources to pay Liquidated Damages Amounts pursuant to the Sale and Contribution Agreements.

(G)    ERISA Event. Either (i) any ERISA Event shall have occurred or (ii) the assets of the Borrower become subject to Title I of ERISA, Section 4975 of the Internal Revenue Code, or, by reason of any investment in the Borrower by any governmental plan, as the case may be, any other federal, state, or local provision similar to Section 406 of ERISA or Section 4975 of the Internal Revenue Code.

(H)    Borrowing Base Deficiency. A Class A Borrowing Base Deficiency or a Class B Borrowing Base Deficiency continues for more than two (2) Business Days.

(I)    Security Interest. The Administrative Agent, for the benefit of the Lenders, ceases to have a first priority perfected security interest in Collateral having a value in excess of $150,000 and such failure shall continue unremedied for more than five (5) Business Days unless such Liens with a higher priority than Agent’s Liens are Permitted Liens or Permitted Equity Liens; provided that if such cessation in security interest is due to Agent’s actions, then no Event of Default shall be deemed to occur under this Section 6.1(I).

(J)    Judgments. There shall remain in force, undischarged, unsatisfied, and unstayed for more than thirty (30) consecutive days, any final non‑appealable judgment against any Relevant Party in excess of $250,000 or the Parent in excess of $1,000,000, in each case over and above the amount of insurance coverage available from a financially sound insurer that has not denied coverage.

(K)    1940 Act. Any Relevant Party becomes, or becomes controlled by, an entity required to register as an “investment company” under the 1940 Act.

(L)    Hedging. Failure of the Borrower to maintain Hedge Agreements satisfying the Hedge Requirements and such failure continues for five (5) Business Days or any Hedge Counterparty ceases to be a Qualifying Hedge Counterparty and such Hedge Counterparty is not replaced with a Qualifying Hedge Counterparty within ten Business Days.

(M)    Change of Control. The occurrence of a Change of Control.

(N)    Financing Fund Material Adverse Effect. The occurrence of any event that results in a Material Adverse Effect (as defined in the Financing Fund LLCA) with respect to a Managing Member or a Financing Fund.


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(O)    Replacement of Manager. The Manager resigns, removed or is replaced under a Management Agreement or a Servicing Agreement and, in each case, a replacement Manager, acceptable to the Administrative Agent has not accepted an appointment under such agreement within 60 days of such resignation or removal.

(P)    Parent Material Adverse Effect. A representation or warranty made or deemed made by the Borrower pursuant to Section 4.1(L) hereof regarding the Parent shall prove to have been inaccurate in any material respect when made and such defect, to the extent it is capable of being cured, is not cured within ninety (90) days from the earlier of the date of receipt by the Borrower of written notice from the Administrative Agent of such failure by the Borrower.

(Q)    Resignation or Removal of Managing Member. A Managing Member resigns or is removed under a Financing Fund LLCA.

(R)     Cross Default. The occurrence of an "Event of Default" under the TEP II Credit Agreement.

(S)     TEP IV-B Tax Loss Insurance Policy. TEP IV-B (or Parent or an affiliate thereof on behalf of such Financing Fund) fails to procure a Tax Loss Insurance Policy by January 31February 28, 2020.

Section 6.2.    Remedies. If any Event of Default shall then be continuing, the Administrative Agent (i) may, in its discretion, or (ii) shall, upon the written request of the Majority Lenders, by written notice to the Borrower and the Lenders, take any or all of the following actions, without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against the Borrower in any manner permitted under applicable law:

(A)    declare the Commitments terminated, whereupon the Commitment of each Lender shall forthwith terminate immediately without any other notice of any kind;

(B)    declare the principal of and any accrued interest in respect of the Class A Advances, the Class B Advances and all other Obligations owing hereunder and thereunder to be, whereupon the same shall become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; provided, that, upon the occurrence of an Insolvency Event with respect to the Borrower, the principal of and any accrued interest in respect of the Advances and all other Obligations owing hereunder shall be immediately due and payable without any notice to the Borrower or Lenders;

(C)    if the Facility Administrator is Sunnova Management, replace the Facility Administrator with a Successor Facility Administrator in accordance with the Facility Administration Agreement; and/or

(D)    foreclose on and liquidate the Collateral or to the extent permitted by the Tax Equity Financing Documents, the Solar Assets owned by a Financing Fund, and pursue all

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other remedies available under the Security Agreement, the Pledge Agreement, the Subsidiary Guaranty and the other Transaction Documents, subject to the terms of the Tax Equity Financing Documents.

Section 6.3.    Class B Lender Purchase Option (A) If an Event of Default other than an Event of Default described in Section 6.1(E) shall occur and be continuing and the Administrative Agent shall not have declared all Obligations under this Agreement or any of the other Transaction Documents to be immediately due and payable, the Class B Lenders shall have the option at any time to purchase all (but not less than all) of the Class A Advances then outstanding and all related Obligations owing by the Borrower to the Class A Lenders (solely in such capacity) from the Class A Lenders (the “Class B Lender Purchase Option”) with the consent of all the Class A Lenders. At any time that the Class B Lender Purchase Option is available to the Class B Lenders, any Class B Lender may request that the Class A Lenders provide such Class B Lender with a statement setting forth the aggregate amount of all the Class A Advances then outstanding and all related Obligations owed by the Borrower to the Class A Lenders (solely in such capacity). Within ten (10) Business Days after the receipt of such statement, the requesting Class B Lender shall provide written notice to the Class A Lenders whether such Class B Lender would like to exercise the Class B Lender Purchase Option. Upon receipt of a notice that a Class B Lender would like to exercise the Class B Lender Purchase Option, the Class A Lenders shall promptly notify such Class B Lender whether the Class A Lenders will consent to a sale. If any or all of the Class B Lenders shall have elected to exercise the Class B Lender Purchase Option and the Class A Lenders shall have consented to a sale, the Class A Lenders and applicable Class B Lenders shall agree to a purchase and sale date and make such purchase and sale in accordance with Section 6.3(C); provided that the Class A Lenders shall retain all rights to be indemnified or held harmless by the Borrower in accordance with the terms hereof for claims accruing prior to such sale date.

(B)    If an Event of Default shall occur and be continuing and the Majority Lenders shall have declared an Event of Default that has not been waived, the Class B Lenders shall have the option at any time to exercise the Class B Lender Purchase Option. Any or all of the Class B Lenders may exercise such Class B Lender Purchase Option upon written notice to the Class A Lenders, which notice shall be irrevocable. On the date specified by the participating Class B Lenders in such notice (which shall not be more than ten (10) Business Days after the receipt by the Class A Lenders of such notice), the Class A Lenders shall sell to the Class B Lenders, and the Class B Lenders shall purchase from the Class A Lenders, the Class A Advances then outstanding and all Obligations owed by the Borrower to the Class A Lenders (solely in such capacity) in accordance with Section 6.3(C); provided that the Class A Lenders shall retain all rights to be indemnified or held harmless by the Borrower in accordance with the terms hereof for claims accruing prior to such sale date.
(C)     Upon the date of a purchase and sale pursuant to this Section 6.3, the Class B Lenders shall (i) pay to the Class A Lenders as the purchase price therefor the full amount of all the Class A Advances and all Obligations owed by the Borrower to the Class A Lenders (solely in such capacity) then outstanding and unpaid including principal, interest, fees, any Liquidation Fee as in effect on the date thereof and expenses, including attorneys’ fees and legal expenses, (ii) reimburse the Class A Lenders for any loss, cost, damage or expense (including attorneys’ fees and

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legal expenses) in connection with any commissions, fees, costs or expenses related to any checks or other payments provisionally credited to the Obligations owing to the Class A Lenders (solely in such capacity), and/or as to which the Class A Lenders have not yet received final payment (and, in each case, all of such payments shall be made without offset, deduction or defense), (iii) reimburse the Class A Lenders for the amount of all liabilities (without duplication) that such Class A Lenders have incurred in the nature of indemnification obligations of the Borrower hereunder which have resulted in any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) to the Class A Lenders, and (iv) agree to indemnify and hold harmless the Class A Lenders from and against any loss, liability, claim, damage or expense (including fees and expenses of legal counsel) arising out of any claim asserted by a third party as a direct result of any acts by the Class B Lenders occurring after the date of such purchase. The Class A Lenders shall provide a reasonably detailed statement of the purchase price and other sums set forth in clauses (i) through (iii) above to the Class B Lenders, and the Class B Lenders shall remit such purchase price and other sums in clauses (i) through (iii) above by wire transfer in federal funds to such bank account of the Class A Lenders as the Class A Lenders may designate in writing to the Class B Lenders for such purpose. Interest shall be calculated through the Business Day on which such purchase and sale shall occur if the amounts so paid by the Class B Lenders to the bank account designated by the Class A Lenders are received in such bank account prior to 1:00 p.m., New York time and interest shall be calculated to and include the next Business Day if the amounts so paid by the Class B Lenders to the bank account designated by the Class A Lenders are received in such bank account later than 1:00 p.m., New York time. Such purchase shall be expressly made without representation or warranty of any kind by the Class A Lenders as to the Obligations owing to the Class A Lenders (solely in such capacity) or otherwise and without recourse to the Class A Lenders, except that the Class A Lenders shall represent and warrant: (a) the amount of Obligations owing to the Class A Lenders (solely in such capacity) being purchased and that the purchase price and other sums payable by the Class B Lenders are true, correct and accurate amounts, (b) that the Class A Lenders shall convey the Obligations owing to the Class A Lenders (solely in such capacity) free and clear of any Liens or encumbrances of the Class A Lenders or created or suffered by the Class A Lenders, (c) as to all claims made or threatened in writing against the Class A Lenders related to the Obligations owing to the Class A Lenders (solely in such capacity), and (d) the Class A Lenders are duly authorized to assign the Obligations owing to the Class A Lenders (solely in such capacity).





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Section 6.4.    Sale of Collateral (A) The power to effect any sale of any portion of the Collateral upon the occurrence and during the continuance of an Event of Default pursuant to this Article VI, the Security Agreement and the Pledge Agreement shall not be exhausted by any one or more sales as to any portion of the Collateral remaining unsold, but shall continue unimpaired until all Collateral shall have been sold or until all Obligations (other than contingent obligations not then due) hereunder have been paid in full. The Administrative Agent acting on its own or through an agent, may from time to time postpone any sale by public announcement made at the time and place of such sale.
(B)    Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent may, in its discretion, and shall, upon the written request of the Majority Lenders, by written notice to the Borrower and the Lenders sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Administrative Agent’s offices or elsewhere, for cash, on credit (including pursuant to a “credit sale” to a Lender or an assignee thereof) or for future delivery, and upon such other terms as the Administrative Agent may require. Notwithstanding the foregoing, prior to the consummation of any sale of the Collateral pursuant to this Article VI and any other Transaction Document (either private or public), the Administrative Agent shall first offer the Class B Lenders the opportunity to purchase the Collateral for a purchase price equal to the greater of (x) the fair market value of the Collateral and (y) the aggregate outstanding principal balance of the Class A Advances, plus accrued interest thereon and fees owed thereto (such right, the “Right of First Refusal”). If the Class B Lenders do not exercise the Right of First Refusal within two (2) Business Days of receipt thereof, then the Administrative Agent shall sell the Collateral as otherwise set forth in this Section 6.4 and pursuant to the other Transaction Documents; provided, further, that if the Class B Lenders do not exercise the Right of First Refusal and the Administrative Agent elects to sell the Collateral in a private sale to a third party, then prior to the sale thereof, the Administrative Agent shall offer the Class B Lenders the opportunity to purchase the Collateral for the purchase price being offered by such third party, and the Class B Lenders shall have two (2) Business Days to accept such offer.
ARTICLE VII

THE ADMINISTRATIVE AGENT AND FUNDING AGENTS
Section 7.1.    Appointment; Nature of Relationship. The Administrative Agent is appointed by the Funding Agents and the Lenders (and by each Qualifying Hedge Counterparty by execution of a Qualifying Hedge Counterparty Joinder, if applicable) as the Administrative Agent hereunder and under each other Transaction Document, and each of the Funding Agents and the Lenders and each Qualifying Hedge Counterparty irrevocably authorizes the Administrative Agent to act as the contractual representative of such Funding Agent and such Lender and such Qualifying Hedge Counterparty with the rights and duties expressly set forth herein and in the other Transaction

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Documents. The Administrative Agent agrees to act as such contractual representative upon the express conditions contained in this Article VII. Notwithstanding the use of the defined term “Administrative Agent,” it is expressly understood and agreed that the Administrative Agent shall not have any fiduciary responsibilities to any Funding Agent or Lender or any Qualifying Hedge Counterparty by reason of this Agreement and that the Administrative Agent is merely acting as the representative of the Funding Agents, the Lenders and each Qualifying Hedge Counterparty with only those duties as are expressly set forth in this Agreement and the other Transaction Documents. In its capacity as the Funding Agents’, the Lenders’ and each Qualifying Hedge Counterparty’s contractual representative, the Administrative Agent (A) does not assume any fiduciary duties to any of the Funding Agents, the Lenders or any Qualifying Hedge Counterparty, (B) is a “representative” of the Funding Agents, the Lenders and each Qualifying Hedge Counterparty within the meaning of Section 9‑102 of the UCC as in effect in the State of New York, and (C) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Transaction Documents. Each of the Funding Agents, the Lenders and each Qualifying Hedge Counterparty agree to assert no claim against the Administrative Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Funding Agent, each Lender and each Qualifying Hedge Counterparty waives.
Section 7.2.    Powers. The Administrative Agent shall have and may exercise such powers under the Transaction Documents as are specifically delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto. The Administrative Agent shall have no implied duties or fiduciary duties to the Funding Agents, the Lenders or to any Qualifying Hedge Counterparty, or any obligation to the Funding Agents, the Lenders or any Qualifying Hedge Counterparty to take any action hereunder or under any of the other Transaction Documents except any action specifically provided by the Transaction Documents required to be taken by the Administrative Agent.
Section 7.3.    General Immunity. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower, the Funding Agents, the Lenders, or any Qualifying Hedge Counterparty for any action taken or omitted to be taken by it or them hereunder or under any other Transaction Document or in connection herewith or therewith except to the extent such action or inaction is found in a final non‑appealable judgment by a court of competent jurisdiction to have arisen solely from (A) the gross negligence or willful misconduct of such Person or (B) breach of contract by such Person with respect to the Transaction Documents.
Section 7.4.    No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc.. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (A) any statement, warranty or representation made in connection with any Transaction Document or any borrowing hereunder, (B) the performance or observance of any of the covenants or agreements of any obligor under any

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Transaction Document, (C) the satisfaction of any condition specified in Article III, except receipt of items required to be delivered solely to the Administrative Agent, (D) the existence or possible existence of any Potential Default or Event of Default, or (E) the validity, effectiveness or genuineness of any Transaction Document or any other instrument or writing furnished in connection therewith. The Administrative Agent shall not be responsible to any Funding Agent, any Lender or any Qualifying Hedge Counterparty for any recitals, statements, representations or warranties herein or in any of the other Transaction Documents, for the perfection or priority of any of the Liens on any of the Collateral, or for the execution, effectiveness, genuineness, validity, legality, enforceability, collectability, or sufficiency of this Agreement or any of the other Transaction Documents or the transactions contemplated thereby, or for the financial condition of any guarantor of any or all of the Obligations, the Borrower or any of its respective Affiliates.
Section 7.5.    Action on Instructions of Lenders. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Transaction Document in accordance with written instructions signed by the Majority Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders and on all holders of Loan Notes. The Administrative Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Transaction Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.
Section 7.6.    Employment of Administrative Agents and Counsel. The Administrative Agent may execute any of its duties as the Administrative Agent hereunder and under any other Transaction Document by or through employees, agents, and attorneys‑in‑fact and shall not be answerable to the Funding Agents, the Lenders or any Qualifying Hedge Counterparty, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys‑in‑fact selected by it with reasonable care. The Administrative Agent shall be entitled to advice of counsel concerning the contractual arrangement between the Administrative Agent and the Funding Agents, the Lenders or any Qualifying Hedge Counterparty and all matters pertaining to the Administrative Agent’s duties hereunder and under any other Transaction Document.
Section 7.7.    Reliance on Documents; Counsel. The Administrative Agent shall be entitled to rely upon any Class A Loan Note, Class B Loan Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and, in respect to legal matters, upon the opinion of counsel selected by the Administrative Agent, which counsel may be employees of the Administrative Agent.
Section 7.8.    The Administrative Agent’s Reimbursement and Indemnification. The Non-Conduit Lenders agree to reimburse and indemnify (on a pro rata basis based on the Class A Lender

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Group Percentages and the Class B Lender Group Percentages, as applicable) the Administrative Agent (A) for any amounts not reimbursed by the Borrower for which the Administrative Agent is entitled to reimbursement by the Borrower under the Transaction Documents, (B) for any other reasonable and documented expenses incurred by the Administrative Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Transaction Documents, and (C) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of the Transaction Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents, provided, that no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non‑appealable judgment by a court of competent jurisdiction to have arisen solely from the gross negligence or willful misconduct of the Administrative Agent.
Section 7.9.    Rights as a Lender. With respect to its Commitment and Advances made by it and the Loan Notes (if any) issued to it, in its capacity as a Lender, the Administrative Agent shall have the same rights and powers hereunder and under any other Transaction Document as any Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders,” as applicable, shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity. The Administrative Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Transaction Document, with the Borrower or any of its Affiliates in which such Person is not prohibited hereby from engaging with any other Person.
Section 7.10.    Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Transaction Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender 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 and the other Transaction Documents.
Section 7.11.    Successor Administrative Agent. The Administrative Agent may resign at any time by giving written notice thereof to the Lenders, the Funding Agents, each Qualifying Hedge Counterparty, the Verification Agent, the Paying Agent and the Borrower and the Administrative Agent may be removed at any time for cause by written notice received by the Administrative Agent from the Majority Lenders. Upon any such resignation or removal, the Lenders shall have the right to appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent. If no

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successor Administrative Agent shall have been so appointed by the Lenders and shall have accepted such appointment within thirty (30) days after the exiting Administrative Agent’s giving notice of resignation or receipt of notice of removal, then the exiting Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent (but only if such successor is reasonably acceptable to each Lender) or petition a court of competent jurisdiction to appoint a successor Administrative Agent. Upon the acceptance of any appointment as the Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the exiting Administrative Agent, and the exiting Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents. After any exiting Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Article VII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent hereunder and under the other Transaction Documents.
Section 7.12.    Transaction Documents; Further Assurances. (A) Each Non-Conduit Lender, each Funding Agent and each Qualifying Hedge Counterparty authorizes the Administrative Agent to enter into each of the Transaction Documents to which it is a party and each Lender, each Funding Agent and each Qualifying Hedge Counterparty authorizes the Administrative Agent to take all action contemplated by such documents in its capacity as Administrative Agent. Each Lender, each Funding Agent and each Qualifying Hedge Counterparty agrees that no Lender, no Funding Agent and no Qualifying Hedge Counterparty, respectively, shall have the right individually to seek to realize upon the security granted by any Transaction Document, it being understood and agreed that such rights and remedies may be exercised solely by the Administrative Agent for the benefit of the Lenders, the Funding Agents and each Qualifying Hedge Counterparty upon the terms of the Transaction Documents.
(B)    Any Funding Agent may (in their sole discretion and expense), at any time, have their Advances rated by Moody’s, S&P, DBRS, Inc., A.M. Best or Kroll Bond Rating Agency, Inc. Any such rating shall not be a condition precedent to closing the credit facility or the making of the Advances as set forth in this Agreement. The Borrower, Sunnova Management, and the Parent shall provide reasonable assistance to obtain such rating. For the avoidance of doubt, any such rating shall not be a condition precedent to the exercise of any rights of the Borrower or Sunnova Management under this Agreement. Any costs or fees associated with the rating of the Advances shall be borne by the Funding Agent and the Lenders.

Section 7.13.    Collateral Review. (A) Prior to the occurrence of an Event of Default, the Administrative Agent and/or its designated agent may not more than one (1) time during any given twelve (12) month period (at the expense of the Borrower), upon reasonable notice, perform

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(i) reviews of the Facility Administrator’s and/or Borrower’s business operations and (ii) audits of the Collateral, in all cases, the scope of which shall be determined by the Administrative Agent.

(B)    After the occurrence of and during the continuance of an Event of Default, the Administrative Agent or its designated agent may, in its sole discretion regarding frequency (at the expense of the Borrower), upon reasonable notice, perform (i) reviews of the Facility Administrator’s and/or Borrower’s business operations and (ii) audits or any other review of the Collateral, in all cases, the scope of which shall be determined by the Administrative Agent.

Section 7.14.    Funding Agent Appointment; Nature of Relationship. Each Funding Agent is appointed by the Lenders in its Lender Group as their agent hereunder, and such Lenders irrevocably authorize such Funding Agent to act as the contractual representative of such Lenders with the rights and duties expressly set forth herein and in the other Transaction Documents. Each Funding Agent agrees to act as such contractual representative upon the express conditions contained in this Article VII. Notwithstanding the use of the defined term “Administrative Agent,” it is expressly understood and agreed that no Funding Agent shall have any fiduciary responsibilities to any Lender by reason of this Agreement and that each Funding Agent is merely acting as the representative of the Lenders in its Lender Group with only those duties as are expressly set forth in this Agreement and the other Transaction Documents. In its capacity as the related Lenders’ contractual representative, each Funding Agent (A) does not assume any fiduciary duties to any of the Lenders, (B) is a “representative” of the Lenders in its Lender Group within the meaning of Section 9‑102 of the UCC as in effect in the State of New York and (C) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Transaction Documents. Each of the Lenders agrees to assert no claim against their Funding Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender waives.

Section 7.15.    Funding Agent Powers. Each Funding Agent shall have and may exercise such powers under the Transaction Documents as are specifically delegated to such Funding Agent by the terms thereof, together with such powers as are reasonably incidental thereto. No Funding Agent shall have any implied duties or fiduciary duties to the Lenders in its Lender Group, or any obligation to such Lenders to take any action hereunder or under any of the other Transaction Documents except any action specifically provided by the Transaction Documents required to be taken by such Funding Agent.

Section 7.16.    Funding Agent General Immunity. Neither any Funding Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower, the Lenders or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Transaction Document or in connection herewith or therewith except to the extent such action or inaction is found in a final non‑appealable judgment by a court of competent jurisdiction to have arisen solely from (A) the gross negligence or willful misconduct of such Person or (B) breach of contract by such Person with respect to the Transaction Documents.

Section 7.17.    Funding Agent Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc. Neither any Funding Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (A) any statement,

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warranty or representation made in connection with any Transaction Document or any borrowing hereunder, (B) the performance or observance of any of the covenants or agreements of any obligor under any Transaction Document, (C) the satisfaction of any condition specified in Article III, except receipt of items required to be delivered solely to the Administrative Agent, (D) the existence or possible existence of any Potential Default, Event of Default, Potential Amortization Event or Amortization Event, or (E) the validity, effectiveness or genuineness of any Transaction Document or any other instrument or writing furnished in connection therewith. No Funding Agent shall be responsible to any Lender for any recitals, statements, representations or warranties herein or in any of the other Transaction Documents, for the perfection or priority of any of the Liens on any of the Collateral, or for the execution, effectiveness, genuineness, validity, legality, enforceability, collectability, or sufficiency of this Agreement or any of the other Transaction Documents or the transactions contemplated thereby, or for the financial condition of any guarantor of any or all of the Obligations, the Borrower or any of their respective Affiliates.
Section 7.18.    Funding Agent Action on Instructions of Lenders. Each Funding Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Transaction Document in accordance with written instructions signed by each of the Lenders in its Lender Group, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of such Lenders. Each Funding Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Transaction Document unless it shall first be indemnified to its satisfaction by the Lenders in its Lender Group pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.
Section 7.19.    Funding Agent Employment of Agents and Counsel. Each Funding Agent may execute any of its duties as a Funding Agent hereunder by or through employees, agents, and attorneys‑in‑fact and shall not be answerable to the Lenders in its Lender Group, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys‑in‑fact selected by it with reasonable care. Each Funding Agent, at the expense of the Non-Conduit Lenders, shall be entitled to advice of counsel concerning the contractual arrangement between such Funding Agent and the Lenders in its Lender Group and all matters pertaining to such Funding Agent’s duties hereunder and under any other Transaction Document.
Section 7.20.    Funding Agent Reliance on Documents; Counsel. Each Funding Agent shall be entitled to rely upon any Loan Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and, in respect to legal matters, upon the opinion of counsel selected by such Funding Agent, which counsel may be employees of such Funding Agent.
Section 7.21.    Funding Agent’s Reimbursement and Indemnification. The Non-Conduit Lenders in each Lender Group agree to reimburse and indemnify (on a pro rata basis based upon the applicable Lender Group Percentages) the Funding Agent in their Lender Group (A) for any amounts not reimbursed by the Borrower for which such Funding Agent is entitled to reimbursement

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by the Borrower under the Transaction Documents, (B) for any other reasonable and documented expenses incurred by such Funding Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Transaction Documents, and (C) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against such Funding Agent in any way relating to or arising out of the Transaction Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents, provided, that no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non‑appealable judgment by a court of competent jurisdiction to have arisen solely from the gross negligence or willful misconduct of such Funding Agent.
Section 7.22.    Funding Agent Rights as a Lender. With respect to its Commitment and Advances made by it and the Loan Notes (if any) issued to it, in its capacity as a Lender, each Funding Agent shall have the same rights and powers hereunder and under any other Transaction Document as any Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders,” as applicable, shall, unless the context otherwise indicates, include such Funding Agent in its individual capacity. Each Funding Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Transaction Document, with the Borrower or any of their Affiliates in which such Person is not prohibited hereby from engaging with any other Person.
Section 7.23.    Funding Agent Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon its Funding Agent or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Transaction Documents. Each Lender also acknowledges that it will, independently and without reliance upon its Funding Agent or any other Lender 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 and the other Transaction Documents.
Section 7.24.    Funding Agent Successor Funding Agent. Any Funding Agent may resign at any time by giving written notice thereof to the Lenders in its Lender Group, the Administrative Agent and the Borrower, and such Funding Agent may be removed at any time for cause by written notice received by the Lenders in its Lender Group. Upon any such resignation or removal, the Lenders in a Lender Group shall have the right to appoint a successor Funding Agent. If no successor Funding Agent shall have been so appointed by such Lenders and shall have accepted such appointment within thirty 30 days after the exiting Funding Agent’s giving notice of resignation or receipt of notice of removal, then the exiting Funding Agent may appoint, on behalf of the Lenders

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in its Lender Group, a successor Funding Agent (but only if such successor is reasonably acceptable to each such Lender) or petition a court of competent jurisdiction to appoint a successor Funding Agent. Upon the acceptance of any appointment as a Funding Agent hereunder by a successor Funding Agent, such successor Funding Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the exiting Funding Agent, and the exiting Funding Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents. After any exiting Funding Agent’s resignation hereunder as Funding Agent, the provisions of this Article VII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Funding Agent hereunder and under the other Transaction Documents. Notwithstanding any provision in this Section 7.24 to the contrary, any Funding Agent that has provided notice of its resignation or has been provided notice of its removal shall be required to serve as Funding Agent until its successor has assumed such role.
Section 7.25.    Funding Agent Transaction Documents; Further Assurances. Each Lender authorizes the Funding Agent in its Lender Group to enter into each of the Transaction Documents to which it is a party and each Lender authorizes the Funding Agent in its Lender Group to take all action contemplated by such documents in its capacity as Funding Agent.
ARTICLE VIII

ADMINISTRATION AND SERVICING OF THE COLLATERAL
Section 8.1.    Management Agreements/Servicing Agreements/Facility Administration Agreement .
(A)    Each Management Agreement, duly executed counterparts of which have been delivered to the Administrative Agent, sets forth the covenants and obligations of the Manager with respect to the Solar Assets and other matters addressed in the Management Agreements, and reference is hereby made to the Management Agreements for a detailed statement of said covenants and obligations of the Manager thereunder. The Borrower shall cause the Manager (to the extent an Affiliate of the Borrower) and each Relevant Party that is party to a Management Agreement to (i) perform and observe all of the material terms, covenants and conditions of each Management Agreement and (ii) promptly notify the Administrative Agent of any notice to Borrower, a Managing Member or SAP of any material default under any Management Agreement.
(B)    Each Servicing Agreement, duly executed counterparts of which have been delivered to the Administrative Agent, sets forth the covenants and obligations of the Manager with respect to the Solar Assets and other matters addressed in the Servicing Agreement, and reference is hereby made to the Servicing Agreements for a detailed statement of said covenants and obligations of the Manager thereunder. The Borrower shall cause the Manager (to the extent an Affiliate of the

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Borrower) and each Relevant Party that is party to a Servicing Agreement to (i) perform and observe all of the material terms, covenants and conditions of each Servicing Agreement and (ii) promptly notify the Administrative Agent of any notice to Borrower, a Managing Member or SAP of any material default under any Servicing Agreement.
(C)     The Facility Administration Agreement, duly executed counterparts of which have been delivered to the Administrative Agent, sets forth the covenants and obligations of the Facility Administrator with respect to the Collateral and other matters addressed in the Facility Administration Agreement, and reference is hereby made to the Facility Administration Agreement for a detailed statement of said covenants and obligations of the Facility Administrator thereunder. The Borrower agrees that (i) the Administrative Agent, in its name or (to the extent required by law) in the name of the Borrower, may (but is not, unless so directed and indemnified by the Majority Lenders, required to) enforce all rights of the Borrower under the Facility Administration Agreement for and on behalf of the Lenders whether or not an Event of Default has occurred and is continuing and (ii) upon the occurrence and during the continuation of an Event of Default, the Majority Class B Lenders may request that the Administrative Agent, in the Administrative Agent’s name or (to the extent required by law) in the name of the Borrower, and the Administrative Agent may (but is not required to) enforce all rights of such Borrower under the Facility Administration Agreement for an on behalf of the Lenders.
(B)    Promptly following a request from the Administrative Agent (acting at the direction of the Majority Lenders or, upon the occurrence and during the continuation of an Event of Default, the Majority Class B Lenders) to do so, the Borrower shall take all such lawful action as the Administrative Agent may request to compel or secure the performance and observance by the Facility Administrator of each of its obligations to the Borrower and with respect to the Collateral under or in connection with the Facility Administration Agreement in accordance with the terms thereof, and in effecting such request shall exercise any and all rights, remedies, powers and privileges lawfully available to the Borrower under or in connection with the Facility Administration Agreement to the extent and in the manner directed by the Administrative Agent, including the transmission of notices of default on the part of the Facility Administrator thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Facility Administrator of each of its obligations under the Facility Administration Agreement.
(C)    The Borrower shall not waive any default by the Facility Administrator under the Facility Administration Agreement without the written consent of the Administrative Agent, the Majority Lenders and the Majority Class B Lenders (consent by the Majority Class B Lenders to not be unreasonably withheld, conditioned or delayed if otherwise approved by the Majority Lenders; provided that if the Majority Class B Lenders have not affirmatively disapproved such waiver in writing within five (5) Business Days of receiving notice of such waiver and the Majority Lenders have otherwise approved such waiver, such waiver shall be deemed approved).

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(D)    The Administrative Agent does not assume any duty or obligation of the Borrower under the Facility Administration Agreement and the rights given to the Administrative Agent thereunder are subject to the provisions of Article VII.
(E)    The Borrower has not and will not provide any payment instructions to any of the Managing Members, SAP or a Financing Fund that are inconsistent with the Facility Administration Agreement or this Agreement.
(F)    With respect to the Facility Administrator’s obligations under Section 3.3 of the Facility Administration Agreement, the Administrative Agent shall not have any responsibility to the Borrower, the Facility Administrator or any party hereunder to make any inquiry or investigation as to, and shall have no obligation in respect of, the terms of any engagement of an independent accountant by the Facility Administrator; provided that the Administrative Agent shall be authorized, upon receipt of written direction from Facility Administrator directing the Administrative Agent, to execute any acknowledgment or other agreement with the independent accountant required for the Administrative Agent to receive any of the reports or instructions provided for herein, which acknowledgment or agreement may include, among other things, (i) acknowledgement that the Facility Administrator has agreed that the procedures to be performed by the independent accountant are sufficient for the Borrower’s purposes, (ii) acknowledgment that the Administrative Agent has agreed that the procedures to be performed by an independent accountant are sufficient for the Administrative Agent’s purposes and that the Administrative Agent’s purposes is limited solely to receipt of the report, (iii) releases by the Administrative Agent (on behalf of itself and the Lenders) of claims against the independent accountant and acknowledgement of other limitations of liability in favor of the independent accountant, and (iv) restrictions or prohibitions on the disclosure of information or documents provided to it by such firm of independent accountants (including to the Lenders). Notwithstanding the foregoing, in no event shall the Administrative Agent be required to execute any agreement in respect of the independent accountant that the Administrative Agent determines adversely affects it in its individual capacity or which is in a form that is not reasonably acceptable to the Administrative Agent.
Section 8.2.    Accounts.
(A)    Establishment. The Borrower has established and shall maintain or cause to be maintained:
(i)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, the “Collection Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Borrower and the Secured Parties;

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(ii)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, being the “Supplemental Reserve Account”), bearing a designation clearly indicating that the funds deposited therein as described below are held for the benefit of the Borrower and the Secured Parties;
(iii)     for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, being the “Liquidity Reserve Account”), bearing a designation clearly indicating that the funds deposited therein as described below are held for the benefit of the Borrower and the Secured Parties;
(iv)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, being the “SAP Revenue Account”), bearing a designation clearly indicating that the funds deposited therein as described below are held for the benefit of the Borrower and the Secured Parties; and
(v)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, being the “Takeout Transaction Account”, and together with the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account and the Takeout Transaction Account, each a “Paying Agent Account” and collectively the “Paying Agent Accounts”), bearing a designation clearly indicating that the funds deposited therein as described below are held for the benefit of the Borrower and the Secured Parties.
(B)    [Reserved].
(C)    Deposits and Withdrawals from the Liquidity Reserve Account. Deposits into, and withdrawals from, the Liquidity Reserve Account shall, subject to Section 2.7(D), be made in the following manner:
(i)    On the Closing Date, the Borrower shall deliver to the Paying Agent for deposit into the Liquidity Reserve Account, an amount equal to the Liquidity Reserve Account Required Balance as of such date;
(ii)    From the proceeds of Advances hereunder, the Borrower shall deliver to the Paying Agent for deposit into the Liquidity Reserve Account amounts necessary to maintain on deposit therein an amount equal to or in excess of the Liquidity Reserve Account Required Balance as of the date of each such Advance, and on each Payment Date, the Facility

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Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to deposit into the Liquidity Reserve Account from available Collections (as set forth and in the order of priority established pursuant to Section 2.7(B)), funds in the amount required under Section 2.7(B), and the Borrower may, at its option, deposit additional funds into the Liquidity Reserve Account;
(iii)    If on any Payment Date (without giving effect to any withdrawal from the Liquidity Reserve Account) available funds on deposit in the Collection Account would be insufficient to make the payments due and payable on such Payment Date pursuant to Sections 2.7(B)(i) through (iii), the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report delivered pursuant to Section 3.1 of the Facility Administration Agreement, to withdraw from the Liquidity Reserve Account an amount equal to the lesser of such insufficiency and the amount on deposit in the Liquidity Reserve Account and deposit such amount into the Collection Account and apply such amount to payments set forth in Sections 2.7(B)(i) through (iii);
(iv)    Upon the occurrence of an Event of Default, the Administrative Agent (or the Facility Administrator with the written consent of the Administrative Agent) shall cause the Paying Agent, by providing written direction to the Paying Agent, to withdraw all amounts on deposit in the Liquidity Reserve Account and deposit such amounts into the Collection Account for distribution in accordance with Section 2.7(B);
(v)    On the earliest to occur of (a) the Maturity Date, (b) an Amortization Event (other than an Event of Default) and (c) the date on which the outstanding balance of the Advances is reduced to zero, the Administrative Agent shall cause the Paying Agent, by providing written direction to the Paying Agent, in the case of subclauses (a) and (b), and the Facility Administrator or the Borrower shall cause the Paying Agent, by providing written direction to the Paying Agent, in the case of subclause (c), to withdraw all amounts on deposit in the Liquidity Reserve Account and deposit such amounts into the Collection Account to be paid in accordance with Section 2.7(B);
(vi)    Unless an Event of Default or an Amortization Event has occurred and is continuing, on any Payment Date, if, as set forth on the Facility Administrator Report, amounts on deposit in the Liquidity Reserve Account are greater than the Liquidity Reserve Account Required Balance (after giving effect to all other distributions and disbursements on such Payment Date), the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to withdraw funds in excess of the Liquidity Reserve Account Required Balance from the Liquidity Reserve Account and disburse such amounts into the TEP Collateral Account; and

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(vii)    On any Payment Date, if, as set forth on the Facility Administrator Report, the amount of funds in the Liquidity Reserve Account and in the Collection Account is equal to or greater than the aggregate outstanding balance of Advances (whether or not then due and payable) and all other amounts due and payable hereunder, then the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to withdraw all funds from the Liquidity Reserve Account and deposit such amounts into the Collection Account to pay all such amounts and the aggregate outstanding balance of all Advances (whether or not then due and payable).
Notwithstanding anything in this Section 8.2(C) to the contrary, in lieu of or in substitution for moneys otherwise required to be deposited to the Liquidity Reserve Account, the Borrower (or the Facility Administrator on behalf of the Borrower) may deliver or cause to be delivered to the Paying Agent a Letter of Credit; provided that any deposit into the Liquidity Reserve Account required to be made by the Borrower (or the Facility Administrator on behalf of the Borrower) after the replacement of amounts on deposit in the Liquidity Reserve Account with a Letter of Credit shall be made by the Borrower (or the Facility Administrator on behalf of the Borrower) by way of cash deposits to the Liquidity Reserve Account as provided in Section 2.7(B) or pursuant to the Borrower’s (or the Facility Administrator’s on behalf of the Borrower) causing an increase in the Letter of Credit or the delivery to the Paying Agent of an additional Letter of Credit.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Liquidity Reserve Account, and if any withdrawals from the Liquidity Reserve Account will be required under this Section 8.2(C) or otherwise, the Administrative Agent (or the Borrower with the written consent of the Administrative Agent) shall, no later than three (3) Business Days prior to the applicable Payment Date or payment date, direct the Paying Agent in writing to draw on the Letter of Credit, which direction shall provide the required draw amount. The Administrative Agent (or the Borrower with the written consent of the Administrative Agent) shall direct the Paying Agent to submit the drawing documents to the applicable Eligible Letter of Credit Bank no later than 5:00 P.M. (New York City time) on the second (2nd) Business Day after the Paying Agent receives such direction. Upon the receipt of the proceeds of any such drawing, the Paying Agent shall deposit such proceeds into the Liquidity Reserve Account. Any (A) references in the Transaction Documents to amounts on deposit in the Liquidity Reserve Account or amounts in or credited to the Liquidity Reserve Account shall include or be deemed to include the aggregate available amount of the Letters of Credit delivered to the Paying Agent pursuant to this Section 8.2(C), and (B) Letter of Credit delivered by the Borrower (or the Facility Administrator on behalf of the Borrower) to the Paying Agent pursuant to this Section 8.2(C) shall be held as an asset of the Liquidity Reserve Account and valued for purposes of determining the amount on deposit in the Liquidity Reserve Account at the amount as of any date then available to be drawn on such Letter of Credit.

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If at any time a Letter of Credit is held by the Paying Agent as an asset of the Liquidity Reserve Account, then: (i) if the Letter of Credit is scheduled to expire by its terms and ten (10) days prior to the scheduled expiration date such Letter of Credit has not been extended or replaced, then the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall on such tenth (10th) day prior to the scheduled expiration date notify the Paying Agent in writing of such failure to extend or replace the Letter of Credit, and the Paying Agent shall, submit the drawing documents delivered to it by the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent to the Eligible Letter of Credit Bank no later than 5:00 P.M. (New York City time) on the second (2nd) Business Day prior to the scheduled expiration date and draw the full amount of such Letter of Credit and deposit the proceeds of such drawing into the Liquidity Reserve Account, and (ii) if the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent notifies the Paying Agent in writing that the financial institution issuing the Letter of Credit ceases to be an Eligible Letter of Credit Bank or a Responsible Officer of the Paying Agent otherwise receives written notice that the financial institution issuing the Letter of Credit ceases to be an Eligible Letter of Credit Bank, then the Paying Agent shall, no later than the second (2nd) Business Day after receipt of any such written notice by a Responsible Officer of the Paying Agent submit the drawing documents delivered to it by the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent to draw the full amount of such Letter of Credit and deposit the proceeds of such drawing into the Liquidity Reserve Account.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Liquidity Reserve Account, the stated amount of the Letter of Credit may be reduced from time to time, to the extent of any reduction in the dollar amount of the Liquidity Reserve Account Required Balance. Each month upon receipt by the Paying Agent of the Facility Administrator Report if such Facility Administrator Report shows a reduction in the Liquidity Reserve Account Required Balance, then the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall, prior to the related Payment Date, direct the Paying Agent to send the Eligible Letter of Credit Bank a letter in the form provided in the Letter of Credit to reduce the stated amount of the Letter of Credit. The Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall ensure that the letter submitted shall provide for the reduction to be effective as of the close of business on the related Payment Date. The reduction shall be in the amount shown on the Facility Administrator Report as the Liquidity Reserve Account “reductions” and the remaining stated amount of the Letter of Credit shall be equal to the Liquidity Reserve Account Required Balance “ending required amount” as shown on the Facility Administrator Report. Any drawing on the Letter of Credit may be reimbursed by the Borrower only from amounts remitted to the Borrower pursuant to clauses (xvi) or (xvii) of Section 2.7(B) or clauses (v) or (vi) of Section 2.7(C).

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Notwithstanding the foregoing or any other provision to the contrary in this Agreement or any other Transaction Document, in no event shall the Paying Agent be required to report, track, calculate or monitor the value, available amount or any other information regarding any Letter of Credit for any party hereto or beneficiary of or under the Liquidity Reserve Account, except as expressly required pursuant to this Section 8.2(C).
(D)    Deposits and Withdrawals from the Supplemental Reserve Account. Deposits into, and withdrawals from, the Supplemental Reserve Account shall, subject to Section 2.7(D), be made in the following manner:
(i)    On each Payment Date, to the extent of Distributable Collections and in accordance with and subject to the priority of payments set forth in Section 2.7(B), the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to deposit into the Supplemental Reserve Account an amount equal to the Supplemental Reserve Account Deposit until the amount on deposit equals the Supplemental Reserve Account Required Balance.
(ii)    On each Payment Date, the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to deposit into the Supplemental Reserve Account from available Collections (as set forth and in the order of priority established pursuant to Section 2.7(B)), funds in the amount required under Section 2.7(B), if any, and the Borrower may, at its option, deposit additional funds into the Supplemental Reserve Account;
(iii)    The Paying Agent shall release funds from the Supplemental Reserve Account to pay the following amounts upon direction from the Facility Administrator set forth in an Officer’s Certificate (no more than once per calendar month) in the following order of priority:
(a)
the costs (inclusive of labor costs) of replacement of any Inverter that no longer has the benefit of a Manufacturer Warranty and for which (1) the Manager is not obligated under the related Management Agreement to cover the replacement costs of such Inverter (or if so obligated, has failed to pay such costs) and the related Financing Fund has insufficient funds to pay replacement costs for such Inverter or (2) the Facility Administrator in its role as Manager has paid under the related Management Agreement;
(b)
the amount of any deductible in connection with each claim paid by the Tax Loss Insurer under the related Tax Loss Insurance Policy plus the amount of the difference, if any, between (1) the amount of a Tax

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Loss Indemnity and (2) the sum of the amount of proceeds of a Tax Loss Insurance Policy received by a Financing Fund, as loss payee under such Tax Loss Insurance Policy with respect to the Tax Loss Indemnity and the amount of any deductible in connection therewith; and
(c)
each Purchase Option Price when due and payable under the terms of a Financing Fund LLCA upon exercise by the related Managing Member of the related Purchase Option.
(iv)    Unless an Event of Default or an Amortization Event has occurred and is continuing, on any Payment Date, if, as set forth on the Facility Administrator Report, amounts on deposit in the Supplemental Reserve Account are greater than the Supplemental Reserve Account Required Balance (after giving effect to all other distributions and disbursements and all releases and withdrawals on such Payment Date), the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to withdraw funds in excess of the Supplemental Reserve Account Required Balance from the Supplemental Reserve Account and disburse such amounts into the TEP Collateral Account;
(v)    If on any Payment Date (after giving effect to any withdrawals from the Liquidity Reserve Account) available funds on deposit in the Collection Account would be insufficient to pay the interest payments or other amounts due and payable pursuant to Sections 2.7(B)(i) through (iii) on such Payment Date, the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to withdraw from the Supplemental Reserve Account an amount equal to the lesser of such insufficiency and the amount on deposit in the Supplemental Reserve Account and deposit such amount into the Collection Account and apply such amount to payments set forth in Sections 2.7(B)(i) through (iii); and
(vi)    If on any Payment Date, the Borrower has provided notice to the Administrative Agent that (1) a Managing Member has irrevocably provided notice to the related Tax Equity Investor that it will not exercise the related Purchase Option or (2) the period in which such Purchase Option may be exercised under the related Financing Fund LLCA has expired and cannot be extended, the Borrower may direct the Paying Agent, to withdraw from the Supplemental Reserve Account any amounts on deposit therein in respect of clause (ii)(a) of the definition of “Supplemental Reserve Account Required Balance” and deposit such amounts into the Collection Account for application in accordance with Section 2.7; and

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(vii)    On the date on which the Aggregate Outstanding Advances are reduced to zero, the Administrative Agent shall cause the Paying Agent, pursuant to a written direction, to withdraw all amounts on deposit in the Supplemental Reserve Account and deposit such amounts into the Collection Account to be paid in accordance with Section 2.7(B).

Notwithstanding anything in this Section 8.2(D) to the contrary, in lieu of or in substitution for moneys otherwise required to be deposited to the Supplemental Reserve Account, the Borrower (or the Facility Administrator on behalf of the Borrower) may deliver or cause to be delivered to the Paying Agent a Letter of Credit; provided that any deposit into the Supplemental Reserve Account required to be made by the Borrower (or the Facility Administrator on behalf of the Borrower) after the replacement of amounts on deposit in the Supplemental Reserve Account with a Letter of Credit shall be made by the Borrower (or the Facility Administrator on behalf of the Borrower) by way of cash deposits to the Supplemental Reserve Account as provided in Section 2.7(B) or pursuant to the Borrower’s (or the Facility Administrator’s on behalf of the Borrower) causing an increase in the Letter of Credit or the delivery to the Paying Agent of an additional Letter of Credit.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Supplemental Reserve Account, and if any withdrawals from the Supplemental Reserve Account will be required under this Section 8.2(D) or otherwise, the Administrative Agent (or the Borrower with the written consent of the Administrative Agent) shall, no later than three (3) Business Days prior to the applicable Payment Date or payment date, direct the Paying Agent in writing to draw on the Letter of Credit, which direction shall provide the required draw amount. The Administrative Agent (or the Borrower with the written consent of the Administrative Agent) shall direct the Paying Agent to submit the drawing documents to the applicable Eligible Letter of Credit Bank no later than 5:00 P.M. (New York City time) on the second (2nd) Business Day after the Paying Agent receives such direction. Upon the receipt of the proceeds of any such drawing, the Paying Agent shall deposit such proceeds into the Supplemental Reserve Account. Any (A) references in the Transaction Documents to amounts on deposit in the Supplemental Reserve Account or amounts in or credited to the Supplemental Reserve Account shall include or be deemed to include the aggregate available amount of the Letters of Credit delivered to the Paying Agent pursuant to this Section 8.2(D), and (B) Letter of Credit delivered by the Borrower (or the Facility Administrator on behalf of the Borrower) to the Paying Agent pursuant to this Section 8.2(D) shall be held as an asset of the Supplemental Reserve Account and valued for purposes of determining the amount on deposit in the Supplemental Reserve Account at the amount as of any date then available to be drawn on such Letter of Credit.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Supplemental Reserve Account, then: (i) if the Letter of Credit is scheduled to expire by its terms and ten (10) days prior to the scheduled expiration date such Letter of Credit has not been extended or replaced, then the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall on such tenth (10th) day prior to the scheduled expiration date notify the Paying Agent in writing of such failure to extend or replace the Letter of Credit, and the Paying Agent shall, submit the drawing documents delivered to it by the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent to the Eligible Letter of Credit Bank no later than 5:00 P.M. (New York City time) on the second (2nd) Business Day prior to the scheduled expiration date

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and draw the full amount of such Letter of Credit and deposit the proceeds of such drawing into the Supplemental Reserve Account, and (ii) if the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent notifies the Paying Agent in writing that the financial institution issuing the Letter of Credit ceases to be an Eligible Letter of Credit Bank or a Responsible Officer of the Paying Agent otherwise receives written notice that the financial institution issuing the Letter of Credit ceases to be an Eligible Letter of Credit Bank, then the Paying Agent shall, no later than the second (2nd) Business Day after receipt of any such written notice by a Responsible Officer of the Paying Agent submit the drawing documents delivered to it by the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent to draw the full amount of such Letter of Credit and deposit the proceeds of such drawing into the Supplemental Reserve Account.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Supplemental Reserve Account, the stated amount of the Letter of Credit may be reduced from time to time, to the extent of any reduction in the dollar amount of the Supplemental Reserve Account Required Balance. Each month upon receipt by the Paying Agent of the Facility Administrator Report if such Facility Administrator Report shows a reduction in the Supplemental Reserve Account Required Balance, then the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall, prior to the related Payment Date, direct the Paying Agent to send the Eligible Letter of Credit Bank a letter in the form provided in the Letter of Credit to reduce the stated amount of the Letter of Credit. The Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall ensure that the letter submitted shall provide for the reduction to be effective as of the close of business on the related Payment Date. The reduction shall be in the amount shown on the Facility Administrator Report as the Supplemental Reserve Account “reductions” and the remaining stated amount of the Letter of Credit shall be equal to the Supplemental Reserve Account Required Balance “ending required amount” as shown on the Facility Administrator Report. Any drawing on the Letter of Credit may be reimbursed by the Borrower only from amounts remitted to the Borrower pursuant to clauses (xvi) or (xvii) of Section 2.7(B) or clauses (v) or (vi) of Section 2.7(C).
Notwithstanding the foregoing or any other provision to the contrary in this Agreement or any other Transaction Document, in no event shall the Paying Agent be required to report, track, calculate or monitor the value, available amount or any other information regarding any Letter of Credit for any party hereto or beneficiary of or under the Supplemental Reserve Account, except as expressly required pursuant to this Section 8.2(D).

    (E)    Deposits and Withdrawals from the SAP Revenue Account. Deposits into the SAP Revenue Account shall be made consistent with Section 5.1(R). The Paying Agent shall withdraw all amounts on deposit in the SAP Revenue Account in excess of $25,000 on the first Business Day of each calendar month and remit such amounts to the Collection Account. The Manager shall be permitted to withdraw up to $25,000 in the aggregate during each Collection Period from the SAP Revenue Account to pay Operational Amounts in accordance with the related SAP Financing Documents. On the date on which the Aggregate Outstanding Advances are reduced to zero, the Administrative Agent shall cause the Paying Agent, pursuant to a written direction, to withdraw all amounts on deposit in the SAP Revenue and deposit such amounts into the Collection Account to be paid in accordance with Section 2.7(B).


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(F)    Paying Agent Account Control. (i) Each Paying Agent Account shall be established and at all times maintained with the Paying Agent which shall act as a “securities intermediary” (as defined in Section 8-102 of the UCC) and a “bank” (as defined in Section 9-102 of the UCC) hereunder (in such capacities, the “Securities Intermediary”) with respect to each Paying Agent Account. The Paying Agent hereby confirms that, as of the Closing Date, the account numbers of each of the Paying Agent Accounts are as described on Schedule II attached hereto.

(ii)    Each Paying Agent Account shall be a “securities account” as defined in Section 8-501 of the UCC and shall be maintained by the Paying Agent as a securities intermediary for and in the name of the Borrower, subject to the lien of the Administrative Agent, for the benefit of the Secured Parties.  The Paying Agent shall treat the Administrative Agent as the “entitlement holder” (within the meaning of Section 8-102(a)(7) of the UCC) in respect of all “financial assets” (within the meaning of Section 8-102(a)(9) of the UCC) credited to the Paying Agent Accounts.

(iii)    The Paying Agent hereby confirms and agrees that:

(a)    the Paying Agent shall not change the name or account number of any Paying Agent Account without the prior written consent of the Administrative Agent and the Borrower;

(b)    all securities or other property underlying any financial assets (as hereinafter defined) credited to a Paying Agent Account shall be registered in the name of the Paying Agent, indorsed to the Paying Agent or indorsed in blank or credited to another securities account maintained in the name of the Paying Agent, and in no case will any financial asset credited to a Paying Agent Account be registered in the name of the Borrower or any other Person, payable to the Borrower or specially indorsed to the Borrower or any other Person, except to the extent the foregoing have been specially indorsed to the Administrative Agent, for the benefit of the Secured Parties, or in blank;

(c)    all property transferred or delivered to the Paying Agent pursuant to this Agreement will be credited to the appropriate Borrower Account in accordance with the terms of this Agreement;

(d)    each Paying Agent Account is an account to which financial assets are or may be credited, and the Paying Agent shall, subject to the terms of this Agreement, treat each of the Borrower and the Facility Administrator as entitled to exercise the rights that comprise any financial asset credited to each such Paying Agent Account; and

(e)    notwithstanding the intent of the parties hereto, to the extent that any Paying Agent Account shall be determined to constitute a “deposit account” within the meaning of Section 9-102(a)(29) of the UCC, such Paying Agent Account shall be subject to the exclusive control of the Administrative Agent, for the benefit of the Secured Parties, and the Paying Agent will comply with instructions originated by

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the Administrative Agent directing disposition of the funds in such Paying Agent Account, without further consent by the Borrower or the Facility Administrator; provided that, notwithstanding the foregoing, the Administrative Agent hereby authorizes the Paying Agent to honor withdrawal, payment, transfer or other instructions directing disposition of the funds in the Collection Account received from the Borrower or the Facility Administrator, on its behalf, pursuant to Section 2.7 or this Section 8.2.

(iv)    The Paying Agent hereby agrees that each item of property (including, without limitation, any investment property, financial asset, security, instrument or cash) credited to any Paying Agent Account shall be treated as a “financial asset” within the meaning of Section 8-102(a)(9) of the UCC.

(v)    If at any time the Paying Agent shall receive an “entitlement order” (as defined in Section 8-102(a)(8) of the UCC) (an “Entitlement Order”) from the Administrative Agent (i.e., an order directing a transfer or redemption of any financial asset in any Paying Agent Account), or any “instruction” (within the meaning of Section 9-104 of the UCC), originated by the Administrative Agent, the Paying Agent shall comply with such Entitlement Order or instruction without further consent by the Borrower, the Facility Administrator or any other Person. Neither the Facility Administrator nor the Borrower shall make any withdrawals from any Paying Agent Account, except pursuant to Section 2.7 or this Section 8.2.

(vi)    In the event that the Paying Agent has or subsequently obtains by agreement, by operation of law or otherwise a security interest in any Paying Agent Account or any financial assets, funds, cash or other property credited thereto or any security entitlement with respect thereto, the Paying Agent hereby agrees that such security interest shall be subordinate to the security interest of the Administrative Agent, for the benefit of the Secured Parties. Notwithstanding the preceding sentence, the financial assets, funds, cash or other property credited to any Paying Agent Account will not be subject to deduction, set-off, banker’s lien, or any other right in favor of any Person other than the Administrative Agent, for the benefit of the Secured Parties (except that the Paying Agent may set-off (i) all amounts due to the Paying Agent in its capacity as securities intermediary in respect of customary fees and expenses for the routine maintenance and operation of the Paying Agent Accounts, and (ii) the face amount of any checks that have been credited to the Paying Agent Accounts but are subsequently returned unpaid because of uncollected or insufficient funds).

(vii)    Regardless of any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the “bank’s jurisdiction” (within the meaning of Section 9-304 of the UCC) and the “security intermediary’s jurisdiction” (within the meaning of Section 8-110 of the UCC).

(viii)    If, at any time, the Paying Agent resigns, is removed hereunder or ceases to meet the eligibility requirements of an Eligible Institution, the Facility Administrator, for the benefit of the Administrative Agent and the Lenders, shall within thirty (30) days establish a new Collection Account, Supplemental Reserve Account, Liquidity Reserve

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Account, the SAP Revenue Account, and Takeout Transaction Account meeting the conditions specified above with an Eligible Institution reasonably acceptable to the Administrative Agent and transfer any cash and/or any investments held therein or with respect thereto to such new Collection Account, Supplemental Reserve Account, Liquidity Reserve Account, SAP Revenue Account, or Takeout Transaction Account, as applicable. From the date such new Collection Account, Supplemental Reserve Account, Liquidity Reserve Account, SAP Revenue Account, or Takeout Transaction Account is established, it shall be the “Collection Account,” “Supplemental Reserve Account,” “Liquidity Reserve Account,” “SAP Revenue Account,” or “Takeout Transaction Account” hereunder, as applicable.

(G)    Permitted Investments. Prior to an Event of Default, the Facility Administrator (and after an Event of Default, the Administrative Agent) may direct each banking institution at which the Collection Account, the Liquidity Reserve Account, Supplemental Reserve Account, SAP Revenue Account, or Takeout Transaction Account shall be established, in writing, to invest the funds held in such accounts in one or more Permitted Investments. Absent such written direction, such funds shall remain uninvested. All investments of funds on deposit in the Collection Account, the Liquidity Reserve Account, Supplemental Reserve Account, SAP Revenue Account, or Takeout Transaction Account shall be uninvested so that such funds will be available on the Business Day immediately preceding the date on which the funds are to be disbursed from such account, unless otherwise expressly set forth herein. All interest derived from such Permitted Investments shall be deemed to be “investment proceeds” and shall be deposited into such account to be distributed in accordance with the requirements hereof. The taxpayer identification number associated with the Collection Account, the Liquidity Reserve Account, Supplemental Reserve Account, SAP Revenue Account, and Takeout Transaction Account shall be that of the Borrower, and the Borrower shall report for federal, state and local income tax purposes the income, if any, earned on funds in such accounts.

Section 8.3.    Adjustments. If the Facility Administrator makes a mistake with respect to the amount of any Collection or payment and deposits, pays or causes to be deposited or paid, an amount that is less than or more than the actual amount thereof, the Facility Administrator shall appropriately adjust the amounts subsequently deposited into the applicable account or paid out to reflect such mistake for the date of such adjustment. Any Eligible Solar Asset in respect of which a dishonored check is received shall be deemed not to have been paid.

ARTICLE IX
THE PAYING AGENT

Section 9.1.    Appointment. The appointment of Wells Fargo Bank, National Association is hereby confirmed by the other parties hereto (other than the Verification Agent) as Paying Agent, and accepts such appointment subject to the terms of this Agreement.

Section 9.2.    Representations and Warranties. The Paying Agent represents to the other parties hereto as follows:


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(A)    Organization; Corporate Powers. The Paying Agent is duly incorporated and validly existing under the laws of the jurisdiction of its incorporation and has all requisite power and authority to conduct its business, to own its property and to execute, deliver and perform all of its obligations under this Agreement, and no license, permit, consent or approval, is required to be obtained, effective or given by the Paying Agent to enable it to perform its obligations hereunder.
(B)    Authority. The execution, delivery and performance by the Paying Agent of this Agreement have been duly authorized by all necessary action on the part of the Paying Agent.
(C)    Enforcement. This Agreement constitutes the legal, valid and binding obligation of the Paying Agent, enforceable against the Paying Agent in accordance with its terms except as such enforcement may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and general principles of equity, regardless of whether such enforcement is sought at equity or at law.
(D)    No Conflict. The Paying Agent is not in violation of any law, rule, or regulation governing the banking or trust powers of the Paying Agent applicable to it or any indenture, lease, loan or other agreement to which the Paying Agent is a party or by which it or its assets may be bound or affected, except for such laws, rules or regulations or indentures, leases, loans or other agreements the violation of which would not have a material adverse effect on the Paying Agent’s abilities to perform its obligations in accordance with the terms of this Agreement.
Section 9.3.    Limitation of Liability of the Paying Agent. Notwithstanding anything contained herein to the contrary, this Agreement has been executed by Wells Fargo Bank, National Association, not in its individual capacity, but solely as the Paying Agent, and in no event shall Wells Fargo Bank, National Association have any liability for the representations, warranties, covenants, agreements or other obligations of the other parties hereto or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the party responsible therefor.
Section 9.4.    Certain Matters Affecting the Paying Agent. Notwithstanding anything herein to the contrary:
(A)    The Paying Agent undertakes to perform such duties and only such duties as are specifically set forth in this Agreement. The Paying Agent shall not have any duties or responsibilities except those expressly set forth in this Agreement.

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(B)    The Paying Agent shall not be subject to any fiduciary or other implied duties, obligations or covenants regardless of whether an Event of Default has occurred and is continuing.
(C)    The Paying Agent shall not be liable for any action taken or any error of judgment made in good faith by an officer or officers of the Paying Agent, unless it shall be conclusively determined by the final judgment of a court of competent jurisdiction not subject to appeal or review that the Paying Agent was grossly negligent or acted with willful misconduct in ascertaining the pertinent facts.
(D)    The Paying Agent shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with any direction given or certificate or other document delivered to the Paying Agent under this Agreement or any other Transaction Document.
(E)    None of the provisions of this Agreement or any other Transaction Document shall require the Paying Agent to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.
(F)    The Paying Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties, and shall be under no obligation to inquire as to the adequacy, content, accuracy or sufficiency of any such information or be under any obligation to make any calculation (or re-calculation), certification, or verification in respect of any such information and shall not be liable for any loss that may be occasioned thereby. The Paying Agent may also, but shall not be required to, 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.
(G)    Whenever in the administration of the provisions of this Agreement or any other Transaction Document the Paying Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action to be taken hereunder, such matter may, in the absence of gross negligence, willful misconduct or bad faith on the part of the Paying Agent, be deemed to be conclusively proved and established by a certificate delivered to the Paying Agent hereunder, and such certificate, in the absence of gross negligence, willful misconduct or bad faith on the part of the Paying Agent, shall be full

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warrant to the Paying Agent for any action taken, suffered or omitted by it under the provisions of this Agreement or any other Transaction Document.

(H)    The Paying Agent, at the expense of the Borrower, may consult with counsel, and the advice or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or opinion of counsel; provided however that such costs of counsel are reasonable and documented. Before the Paying Agent acts or refrains from acting hereunder, it may require and shall be entitled to receive an Officer’s Certificate and/or an opinion of counsel, the costs of which (including the Paying Agent's reasonable and documented attorney's fees and expenses) shall be paid by the party requesting that the Paying Agent act or refrain from acting. The Paying Agent shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or opinion of counsel.

(I)    The Paying Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, entitlement order, approval or other paper or document.

(J)    Except as provided expressly in Section 8.2(G) hereof, the Paying Agent shall have no obligation to invest and reinvest any cash held in any of the accounts hereunder in the absence of a timely and specific written investment direction pursuant to the terms of this Agreement. In no event shall the Paying Agent be liable for the selection of investments or for investment losses incurred thereon. The Paying Agent shall have no liability in respect of losses incurred as a result of the liquidation of any investment prior to its stated maturity or the failure of another party to timely provide a written investment direction pursuant to the terms of this Agreement. Investments in any Permitted Investments are not obligations or recommendations of, or endorsed or guaranteed by, the Paying Agent or its Affiliates. The Paying Agent and its Affiliates may provide various services for Permitted Investments and may be paid fees for such services. Each party hereto understands and agrees that proceeds of the sale of investments of the funds in any account maintained with the Paying Agent will be deposited by the Paying Agent into the applicable accounts on the Business Day on which the Paying Agent receives appropriate instructions hereunder, if such instructions received by the Paying Agent prior to the deadline for same day sale of such investments. If the Paying Agent receives such instructions after the applicable deadline for the sale of such investments, such proceeds will be deposited by the Paying Agent into the applicable account on the next succeeding Business Day. The parties hereto agree that notifications after the completion of purchases and sales of investments shall not be provided by the Paying Agent hereunder, and the Paying Agent shall make available, upon request and in lieu of notifications, periodic account statements that reflect such investment activity. No statement shall be made available if no investment activity has occurred during such period.

(K)    The Paying Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians

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or nominees appointed with due care, and shall not be responsible for any action or omission on the part of any agent, attorney, custodian or nominee so appointed.

(L)    Any corporation or entity into which the Paying Agent may be merged or converted or with which it may be consolidated, or any corporation or entity resulting from any merger, conversion or consolidation to which the Paying Agent shall be a party, or any corporation or entity succeeding to the business of the Paying Agent shall be the successor of the Paying Agent hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.

(M)    In no event shall the Paying Agent be liable for punitive, special, indirect or consequential loss or damage of any kind whatsoever (including lost profits), even if the Paying Agent has been advised of such loss or damage and regardless of the form of action.

(N)    In no event shall the Paying Agent be liable for any failure or delay in the performance of its obligations under this Agreement or any related documents because of circumstances beyond the Paying Agent’s control, including a failure, termination, or suspension of a clearing house, securities depositary, settlement system or central payment system in any applicable part of the world or acts of God, flood, war (whether declared or undeclared), civil or military disturbances or hostilities, nuclear or natural catastrophes, political unrest, explosion, severe weather or accident, earthquake, terrorism, fire, riot, labor disturbances, strikes or work stoppages for any reason, embargo, government action, including any laws, ordinances, regulations or the like (whether domestic, federal, state, county or municipal or foreign) which delay, restrict or prohibit the providing of the services contemplated by this Agreement or any other Transaction Document or any related documents, or the unavailability of communications or computer facilities, the failure of equipment or interruption of communications or computer facilities, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility, or any other causes beyond the Paying Agent’s control whether or not of the same class or kind as specified above.

(O)    Knowledge of the Paying Agent shall not be attributed or imputed to any affiliate, line of business, or other division of Wells Fargo Bank, National Association (and vice versa).

(P)    The right of the Paying Agent to perform any permissive or discretionary act enumerated in this Agreement or any other Transaction Document shall not be construed as a duty.

(Q)    Absent gross negligence, bad faith or willful misconduct (in each case as conclusively determined by a court of competent jurisdiction pursuant to a final order or verdict not subject to appeal) on the part of, Wells Fargo Bank, National Association in acting in each of its capacities under this Agreement and the related Transaction Documents shall not constitute impermissible self-dealing or a conflict of interest, and the parties hereto

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hereby waive any conflict of interest presented by such service. Wells Fargo Bank, National Association may act as agent for, provide banking, custodial, collateral agency, verification and other services to, and generally engage in any kind of business, with others to the same extent as if Wells Fargo Bank, National Association, were not a party hereto. Nothing in this Agreement or any other Transaction Document shall in any way be deemed to restrict the right of Wells Fargo Bank, National Association to perform such services for any other person or entity, and the performance of such services for others will not, in and of itself, be deemed to violate or give rise to any duty or obligation to any party hereto not specifically undertaken by Wells Fargo Bank, National Association hereunder or under any other Transaction Document.

(R)    The Paying Agent shall not be responsible for preparing or filing any reports or returns relating to federal, state or local income taxes with respect to this Agreement or any other Transaction Document other than for the Paying Agent’s compensation.

(S)    The Paying Agent shall not be deemed to have notice or knowledge of, or be required to act based on, any event or information (including any Event of Default, Amortization Event or any other default and including the sending of any notice) unless a Responsible Officer of the Paying Agent has actual knowledge or shall have received written notice thereof. In the absence of such actual knowledge or receipt of such notice, the Paying Agent may conclusively assume that none of such events have occurred and the Paying Agent shall not have any obligation or duty to determine whether any Event of Default, Amortization Event or any other default has occurred. The delivery or availability of reports or other documents to the Paying Agent (including publicly available reports or documents) shall not constitute actual or constructive knowledge or notice of information contained in or determinable from those reports or documents, except for such information provided to be delivered under this Agreement to the Paying Agent; and knowledge or information acquired by any Responsible Officer of the Paying Agent in any of its respective capacities hereunder or under any other document related to this transaction, provided that the foregoing shall not relieve the Person acting as Paying Agent, as applicable, from its obligations to perform or responsibility for the manner of performance of its duties in a separate capacity under the Transaction Documents.

(T)     Except as otherwise provided in this Article IX:

(i)    except as expressly required pursuant to the terms of this Agreement, the Paying Agent shall not be required to make any initial or periodic examination of any documents or records for the purpose of establishing the presence or absence of defects, the compliance by the Borrower or any other Person with its representations and warranties or for any other purpose except as expressly required pursuant to the terms of this Agreement;

(ii)    whether or not therein expressly so provided, every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Paying Agent shall be subject to the provisions of this Article IX;


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(iii)    the Paying Agent shall not have any liability with respect to the acts or omissions of any other Person, and may assume compliance by each of the other parties to the Transaction Documents with their obligations thereunder unless a Responsible Officer of the Paying Agent is notified of any such noncompliance in writing;

(iv)    under no circumstances shall the Paying Agent be personally liable for any representation, warranty, covenant, obligation or indebtedness of any other party to the Transaction Documents (other than Wells Fargo Bank, National Association in any of its capacities under the Transaction Documents);

(v)    the Paying Agent shall not be held responsible or liable for or in respect of, and makes no representation or warranty with respect to (A) any recording, filing or depositing of this Agreement or any agreement referred to herein or any financing statement, continuation statement or amendments to a financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any re-recording, refiling or redepositing of any thereof, or (B) the existence, genuineness, value or protection of any collateral, for the legality, enforceability, effectiveness or sufficiency of the Transaction Documents or for the monitoring, creation, maintenance, enforceability, existence, status, validity, priority or perfection of any security interest, lien or collateral or the performance of any collateral; and

(vi)    the Paying Agent shall not be required to take any action hereunder if it shall have reasonably determined, or shall have been advised by its counsel, that such action is likely to result in liability on the part of the Paying Agent or is contrary to the terms hereof or any other Transaction Document to which it is a party or is not in accordance with applicable laws.

(U)    It is expressly understood and agreed by the parties hereto that the Paying Agent (i) has not provided nor will it provide in the future, any advice, counsel or opinion regarding the tax, financial, investment, securities law or insurance implications and consequences of the consummation, funding and ongoing administration of this Agreement and the matters contemplated herein, including, but not limited to, income, gift and estate tax issues, and the initial and ongoing selection and monitoring of financing arrangements, (ii) has not made any investigation as to the accuracy of any representations, warranties or other obligations of any other party to this Agreement or the other Transaction Documents or any other document or instrument and shall not have any liability in connection therewith and (iii) has not prepared or verified, or shall be responsible or liable for, any information, disclosure or other statement in any disclosure or offering document delivered in connection with this Agreement or the other Transaction Documents.

(V)    The recitals contained herein shall not be taken as the statements of the Paying Agent, and the Paying Agent does not assume any responsibility for their correctness. The Paying Agent does not make any representation regarding the validity, sufficiency or enforceability of this Agreement or the other Transaction Documents or as to the perfection or priority of any security interest therein, except as expressly set forth in Section 9.2(C).

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(W)    In the event that (i) the Paying Agent is unsure as to the application or interpretation of any provision of this Agreement or any other Transaction Document, (ii) this Agreement is silent or is incomplete as to the course of action that the Paying Agent is required or permitted to take with respect to a particular set of facts, or (iii) more than one methodology can be used to make any determination or calculation to be performed by the Paying Agent hereunder, then the Paying Agent may give written notice to the Administrative Agent requesting written instruction and, to the extent that the Paying Agent acts or refrains from acting in good faith in accordance with any such written instruction, the Paying Agent shall not be personally liable to any Person. If the Paying Agent shall not have received such written instruction within ten (10) calendar days of delivery of notice to the Administrative Agent (or within such shorter period of time as may reasonably be specified in such notice or as may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking any action, and shall have no liability to any Person for such action or inaction.

(X)    The Paying Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement or any other Transaction Document or to institute, conduct or defend any litigation hereunder or thereunder or in relation hereto or thereto at the request, order or direction of any of any Person, unless such Person with the requisite authority shall have offered to the Paying Agent security or indemnity satisfactory to the Paying Agent against the costs, expenses and liabilities (including the reasonable and documented fees and expenses of the Paying Agent's counsel and agents) which may be incurred therein or thereby.

(Y)    The Paying Agent shall have no duty (i) to maintain or monitor any insurance or (ii) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Collateral.

(Z)    Notwithstanding anything to the contrary in this Agreement, the Paying Agent shall not be required to take any action that is not in accordance with applicable law.

Section 9.5.    Indemnification. The Borrower and the Facility Administrator (for so long as the Facility Administrator is an Affiliate of the Borrower) agree, jointly and severally, to reimburse and indemnify, defend and hold harmless the Paying Agent, in its individual and representative capacities, and its officers, directors, agents and employees (collectively, the “Paying Agent Indemnified Parties”) against any and all fees, costs, damages, losses, suits, claims, judgments, liabilities, obligations, penalties, actions, expenses (including the reasonable and documented fees and expenses of counsel and court costs) or disbursements of any kind and nature whatsoever, regardless of the merit, which may be imposed on, incurred by or demanded, claimed or asserted against any of them in any way directly or indirectly relating to or arising out of or in connection with this Agreement or any other Transaction Document or any other document delivered in connection herewith or therewith or the transactions contemplated hereby or thereby, or the enforcement of any of the terms hereof or thereof or of any such other documents, including in connection with any enforcement (including any action, claim or suit brought) by any Paying Agent Indemnified Party of its rights hereunder or thereunder (including rights to indemnification),

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provided, that none of the Borrower or the Facility Administrator shall be liable for any of the foregoing to the extent arising from the gross negligence, willful misconduct or bad faith of the Paying Agent, as determined by the final judgment of a court of competent jurisdiction, no longer subject to appeal or review. The provisions of this Section 9.5 shall survive the discharge, termination or assignment of this Agreement or any related agreement or the earlier of the resignation or removal of the Paying Agent. This Section 9.5 shall not apply with respect to Taxes other than any Taxes that represent losses, liabilities, claims and damages arising from any non-Tax Proceeding. The Paying Agent Indemnified Parties’ reasonable and documented expenses are intended as expenses of administration.
Section 9.6.    Successor Paying Agent. The Paying Agent may resign at any time by giving at least thirty (30) days’ prior written notice thereof to the other parties hereto; provided, that no such resignation shall become effective until a successor Paying Agent that is satisfactory to the Administrative Agent and, to the extent no Event of Default or Amortization Event has occurred and is continuing, the Borrower, has been appointed hereunder. The Paying Agent may be removed at any time for cause by at least thirty (30) days’ prior written notice received by the Paying Agent from the Administrative Agent. Upon any such resignation or removal, the Administrative Agent shall have the right to appoint a successor Paying Agent that is satisfactory to the Borrower (unless an Event of Default or Amortization Event has occurred and is continuing). If no successor Paying Agent shall have been so appointed and shall have accepted such appointment within thirty (30) days after the exiting Paying Agent’s giving notice of resignation or receipt of notice of removal, then the exiting Paying Agent may, at the sole expense (including all fees, costs and expenses (including attorneys’ reasonable and documented fees and expenses) incurred in connection with such petition) of the Borrower, petition a court of competent jurisdiction to appoint a successor Paying Agent. Upon the acceptance of any appointment as the Paying Agent hereunder by a successor Paying Agent, such successor Paying Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the exiting Paying Agent, and the exiting Paying Agent shall be discharged from its duties and obligations hereunder. After any exiting Paying Agent’s resignation hereunder, the provisions of this Article IX shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Paying Agent hereunder. If the Paying Agent consolidates with, merges or converts into, or transfers or sells all or substantially all its corporate trust business or assets to, another Person, the resulting, surviving or transferee Person without any further act shall be the successor Paying Agent.
ARTICLE X    

MISCELLANEOUS
Section 10.1.    Survival. All representations and warranties made by the Borrower and the Facility Administrator herein and all indemnification obligations of the Borrower and the Facility

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Administrator hereunder shall survive, and shall continue in full force and effect, after the making and the repayment of the Advances hereunder and the termination of this Agreement.
Section 10.2.    Amendments, Etc.     (A) No amendment to or waiver of any provision of this Agreement, nor consent to any departure therefrom by the parties hereto, shall in any event be effective unless the same shall be in writing and signed by the Administrative Agent, on behalf of the Lenders and each Funding Agent, and the Borrower; provided that no such amendment or waiver shall (i) reduce the amount of or extend the maturity of any Advance or reduce the rate or extend the time of payment of interest thereon, or reduce or alter the timing of any other amount payable to any Lender hereunder, including amending or modifying any of the definitions related to such terms, in each case without the consent of the Lenders affected thereby, (ii) reduce the percentage specified in the definition of the Majority Class B Lenders without the written consent of all Class B Lenders, (iii) reduce the percentage specified in the definition of the Majority Lenders without the written consent of all Lenders, (iv) amend, modify or waive any provision of Sections 7.14 through 7.25 hereof without the written consent of all Funding Agents, (v) modify or amend this Agreement in a manner that could reasonably be expected to materially and adversely affect the Class B Lenders in a manner (economic or otherwise) disproportionate to the Class A Lenders, without the consent of the Class B Lenders, (vi) affect the rights or duties of the Paying Agent, Verification Agent or Facility Administrator under this Agreement without the written consent of such Paying Agent, Verification Agent or Facility Administrator, respectively, or (vii) amend or modify any provision of Section 6.1 or Section 6.2 without the consent of all Lenders. The Borrower agrees to provide notice to each party hereto of any amendments to or waivers of any provision of this Agreement; provided that the Borrower shall provide the Conduit Lender with prompt written notice of any amendment to any provision of this Agreement, prior to such amendment becoming effective.
(B)    Notwithstanding the foregoing or any other provision of this Agreement or any other Transaction Document to the contrary, the Administrative Agent, on behalf of the Lenders and each Funding Agent, and the Borrower may enter into an amendment hereto for the purpose of subdividing the Advances into separate tranches or reallocating the outstanding principal balance of the Advances among the Class A Advances and the Class B Advances; provided, no such amendment may be executed without the consent of all Lenders affected thereby; provided further, that such amendment shall be at the expense of the Lender or Lenders requesting such amendment and that none of the Borrower, Paying Agent or the Administrative Agent need enter into such amendment and no Lender need consent to such amendment if it would have a Material Adverse Effect on the payments, economics or obligations of any such party. Subject to the preceding sentence, each of the Borrower and the Facility Administrator agree to cooperate in effecting any amendment pursuant to this Section 10.2(B).

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(C)    Notwithstanding anything to the contrary set forth in this Section 10.2, the consent of the Administrative Agent shall not be required for any amendment made in accordance with Sections 5.1(A)(ix) and (x).
Section 10.3.    Notices, Etc.. All notices and other communications provided for hereunder shall be in writing and mailed or delivered by courier or facsimile: (A) if to the Borrower, to the Borrower, at its address at 20 Greenway Plaza, Suite 475, Houston, TX 77046. Attention: Chief Financial Officer and Treasurer, Facsimile: (281) 985‑9907, email address: treasury@sunnova.com; notices@sunnova.com; (B) if to the Facility Administrator, at its address at 20 Greenway Plaza, Suite 475, Houston, TX 77046, Attention: Chief Financial Officer and Treasurer, Facsimile: (281) 985‑9907, email address: treasury@sunnova.com; notices@sunnova.com; (C)  if to the Administrative Agent, the CS Funding Agent, the CS  Non-Conduit Lender or the Class B Lender, at its address at Credit Suisse AG, New York Branch, 11 Madison Avenue, 4th Floor, New York, NY 10010; Conduit and Warehouse Financing (212) 538‑2007; email address: list.afconduitreports@creditsuisse.com; abcp.monitoring@creditsuisse.com; (D) if to the CS Conduit Lender, at its address at Mountcliff Funding LLC, c/o 20 Gates Management LLC, 120 West 45th Street, Suite 3700, New York, NY 10036, Attention: 20 Gates Management / Mountcliff Funding, E-Mail: mountcliff@20gates.com; (E) if to the Paying Agent, at its address at 600 S. 4th Street, MAC N9300-061, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services – Asset-Backed Administration, E-mail: ctsabsservicer@wellsfargo.com; and (F) in the case of any party, at such address or other address as shall be designated by such party in a written notice to each of the other parties hereto. Notwithstanding the foregoing, each Facility Administrator Report described in Section 5.1(B) and the Borrowing Base Certificate described in Section 2.4 may be delivered by electronic mail; provided, that such electronic mail is sent by a Responsible Officer and each such Facility Administrator Report or the Borrowing Base Certificate is accompanied by an electronic reproduction of the signature of a Responsible Officer of the Borrower. All such notices and communications shall be effective, upon receipt, provided, that notice by facsimile or email shall be effective upon electronic or telephonic confirmation of receipt from the recipient.
Section 10.4.    No Waiver; Remedies. No failure on the part of the Administrative Agent or any Lender to exercise, and no delay in exercising, any right hereunder or under the Loan Notes shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
Section 10.5.    Indemnification. The Borrower agrees to indemnify the Administrative Agent, the Paying Agent, the Successor Facility Administrator, the Verification Agent, each Lender, and their respective Related Parties (collectively, the “Indemnitees”) from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses (including court costs and fees and expenses of counsel and of enforcing the Borrower’s indemnification obligations

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hereunder) to which such Indemnitee may become subject arising out of, resulting from or in connection with any claim, litigation, investigation or proceeding (each, a “Proceeding” (including any Proceedings under environmental laws)) relating to the Transaction Documents or any other agreement, document, instrument or transaction related thereto, the use of proceeds thereof and the transactions contemplated hereby, regardless of whether any Indemnitee is a party thereto and whether or not such Proceedings are brought by the Borrower, its equity holders, affiliates, creditors or any other third party, and to reimburse each Indemnitee upon written demand therefor (together with reasonable back‑up documentation supporting such reimbursement request) for any reasonable and documented legal or other out‑of‑pocket expenses incurred in connection with investigating or defending any of the foregoing of one law firm to all such Indemnitees, taken as a whole, and, in the case of a conflict of interest, of one additional counsel to the affected Indemnitee taken as a whole (and, if reasonably necessary, of one local counsel and/or one regulatory counsel in any material relevant jurisdiction); provided, that the foregoing indemnity and reimbursement obligation will not, as to any Indemnitee, apply to (A) losses, claims, damages, liabilities or related expenses (i) to the extent they are found in a final non‑appealable judgment of a court of competent jurisdiction to arise from the willful misconduct, bad faith or gross negligence of, or with respect to Indemnitees other than the Paying Agent or the Verification Agent, material breach of the Transaction Documents by, such Indemnitee or any of its affiliates or controlling persons or any of the officers, directors, employees, advisors or agents of any of the foregoing or (ii) arising out of any claim, litigation, investigation or proceeding that does not involve an act or omission of the Borrower or any of their Affiliates and that is brought by such Indemnitee against another Indemnitee (other than an Indemnitee acting in its capacity as Paying Agent, agent, arranger or any other similar role in connection with the Transaction Documents) or (B) any settlement entered into by such Indemnitee without the Borrower’s written consent (such consent not to be unreasonably withheld or delayed). This Section 10.5 shall not apply with respect to Taxes other than any Taxes that represent losses, liabilities, claims and damages arising from any non‑Tax Proceeding. The provisions of this Section 10.5 shall survive the discharge, termination or assignment of this Agreement or any related agreement or the earlier of the resignation or removal of the Paying Agent or the Verification Agent. Notwithstanding anything to the contrary in this Section 10.5, the provisions of this Section shall be applied without prejudice to, and the provisions shall not have the effect of diminishing, the rights of the Paying Agent and any Paying Agent Indemnified Parties under Section 9.5 of this Agreement or any other provision of any Transaction Document providing for the indemnification of any such Persons.
Section 10.6.    Costs, Expenses and Taxes. The Borrower agrees to pay all reasonable and documented costs and expenses in connection with the preparation, execution, delivery, filing, recording, administration, modification, amendment or waiver of this Agreement, the Loan Notes and the other documents to be delivered hereunder, including the reasonable fees and out‑of‑pocket expenses of counsel for the Administrative Agent and the Paying Agent with respect thereto and with respect to advising the Administrative Agent and the Paying Agent as to their respective rights

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and responsibilities under this Agreement and the other Transaction Documents. The Borrower further agrees to pay on demand all costs and expenses, if any (including reasonable and documented counsel fees and expenses) (A) in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Loan Notes and the other documents to be delivered hereunder and (B) incurred by the Administrative Agent or the Paying Agent in connection with the transactions described herein and in the other Transaction Documents, or any potential Takeout Transaction, including in any case reasonable and documented counsel fees and expenses in connection with the enforcement of rights under this Section 10.6. Without limiting the foregoing, the Borrower acknowledges and agrees that the Administrative Agent or its counsel may at any time after an Event of Default shall have occurred and be continuing, engage professional consultants selected by the Administrative Agent to conduct additional due diligence with respect to the transactions contemplated hereby, including (A) review and independently assess the existing methodology employed by the Borrower in allocating Collections with respect to the Collateral, assess the reasonableness of the methodology for the equitable allocation of those Collections and make any recommendations to amend the methodology, if appropriate, (B) review the financial forecasts submitted by the Borrower to the Administrative Agent and assess the reasonableness and feasibility of those forecasts and make any recommendations based on that review, if appropriate, and (C) verify the asset base of the Borrower and the Borrower’s valuation of their assets, as well as certain matters related thereto. The reasonable and documented fees and expenses of such professional consultants, in accordance with the provisions of this Section 10.6, shall be at the sole cost and expense of the Borrower. In addition, the Borrower shall pay any and all Other Taxes and agrees to save the Administrative Agent, the Paying Agent and each Lender harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such Other Taxes.
Section 10.7.    Right of Set‑off; Ratable Payments; Relations Among Lenders‑. (A) Upon the occurrence and during the continuance of any Event of Default, and subject to the prior payment of Obligations owed to the Paying Agent, each of the Administrative Agent and the Lenders are hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by and other indebtedness incurred pursuant to this Agreement at any time owing to the Administrative Agent or such Lender to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and the Loan Notes, whether or not the Administrative Agent or such Lenders shall have made any demand under this Agreement or the Loan Notes and although such obligations may be unmatured. The Administrative Agent and each Lender agrees promptly to notify the Borrower after any such set‑off and application; provided that the failure to give such notice shall not affect the validity of such set‑off and application. The rights of the Administrative Agent and the Lenders under this Section 10.7(A) are in addition to other rights and remedies (including other rights of set‑off) which the Administrative Agent and the Lenders may have.

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(B)    If any Lender, whether by setoff or otherwise, has payment made to it upon its Advances in a greater proportion than that received by any other Lender, such other Lender agrees, promptly upon demand, to purchase a portion of the Advances held by the Lenders so that after such purchase each Lender will hold its ratable share of Advances. If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon written demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in proportion to the obligations owing to them. In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made.

(C)    Except with respect to the exercise of set‑off rights of any Lender in accordance with Section 10.7(A), the proceeds of which are applied in accordance with this Agreement, each Lender agrees that it will not take any action, nor institute any actions or proceedings, against the Borrower or any other obligor hereunder or with respect to any Collateral or Transaction Document, without the prior written consent of the other Lenders or, as may be provided in this Agreement or the other Transaction Documents, at the direction of the Administrative Agent.

(D)    The Lenders are not partners or co‑venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender.

Section 10.8.    Binding Effect; Assignment. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the Paying Agent, the Verification Agent and the Administrative Agent and each Lender, and their respective successors and assigns, except that the Borrower shall not have the right assign to their rights hereunder or any interest herein without the prior written consent of the Administrative Agent and the Lenders, and any assignment by Borrower in violation of this Section 10.8 shall be null and void. Any Lender may at any time, without the consent of the Borrower or the Administrative Agent, assign all or any portion of its rights and obligations under this Agreement and any Loan Note to a Federal Reserve Bank and each Conduit Lender may assign its rights and obligations under this Agreement to a Program Support Provider; provided, that no such assignment or pledge shall release the transferor Lender from its obligations hereunder. Each Lender may assign to one or more banks or other entities all or any part or portion of, or may grant participations to one or more banks or other entities in all or any part or portion of its rights and obligations hereunder (including, without limitation, its Commitment, its Loan Notes or its Advances); provided that during the Availability Period, no Lender may transfer or assign any portion of its rights and obligations under this Agreement or any Loan Note to a Disqualified Lender; provided further that each such assignment (A) shall be substantially in the form of Exhibit F hereto or any other form reasonably acceptable to the Administrative Agent and (B) shall either be made (i) to a Permitted Assignee or (ii) to a Person that is acceptable to the Administrative Agent in its reasonable discretion (such consent not to be unreasonably withheld or delayed) unless an Event of Default or Amortization Event shall have occurred and be continuing.

(b)    If any assignment or participation is made to a Disqualified Lender in violation of this Section 10.8, the Borrower may upon notice to the applicable Disqualified Lender and the Administrative Agent, (A) purchase or prepay the Advances held by such Disqualified Lender by paying the lesser of (x) the principal amount thereof and (y) the amount that such

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Disqualified Lender paid to acquire such Advances, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder and/or (B) require such Disqualified Lender to assign, without recourse (in accordance with and subject to the restrictions contained in this Section 10.8), all of its interest, rights and obligations under this Agreement to one or more banks or other entities at the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Lender paid to acquire such interests, rights and obligations, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder.

Disqualified Lenders (A) will not, absent an Event of Default or consent from the Borrower (x) have the right to receive financial reports that are not publicly available, Facility Administrator Reports or other reports or confidential information provided to Lenders by the Borrower or the Administrative Agent (other than Tax reporting information with respect to the Advances), (y) attend or participate in meetings with the Borrower attended by the Lenders and the Administrative Agent, or (z) access any electronic site maintained by the Borrower or Administrative Agent to provide Lenders with confidential information or confidential communications from counsel to or financial advisors of the Administrative Agent and (B) (x) for purposes of any consent to any amendment, waiver or modification of, or any action under, and for the purpose of any direction to the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) under this Agreement or any other Transaction Document, each Disqualified Lender will be deemed to have consented in the same proportion as the Lenders that are not Disqualified Lenders consented to such matter, and (y) for purposes of voting on any plan of reorganization or plan of liquidation, each Disqualified Lender party hereto hereby agrees (1) not to vote on such plan, (2) if such Disqualified Lender does vote on such plan notwithstanding the restriction in the foregoing clause (1), such vote will be deemed not to be in good faith and shall be “designated” pursuant to Section 1126(e) of the Bankruptcy Code (or any similar provision in any other debtor relief laws), and such vote shall not be counted in determining whether the applicable class has accepted or rejected such plan in accordance with Section 1126(c) of the Bankruptcy Code (or any similar provision in any other debtor relief laws) and (3) not to contest any request by any party for a determination by the a bankruptcy court (or other applicable court of competent jurisdiction) effectuating the foregoing clause (2).

(c)    Upon, and to the extent of, any assignment (unless otherwise stated therein) made by any Lender hereunder, the assignee or purchaser of such assignment shall be a Lender hereunder for all purposes of this Agreement and shall have all the rights, benefits and obligations (including the obligation to provide documentation pursuant to Section 2.17(G)) of a Lender hereunder. Each Funding Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices a register (the “Register”) for the recordation of the names and addresses of the Lenders in its Lender Group, the outstanding principal amounts (and accrued interest) of the Advances owing to each Lender in its Lender Group pursuant to the terms hereof from time to time and any assignment of such outstanding Advances. The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall 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. The Register shall be available for inspection by the Borrower, the Paying Agent and any Lender, at any reasonable time and from time to time upon reasonable prior notice.


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(d)    Any Lender may, without the consent of the Borrower, sell participation interests in its Advances and obligations hereunder (each such recipient of a participation a “Participant”); provided that after giving effect to the sale of such participation, such Lender’s obligations hereunder and rights to consent to any waiver hereunder or amendment hereof shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, all amounts payable to such Lender hereunder and all rights to consent to any waiver hereunder or amendment hereof shall be determined as if such Lender had not sold such participation interest, and the Borrower and the Administrative Agent and the other parties hereto shall continue to deal solely and directly with such Lender and not be obligated to deal with such participant. The Participant shall have no right to affect such Lender’s vote or action with respect to any matter requiring such Lender’s vote or action under this Agreement. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the outstanding principal amounts (and accrued interest) of each Participant’s interest in the Advances or other obligations under the Transaction Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of 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 Transaction Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, or other obligation is in registered form under Section 5f.103‑1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant 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 shall have no responsibility for maintaining a Participant Register. Each recipient of a participation shall, to the fullest extent permitted by law, have the same rights, benefits and obligations (including the obligation to provide documentation pursuant to Section 2.17(G)), hereunder with respect to the rights and benefits so participated as it would have if it were a Lender hereunder, except that no Participant shall be entitled to receive any greater payment under Sections 2.11 or 2.17 than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.

(e)    Notwithstanding any other provision of this Agreement to the contrary, (i) a Lender may pledge as collateral, or grant a security interest in, all or any portion of its rights in, to and under this Agreement to a security trustee in connection with the funding by such Lender of Advances without the consent of the Borrower; provided that no such pledge or grant shall release such Lender from its obligations under this Agreement and (ii) a Conduit Lender may at any time, without any requirement to obtain the consent of the Administrative Agent or the Borrower, pledge or grant a security interest in all or any portion of its rights (including, without limitation, rights to payment of capital and yield) under this Agreement to a collateral agent or trustee for its commercial paper program.

Section 10.9.    GOVERNING LAW. THIS AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5‑1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES

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THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

Section 10.10.    Jurisdiction. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK (NEW YORK COUNTY) OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.

Section 10.11.    Waiver of Jury Trial. ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS AGREEMENT.

Section 10.12.    Section Headings. All section headings are inserted for convenience of reference only and shall not affect any construction or interpretation of this Agreement.

Section 10.13.    Tax Characterization. The parties hereto intend for the transactions effected hereunder to constitute a loan for U.S. federal income tax purposes.

Section 10.14.    Execution. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed 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 a signature page to this Agreement by facsimile or by e‑mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 10.15.    Limitations on Liability. None of the members, managers, general or limited partners, officers, employees, agents, shareholders, directors, Affiliates or holders of limited liability company interests of or in the Borrower shall be under any liability to the Administrative Agent or

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the Lenders, respectively, any of their successors or assigns, or any other Person for any action taken or for refraining from the taking of any action in such capacities or otherwise pursuant to this Agreement or for any obligation or covenant under this Agreement, it being understood that this Agreement and the obligations created hereunder shall be, to the fullest extent permitted under applicable law, with respect to the Borrower, solely the limited liability company obligations of the Borrower. The Borrower and any member, manager, partner, officer, employee, agent, shareholder, director, Affiliate or holder of a limited liability company interest of or in the Borrower may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person (other than the Borrower) respecting any matters arising hereunder.
Section 10.16.    Confidentiality. (A)  Except as otherwise provided herein, the Fee Letters (including such information set forth in any engagement letter, term sheet or proposal prior to the Closing Date that contains fees similar in nature to those in the Fee Letters) (collectively, “Confidential Information”) are confidential. Each of the Borrower, the Facility Administrator, the Paying Agent and the Verification Agent agrees:
(i)    to keep all Confidential Information confidential and to disclose Confidential Information only to those Affiliates, officers, employees, agents, accountants, equity holders, legal counsel and other representatives of the Borrower or its Affiliates (collectively, “Representatives”) who have a need to know such Confidential Information for the purpose of assisting in the negotiation, completion and administration of this Facility;
(ii)    to use the Confidential Information only in connection with the Facility and not for any other purpose; and
(iii)    to maintain and keep in force procedures reasonably designed to cause its Representatives to comply with these provisions and to be responsible for any failure of any Representative to follow those procedures. The provisions of this section 10.16(A) shall not apply to Confidential Information that (a) has been approved for release by written authorization of the appropriate party, or (b) is or hereafter becomes (through a source other than the Borrower, the Facility Administrator, the Paying Agent, the Verification Agent or their respective Affiliates or Representatives) generally available to the public and shall not prohibit the disclosure of Confidential Information to the extent required by applicable Law or by any Governmental Authority or to the extent necessary in connection with the enforcement of any Transaction Document.
The Borrower and the Facility Administrator agree not to provide copies of the Transaction Documents to any prospective investor in, or prospective lender to, the Borrower and the Facility Administrator without the prior written consent of the Administrative Agent, which shall not be unreasonably withheld, delayed or conditioned. For the avoidance of doubt, Borrower and the

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Facility Administrator or any other affiliate of Parent may provide copies of the Transaction Documents to any potential investor or equity holder in Parent or its affiliates, provided that each such Person shall have been instructed to keep the same confidential in accordance with this Section 10.16.

(B)    Each Lender, each Funding Agent, and the Administrative Agent agrees to maintain the confidentiality of all nonpublic information with respect to the parties herein or any other matters furnished or delivered to it pursuant to or in connection with this Agreement or any other Transaction Document; provided, that such information may be disclosed (i) to such party’s Affiliates or such party’s or its Affiliates’ officers, directors, employees, agents, accountants, legal counsel and other representatives (collectively “Lender Representatives”), in each case, who have a need to know such information for the purpose of assisting in the negotiation, completion and administration of the Facility and on a confidential basis, (ii) to any permitted assignee of or participant in, or any prospective assignee of or participant in, the Facility or any of its rights or obligations under this Agreement, in each case on a confidential basis, (iii) to any financing source, dealer, hedge counterparty or other similar party in connection with financing or risk management activities related to the Facility, (iv) to any Commercial Paper rating agency (including by means of a password protected internet website maintained in connection with Rule 17g‑5), (v) to the extent required by applicable Law or by any Governmental Authority, and (vi) to the extent necessary in connection with the enforcement of any Transaction Document.

The provisions of this Section 10.16(B) shall not apply to information that (i) is or hereafter becomes (through a source other than the applicable Lender, Funding Agent or the Administrative Agent or any Lender Representative associated with such party) generally available to the public, (ii) was rightfully known to the applicable Lender, applicable Funding Agent or the Administrative Agent or any Lender Representative or was rightfully in their possession prior to the date of its disclosure pursuant to this Agreement, (iii) becomes available to the applicable Lender, applicable Funding Agent or the Administrative Agent or any Lender Representative from a third party unless to their knowledge such third party disclosed such information in breach of an obligation of confidentiality to the applicable Lender, applicable Funding Agent or the Administrative Agent or any Lender Representative, (iv) has been approved for release by written authorization of the parties whose information is proposed to be disclosed, or (v) has been independently developed or acquired by any Lender, any Funding Agent or the Administrative Agent or any Lender Representative without violating this Agreement. The provisions of this Section 10.16 shall not prohibit any Lender, any Funding Agent or the Administrative Agent from filing with or making available to any judicial, governmental or regulatory agency or providing to any Person with standing any information or other documents with respect to the Facility as may be required by applicable Law or requested by such judicial, governmental or regulatory agency.
Section 10.17.    Limited Recourse. All amounts payable by the Borrower on or in respect of the Obligations shall constitute limited recourse obligations of the Borrower secured by, and payable solely from and to the extent of, the Collateral; provided that (A) the foregoing shall not limit in any manner the ability of the Administrative Agent or any other Lender to seek specific performance of any Obligation (other than the payment of a monetary obligation in excess of the amount payable solely from the Collateral), (B) the provisions of this Section 10.17 shall not limit the right of any

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Person to name the Borrower as party defendant in any action, suit or in the exercise of any other remedy under this Agreement or the other Transaction Documents and (C) when any portion of the Collateral is transferred in a transfer permitted under and in accordance with this Agreement, the security interest in and Lien on such Collateral shall automatically be released, and the Lenders under this Agreement will no longer have any security interest in, lien on, or claim against such Collateral. No recourse shall be sought or had for the obligations of the Borrower against any Affiliate, director, officer, shareholder, manager or agent of the Borrower other than as specified in the Transaction Documents.
Section 10.18.    Customer Identification ‑ USA Patriot Act Notice‑. The Administrative Agent and each Lender hereby notifies the Borrower and the Facility Administrator that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107‑56, signed into law October 26, 2001) (the “Patriot Act”), and the Administrative Agent’s and each Lender’s policies and practices, the Administrative Agent and the Lenders are required to obtain, verify and record certain information and documentation that identifies the Borrower and the Facility Administrator, which information includes the name and address of the Borrower and such other information that will allow the Administrative Agent or such Lender to identify the Borrower in accordance with the Patriot Act.
Section 10.19.    Paying Agent Compliance with Applicable Anti‑Terrorism and Anti‑Money Laundering Regulations‑‑. In order to comply with laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including, but not limited to those relating to funding of terrorist activities and money laundering, the Paying Agent is required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Paying Agent. Accordingly, each of the parties agrees to provide to the Paying Agent upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Paying Agent to comply with such laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including, but not limited to those relating to funding of terrorist activities and money laundering.
Section 10.20.    Non‑Petition‑. 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 of any state of the United States or of any other jurisdiction 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 Section 10.20 and the parties’ respective obligations under this Section 10.20 shall survive the termination of this Agreement.
Section 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 a Conduit Lender hereunder shall be without recourse of any kind to such Conduit Lender. A Conduit Lender

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shall have no liability or obligation hereunder unless and until such Conduit Lender has received such amounts pursuant to this Agreement. In addition, the parties hereto hereby agree that (i) a Conduit Lender shall have no obligation to pay the parties hereto any amounts constituting fees, reimbursement for expenses or indemnities (collectively, “Expense Claims”) and such Expense Claims shall not constitute a claim (as defined in Section 101 of Title 11 of the Bankruptcy Code or similar laws of another jurisdiction) against such Conduit Lender, unless or until such Conduit Lender has received amounts sufficient to pay such Expense Claims pursuant to this Agreement and such amounts are not required to pay the outstanding indebtedness of such Conduit Lender and (ii) no recourse shall be sought or had for the obligations of a Conduit Lender hereunder against any Affiliate, director, officer, shareholders, manager or agent of such Conduit Lender.
(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.
Section 10.22.    [Reserved].
Section 10.23.    Additional Paying Agent Provisions. The parties hereto acknowledge that the Paying Agent shall not be required to act as a “commodity pool operator” as defined in the Commodity Exchange Act, as amended, or be required to undertake regulatory filings related to this Agreement in connection therewith.
Section 10.24.    Acknowledgement Regarding Any Supported QFCs.     To the extent that the Transaction Documents provide support, through a guarantee or otherwise, for Hedge Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Transaction Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United

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States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Transaction Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Transaction Documents were governed by the laws of the United States or a state of the United States.
[Signature Pages Follow]


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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
SUNNOVA TEP HOLDINGS, LLC, as Borrower

By:    ____________________________________
Name:
Title:    

SUNNOVA TE MANAGEMENT, LLC, as Facility Administrator

By:    ____________________________________
Name:
Title:    










[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


CREDIT SUISSE AG, New York Branch,
as Administrative Agent and as a Funding Agent
By:
_________________________________
Name:
Title:
By:
_________________________________
Name:
Title:
CREDIT SUISSE AG, Cayman Islands Branch,
as a Lender
By:
_________________________________
Name:
Title:
By:
_________________________________
Name:
Title:


[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



MOUNTCLIFF FUNDING LLC, as a Conduit Lender
By:
_________________________________
Name:
Title:


[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


WELLS FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity but solely as Paying Agent
By:
_________________________________
Name:
Title:


[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


U.S. BANK NATIONAL ASSOCIATION,
as Verification Agent
By:
_________________________________
Name:
Title:


[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT A
DEFINED TERMS
“1940 Act” shall mean the Investment Company Act of 1940, as amended.
“A-1 Verification Agent Certification” shall have the meaning set forth in Section 4(a) of the Verification Agent Agreement.
“A-2 Verification Agent Certification” shall have the meaning set forth in Section 4(b) of the Verification Agent Agreement.
“Accession Agreement” shall mean (i) a Security Agreement Supplement in the form of Exhibit B to the Security Agreement, (ii) a Pledge Agreement Joinder in the form of Exhibit A to the Pledge Agreement, (iii) a Joinder Agreement in the form of Exhibit C to the Verification Agent Agreement, (iv) Guaranty Supplement in the form of Exhibit A to the Subsidiary Guaranty and (v) an Subsidiary Supplement in the form of Exhibit A to the Parent Guaranty.
“Additional Solar Assets” shall mean each Eligible Solar Asset that is acquired by a Financing Fund or SAP after the Closing Date and during the Availability Period.
“Adjusted LIBOR Rate” shall mean a rate per annum equal to the rate (rounded upwards, if necessary, to the next higher 1/100 of 1%) obtained by dividing (i) LIBOR by (ii) a percentage equal to 100% minus the reserve percentage (rounded upward to the next 1/100th of 1%) in effect on such day and applicable to the Non-Conduit Lender for which this rate is calculated under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “eurocurrency liabilities”). The Adjusted LIBOR Rate shall be adjusted automatically as of the effective date of any change in such reserve percentage.
“Administrative Agent” shall have the meaning set forth in the introductory paragraph hereof.
“Administrative Agent’s Account” shall mean the Administrative Agent’s bank account designated by the Administrative Agent from time to time by written notice to the Borrower.
“Advance” shall mean, individually or collectively, as the context may require, a Class A Advance and/or a Class B Advance.
“Affected Party” shall have the meaning set forth in Section 2.102.12(B).

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Affiliate” shall mean, with respect to any Person, any other Person that (i) directly or indirectly controls, is controlled by, or is under direct or indirect common control with such Person, or, (ii) is an officer or director of such Person, and in the case of any Lender that is an investment fund, the investment advisor thereof and any investment fund having the same investment advisor. A Person shall be deemed to be “controlled by” another Person if such other Person possesses, directly or indirectly, power to (a) vote 50% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managing partners of such other Person, or (b) direct or cause the direction of the management and policies of such other Person whether by contract or otherwise.
“Affiliated Entity” shall mean any of the Parent, the Facility Administrator (if the Facility Administrator is an Affiliate of the Borrower), the Seller, and any of their respective direct or indirect Subsidiaries and/or Affiliates, whether now existing or hereafter created, organized or acquired.
“Aggregate Commitment” shall mean, on any date of determination, the sum of the Commitments then in effect. The Aggregate Commitment as of the Closing Date shall be equal to $100,000,000.
“Aggregate Discounted Solar Asset Balance” shall mean, on any date of determination, the sum of the Discounted Solar Asset Balances for the Managing Member Interests, the SAP Solar Assets and any Hedged SREC Solar Assets. Any Managing Member Interests, SAP Solar Assets or Hedged SREC Solar Assets that would otherwise be duplicated in computing this sum shall only be counted once.
“Aggregate Outstanding Advances” shall mean, as of any date of determination, the sum of (i) the aggregate principal balance of all Class A Advances outstanding plus (ii) the aggregate principal balance of all Class B Advances outstanding.
“Agreement” shall have the meaning set forth in the introductory paragraph hereof.
“A.M. Best” shall mean A. M. Best Company, Inc. and any successor rating agency.
“Amortization Event” shall mean the occurrence of the any of the following events:
(i)a Facility Administrator Termination Event;
(ii)the Solar Asset Payment Level is less than 88.0%;
(iii)the Managing Member Distributions Payment Level is less than 88.0%;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(iv)the Default Level is greater than 0.75%;
(v)an Event of Default (whether or not cured by a Tax Equity Investor);
(vi)a Tax Loss Insurance Policy ceases to be of full force and effect or ceases to meet the requirements of the related Tax Equity Facility;
(vii)if Sunnova Management is the Facility Administrator and the sum of (a) the net cash provided by operating activities of Sunnova Management, as reported in any set of quarterly financial statements delivered pursuant to Section 5(q)(ii) of the Parent Guaranty plus (b) unrestricted cash on hand held by Sunnova Management as of the date of such financial statements, shall be negative (for purposes of this clause (viii), the term “net cash” and “operating activities” shall have the meanings attributable to such terms under GAAP); provided, that if (x) on or prior to the date that is fifteen (15) Business Days after the date on which it is determined that such amount is negative, the Parent Guarantor's equity holders, any of their Affiliates and any other Person makes an equity investment to Sunnova Management in cash in an amount not less than such shortfall, and such cash, if so designated by Sunnova Management, be included as unrestricted cash, and (y) any such action described in subclause (x) is communicated to the Administrative Agent in writing, then no Amortization Event shall be deemed to have occurred or be continuing;
(viii)Parent breaches any of the Financial Covenants and such breach has not been cured in accordance with Section 5(r) of the Parent Guaranty;
(ix)the amounts on deposit in the Liquidity Reserve Account are at any time less than the Liquidity Reserve Account Required Balance and such deficit is not cured by the earlier of the next Payment Date or the next Funding Date;
(x)the amounts on deposit in the Supplemental Reserve Account are at any time less than the Supplemental Reserve Account Required Balance and such deficit is not cured by the earlier of the next Payment Date or the next Funding Date; or
(xi)the occurrence of a default under a Sunnova Credit Facility.
“Amortization Period” shall mean the period commencing at the end of the Availability Period.
“Ancillary Solar Service Agreements” shall mean in respect of each Eligible Solar Asset, all agreements and documents ancillary to the Solar Service Agreement associated with such Eligible

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Solar Asset, which are entered into with a Host Customer in connection therewith, including any Customer Warranty Agreement.
“Applicable Law” shall mean all applicable laws of any Governmental Authority, including, without limitation, laws relating to consumer leasing and protection and any ordinances, judgments, decrees, injunctions, writs and orders or like actions of any Governmental Authority and rules and regulations of any federal, regional, state, county, municipal or other Governmental Authority.
“Approved Installer” shall mean an installer approved by the Parent to design, procure and install PV Systems on the properties of Host Customers and listed on the Parent’s list of approved installers as of the time of installation of an applicable PV System.
“Approved U.S. Territory” shall initially mean Puerto Rico, Guam and the Northern Mariana Islands and shall mean any other territory of the United States which the Administrative Agent has, in its sole discretion, approved as an Approved U.S. Territory, by providing a written notice to the Borrower regarding the same.
“Approved Vendor” shall mean a manufacturer of Solar Photovoltaic Panels, Inverters or Energy Storage Systems for PV Systems that was approved by the Parent and listed on the Parent’s list of approved vendors as of the time of installation of an applicable PV System.
“Assignor” shall mean each of Parent, Intermediate Holdco, Sunnova Inventory Holdings, Sunnova Inventory Pledgor and TEP Inventory, as assignors of Solar Assets and/or Solar Asset Owner Subsidiaries pursuant to the Contribution Agreement.
“Availability Period” shall mean the period from the Closing Date until the earlier to occur of (i) the Commitment Termination Date, and (ii) an Amortization Event.
“Bank Base Rate” shall mean, with respect to any Lender for any day, a rate per annum equal to the Base Rate with respect to such Lender on such date.
“Bankruptcy Code” shall mean the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., as amended.
“Base Rate” shall mean, with respect to any Lender for any day, a rate per annum equal to the greater of (i) the prime rate of interest announced publicly by a Funding Agent with respect to its Lender Group (or the Affiliate of such Lender or Funding Agent, as applicable, that announces such rate) as in effect at its principal office from time to time, changing when and as said prime rate changes (such rate not necessarily being the lowest or best rate charged by such Person) or, if such Lender, Funding Agent or Affiliate thereof does not publicly announce the prime rate of interest,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


as quoted in The Wall Street Journal on such day and (ii) the sum of (a) 0.50% and (b) the rate 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, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by such Funding Agent with respect to such Lender Group from three Federal funds brokers of recognized standing selected by it.
“Base Case Model” shall mean a computer model agreed to by a Managing Member and the related Tax Equity Investor showing the expected economic results from ownership of the PV Systems owned by the related Financing Fund and the assumptions to be used in calculating when the such Tax Equity Investor has reached its target internal rate of return, which is attached as an exhibit to the related Financing Fund LLCA.
“Base Reference Banks” shall mean the principal London offices of Standard Chartered Bank, Lloyds TSB Bank, Royal Bank of Scotland, Deutsche Bank and the investment banking division of Barclays Bank PLC or such other banks as may be appointed by the Administrative Agent with the approval of the Borrower.
“Basel III” shall mean Basel III: A global regulatory framework for more resilient banks and banking systems prepared by the Basel Committee on Banking Supervision, and all national implementations thereof.

“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation, which certification shall be substantially similar in form and substance to the form of Certification Regarding Beneficial Owners of Legal Entity Customers published jointly, in May 2018, by the Loan Syndications and Trading Association and Securities Industry and Financial Markets Association.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“BHC Act Affiliate” has the meaning assigned to the term "affiliate" in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Borrower” shall have the meaning set forth in the introductory paragraph hereof.
“Borrower’s Account” shall mean (i) the bank account of the Borrower, described on Schedule II attached hereto, for the benefit of the Borrower or (ii) such other account as may be designated by the Borrower from time to time by at least ten (10) Business Days’ prior written

A-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


notice to the Administrative Agent and the Lenders, so long as such other account is acceptable to the Administrative Agent in its sole and absolute discretion.
“Borrowing Base” shall mean the Class A Borrowing Base and/or the Class B Borrowing Base, as applicable.
“Borrowing Base Certificate” shall mean the certificate in the form of Exhibit B‑1 attached hereto.
“Borrowing Base Deficiency” shall have the meaning set forth in Section 2.9.
“Borrowing Base Step-up Period” shall mean the period from and including December 2, 2019 to and excluding the earlier orearliest of (x) the date on which a Takeout Transaction is first effected after December 2, 2019 and (y), (y) the date on which all Obligations (as defined in the TEP II Credit Agreement) are paid in full and all Commitments (as defined in the TEP II Credit Agreement) are terminated under the TEP II Credit Agreement and (z) March 31, 2020.
“Breakage Costs” shall mean, with respect to a failure by the Borrower, for any reason resulting from Borrower’s failure (but excluding any failures to borrow resulting from a Lender default under this Agreement), to borrow any proposed Advance on the date specified in the applicable Notice of Borrowing (including without limitation, as a result of the Borrower’s failure to satisfy any conditions precedent to such borrowing) after providing such Notice of Borrowing, the resulting loss, cost, expense or liability incurred by reason of the liquidation or reemployment of deposits, actually sustained by the Administrative Agent, any Lender or any Funding Agent; provided, however, that the Administrative Agent, such Lender or such Funding Agent shall use commercially reasonable efforts to minimize such loss or expense and shall have delivered to the Borrower a certificate as to the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error. For the avoidance of doubt, if a Lender does not make an advance and the Borrower has met all conditions precedent required under Article III or Lender has breached this Agreement, then any Breakage Costs shall be borne by Lender.
“Business Day” shall mean any day other than Saturday, Sunday and any other day on which commercial banks in New York, New York, Minnesota or California are authorized or required by law to close.
“Calculation Date” shall mean with respect to a Payment Date, the close of business on the last day of the related Collection Period.
“Call Date” shall mean, with respect to a Purchase Option, the earliest date on which such Purchase Option may be exercised.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Capital Stock” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents, including membership interests (however designated, whether voting or non‑voting) of equity of such Person, including, if such Person is a partnership, partnership interests (whether general or limited) or any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership, but in no event will Capital Stock include any debt securities convertible or exchangeable into equity unless and until actually converted or exchanged.
“Carrying Cost” shall mean, as of any date of determination, the sum of (i) the weighted average Swap Rate as of such date of determination, (ii) the weighted average Class A Usage Fee Rate and Class B Usage Fee Rate as of such date of determination and (iii) 0.10%.
“Change in Law” shall mean (i) the adoption or taking effect of any Law after the date of this Agreement, (ii) any change in Law or in the administration, interpretation, application or implementation thereof by any Governmental Authority after the date of this Agreement, (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority after the date of this Agreement or (iv) compliance by any Affected Party, by any lending office of such Affected Party or by such Affected Party’s holding company, if any, with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided, that notwithstanding anything herein to the contrary, (a) the Dodd‑Frank Act, (b) Basel III and (c) all requests, rules, guidelines and directives under either of the Dodd‑Frank Act or Basel III or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date implemented, enacted, adopted or issued.
“Change of Control” shall mean, the occurrence of one or more of the following events:
(i)    any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of SEI or Parent to any Person or group of related Persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (a “Group”), other than, in each case, any such sale, lease, exchange or transfer to a Person or Group that is, prior to such, lease, exchange or transfer, an Affiliate of SEI and is controlled (as that term is used in the definition of Affiliate) by SEI;
(ii)    the approval by the holders of Capital Stock of SEI, Parent, Intermediate Holdco, Sunnova Inventory Pledgor, TEP Inventory, the Seller, TEP Resources, the Borrower or any Subsidiary of the Borrower of any plan or proposal for the liquidation or dissolution of such Person;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(iii)    any Person or Group shall become the owner, directly or indirectly, beneficially or of record, of shares representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of SEI, other than any Person that is a Permitted Investor or Group that is controlled by a Permitted Investor provided that any transfers or issuances of equity of SEI on or after the Closing Date to, among or between a Permitted Investor or any Affiliate thereof, shall not constitute a “Change of Control” for purposes of this clause (iii);
(iv)     SEI shall cease to directly own all of the Capital Stock in Parent;
(v)     Parent shall cease to directly own all of the Capital Stock in Intermediate Holdco;
(vi)     Intermediate Holdco shall cease to directly own all of the Capital Stock in Sunnova Inventory Pledgor;
(vii)     Sunnova Inventory Pledgor shall cease to directly own all of the Capital Stock in TEP Inventory;
(viii)     TEP Inventory shall cease to directly own all of the Capital Stock in Seller;
(ix)     Seller shall cease to directly own all of the Capital Stock in TEP Resources;
(x)     TEP Resources shall cease to directly own all of the Capital Stock in the Borrower; or
(xi)    the Borrower shall cease to own all of the Capital Stock in a Managing Member or SAP other than in connection with a Takeout Transaction pursuant to which 100% of the outstanding Capital Stock of such Managing Member or SAP is sold.
“Class A Advance” shall have the meaning set forth in Section 2.2.
“Class A Aggregate Commitment” shall mean, on any date of determination, the sum of the Class A Commitments then in effect. The Class A Aggregate Commitment as of the Closing Date shall be equal to $87,500,000. For the avoidance of doubt, any Class A Advance approved or funded pursuant to Section 2.18 herein shall be deemed to increase the Commitment of the Non-Conduit Lender approving such Class A Advance.
“Class A Borrowing Base” shall mean, as of any date of determination, the product of (x)(a) the Aggregate Discounted Solar Asset Balance minus (b) the Excess Concentration Amount

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


times (y)(a) with respect to Solar Assets other than Puerto Rico Solar Assets or Substantial Stage Solar Assets included in clause (x), [***], (b) with respect to Puerto Rico Solar Assets other than Substantial Stage Solar Assets included in clause (x), [***], and (c) with respect to Substantial Stage Solar Assets included in clause (x), (i) during the Borrowing Base Step-up Period, [***]% and (ii) at all times after the Borrowing Base Step-up Period, [***]%.
“Class A Borrowing Base Deficiency” shall have the meaning set forth in Section 2.9.
“Class A Commitment” shall mean the obligation of a Non-Conduit Lender to fund a Class A Advance on the Closing Date, as set forth on Exhibit E attached hereto.
“Class A Funding Agent” shall mean a Person appointed as a Class A Funding Agent for a Class A Lender Group pursuant to Section 7.14.
“Class A Interest Distribution Amount” shall mean, with respect to the Class A Advances on any date of determination, an amount equal to the sum of (i) the product of (a) the daily average outstanding principal balance of all Class A Advances during the related period (including any related Interest Accrual Period), (b) the actual number of days in such period (including any related Interest Accrual Period), divided by 360, 365 or 366, as applicable, and (c) the Class A Usage Fee Rate and (ii) any unpaid Class A Interest Distribution Amounts from prior Payment Dates plus, to the extent permitted by law, interest thereon at the Class A Usage Fee Rate for the related Interest Accrual Period. For the avoidance of doubt, the Class A Interest Distribution Amount shall not constitute “Confidential Information.”
“Class A Lender” shall mean a Lender that has funded a Class A Advance.
“Class A Lender Group” shall mean with respect to any Class A Advances, any group consisting of related Conduit Lenders, Non-Conduit Lenders and Funding Agents.
“Class A Lender Group Percentage” shall mean, for any Class A Lender Group, the percentage equivalent of a fraction (expressed out to five decimal places), the numerator of which is, with respect to each Class A Lender Group, the Class A Commitment of all Non-Conduit Lenders in such Class A Lender Group, and the denominator of which is the Class A Aggregate Commitment.
“Class A Loan Note” shall mean each Class A Loan Note of the Borrower in the form of Exhibit D-1 attached hereto, payable to a Class A Funding Agent for the benefit of the Class A Lenders in such Class A Funding Agent’s Class A Lender Group, in the aggregate face amount of up to such Class A Lender Group’s portion of the Class A Maximum Facility Amount, evidencing the aggregate indebtedness of the Borrower to the Class A Lenders in such Funding Agent’s Class

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


A Lender Group, as the same be amended, restated, supplemented or otherwise modified from time to time.
“Class A Maximum Facility Amount” shall mean $131,250,000.
“Class A Unused Portion of the Commitments” shall mean, with respect to the Class A Lenders on any day, the excess of (x) the Class A Aggregate Commitment as of such day as of 5:00 P.M. (New York City time) on such day, over (y) the sum of the aggregate outstanding principal balance of the Class A Advances as of 5:00 P.M. (New York City time) on such day.
“Class A Usage Fee Rate” shall mean the greater of (x) zero and (y) sum of (i) the Cost of Funds and (ii) the Class A Usage Fee Margin.
“Class A Usage Fee Margin” shall have the meaning set forth in the Fee Letter referred to in clause (i) of the definition thereof.
“Class B Advance” shall have the meaning set forth in Section 2.2
“Class B Aggregate Commitment” shall mean, on any date of determination, the sum of the Class B Commitments then in effect. The Class B Aggregate Commitment as of the Closing Date shall be equal to $12,500,000. For the avoidance of doubt, any Class B Advance approved or funded pursuant to Section 2.18 herein shall be deemed to increase the Commitment of the Non-Conduit Lender approving such Class B Advance.
“Class B Borrowing Base” shall mean, as of any date of determination, the product of (x)(a) the Aggregate Discounted Solar Asset Balance minus (b) the Excess Concentration Amount times (y)(a) with respect to Solar Assets other than Puerto Rico Solar Assets or Substantial Stage Solar Assets included in clause (x), [***]%, (b) with respect to Puerto Rico Solar Assets other than Substantial Stage Solar Assets included in clause (x), [***]%, and (c) with respect to Substantial Stage Solar Assets included in clause (x), (i) during the Borrowing Base Step-up Period, [***]% and (ii) at all times after the Borrowing Base Step-up Period, [***]%.
“Class B Borrowing Base Deficiency” shall have the meaning set forth in Section 2.9.
“Class B Commitment” shall mean the obligation of a Non-Conduit Lender to fund a Class B Advance on the Closing Date, as set forth on Exhibit E attached hereto.
“Class B Funding Agent” shall mean a Person appointed as a Class B Funding Agent for a Class B Lender Group pursuant to Section 7.14.

A-10

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Class B Interest Distribution Amount” shall mean, with respect to the Class B Advances on any date of determination, an amount equal to the sum of (i) the product of (a) the daily average outstanding principal balance of all Class B Advances during the related period (including any related Interest Accrual Period), (b) the actual number of days in such period (including any related Interest Accrual Period), divided by 360, 365 or 366, as applicable, and (c) the Class B Usage Fee Rate and (ii) any unpaid Class B Interest Distribution Amounts from prior Payment Dates plus, to the extent permitted by law, interest thereon at the Class B Usage Fee Rate for the related Interest Accrual Period. For the avoidance of doubt, the Class B Interest Distribution Amount shall not constitute “Confidential Information.”
“Class B Lender” shall mean a Lender that has funded a Class B Advance.
“Class B Lender Group” shall mean with respect to any Class B Advances, any group consisting of related Conduit Lenders, Non-Conduit Lenders and Funding Agents.
“Class B Lender Group Percentage” shall mean, for any Class B Lender Group, the percentage equivalent of a fraction (expressed out to five decimal places), the numerator of which is, with respect to each Class B Lender Group, the Class B Commitment of all Non-Conduit Lenders in such Class B Lender Group, and the denominator of which is the Class B Aggregate Commitment.
“Class B Loan Note” shall mean each Class B Loan Note of the Borrower in the form of Exhibit D-2 attached hereto, payable to a Class B Funding Agent for the benefit of the Class B Lenders in such Class B Funding Agent’s Class B Lender Group, in the aggregate face amount of up to such Class B Lender Group’s portion of the Class B Maximum Facility Amount, evidencing the aggregate indebtedness of the Borrower to the Class B Lenders in such Class B Funding Agent’s Class B Lender Group, as the same be amended, restated, supplemented or otherwise modified from time to time.
“Class B Maximum Facility Amount” shall mean $18,750,000.
“Class B Unused Portion of the Commitments” shall mean, with respect to the Class B Lenders on any day, the excess of (x) the Class B Aggregate Commitment as of such day as of 5:00 P.M. (New York City time) on such day, over (y) the sum of the aggregate outstanding principal balance of the Class B Advances as of 5:00 P.M. (New York City time) on such day.
“Class B Usage Fee Margin” shall have the meaning set forth in the Fee Letter referred to in clause (i) of the definition thereof.
“Class B Usage Fee Rate” shall mean the sum of (i) the Cost of Funds and (ii) the Class B Usage Fee Margin.

A-11

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Closing Date” shall mean September 6, 2019.
“Closing Date Verification Agent Certification” shall have the meaning set forth in Section 4(c) of the Verification Agent Agreement.
“Collateral” shall mean the Pledged Collateral (as defined in the Pledge Agreement) and have the meaning set forth in the Security Agreement, as applicable.
“Collection Account” shall have the meaning set forth in Section 8.2(A)(i).
“Collection Period” shall mean, with respect to a Payment Date, the three calendar months preceding the month in which such Payment Date occurs; provided that with respect to the first Payment Date, the Collection Period will be the period from and including the Closing Date to the end of the calendar quarter preceding such Payment Date.
“Collections” shall mean, all distributions and payments received in respect of the Solar Asset Owner Member Interests and other cash proceeds thereof. Without limiting the foregoing, “Collections” shall include any amounts payable to the Borrower with respect to the Eligible Solar Assets (i) under any Hedge Agreement entered into in connection with this Agreement or (ii) in connection with the disposition of any Collateral.
“Commercial Paper” shall mean commercial paper, money market notes and other promissory notes and senior indebtedness issued by or on behalf of a Conduit Lender.
“Commitment” shall mean, individually or collectively, as the context may require, the Class A Commitments and the Class B Commitments, as applicable.
“Commitment Termination Date” shall mean the earliest to occur of (i) the Scheduled Commitment Termination Date and (ii) the date of any voluntary termination of the facility by the Borrower.
“Conduit Lender” shall mean the CS Conduit Lender and each financial institution identified as such that may become a party hereto.
“Confidential Information” shall have the meaning set forth in Section 10.16(A).
“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

A-12

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Contribution Agreement” shall mean, collectively, (a) that Contribution Agreement, dated as of the Closing Date, by and among the Assignors and the Seller, and(b) that certain Contribution and Assignment Agreement, dated as of the Closing Date, by and among Parent, TEP Inventory and the Seller, and (c) that certain Transfer Agreement, dated as of December 31, 2019, by and among Parent, TEP Inventory and the Seller.
“Conveyed Property” shall have the meaning set forth in the Sale and Contribution Agreement.
“Corporate Trust Office” shall mean, with respect to the Paying Agent, the corporate trust office thereof at which at any particular time its corporate trust business with respect to the Transaction Documents is conducted, which office at the date of the execution of this instrument is located at 600 S. 4th Street, MAC N9300-061, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services – Asset-Backed Administration, or at such other address as such party may designate from time to time by notice to the other parties to this Agreement.
“Cost of Funds” shall mean, (i) with respect to the Class A Advances for any Interest Accrual Period, interest accrued on such Class A Advances during such Interest Accrual Period at the Adjusted LIBOR Rate for such Interest Accrual Period or, if the Adjusted LIBOR Rate is not available, the Base Rate and (ii) with respect to the Class B Advances for any Interest Accrual Period, interest accrued on such Class B Advances during such Interest Accrual Period at the Adjusted LIBOR Rate for such Interest Accrual Period or, if the Adjusted LIBOR Rate is not available, the Base Rate.
“Covered Entity” means any of the following: (i) a "covered entity" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii)    a "covered bank" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a "covered FSI" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Covered Party” shall have the meaning set forth in Section 10.24 hereof.
“Credit Card Receivable” shall mean Host Customer Payments that are made via credit card.
“CS Conduit Lender” shall mean Mountcliff Funding LLC.
“CS Lender Group” shall mean a group consisting of the CS Conduit Lender, the CS Non-Conduit Lender and CSNY, as a Funding Agent for such Lenders.
“CS Non-Conduit Lender” shall mean Credit Suisse AG, Cayman Islands Branch.

A-13

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“CSNY” shall have the meaning set forth in the introductory paragraph hereof.
“Customer Collection Policy” shall mean the initial Manager’s internal collection policy as described in each Management Agreement; provided that from and after the appointment of a Successor Manager pursuant to such Management Agreement, the “Customer Collection Policy” shall mean the collection policy of such Successor Manager for servicing assets comparable to the Borrower Solar Assets (as defined in such Management Agreement).
“Customer Warranty Agreement” shall mean any separate warranty agreement provided by Parent to a Host Customer (which may be an exhibit to a Solar Service Agreement) in connection with the performance and installation of the related PV System (which may include a Performance Guaranty).
“Cut‑off Date” shall mean, (i) for each Solar Asset acquired on the Closing Date, the date that is three (3) Business Days prior to the Closing Date, and (ii) for any Additional Solar Asset, the date specified as such in the related Schedule of Solar Assets.
“Default Level” shall mean, for any Collection Period, the quotient (expressed as a percentage) of (i) the sum of the Discounted Solar Asset Balances of all Eligible Solar Assets that became Defaulted Solar Assets during such Collection Period and that did not repay all past due portions of a contractual payment due under the related Solar Service Agreement by the end of such Collection Period, divided by (ii) the Aggregate Discounted Solar Asset Balance on the first day of such Collection Period.
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“Defaulted Solar Asset” shall mean a Solar Asset for which the related Host Customer is more than 120 days past due on any portion of a contractual payment due under the related Solar Service Agreement; provided, however, once such amounts are paid in full by the Host Customer such Solar Asset shall no longer be a “Defaulted Solar Asset”. For the avoidance of doubt, any past due amounts owed by an original Host Customer after reassignment to or execution of a replacement Solar Service Agreement with a new Host Customer shall not cause the Solar Asset to be deemed to be a Defaulted Solar Asset.
“Defective Solar Asset” shall mean a Solar Asset with respect to which it is determined by the Administrative Agent (acting at the written direction of the Majority Lenders, such direction not to be unreasonably withheld, condition or delayed) or the Facility Administrator, at any time, that the Borrower breached as of the Transfer Date for such Solar Asset the representation in Section

A-14

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


4.1(U), unless such breach has been waived, in writing, by the Administrative Agent, acting at the direction of the Majority Lenders.
“Delayed Amount” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Date” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Lender” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Notice” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Reimbursement Amount” shall have the meaning set forth in Section 2.4(G).
“Delinquent Solar Asset” shall mean a Solar Asset for which the related Host Customer is more than 90 days past due on any portion of a contractual payment due under the related Solar Service Agreement; provided, however, once such amounts are paid in full by the Host Customer such Solar Asset shall no longer be a “Delinquent Solar Asset”.
“Discount Rate” shall mean, as of any date of determination, the greater of (i) 6.00% per annum and (ii) the Carrying Cost, in each case, determined as of such date of determination.
“Discounted Solar Asset Balance” shall mean, as of any date of determination (x)(i) with respect to the Managing Member Interests or the SAP Solar Assets (other than a Substantial Stage Solar Asset), the present value of the remaining and unpaid stream of Net Cash Flow on or after such date of determination, based upon discounting such Net Cash Flow to such date of determination at an annual rate equal to the Discount Rate, (ii) with respect to a Hedged SREC Solar Asset, the present value of the remaining and unpaid stream of Scheduled Hedged SREC Payments for such Hedged SREC Solar Asset on or after such date of determination, based upon discounting such Scheduled Hedged SREC Payments to such date of determination at an annual rate equal to the Discount Rate, and (iii) with respect to a Substantial Stage Solar Asset, the amount actually disbursed to channel partners for services rendered in respect of such Substantial Stage Solar Asset; provided, however, that in the case of either (i) or (ii), any Transferable Solar Asset will be deemed to have a Discounted Solar Asset Balance equal to [***], and (y) for purposes of determining the Default Level respect to a Host Customer Solar Asset, the present value of the remaining and unpaid stream of Net Scheduled Payments for such Host Customer Solar Asset for the period beginning on such date of determination and ending on the date of the last Net Scheduled Payment for such Host Customer Solar Asset shall be based upon discounting such Net Scheduled Payments to such date of determination at an annual rate equal to the Discount Rate.

A-15

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Disqualified Entity” shall have the meaning set forth in the Tax Equity Financing Documents.
“Disqualified Lender” shall mean any financial institution or other Persons identified in writing, prior to the Closing Date, by the Borrower to the Administrative Agent and any known Affiliate thereof clearly identifiable on the basis of its name (in each case, other than any Affiliate that is primarily engaged in, or that advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course and with respect to which such financial institution or other Person does not, directly or indirectly, possess the power to direct or cause the direction of the investment policies of such entity); provided that in no event shall a Lender designated under this Agreement as of the Closing Date be designated as a Disqualified Lender. The Borrower may from time to time update the list of Disqualified Lenders provided to the Administrative Agent prior to the Closing Date to (x) include identified Affiliates of financial institutions or other Persons identified pursuant to the preceding sentence; provided that such updates shall not apply retroactively to disqualify parties that have previously acquired an assignment or participation interest in the Commitment or (y) remove one or more Persons as Disqualified Lenders (in which case such removed Person or Persons shall no longer constitute Disqualified Lenders).
“Distributable Collections” shall have the meaning set forth in Section 2.7(B).
“Dodd‑Frank Act” shall mean the Dodd‑Frank Wall Street Reform and Consumer Protection Act.
“Dollar,” “Dollars,” “U.S. Dollars” and the symbol “$” shall mean the lawful currency of the United States.
“East Region” shall mean the states of New York, New Jersey, Massachusetts, Connecticut, Pennsylvania, Rhode Island, Maryland, Florida, and South Carolina and any other territory of the United States consented to in writing by the Administrative Agent.
“East Region Substantial Stage Date Solar Asset Reserve Amount” shall mean, as of any date of determination, the product of (i) 9/3 times (ii) the sum of the Class A Interest Distribution Amount and the Class B Interest Distribution Amount due and payable on the immediately succeeding Payment Date times (iii) the ratio of (x) the aggregate principal balance of all Advances related to Substantial Stage Solar Assets the Obligor of which is located in the East Region as of such date divided by (y) the Aggregate Outstanding Advances as of such date; provided, however, that solely for the purpose of determining the East Region Substantial Stage Date Solar Asset Reserve Amount as of the Closing Date, the East Region Substantial Stage Date Solar Asset Reserve Amount

A-16

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


shall be an amount reasonably calculated by the Administrative Agent and provided to the Borrower prior to the Closing Date.
“Effective Advance Rate” shall mean, as of any date of determination, the ratio of the Aggregate Outstanding Advances to the Aggregate Discounted Solar Asset Balance.
“Eligible Facility Administrator” shall mean Sunnova Management or any other operating entity which, at the time of its appointment as Facility Administrator, (i) is legally qualified and has the capacity to service the Solar Assets or provide administrative services to the Borrower, and (ii) prior to such appointment, is approved in writing by the Administrative Agent as having demonstrated the ability to professionally and competently service the Collateral and/or a portfolio of assets of a nature similar to the Eligible Solar Assets in accordance with high standards of skill and care.
“Eligible Hedged SREC Counterparty” shall mean (i) [reserved], (ii) any entity rated, or guaranteed (such guaranty to be acceptable to the Administrative Agent in its sole discretion) by an entity rated, investment grade by any of Moody’s, Standard & Poor’s, Fitch, Inc., DBRS, Inc. or Kroll Bond Rating Agency, Inc. and (iii) such other parties which are agreed to in writing by the Administrative Agent to be Eligible Hedged SREC Counterparties.
“Eligible Institution” shall mean a commercial bank or trust company having capital and surplus of not less than $[***] in the case of U.S. banks and $[***] (or the U.S. dollar equivalent as of the date of determination) in the case of foreign banks; provided that a commercial bank which does not satisfy the requirements set forth above shall nonetheless be deemed to be an Eligible Institution for purposes of holding any deposit account or any other account so long as such commercial bank is a federally or state chartered depository institution subject to regulations regarding fiduciary funds on deposit substantially similar to 12 C.F.R. § 9.10(b) and such account is maintained as a segregated trust account with the corporate trust department of such bank.
“Eligible Letter of Credit Bank” means a financial institution (a) organized in the United States, (b) having total assets in excess of $[***] and with a long term rating of at least “A-” by S&P or “A3” by Moody’s and a short term rating of at least “A-1” by S&P or “P-1” by Moody’s, and (c) approved by the Administrative Agent acting on the instructions of the Majority Lenders (such approval not to be unreasonably delayed withheld or delayed).
“Eligible Solar Asset” shall mean, on any date of determination, a Solar Asset:
(i)    which meets all of the criteria specified in Schedule I;

A-17

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(ii)    for which the legal title to the Host Customer Payments, PBI Payments, Energy Storage System Incentives, and Hedged SREC Payments related thereto is vested solely in a Financing Fund or SAP; and
(iii)    was acquired by a Financing Fund or SAP pursuant to the related SAP NTP Financing Documents, Tax Equity Financing Documents or the SAP Contribution Agreement, as applicable, and has not been sold or encumbered by the related Financing Fund or SAP except as permitted hereunder (with respect to Permitted Liens and Permitted Equity Liens) and under the applicable SAP Financing Documents, SAP NTP Financing Documents or Tax Equity Financing Documents.
“Energy Storage System” shall mean an energy storage system to be used in connection with a PV System, including all equipment related thereto (including any battery management system, wiring, conduits and any replacement or additional parts included from time to time).
“Energy Storage System Incentives” shall mean payments paid by a state or local Governmental Authority, based in whole or in part on the size of an Energy Storage System, made as an inducement to the owner thereof.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA, as in effect at the Closing Date and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.
“ERISA Affiliate” shall mean each Person (as defined in Section 3(9) of ERISA), which together with the Borrower, would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Internal Revenue Code or Section 4001(a)(14) or 4001(b)(1) of ERISA.
“ERISA Event” shall mean (i) that a Reportable Event has occurred with respect to any Single‑Employer Plan; (ii) the institution of any steps by the Borrower or any ERISA Affiliate, the Pension Benefit Guaranty Corporation or any other Person to terminate any Single‑Employer Plan or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, a Single‑Employer Plan; (iii) the institution of any steps by the Borrower or any ERISA Affiliate to withdraw from any Multi‑Employer Plan or Multiple Employer Plan or written notification of the Borrower or any ERISA Affiliate concerning the imposition of withdrawal liability; (iv) a non‑exempt “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code in connection with any Plan; (v) the cessation of operations at a facility of the Borrower or

A-18

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (vi) with respect to a Single‑Employer Plan, a failure to satisfy the minimum funding standard under Section 412 of the Internal Revenue Code or Section 302 of ERISA, whether or not waived; (vii) the conditions for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to a Single‑Employer Plan; (viii) a determination that a Single‑Employer Plan is or is expected to be in “at‑risk” status (within the meaning of Section 430(i)(4) of the Internal Revenue Code or Section 303(i)(4) of ERISA); (ix) the insolvency of or commencement of reorganization proceeding with respect to a Multi Employer Plan or written notification that a Multi‑Employer Plan is in “endangered” or “critical” status (within the meaning of Section 432 of the Internal Revenue Code or Section 305 of ERISA); or (x) the taking of any action by, or the threatening of the taking of any action by, the Internal Revenue Service, the Department of Labor or the Pension Benefit Guaranty Corporation with respect to any of the foregoing.
“Event of Default” shall mean any of the Events of Default described in Section 6.1.
“Event of Loss” shall mean the occurrence of an event with respect to a PV System if such PV System is damaged or destroyed by fire, theft or other casualty and such PV System has become inoperable because of such event.
“Excess Concentration Amount” shall mean the dollar amount specified as such on Schedule III of a Borrowing Base Certificate; provided, that for the periods (i) commencing on the Closing Date and ending one hundred eighty (180) days thereafter and (ii) commencing on the effective date of a Takeout Transaction and ending ninety (90) days thereafter, lines 34, 37 and 40 thereof shall not be included in the calculation of the Excess Concentration Amount.
“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (a) 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 applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) that are Other Connection Taxes, (ii) 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 pursuant to a Law in effect on the date on which (a) such Lender acquires such interest in the Loan or (b) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, 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, (iii) Taxes attributable to such Recipient’s failure to comply with Section 2.17(G) and (iv) any U.S. federal withholding Taxes imposed under FATCA.

A-19

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Expected Amortization Profile” shall mean the expected amortization schedule of any outstanding Advance or any Advance that has been requested pursuant to Section 2.4, as the context may require, as of the applicable date of determination as determined by the Administrative Agent using its proprietary model and in consultation with the Borrower.
“Expense Claim” shall have the meaning set forth in Section 10.21.
“Facility” shall mean this Agreement together with all other Transaction Documents.
“Facility Administration Agreement” shall mean the Facility Administration Agreement, dated as of the Closing Date, by and among the Borrower, the Facility Administrator and the Administrative Agent, as amended, restated, modified and/or supplemented from time to time in accordance with its terms.
“Facility Administrator” shall have the meaning set forth in the introductory paragraph hereof.
“Facility Administrator Fee” shall have the meaning set forth in Section 2.1(b) of the Facility Administration Agreement.
“Facility Administrator Report” shall have the meaning set forth in the Facility Administration Agreement.
“Facility Administrator Termination Event” shall have the meaning set forth in Section 7.1 of the Facility Administration Agreement.
“Facility Maturity Date” shall mean November 21, 2022.
“FATCA” shall mean Sections 1471 through 1474 of the Internal Revenue 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 interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code, and any intergovernmental agreements between the United States and another country which modify the provisions of the foregoing.
“FATCA Withholding Tax” means any withholding or deduction required pursuant to FATCA.
“Fee Letters” shall mean (i) that certain fee letter agreement, dated as of the Closing Date, entered into by and among the Administrative Agent and the Borrower, as the same be amended, restated, supplemented or otherwise modified from time to time, and (ii) any other fee letter between

A-20

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


the Borrower and any other Lender or other Person, as the same be amended, restated, supplemented or otherwise modified from time to time.
“Final Stage Solar Asset” shall mean a Solar Asset for which the related PV System is fully installed but has not received Permission to Operate.
“Final Stage Solar Asset Reserve Amount” shall mean, as of any date of determination, the product of (i) 5/3 times (ii) the sum of the Class A Interest Distribution Amount and the Class B Interest Distribution Amount due and payable on the immediately succeeding Payment Date times (iii) the ratio of (x) the aggregate principal balance of all Advances related to Final Stage Solar Assets as of such date divided by (y) the Aggregate Outstanding Advances as of such date; provided, however, that solely for the purpose of determining the Final Stage Solar Asset Reserve Amount as of the Closing Date, the Final Stage Solar Asset Reserve Amount shall be an amount reasonably calculated by the Administrative Agent and provided to the Borrower prior to the Closing Date.
“Financial Covenants” shall have the meaning set forth in the Parent Guaranty.
“Financing Fund” shall mean, collectively, each entity set forth under the heading “Financing Funds” on Schedule VIII hereto.
“Financing Fund Contributions” shall mean any capital contributions from Parent or its Affiliates to Borrower or a Managing Member for contribution to a Financing Fund.
“Financing Fund LLCA” shall mean, collectively, each document set forth under the heading “Financing Fund LLCAs” on Schedule VIII hereto.
“First Payment Date Reserve Amount” shall mean, as of any date of determination, the product of (i) 1/3 times (ii) the sum of the Class A Interest Distribution Amount and the Class B Interest Distribution Amount due and payable on the immediately succeeding Payment Date times (iii) the ratio of (x) the aggregate principal balance of all Advances related to Solar Assets which have received Permission to Operate but have not yet made a payment under the related Solar Service Agreement as of such date divided by (y) the Aggregate Outstanding Advances as of such date.
“Funding Agent” shall mean, individually or collectively as the context may require, each Class A Funding Agent and each Class B Funding Agent, as applicable.
“Funding Date” shall mean any Business Day on which an Advance is made at the request of the Borrower in accordance with provisions of this Agreement.

A-21

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“GAAP” shall mean generally accepted accounting principles as are in effect from time to time and applied on a consistent basis (except for changes in application in which the Borrower’s independent certified public accountants and the Administrative Agent reasonably agree) both as to classification of items and amounts.
“Governmental Authority” shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Hedge Agreement” shall mean, collectively, (i) the ISDA Master Agreement, the related Schedule to the ISDA Master Agreement, and the related Confirmation or (ii) a long form confirmation, in each case in form and substance reasonably acceptable to the Administrative Agent.
“Hedge Counterparty” shall mean the initial counterparty under a Hedge Agreement, and any Qualifying Hedge Counterparty to such Hedge Agreement thereafter.
“Hedge Requirements” shall mean the requirements of the Borrower (i) within two (2) Business Days of the Closing Date and on each Funding Date to enter into forward-starting interest rate swap agreements with a forward start date no later than the Facility Maturity Date to an aggregate DV01 exposure of within +/- 5.0% of the then present value of such forward-starting interest rate swap agreement according to the aggregate Expected Amortization Profile of the Aggregate Outstanding Advances and, to the extent the expected notional balance of the Aggregate Outstanding Advances is equal to or greater than $5,000,000, with an amortizing notional balance schedule which, after giving effect to such interest rate swap agreement, will cause not greater than 125.0% and not less than 75.0% of the aggregate Expected Amortization Profile of the Aggregate Outstanding Advances to be subject to a fixed interest rate, with each such interest rate swap agreement being entered into at the market fixed versus LIBOR swap rate as at the date of the execution thereof and (ii) upon the election of the Borrower or no later than five (5) Business Days following the occurrence of a Hedge Trigger Event and each Funding Date thereafter enter into one or more interest rate swap or cap agreements with a Hedge Counterparty, under which the Borrower will expect to, at all times until the Facility Maturity Date, receive on or about each Payment Date, an amount required to maintain a fixed interest rate or interest rate protection at then current market interest rates on not greater than 110.0% and not less than 90.0% of the expected notional balance of the Aggregate Outstanding Advances through the Facility Maturity Date (determined after giving effect to Advances and payments made on the applicable Funding Date) (it being understood that an interest rate swap agreement entered into under clause (i) of this definition of “Hedge

A-22

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Requirements” (to the extent the effective date thereof is earlier than the Facility Maturity Date) may be taken into account in determining whether the Borrower satisfies the requirements of this clause (ii)).
“Hedge Trigger Event” shall mean the occurrence of either of the following (i) LIBOR for any Interest Accrual Period is greater than or equal to 2.75% or (ii) the end of the Availability Period.
“Hedged SREC” shall mean a solar renewable energy certificate representing any and all environmental credits, benefits, emissions reductions, offsets and allowances, howsoever entitled, that are created or otherwise arise from a PV System’s generation of electricity, including a solar renewable energy certificate issued to comply with a State’s renewable portfolio standard, which is subject to a Hedged SREC Agreement.
“Hedged SREC Agreement” shall mean, with respect to a PV System, the agreement evidencing all conditions to the payment of Hedged SREC Payments by the Eligible Hedged SREC Counterparty and the rate and timing of such Hedged SREC Payments.
“Hedged SREC Credit Support Obligations” shall mean that Indebtedness constituting credit support for Hedged SRECs in favor of Eligible Hedged SREC Counterparties in the form of guarantees, letters of credit and similar reimbursement and credit support obligations.
“Hedged SREC Payments” shall mean, with respect to a PV System and the related Hedged SREC Agreement, all payments due by the related Eligible Hedged SREC Counterparty under or in respect of such Hedged SREC Agreement.
“Hedged SREC Solar Asset” shall mean (i) a Hedged SREC Agreement and all rights and remedies of the Borrower thereunder, including all Hedged SREC Payments due on and after the related Cut-Off Date and any related security therefor, (ii) the related Hedged SRECs subject to such Hedged SREC Agreement, and (iii) all documentation in the Solar Asset File and other documents held by the Verification Agent related to such Hedged SREC Agreement and related Hedged SRECs.
“Host Customer” shall mean the customer under a Solar Service Agreement.
“Host Customer Payments” shall mean with respect to a PV System and a Solar Service Agreement, all payments due from the related Host Customer under or in respect of such Solar Service Agreement, including any amounts payable by such Host Customer that are attributable to sales, use or property taxes.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Host Customer Security Deposit” shall mean any security deposit that a Host Customer must provide in accordance with such Host Customer’s Solar Service Agreement or the Facility Administrator’s credit and collections policy.
“Host Customer Solar Asset” shall mean (i) a PV System installed on a residential property, (ii) all related real property rights, Permits and Manufacturer Warranties (in each case, to the extent transferable), (iii) all rights and remedies of the lessor/seller under the related Solar Service Agreement, including all Host Customer Payments on and after the related Cut-Off Date and any related security therefor (other than Host Customer Security Deposits) and all Energy Storage System Incentives, (iv) all related PBI Solar Assets on and after the related Cut-Off Date, and (v) all documentation in the Solar Asset File and other documents held by the Verification Agent related to such PV System, the Solar Service Agreement and PBI Documents, if any.
“Indebtedness” shall mean as to any Person at any time, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (i) borrowed money; (ii) obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (iii) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility; (iv) reimbursement obligations under any letter of credit, currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device (other than in connection with this Agreement); (v) obligations of such Person to pay the deferred purchase price of property or services; (vi) obligations of such Person as lessee under leases which have been or should be in accordance with GAAP recorded as capital leases; (vii) any other transaction (including without limitation forward sale or purchase agreements, capitalized leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements, and whether structured as a borrowing, sale and leaseback or a sale of assets for accounting purposes; (viii) any guaranty or endorsement of, or responsibility for, any Indebtedness of the types described in this definition; (ix) liabilities secured by any Lien on property owned or acquired, whether or not such a liability shall have been assumed (other than any Permitted Liens or Permitted Equity Liens); or (x) unvested pension obligations.
“Indemnified Taxes” shall mean (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Transaction Document and (ii) to the extent not otherwise described in clause (i), Other Taxes.
“Indemnitees” shall have the meaning set forth in Section 10.5.
“Independent Accountant” shall have the meaning set forth in the Facility Administration Agreement.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Independent Director” shall have the meaning set forth in Section 5.1(M).
“Initial Solar Asset” shall mean each Solar Asset listed on the Schedule of Solar Assets as of the Closing Date.
“Insolvency Event” shall mean, with respect to any Person:
(i)    the commencement of: (a) a voluntary case by such Person under the Bankruptcy Code or (b) the seeking of relief by such Person under other debtor relief Laws in any jurisdiction outside of the United States;
(ii)    the commencement of an involuntary case against such Person under the Bankruptcy Code (or other debtor relief Laws) and the petition is not controverted or dismissed within sixty (60) days after commencement of the case;
(iii)    a custodian (as defined in the Bankruptcy Code) (or equal term under any other debtor relief Law) is appointed for, or takes charge of, all or substantially all of the property of such Person;
(iv)    such Person commences (including by way of applying for or consenting to the appointment of, or the taking of possession by, a rehabilitator, receiver, custodian, trustee, conservator or liquidator (or any equal term under any other debtor relief Laws) (collectively, a “conservator”) of such Person or all or any substantial portion of its property) any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency, liquidation, rehabilitation, conservatorship or similar law of any jurisdiction whether now or hereafter in effect relating to such Person;
(v)    such Person is adjudicated by a court of competent jurisdiction to be insolvent or bankrupt;
(vi)    any order of relief or other order approving any such case or proceeding referred to in clauses (i) or (ii) above is entered;
(vii)    such Person suffers any appointment of any conservator or the like for it or any substantial part of its property that continues undischarged or unstayed for a period of sixty (60) days; or
(viii)    such Person makes a compromise, arrangement or assignment for the benefit of creditors or generally does not pay its debts as such debts become due.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Interconnection Agreement” shall mean, with respect to a PV System, a contractual obligation between a utility and a Host Customer that allows the Host Customer to interconnect such PV System to the utility electrical grid.
“Interest Accrual Period” shall mean for each Payment Date, the period from and including the immediately preceding Payment Date to but excluding such Payment Date except that the Interest Accrual Period for the initial Payment Date shall be the actual number of days from and including the Closing Date to, but excluding, the initial Payment Date; provided, however, that with respect to any application of Distributable Collections pursuant to Section 2.7(C) on a Business Day other than a Payment Date, the “Interest Accrual Period” shall mean the period from and including the immediately preceding Payment Date to but excluding such Business Day.
“Interest Distribution Amount” shall mean, individually or collectively as the context may require, the Class A Interest Distribution Amount and the Class B Interest Distribution Amount. For the avoidance of doubt, the Interest Distribution Amount shall not constitute “Confidential Information.”
“Intermediate Holdco” shall mean Sunnova Intermediate Holdings, LLC, a Delaware limited liability company.
“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, or any successor statute, and the rules and regulations thereunder, as the same are from time to time in effect.
“Inverter” shall mean, with respect to a PV System, the necessary device required to convert the variable direct electrical current (DC) output from a Solar Photovoltaic Panel into a utility frequency alternating electrical current (AC) that can be used by a Host Customer’s home or property, or that can be fed back into a utility electrical grid pursuant to an Interconnection Agreement.
“Law” shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, guideline, judgment, injunction, writ, decree or award of any Governmental Authority.
“Lease Agreement” shall mean an agreement between the owner of the PV System and a Host Customer whereby the Host Customer leases a PV System from such owner for fixed or escalating monthly payments.
“Lender Group” shall mean, individually or collectively as the context may require, each Class A Lender Group and each Class B Lender Group, as applicable.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Lender Group Percentage” shall mean, individually or collectively as the context may require, each Class A Lender Group Percentage and each Class B Lender Group Percentage, as applicable.
“Lender Representative” shall have the meaning set forth in Section 10.16(B)(i).
“Lenders” shall have the meaning set forth in the introductory paragraph hereof.
“Letter of Credit” means any letter of credit issued by an Eligible Letter of Credit Bank and provided by the Borrower to the Administrative Agent in lieu of or in substitution for moneys otherwise required to be deposited in the Liquidity Reserve Account or the Supplemental Reserve Account, as applicable, which Letter of Credit is to be held as an asset of the Liquidity Reserve Account or the Supplemental Reserve Account, as applicable, and which satisfies each of the following criteria: (i) the related account party of which is not the Borrower, (ii) is issued for the benefit of the Paying Agent, (iii) has a stated expiration date of at least 180 days from the date of determination (taking into account any automatic renewal rights), (iv) is payable in Dollars in immediately available funds to the Paying Agent upon the delivery of a draw certificate duly executed by the Paying Agent stating that (A) such draw is required pursuant to Section 8.2(C) or (D), as applicable, or (B) the issuing bank ceased to be an Eligible Letter of Credit Bank and the Letter of Credit has not been extended or replaced with a Letter of Credit issued by an Eligible Letter of Credit Bank within ten (10) Business Days such issuing bank ceasing to be an Eligible Letter of Credit Bank, (v) the funds of any draw request submitted by the Paying Agent in accordance with Sections 8.2(C) and (D) will be made available in cash no later than two (2) Business Days after the Paying Agent submits the applicable drawing documents to the related Eligible Letter of Credit Bank, and (vi) that has been reviewed by the Administrative Agent and otherwise contains terms and conditions that are acceptable to the Administrative Agent. For purposes of determining the amount on deposit in the Liquidity Reserve Account or the Supplemental Reserve Account, as applicable, the Letter of Credit shall be valued at the amount as of any date then available to be drawn under such Letter of Credit.
“LIBOR” shall mean (a) an interest rate per annum equal to the rate appearing on the applicable Screen Rate; or (b) (if no Screen Rate is available for U.S. Dollars or the Interest Accrual Period or such Screen Rate ceases to be available), the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Administrative Agent at its request quoted by the Base Reference Banks, in each case at approximately 11:00 A.M., London time, two (2) Business Days prior to the commencement of such Interest Accrual Period for the offering of deposits in U.S. Dollars in the principal amount of the Advances and for a three (3) month period. Notwithstanding the foregoing, if LIBOR as determined herein would be less than zero (0.00), such rate shall be deemed to be zero percent (0.00%) for purposes of this Agreement. Notwithstanding the foregoing,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


if at any time while any Advances are outstanding, the applicable London interbank offered rate described in the definition of Screen Rate ceases to exist or be reported on the Screen Rate, the Administrative Agent may select (with notice to the Borrower and any other Lenders) an alternative rate, including any applicable spread adjustments thereto (the "Alternative Rate") that in its commercially reasonable judgment is consistent with the successor for the London interbank offered rate, including any applicable spread adjustments thereto, generally being used in the new issue collateralized loan obligation market and all references herein to "LIBOR" will mean such Alternative Rate selected by the Administrative Agent.
“Lien” shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing).
“Liquidated Damages Amount” shall have the meaning set forth in the Sale and Contribution Agreement.
“Liquidation Fee” shall mean for any Interest Accrual Period for which a reduction of the principal balance of the relevant Advance is made for any reason, on any day other than the last day of such Interest Accrual Period, the amount, if any, by which (A) the additional interest (calculated without taking into account any Liquidation Fee or any shortened duration of such Interest Accrual Period) which would have accrued during the portion of such Interest Accrual Period for which the cost of funding had been established prior to such reduction of the principal balance on the portion of the principal balance so reduced, exceeds (B) the income, if any, received by the Conduit Lender or the Non-Conduit Lender which holds such Advance from the investment of the proceeds of such reductions of principal balance for the portion of such Interest Accrual Period for which the cost of funding had been established prior to such reduction of the principal balance. A statement as to the amount of any Liquidation Fee (including the computation of such amount) shall be submitted by the affected Conduit Lender or the Non-Conduit Lender to the Borrower and shall be prima facie evidence of the matters to which it relates for the purpose of any litigation or arbitration proceedings, absent manifest error or fraud. Such statement shall be submitted five (5) Business Days prior to such amount being due.
“Liquidity Reserve Account” shall have the meaning set forth in Section 8.2(A)(iii).
“Liquidity Reserve Account Required Balance” shall mean on any date of determination, an amount equal to the sum of (i) the product of (a) six, (b) one-twelfth, (c) the Aggregate Outstanding

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Advances and (d) the weighted average effective per annum rate used to calculate the Class A Interest Distribution Amounts and the Class B Interest Distribution Amounts for the immediately preceding Payment Date or, with respect to the initial Payment Date hereunder, 5.58%, (ii) the Final Stage Solar Asset Reserve Amount, (iii) the East Region Substantial Stage Date Solar Asset Reserve Amount, (iv) the Non-East Region Substantial Stage Date Solar Asset Reserve Amount and (v) the First Payment Date Reserve Amount.
“Loan Note” shall mean, individually or collectively as the context may require, each Class A Loan Note and each Class B Loan Note, as applicable.
“Majority Class B Lenders” shall mean, as of any date of determination, Class B Lenders having Class B Advances exceeding fifty percent (50%) of all outstanding Class B Advances.
“Majority Lenders” shall mean, as of any date of determination, (i) unless and until all Obligations owing to any Class A Lender solely in its capacity as a Class A Lender have been reduced to zero, Class A Lenders having Class A Advances exceeding fifty percent (50%) of all outstanding Class A Advances, and (ii) at any time on and after all Obligations owing to each Class A Lender solely in its capacity as Class A Lender have been reduced to zero, Class B Lenders having Class B Advances exceeding fifty percent (50%) of all outstanding Class B Advances; provided, that (w) in the event that no Advances are outstanding as of such date, “Majority Lenders” shall mean Administrative Agent, (x) so long as CSNY, its Affiliates or any related Conduit Lender with respect to CSNY or its Affiliates (the foregoing collectively referred to herein as the “Credit Suisse Related Parties”) holds at least twenty-five percent (25%) of Class A Advances or, if no Obligations are owing to any Class A Lender, Class B Advances or, if no Obligations are owing to any Lender, “Majority Lenders” shall include such Credit Suisse Related Party holding such Advances hereunder and (y) at any time there are two or less Class A Lenders, the term “Majority Lenders” shall mean all Class A Lenders holding at least ten percent (10%) of Class A Advances. For the purposes of determining the number of Lenders in the foregoing proviso, Affiliates of a Lender shall constitute the same Lender.  
“Management Agreement” shall mean, collectively, each document set forth under the heading “Management Agreements” on Schedule VIII hereto.
“Manager” shall mean, collectively, each entity set forth under the heading “Managers” on Schedule VIII hereto.
“Manager Fee” shall mean the fees, expenses and other amounts owed to the Manager pursuant to the Management Agreements.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Managing Member” shall mean, collectively, each entity set forth under the heading “Managing Members” on Schedule VIII hereto.
“Managing Member Distributions” shall mean all distributions and payments in any form made, or due to be made, to the Managing Members or the Borrower in connection with its ownership interest in the Managing Member Interests, including Hedged SREC Payments.
“Managing Member Distributions Payment Level” shall mean, for any Collection Period, the quotient (expressed as a percentage) of (i) the sum of all Managing Member Distributions actually received in the Collection Account during such Collection Period, divided by (ii) the Scheduled Managing Member Distributions during such Collection Period.
“Managing Member Interests” shall mean, collectively, the Managing Members’ interest in 100% of the interests listed under the heading “Managing Member Interests” on Schedule VIII hereto.
“Manufacturer’s Warranty” shall mean any warranty given by a manufacturer of a PV System relating to such PV System or any part or component thereof.
“Margin Stock” shall have the meaning set forth in Regulation U.
“Marketable REC” shall mean a renewable energy certificate representing any and all environmental credits, benefits, emissions reductions, offsets and allowances, howsoever entitled, that are created or otherwise arise from a PV System’s generation of electricity, including a solar renewable energy certificate issued to comply with a State’s renewable portfolio standard and in each case resulting from the avoidance of the emission of any gas, chemical, or other substance attributable to the generation of solar energy by a PV System. For the avoidance of doubt, Marketable RECs do not include any renewable energy certificates that are the basis for PBI Payments or to which a PBI Obligor is given title to under a performance based incentive program or the basis for any Hedged SREC Payments.
“Master Purchase Agreement” shall mean, collectively, each document set forth under the heading “Master Purchase Agreements” on Schedule VIII hereto.
“Material Adverse Effect” shall mean, any event or circumstance having a material adverse effect on any of the following: (i) the business, property, operations or financial condition of the Borrower, the Facility Administrator, the Parent, a Financing Fund, a Managing Member or SAP, (ii) the ability of the Borrower or the Facility Administrator to perform its respective obligations under the Transaction Documents (including the obligation to pay interest that is due and payable), (iii) the validity or enforceability of, or the legal right to collect amounts due under or with respect

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


to, a material portion of the Eligible Solar Assets, or (iv) the priority or enforceability of any liens in favor of the Administrative Agent.
“Maturity Date” shall mean the earliest to occur of (i) the Facility Maturity Date, (ii) the occurrence of an Event of Default and declaration of all amounts due in accordance with Section 6.2(B) and (iii) the date of any voluntary termination of the Facility by the Borrower; provided that the Maturity Date may be extended in accordance with Section 2.16.
“Maximum Facility Amount” shall mean $150,000,000.
“Minimum Payoff Amount” shall mean, with respect to a Takeout Transaction, an amount of proceeds equal to the sum of (i) the product of the aggregate Discounted Solar Asset Balance or the Collateral subject to such Takeout Transaction times the Effective Advance Rate then in effect plus (ii) any accrued interest with respect to the amount of principal of Advances being prepaid in connection with such Takeout Transaction, plus (iii) any fees due and payable to any Lender or the Administrative Agent with respect to such Takeout Transaction; provided that if such Takeout Transaction is being undertaken to cure an Event of Default, then the Minimum Payoff Amount shall include such additional proceeds as are necessary to cure such Event of Default, if any.
“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor rating agency.
“Multi‑Employer Plan” shall mean a multi‑employer plan, as defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making or accruing an obligation to make contributions or has within any of the preceding five plan years made or accrued an obligation to make contributions or had liability with respect to.
“Multiple Employer Plan” shall mean a Single Employer Plan, to which the Borrower or any ERISA Affiliate, and one or more employers other than the Borrower or an ERISA Affiliate, is making or accruing an obligation to make contributions or, in the event that any such plan has been terminated, to which the Borrower or an ERISA Affiliate made or accrued an obligation to make contributions during any of the five plan years preceding the date of termination of such plan.
“Nationally Recognized Accounting Firm” shall mean (A) PricewaterhouseCoopers LLP, Ernst & Young LLP, KPMG LLC, Deloitte LLP and any successors to any such firm and (B) any other public accounting firm designated by the Parent and approved by the Administrative Agent, such approval not to be unreasonably withheld or delayed.
“Net Cash Flow” shall mean for any Collection Period (i) with respect to the Managing Member Interests (A) the Scheduled Managing Member Distributions minus (B) the sum of (x) the Tax Equity Investor Distribution Reduction Amount for such Collection period and (y) amounts

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


attributable to (1) Solar Assets that were Transferable Solar Assets as of the last day of such Collection Period, and (2) SRECs related to the Solar Assets that are not Hedged SRECs, and (ii) with respect to a SAP Solar Asset (other than a Substantial Stage Solar Asset), an amount equal to (A) the sum of (x) the Scheduled Host Customer Payment for such SAP Solar Asset during such Collection Period, plus (y) the Scheduled PBI Payments for such SAP Solar Asset during such Collection Period minus (B) the Operational Amounts for such Collection Period.
“Net Scheduled Payment” shall mean, with respect to a Host Customer Solar Asset and PBI Solar Asset and any Collection Period an amount equal to (i) the sum of (A) the Scheduled Host Customer Payment for such Host Customer Solar Asset during such Collection Period, plus (B) the Scheduled PBI Payments for such Host Customer Solar Asset during such Collection Period, minus (ii) the Manager Fee and the Servicing Fee allocated with respect to such Host Customer Solar Asset during such Collection Period.
“Non-Conduit Lender” shall mean each Lender that is not a Conduit Lender.
“Non-East Region” means any state or territory of the United States that is not an East Region state or territory.
“Non-East Region Substantial Stage Date Solar Asset Reserve Amount” shall mean, as of any date of determination, the product of (i) 8/3 times (ii) the sum of the Class A Interest Distribution Amount and the Class B Interest Distribution Amount due and payable on the immediately succeeding Payment Date times (iii) the ratio of (x) the aggregate principal balance of all Advances related to Substantial Stage Solar Assets the Obligor of which is located in a Non-East Region as of such date divided by (y) the Aggregate Outstanding Advances as of such date; provided, however, that solely for the purpose of determining the Non-East Region Substantial Stage Date Solar Asset Reserve Amount as of the Closing Date, the Non-East Region Substantial Stage Date Solar Asset Reserve Amount shall be an amount reasonably calculated by the Administrative Agent and provided to the Borrower prior to the Closing Date.
“Notice of Borrowing” shall have the meaning set forth in Section 2.4.
“Obligations” shall mean and include, with respect to each of the Borrower, SAP, the Managing Members or Parent, respectively, all loans, advances, debts, liabilities, obligations, covenants and duties owing by such Person to the Administrative Agent, the Paying Agent or any Lender of any kind or nature, present or future, arising under this Agreement, the Loan Notes, the Security Agreement, the Pledge Agreement, the Subsidiary Guaranty, any of the other Transaction Documents or any other instruments, documents or agreements executed and/or delivered in connection with any of the foregoing, but, in the case of Parent, solely to the extent Parent is a party

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


thereto, whether or not for the payment of money, whether arising by reason of an extension of credit, the issuance of a letter of credit, a loan, guaranty, indemnification or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising. The term includes the principal amount of all Advances, together with interest, charges, expenses, fees, attorneys’ and paralegals’ fees and expenses, any other sums chargeable to the Borrower or Parent, as the case may be, under this Agreement or any other Transaction Document pursuant to which it arose but, in the case of Parent, solely to the extent Parent is a party thereto.
“OFAC” shall have the meaning set forth in Section 4.1(S).
“Officer’s Certificate” shall mean a certificate signed by an authorized officer of an entity.
“Operational Amounts” shall mean amounts necessary for SAP to pay the Manager for O&M Services and Servicing Services related to Solar Assets owned by SAP.
“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Transaction Document, or sold or assigned an interest in any Solar Asset or Transaction Document).
“Other Taxes” shall mean 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 Transaction Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.
“O&M Services” shall mean the services required to be performance by the Manager pursuant to the terms of each Management Agreement, including all administrative, operations, maintenance, collection and other management services with respect to the related Solar Assets, maintaining required insurance and collecting sales and use taxes payable by Host Customers under their Solar Service Agreements.
“Parent” shall mean Sunnova Energy Corporation, a Delaware corporation.
“Parent Guaranty” shall mean the Limited Performance Guaranty, dated as of the Closing Date, by the Parent in favor of the Borrower and the Administrative Agent.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Participant” shall have the meaning set forth in Section 10.8.
“Participant Register” shall have the meaning set forth in Section 10.8.
“Parts” shall mean components of a PV System.
“Patriot Act” shall have the meaning set forth in Section 10.18.
“Paying Agent” shall have the meaning set forth in the introductory paragraph hereof.
“Paying Agent Account” shall have the meaning set forth in Section 8.2(A)(v).
“Paying Agent Fee” shall mean a fee payable by the Borrower to the Paying Agent as set forth in the Paying Agent Fee Letter.
“Paying Agent Fee Letter” shall mean that certain letter agreement, dated as of August 22, 2019, between the Borrower and the Paying Agent.
“Paying Agent Indemnified Parties” shall have the meaning set forth in Section 9.5.
“Payment Date” shall mean the 30th day of each October, January, April and July or, if such 30th day is not a Business Day, the next succeeding Business Day, commencing October 2019.
“Payment Facilitation Agreement” shall mean each modification, waiver or amendment agreement (including a replacement Solar Service Agreement) entered into by the Manager in accordance with a Servicing Agreement relating to a Solar Service Agreement.
“PBI Documents” shall mean, with respect to a PV System, (i) all applications, forms and other filings required to be submitted to a PBI Obligor in connection with the performance based incentive program maintained by such PBI Obligor and the procurement of PBI Payments, and (ii) all approvals, agreements and other writings evidencing (a) that all conditions to the payment of PBI Payments by the PBI Obligor have been met, (b) that the PBI Obligor is obligated to pay PBI Payments and (c) the rate and timing of such PBI Payments.
“PBI Liquidated Damages” shall mean any liquidated damages due and payable to a PBI Obligor in respect of a Solar Asset.
“PBI Obligor” shall mean a utility or Governmental Authority that maintains or administers a renewable energy program designed to incentivize the installation of PV Systems and use of solar generated electricity that has approved and is obligated to make PBI Payments to the owner of the related PV System.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“PBI Payments” shall mean, with respect to a PV System and the related PBI Documents, all payments due by the related PBI Obligor under or in respect of such PBI Documents; provided, that PBI Payments do not include Rebates or Hedged SRECs or amounts received, if any, in respect of Hedged SRECs.
“PBI Solar Assets” shall mean (i) all rights and remedies of the payee under any PBI Documents related to such PV System, including all PBI Payments on and after the related Transfer Date and (ii) all documentation in the Solar Asset File and other documents held by the Verification Agent related to such than PBI Documents.
“Performance Guaranty” shall mean, with respect to a PV System, an agreement in the form of a production warranty between the Host Customer and Parent (or in some cases, between the Host Customer and the owner of the Solar Asset), which the Facility Administrator has agreed to perform on behalf of the Borrower that specifies a minimum level of solar energy production, as measured in kWh, for a specified time period. Such guarantees stipulate the terms and conditions under which the Host Customer could be compensated if their PV System does not meet the electricity production guarantees.
“Permission to Operate” shall mean, with respect to any PV System, receipt of a letter or functional equivalent from the connecting utility authorizing such PV System to be operated.
“Permits” shall mean, with respect to any PV System, the applicable permits, franchises, leases, orders, licenses, notices, certifications, approvals, exemptions, qualifications, rights or authorizations from or registration, notice or filing with any Governmental Authority required to operate such PV System.
“Permitted Assignee” shall mean (a) a Lender or any of its Affiliates, (b) any Person managed by a Lender or any of its Affiliates, and (c) any Program Support Provider for any Conduit Lender, an Affiliate of any Program Support Provider, or any commercial paper conduit administered, sponsored or managed by a Lender or to which a Non-Conduit Lender provides liquidity support, an Affiliate of a Lender or an Affiliate of an entity that administers or manages a Lender or with respect to which the related Program Support Provider of such commercial paper conduit is a Lender.
“Permitted Equity Liens” shall mean the ownership interest of the related Tax Equity Investor in the related Tax Equity Facility and in each case arising under the related Financing Fund LLCA.
“Permitted Indebtedness” shall mean (i) Indebtedness under the Transaction Documents, and (ii) to the extent constituting Indebtedness, reimbursement obligations of the Borrower owed to the Borrower in connection with the payment of expenses incurred in the ordinary course of

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


business in connection with the financing, management, operation or maintenance of the Solar Assets or the Transaction Documents.
“Permitted Investments” shall mean any one or more of the following obligations or securities: (i) (a) direct interest bearing obligations of, and interest-bearing obligations guaranteed as to payment of principal and interest by, the United States or any agency or instrumentality of the United States the obligations of which are backed by the full faith and credit of the United States; (b) direct interest-bearing obligations of, and interest-bearing obligations guaranteed as to payment of principal and interest by, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, but only if, at the time of investment, such obligations are assigned the highest credit rating by S&P; and (c) evidence of ownership of a proportionate interest in specified obligations described in (a) and/or (b) above; (ii) demand, time deposits, money market deposit accounts, certificates of deposit of and federal funds sold by, depository institutions or trust companies incorporated under the laws of the United States of America or any state thereof (or domestic branches of foreign banks), subject to supervision and examination by federal or state banking or depository institution authorities, and having, at the time of a relevant Borrower’s investment or contractual commitment to invest therein, a short term unsecured debt rating of “A-1” by S&P; (iii) securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States of America or any state thereof which have a rating of no less than “A-1+” by S&P and a maturity of no more than 365 days; (iv) commercial paper (including both non-interest bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the closing date thereof) of any corporation (other than the Parent), incorporated under the laws of the United States of America or any state thereof, that, at the time of the investment or contractual commitment to invest therein, a rating of “A-1” by S&P; (v) money market mutual funds, or any other mutual funds registered under the 1940 Act which invest only in other Permitted Investments, having a rating, at the time of such investment, in the highest rating category by S&P; (vi) money market deposit accounts, demand deposits, time deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal or state banking or depository institution authorities; provided, however, that at the time of the investment or contractual commitment to invest therein, the commercial paper or other short-term unsecured debt obligations (other than such obligations the rating of which is based on the credit of a Person other than such depository institution or trust company) thereof will be rated “A-1+” by S&P, including proprietary money market funds offered or managed by the Paying Agent or an Affiliate thereof; (vii) repurchase agreements with respect to obligations of, or guaranteed as to principal and interest by, the United States of America or any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States of America; provided, however, that the unsecured obligations of the party agreeing to repurchase such obligations at the time have a credit rating of no less than the A-1 by S&P; and

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(viii) any investment agreement (including guaranteed investment certificates, forward delivery agreements, repurchase agreements or similar obligations) with an entity which on the date of acquisition has a credit rating of no less than the A-1 by S&P, in each case denominated in or redeemable in Dollars.
“Permitted Investor” shall mean collectively, Energy Capital Partners III, LP, Energy Capital Partners III-A, LP, Energy Capital Partners III-B, LP, Energy Capital Partners III-C, LP and Energy Capital Partners-D, LP, Quantum Strategic Partners, and each of their Permitted Transferees (as defined in the Investors Agreement, dated as of March 29, 2018, by and among the Parent and the other signatories thereto).
“Permitted Liens” shall mean (i) any lien for taxes, assessments and governmental charges or levies owed by the applicable asset owner and not yet due and payable or which are being contested in good faith, (ii) Liens in favor of the Administrative Agent (or in favor of the Borrower and created pursuant to the Transaction Documents), (iii) solely in the case of Substantial Stage Solar Assets and Final Stage Solar Assets, workmen’s, mechanic’s, or similar statutory Liens securing obligations owing to approved channel partners (or subcontractors of channel partners) which are not yet due or for which reserves in accordance with GAAP have been established; provided that any such Solar Asset shall be classified as a Defective Solar Asset if not resolved within sixty (60) days of such Solar Asset receiving Permission to Operate from the applicable Governmental Authority, (iv) Liens on cash collateral or other liquid assets in favor of Eligible Hedged SREC Counterparties securing Hedged SREC Credit Support Obligations that constitute Permitted Indebtedness, (v) to the extent a PV System constitutes a fixture, any conflicting interest of an encumbrancer or owner of the real property that has or would have priority over the applicable UCC fixture filing (or jurisdictional equivalent) so long as any such lien does not adversely affect the rights of the Borrower of the Administrative Agent and (vi) any rights of customers under Host Customers Agreements.
“Person” shall mean any individual, corporation (including a business trust), partnership, limited liability company, joint‑stock company, trust, unincorporated organization or association, joint venture, government or political subdivision or agency thereof, or any other entity.
“Plan” shall mean an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code as to which the Borrower or any Affiliate may have any liability.
“Pledge Agreement” shall mean the Pledge Agreement, dated as of the Closing Date, by TEP Resources, the Borrower and the Managing Members in favor of the Administrative Agent, as amended, restated, modified and/or supplemented from time to time in accordance with its terms.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Potential Amortization Event” shall mean any occurrence or event that, with notice, passage of time or both, would constitute an Amortization Event.
“Potential Default” shall mean any occurrence or event that, with notice, passage of time or both, would constitute an Event of Default.
“Power Purchase Agreement” shall mean an agreement between the owner of the PV System and a Host Customer whereby the Host Customer agrees to purchase electricity produced by such PV System for a fixed fee per kWh.
“Prepaid Solar Asset” shall mean a Solar Asset for which the related Host Customer has prepaid all amounts under the related Solar Service Agreement.
“Projected Purchase Option Price” shall mean, with respect to a Purchase Option, an amount estimated by the related Managing Member and agreed upon by the Administrative Agent on or before the Scheduled Commitment Termination Date. Should the Availability Period expire before the Scheduled Commitment Termination Date, the Administrative Agent may use its reasonable judgment to estimate the Projected Purchase Option Price.
“Program Support Provider” shall mean and include any Person now or hereafter extending liquidity or credit or having a commitment to extend liquidity or credit to or for the account of, or to make purchases from, a Conduit Lender (or any related commercial paper issuer that finances such Conduit Lender) in support of commercial paper issued, directly or indirectly, by such Conduit Lender in order to fund Advances made by such Conduit Lender hereunder.
“Projected SREC Hedge Ratio” shall mean, with respect to a state and SREC Year, the quotient (expressed as a percentage) of (i) the sum of all SRECs to be delivered for such SREC Year (or portion of an SREC Year remaining) under Hedged SREC Agreements for such state, divided by (ii) SRECs that are available for delivery in such SREC Year (or portion of an SREC Year remaining) in such state, as calculated by the Administrative Agent. For the avoidance of doubt, only PV Systems that have been certified for SREC production will be included in the calculation of SRECs available for delivery.
“Puerto Rico Solar Asset” shall mean a Host Customer Solar Asset for which the related PV System is installed on a residence in Puerto Rico.
“Purchase Option” shall mean, collectively, each purchase option set forth under the heading “Purchase Options” on Schedule VIII hereto.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Purchase Option Price” shall have the meaning set forth in the Tax Equity Financing Documents.
“Purchase Standard” shall mean (i) the terms of the related Financing Fund LLCA and the terms of the Transaction Documents to which the Borrower is a party, (ii) the availability of funds in the Supplemental Reserve Account to pay the Purchase Option Price as then projected by the Facility Administrator and (iii) the same degree of analysis that the Borrower and its Affiliates use in determining whether or not to exercise similar purchase options for comparable assets owned by the Borrower and its Affiliates, taking into consideration the best interests of all parties to the Transaction Documents.
“PV System” shall mean, with respect to a Solar Asset, a photovoltaic system, including Solar Photovoltaic Panels, Inverters, Racking Systems, any Energy Storage Systems installed in connection therewith, wiring and other electrical devices, as applicable, conduits, weatherproof housings, hardware, remote monitoring equipment, connectors, meters, disconnects and over current devices (including any replacement or additional parts included from time to time).
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

“QFC Credit Support” shall have the meaning set forth in Section 10.24 hereof.
“Qualified Service Provider” shall mean one or more Independent Accountants or, subject to the approval of Administrative Agent, other service providers.
“Qualifying Hedge Counterparty” shall mean (i) a counterparty which at all times satisfies all then applicable counterparty criteria of S&P or Moody’s for eligibility to serve as counterparty under a structured finance transaction rated “A+”, in the case of S&P or “A1”, in the case of Moody’s or (ii) an affiliate of any Funding Agent (in which case rating agency counterparty criteria shall not be applicable).
“Qualifying Hedge Counterparty Joinder” shall mean that certain Joinder Agreement executed by a Qualifying Hedge Counterparty and acknowledged by the Administrative Agent, a copy of which shall be provided to all Parties to this Agreement.
“Racking System” shall mean, with respect to a PV System, the hardware required to mount and securely fasten a Solar Photovoltaic Panel onto the Host Customer site where the PV System is located.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Rebate” shall mean any rebate by a PBI Obligor, electric distribution company, or state or local governmental authority or quasi‑governmental agency as an inducement to install or use a PV System, paid upon such PV System receiving Permission to Operate.
“Recipient” shall mean the Administrative Agent, the Lenders or any other recipient of any payment to be made by or on account of any obligation of the Borrower under this Agreement or any other Transaction Document.
“Register” shall have the meaning set forth in Section 10.8.
“Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Relevant Parties” shall mean the Borrower, the Managing Members and SAP.
“Reportable Event” shall mean a reportable event as defined in Section 4043 of ERISA and the regulations issued under such Section, with respect to a Plan, excluding, however, such events as to which the Pension Benefit Guaranty Corporation by regulation or by public notice waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event, provided, that a failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waivers in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Internal Revenue Code.
“Required Tax Loss Insurance Coverage Period” shall mean the period beginning on the date on which a Tax Loss Insurance Policy is issued to, if prior to the scheduled expiration of a Tax Loss Insurance Policy, the Internal Revenue Service commenced an investigation of a Financing Fund that could result in a Tax Loss Indemnity with respect to such Financing Fund, the date of either (a) the termination of such investigation without a determination by the Internal Revenue Service that results in a Tax Loss Indemnity or (b) a final determination with respect to such investigation and payment of any Tax Loss Indemnity resulting from such final determination.
“Responsible Officer” shall mean (x) with respect to the Paying Agent, any President, Vice President, Assistant Vice President, Assistant Secretary, Assistant Treasurer or Corporate Trust Officer, or any other officer in the Corporate Trust Office customarily performing functions similar to those performed by any of the above designated officers, in each case having direct responsibility for the administration of this Agreement or the Facility Administration Agreement, as applicable, and (y) with respect to any other party hereto, any corporation, limited liability company or partnership, the chairman of the board, the president, any vice president, the secretary, the treasurer, any assistant secretary, any assistant treasurer, managing member and each other officer of such

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


corporation or limited liability company or the general partner of such partnership specifically authorized in resolutions of the board of directors of such corporation or managing member of such limited liability company to sign agreements, instruments or other documents in connection with the Transaction Documents on behalf of such corporation, limited liability company or partnership, as the case may be, and who is authorized to act therefor.
“S&P” shall mean S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, or any successor rating agency.
“Sale and Contribution Agreement” shall mean that certain Sale and Contribution Agreement, dated as of the Closing Date, by and among the Seller, TEP Resources and the Borrower.
“SAP” shall mean Sunnova SAP IV, LLC, a Delaware limited liability company.
“SAP Contribution Agreement” shall mean that certain Contribution Agreement, dated as of the Closing Date, between the Borrower and SAP.
“SAP Distributions” shall mean all distributions and payments in any form made, or due to be made, to the Borrower in connection with its ownership interest in SAP.
“SAP Financing Documents” shall mean the documents listed on Schedule IX hereto
“SAP NTP Financing Documents” shall mean the documents listed on Schedule X hereto.
“SAP Revenue Account” shall have the meaning set forth in Section 8.2(A)(iv).
“SAP Solar Asset” shall mean a Solar Asset owned by SAP.
“SAP Transfer” shall mean a transfer of Solar Assets pursuant to the SAP NTP Financing Documents pursuant to which (i) the SAP Solar Assets subject to such transfer are contemporaneously transferred to a Financing Fund and (ii) after giving effect thereto, neither a Class A Borrowing Base Deficiency nor a Class B Borrowing Base Deficiency exists, as demonstrated in a Borrowing Base Certificate delivered by the Borrower to the Administrative Agent no later than two (2) Business Days prior to the SAP Transfer.
“Schedule of Solar Assets” shall mean, as the context may require, the Schedule of Solar Assets owned by the Financing Funds and SAP, as such schedule may be amended from time to time in connection with the delivery of a Notice of Borrowing.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Scheduled Commitment Termination Date” shall mean May 20, 2022, unless otherwise extended pursuant to and in accordance with Section 2.16.
“Scheduled Hedged SREC Payments” shall mean the payments scheduled to be paid by an Eligible Hedged SREC Counterparty during each Collection Period, if any, as set forth on Schedule IV hereto, as the same may be updated from time to time.
“Scheduled Host Customer Payments” shall mean for each Solar Asset, the payments scheduled to be paid by a Host Customer during each Collection Period in respect of the initial term of the related Solar Services Agreement, as set forth on Schedule V hereto, as the same may be updated from time to time and may be adjusted by the Facility Administrator to reflect that such Solar Asset has become a Defaulted Solar Asset, a Defective Solar Asset or if a Payment Facilitation Agreement has been executed in connection with such Solar Asset. The Scheduled Customer Payments exclude any amounts attributable to sales, use or property taxes to be collected from Host Customers.
“Scheduled Managing Member Distributions” shall mean forecasted Managing Member Distributions set as set forth on Schedule VII hereto.
“Scheduled PBI Payments” shall mean for each Solar Asset, the payments scheduled to be paid by a PBI Obligor during each Collection Period, if any, as set forth on Schedule VI hereto, as the same may be updated from time to time and may be adjusted by the Facility Administrator to reflect that such Solar Asset has become a Defaulted Solar Asset, a Defective Solar Asset or if a Payment Facilitation Agreement has been executed in connection with such Solar Asset.
“Screen Rate” shall mean the London interbank offer rate administered by ICE Benchmark Administration Limited for the relevant currency and period displayed on the appropriate page of the Thomson Reuters screen. If the agreed page is replaced or service ceases to be available, the Administrative Agent may specify another page or service displaying the same rate after consultation with the Borrower and the Majority Lenders.
“Secured Parties” shall mean the Administrative Agent, each Lender and each Qualifying Hedge Counterparty.
“Security Agreement” shall mean the Security Agreement, dated as of the Closing Date, executed and delivered by the Borrower, SAP and the Managing Members in favor of the Administrative Agent, for the benefit of the Secured Parties, as amended, restated, modified and/or supplemented from time to time in accordance with its terms.
“SEI” shall mean Sunnova Energy International Inc., a Delaware corporation.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Seller” shall mean TEP Developer.
“Servicing Agreement” shall mean, collectively, each document set forth under the heading “Servicing Agreements” on Schedule VIII hereto.
“Servicing Fee” shall mean the fees, expenses and other amounts owed to the Manager pursuant to the Servicing Agreements.
“Servicing Services” shall mean the services required to be performed by the Manager pursuant to the terms of each Servicing Agreement, including all billing and collection services with respect to the related Solar Assets.
“Single Employer Plan” shall mean any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multi‑Employer Plan, that is subject to Title IV of ERISA or Section 412 of the Internal Revenue Code and is sponsored or maintained by the Borrower or any ERISA Affiliate or for which the Borrower or any ERISA Affiliate may have liability by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.
“Solar Asset” shall mean a Host Customer Solar Asset, PBI Solar Asset or a Hedged SREC Solar Asset, in each case owned by a Financing Fund or SAP, as applicable.
“Solar Asset File” shall have the meaning set forth in the Verification Agent Agreement.
“Solar Asset Owner Member Interests” shall mean, collectively, the 100.00% equity interests in the Managing Members and SAP.
“Solar Asset Payment Level” shall mean, for any Collection Period, the quotient (expressed as a percentage) of (i) the sum of all Host Customer Payments, PBI Payments, Hedged SREC Payments actually received by the Financing Fund or SAP, as applicable, during such Collection Period, divided by (ii) the sum of all Scheduled Host Customer Payments, Scheduled PBI Payments and Scheduled Hedged SREC Payments during such Collection Period.
“Solar Photovoltaic Panel” shall mean, with respect to a PV System, the necessary hardware component that uses wafers made of silicon, cadmium telluride, or any other suitable material, to generate a direct electrical current (DC) output using energy from the sun’s light.
“Solar Service Agreement” shall mean in respect of a PV System, a Lease Agreement or a Power Purchase Agreement entered into with a Host Customer and all related Ancillary Solar Service Agreements, including any related Payment Facilitation Agreements, but excluding any Performance Guaranty or Customer Warranty Agreement.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Solvent” shall mean, with respect the Borrower, that as of the date of determination, both (a) (i) the sum of such entity’s debt (including contingent liabilities) does not exceed the present fair saleable value of such entity’s present assets; (ii) such entity’s capital is not unreasonably small in relation to its business as contemplated on the Closing Date; and (iii) such entity 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 (b) such entity is “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).
“SREC” shall mean a solar renewable energy certificate representing any and all environmental credits, benefits, emissions reductions, offsets and allowances, howsoever entitled, that are created or otherwise arise from a PV System’s generation of electricity, including, but not limited to, a solar renewable energy certificate issued to comply with a State’s renewable portfolio standard.
“SREC Year” shall mean (i) with respect to New Jersey, the twelve-month period beginning on June 1 and ending on May 31 and numbered in accordance with the calendar year in which such twelve-month period ends and (ii) with respect to Massachusetts, a calendar year.
“Subsidiary” shall mean, with respect to any Person at any time, (i) any corporation or trust of which 50% or more (by number of shares or number of votes) of the outstanding Capital Stock or shares of beneficial interest normally entitled to vote for the election of one or more directors, managers or trustees (regardless of any contingency which does or may suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person’s subsidiaries, or any partnership of which such Person or any of such Peron’s Subsidiaries is a general partner or of which 50% or more of the partnership interests is at the time directly or indirectly owned by such Person or one or more of such Person’s subsidiaries, and (ii) any corporation, trust, partnership or other entity which is controlled or capable of being controlled by such Person or one or more of such Person’s subsidiaries.
“Subsidiary Guaranty” shall mean the Guaranty, dated as of the Closing Date, by SAP, the Managing Members and each other party joined thereto as a guarantor in favor of the Administrative Agent.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Substantial Stage Solar Asset” shall mean a Solar Asset that has not yet been installed but for which the Parent or an Affiliate thereof has been issued a “notice to proceed” confirming that the Host Customer has signed a Solar Service Agreement, and a channel partner has submitted a final design proposal and such proposal has been approved by the Parent or an Affiliate thereof, as of a Funding Date.
“Successor Facility Administrator” shall mean a successor Facility Administrator appointed pursuant to the Facility Administration Agreement.
“Sunnova Credit Facility” shall mean any financing agreement providing extensions of credit to the Parent or its Subsidiaries in which the Administrative Agent or its affiliates is a lender, agent or noteholder thereunder.
“Sunnova Inventory Holdings” shall mean Sunnova Inventory Holdings, LLC, a Delaware limited liability company.
“Sunnova Inventory Pledgor” shall mean Sunnova Inventory Pledgor, LLC, a Delaware limited liability company.
“Sunnova Management” shall mean Sunnova TE Management, LLC, a Delaware limited liability company.
“Supplemental Reserve Account” shall have the meaning set forth in Section 8.2(A)(ii).
“Supplemental Reserve Account Deposit” shall mean, for any Payment Date after Availability Period, an amount equal to the sum of (i) any Supplemental Reserve Account Deposit amounts from Payment Dates not deposited into the Supplemental Reserve Account, and (ii) the lesser of (a) the product of (1) one-fourth of $[***] and (2) the aggregate DC nameplate capacity (measured in kW) of all PV Systems owned by the Financing Funds and SAP which are operational (excluding Transferable Solar Assets) and that have related Solar Service Agreements with remaining terms that exceed the remaining terms of the related manufacturer warranty for the Inverter associated with such PV System and (b) the Supplemental Reserve Account Required Balance as of the related Calculation Date minus the sum of (1) the amount on deposit in the Supplemental Reserve Account as of the related Calculation Date, and (2) the amount, if any, being deposited into the Supplemental Reserve Account on such Payment Date pursuant to clause (i). Notwithstanding the foregoing, the Supplemental Reserve Account Deposit shall be $0 for any Payment Date on which the sum of Distributable Collections is greater than or equal to the sum of (i) the payments and distributions required under clauses (i) through (iii) of Section 2.7(B) and (ii) the Aggregate Outstanding Advances as of such Payment Date prior to any distributions made on such Payment Date.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Supplemental Reserve Account Required Balance” shall mean, as of any date of determination, (i) prior to the end of the Availability Period, $[***] or (ii) after the Availability Period, an amount equal to the sum of (a) for any Payment Date prior to the date on which a Managing Member has acquired the related Tax Equity Investor Interests in the related Financing Fund pursuant to the related Purchase Option, the sum of the Projected Purchase Option Prices under each Financing Fund, (b) for any Payment Date during a Required Tax Loss Insurance Coverage Period, the Tax Loss Insurance Deductibles and (c) the product of (1) $[***] and (2) the aggregate DC nameplate capacity (measured in kW) of all PV Systems owned by the Financing Funds and SAP which are operational (excluding Transferable Solar Assets) and that have related Solar Service Agreements with remaining terms that exceed the remaining terms of the related manufacturer warranty for the Inverter associated with such PV System.

“Supported QFC” shall have the meaning set forth in Section 10.24 hereof.
“Swap Rate” shall mean, as of any date of determination, the then current weighted average of (i) the fixed interest rates under the swap agreements entered into in accordance with clause (i) of the definition of Hedge Requirements and (ii) with respect to any Advance not yet hedged in accordance with such clause (i) the then current fixed versus LIBOR swap rate associated with the Expected Amortization Profile of such Advance, as determined by the Administrative Agent in consultation with the Borrower.
“Takeout Agreements” shall mean agreements, instruments, documents and other records entered into in connection with a Takeout Transaction.
“Takeout Transaction” shall mean (i) any sale, assignment or other transfer of the Solar Asset Owner Member Interests and related Collateral (either directly or through the sale, assignment or other transfer of all the Capital Stock of the Borrower) by the Borrower to any of its Affiliates (including a special purpose bankruptcy remote subsidiary of Parent) or to a third party, in each case, in an arms’ length transaction, which Collateral is used to secure or provide for the payment of amounts owing (or to be owing) or expected as a result of the issuance of equity or debt securities or other Indebtedness by a Person other than the Borrower that are backed by such Collateral (a “Financing Transaction”); provided, that there is no Borrowing Base Deficiency, then the Borrower may only enter into a Takeout Transaction if immediately after giving effect to such Financing Transaction, (w) no Event of Default exists (unless such Event of Default would be cured by application of the net proceeds of such Financing Transaction), (x) an amount equal to the greater of $[***] or the Minimum Payoff Amount for the Collateral removed from the Borrower in the Financing Transaction shall be deposited into the Takeout Transaction Account for distribution in accordance with Section 2.8(C), (y) there are no selection procedures utilized which are materially adverse to the Lenders with respect to those items of the Collateral assigned by the Borrower in the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Financing Transaction and (z) such Financing Transaction is not guaranteed by and has no material recourse to the Borrower (except that such assets are being sold and assigned by it free and clear of all Liens), (ii) a financing arrangement, securitization, sale or other disposition of such Collateral (either directly or through the sale or other disposition of all the Capital Stock of the Borrower, a Managing Member, a Financing Fund or SAP) entered into by Borrower or any of its Affiliates other than under this Agreement so long as (1) all proceeds of such transaction shall have been deposited into the Takeout Transaction Account and (2) such proceeds are sufficient, together with any equity contributions of the Parent, to repay the Obligations prorated to the reduction in the Borrowing Base as a result of such transaction, or (iii) any other financing arrangement, securitization, sale or other disposition of items of Collateral (either directly or through the sale or other disposition of the Capital Stock of the Borrower, a Managing Member, a Financing Fund, or SAP) entered into by Borrower or any of its Affiliates other than under this Agreement that is not a Financing Transaction and that has been consented to in writing by the Administrative Agent and the Majority Lenders.
“Takeout Transaction Account” shall have the meaning set forth in Section 8.2(A)(v).
“Tax Credit” shall mean an investment tax credit under Section 48(a)(3)(A)(i) of the Code or any successor provision.
“Tax Equity Facility” shall mean each transaction contemplated by the Tax Equity Financing Documents.
“Tax Equity Financing Documents” shall mean, collectively, each document set forth under the heading “Tax Equity Financing Documents” on Schedule VIII hereto.
“Tax Equity Investor” shall mean, collectively, each entity set forth under the heading “Tax Equity Investors” on Schedule VIII hereto.
“Tax Equity Investor Consent” shall mean the consent of a Tax Equity Investor of the related Tax Equity Financing Documents, as applicable relating to the transactions contemplated by this Facility.
“Tax Equity Investor Distribution Reduction Amount” shall mean, for any Collection Period, amounts required to be paid by the Financing Funds to the Tax Equity Investors, in each case, which reduce Scheduled Managing Member Distributions for such Collection Period.
“Tax Equity Investor Interests” shall mean the Tax Equity Investors’ interest in 100% of the Class A Interest in the related Financing Fund.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Tax Equity Party” shall mean each of the Financing Funds, the Managing Members and SAP.
“Tax Loss” shall mean the amount a Tax Credit and other federal tax benefits assumed in the Base Case Model that the respective Financing Fund, the respective Managing Member or the respective Tax Equity Investor (or their respective affiliates) shall lose the benefit of, shall not have the right to claim, shall suffer the disallowance or reduction of, shall be required to recapture or shall not claim (as a result of a final determination in accordance with the terms of such Financing Fund LLCA.
“Tax Loss Claim” shall mean the assertion by the Internal Revenue Service of a position that would result in a Tax Loss Indemnity if not reversed through administrative action or litigation.
“Tax Loss Indemnity” shall mean a Managing Member’s obligation, pursuant to the terms of the related Financing Fund LLCA, to pay the related Tax Equity Investor the amount of any Tax Loss, reduced by any Tax Savings and grossed up for any U.S. federal interest, penalties, fines or additions to tax payable by a Managing Member or the related Tax Equity Investor (or their respective affiliates) as a result thereof and for the net amount of any additional U.S. federal income taxes payable by a Managing Member or the related Tax Equity Investor (or their respective affiliates) as a result of including any Tax Loss Indemnity payment in its income, in each case as a result of the breach or inaccuracy of certain representations, warranties and covenants of a Managing Member set forth in such Financing Fund LLCA or the failure by Managing Member to comply with applicable law in connection with its acts or omissions pursuant to, or the performance of any covenant or obligation under, such Financing Fund LLCA.
“Tax Loss Insurance Deductible” shall mean, with respect to a Tax Loss Insurance Policy, the deductible due under such Tax Loss Insurance Policy. Should the Availability Period expire before a Tax Loss Insurance Policy is entered into, the Administrative Agent may use reasonable judgment to estimate the Tax Loss Insurance Deductible.
“Tax Loss Insurance Policy” shall mean the policy of insurance issued by a Tax Loss Insurer with respect to a Financing Fund naming such Financing Fund and the related Managing Member as insureds and such Financing Fund as loss payee, in form and substance (including, but not limited to, amounts and coverage period) approved by the Administrative Agent in its sole discretion.
“Tax Loss Insurer” shall mean the insurance company party to any Tax Loss Insurance Policy.
“Tax Savings” shall mean, with respect to a Tax Loss, any federal income tax savings realized by a Managing Member or the related Tax Equity Investor (or their respective affiliates) as a result

A-48

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


of the Tax Loss, using an assumed tax rate equal to the maximum allowable U.S. federal corporate income tax rate applicable to corporations as of a given date of determination.
“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, and including any interest, additions to tax or penalties applicable thereto.
“TEP Collateral Account” shall have the meaning set forth in Section 5.1(W).
“TEP Developer” shall mean Sunnova TEP Developer, LLC, a Delaware limited liability company.
“TEP II Credit Agreement” shall mean that certain Amended and Restated Credit Agreement, dated as of March 29, 2019, by and among Sunnova TEP II Holdings, LLC, a Delaware limited liability company, as borrower, Sunnova TE Management II, LLC, a Delaware limited liability company, as facility administrator, the financial institutions from time to time parties thereto, as lenders, each funding agent representing a group of lenders thereunder, Credit Suisse AG, New York Branch, as administrative agent for the lenders thereunder, Wells Fargo Bank, National Association, not in its individual capacity, but solely as paying agent, and U.S. Bank National Association, as verification agent, as amended, restated, modified and/or supplemented.
“TEP II Transaction Documents” shall mean the “Transaction Documents” referred to in the TEP II Credit Agreement.
“TEP Inventory” shall mean Sunnova TEP Inventory, a Delaware limited liability company.
“TEP Resources” shall mean Sunnova TEP Resources, a Delaware limited liability company.
“Terminated Solar Asset” shall mean a Solar Asset for which the related PV System has experienced an Event of Loss and (i) is not repaired, restored, replaced or rebuilt to substantially the same condition as it existed immediately prior to the Event of Loss within 120 days of such Event of Loss or (ii) is deemed to be a “Cancelled Project” in accordance with the related Master Purchase Agreement.
“Transaction Documents” shall mean this Agreement, the Loan Notes, the Security Agreement, the Pledge Agreement each Fee Letter, the Paying Agent Fee Letter, the Verification Agent Fee Letter, the Facility Administration Agreement, the Verification Agent Agreement, the Contribution Agreements, the Sale and Contribution Agreement, the SAP Contribution Agreement, the Parent Guaranty, the Tax Equity Investor Consents, each Hedge Agreement, and any other agreements, instruments, certificates or documents delivered hereunder or thereunder or in

A-49

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


connection herewith or therewith, and “Transaction Document” shall mean any of the Transaction Documents.
“Transfer Date” shall mean (i) with respect to Initial Solar Assets, the Closing Date and (ii) (x) with respect to any Additional Solar Asset that is not a SAP Solar Asset, the date on which such Additional Solar Asset is included in the definition of Borrowing Base and the Lenders make an Advance against such Additional Solar Asset and (y) with respect to any Additional Solar Asset that is a SAP Solar Asset, the date set forth in the relevant Additional Solar Asset Supplement (as defined in the Sale and Contribution Agreement).
“Transferable Solar Asset” shall mean (i) any Solar Asset that constitutes a Defaulted Solar Asset, Defective Solar Asset, Delinquent Solar Asset, or Terminated Solar Asset and (ii) any other Solar Asset that is not an Eligible Solar Asset hereunder.
“UCC” shall mean the Uniform Commercial Code as from time to time in effect in any applicable jurisdiction.
“Underwriting and Reassignment Credit Policy” shall mean the internal underwriting and reassignment policy of TEP Developer attached as Exhibit J hereto.
“United States” shall mean the United States of America.
“Unused Line Fee” shall have the meaning set forth in Section 2.5(D).
“Unused Line Fee Percentage” shall have the meaning set forth in the Fee Letter referred to in clause (i) of the definition thereof.
“Unused Portion of the Commitments” shall mean, as of any date of determination, the sum of the Class A Unused Portion of the Commitments plus the Class B Unused Portion of the Commitments as of such date of determination.
“Usage Percentage” shall mean, as of such date of determination, a percentage equal to (i) the Aggregate Outstanding Advances divided by (ii) the Aggregate Commitment as of such date.
“U.S. Person” shall mean any Person who is a U.S. person within the meaning of Section 7701(a)(30) of the Internal Revenue Code.

“U.S. Special Resolution Regime” shall have the meaning set forth in Section 10.24 hereof.

A-50

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“U.S. Tax Compliance Certificate” shall have the meaning set forth in Section 2.17(G)(ii)(b)(3).
“Verification Agent” shall have the meaning set forth in the introductory paragraph hereof.
“Verification Agent Agreement” shall mean the Verification Agent Agreement dated as of or about the Closing Date, by and among the Verification Agent, the Borrower, the Facility Administrator and the Administrative Agent, as amended, restated, modified and/or supplemented from time to time in accordance with its terms.
“Verification Agent Fee” shall mean a fee payable by the Borrower to the Verification Agent as set forth in the Verification Agent Fee Letter.
“Verification Agent Fee Letter” shall mean the Verification Agent Fee Letter, dated as of the date hereof, among the Borrower and the Verification Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.


A-51

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT B‑1
FORM OF BORROWING BASE CERTIFICATE
BORROWING BASE CERTIFICATE
SUNNOVA TEP HOLDINGS, LLC
[DATE]
In connection with that certain Credit Agreement, dated as of September 6, 2019 (as may be amended from time to time, the “Credit Agreement”), by and among SUNNOVA TEP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA TE MANAGEMENT, LLC, a Delaware limited liability company, as Facility Administrator (in such capacity, the “Facility Administrator”), CREDIT SUISSE AG, NEW YORK BRANCH, as Administrative Agent for the financial institutions that may become parties thereto as Lenders, the Lenders, WELLS FARGO BANK, NATIONAL ASSOCIATION, as Paying Agent, and U.S. BANK NATIONAL ASSOCIATION, as Verification Agent, the Borrower hereby certifies that
1.    The attached Schedule I sets forth the borrowing base calculations with respect to Class A Advances on the proposed Funding Date (the “Class A Borrowing Base Calculation”) and provides all data used, in Excel format, to calculate the foregoing as of the date set forth above and the computations reflected in the Class A Borrowing Base Calculation are true, correct and complete.
2.    The attached Schedule II sets forth the borrowing base calculations with respect to Class B Advances on the proposed Funding Date (the “Class B Borrowing Base Calculation”) and provides all data used, in Excel format, to calculate the foregoing as of the date set forth above and the computations reflected in the Class B Borrowing Base Calculation are true, correct and complete.
3.    The attached Schedule III sets forth the Excess Concentration Amount calculations on the Funding Date (the “Excess Concentration Amount Calculation”) and provides all data used, in Excel format, to calculate the foregoing as of the date set forth above and the computations reflected in the Excess Concentration Amount Calculation are true, correct and complete.
4.    Each Solar Asset included in the Class A Borrowing Base Calculations and in the Class B Borrowing Base Calculations constitutes an Eligible Solar Asset as of the

B-1-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


date hereof and the Excess Concentration Amount Calculation has been computed based on the information known to the Borrower or Facility Administrator as of the date hereof.
Capitalized terms used but not defined herein shall have the meanings specified in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first written above.
SUNNOVA TEP HOLDINGS, LLC, as Borrower
By:
_________________________________
Name:
Title:


B-1-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE I

Class A Borrowing Base Calculation

1. Aggregate Discounted Solar Asset Balance                $_____________
2. Excess Concentration Amount (see Line 45 of Schedule III)        $_____________
3. Line 1 minus Line 2                            $_____________
4. Solar Assets other than Puerto Rico Solar Assets
or Substantial Stage Solar Assets included in Line 3 times 70.00%    $_____________
5. Puerto Rico Solar Assets other than Substantial Stage Solar Assets
included in Line 3 times 63.00%                        $_____________
6. Substantial Stage Solar Assets
included in Line 3 times (x) during the Borrowing Base Step-up
Period, 61.25% and (y) at all times after the Borrowing Base Step-up
Period, 52.50%                                $_____________
7. Line 4 plus Line 5 plus Line 6 (the “Class A Borrowing Base”)     $_____________
8. The Class A Aggregate Commitment                  $87,500,000
9. The lesser of Line 7 or Line 8                         $_____________
                        
                        



B-1-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE II

Class B Borrowing Base Calculation

1. Aggregate Discounted Solar Asset Balance                $_____________
2. Excess Concentration Amount (see Line 45 of Schedule III)        $_____________
3. Line 1 minus Line 2                            $_____________
4. Solar Assets other than Puerto Rico Solar Assets
or Substantial Stage Solar Assets included in Line 3 times 10.00%    $_____________
5. Puerto Rico Solar Assets other than Substantial Stage Solar Assets
included in Line 3 times 9.00%                        $_____________
6. Substantial Stage Solar Assets
included in Line 3 times (x) during the Borrowing Base Step-up
Period, 8.75% and (y) at all times after the Borrowing Base Step-up
Period, 7.50%                                 $_____________
7. Line 4 plus Line 5 plus Line 6 (the “Class B Borrowing Base”)     $_____________
8. The Class B Aggregate Commitment                      $12,500,000
9. The lesser of Line 7 or Line 8                        $_____________


B-1-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



SCHEDULE III
Excess Concentration Amount Calculation1 
1.    Aggregate Discounted Solar Asset Balance
$_____________
2.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer had a FICO score of less than [***] at the time of origination
$_____________
3.    Line 1 times 35.0%
$_____________
4.    Line 2 minus 3 (enter $0 if less than $0)
$_____________
 
 
5.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer had a FICO score of less than [***] at the time of origination
$_____________
6.    Line 1 times 28.0%
$_____________
7.    Line 5 minus Line 6 (enter $0 if less than $0)
$_____________
 
 
8.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer reside in the state in the United States with the highest concentration of Host Customers measured by the aggregate Discounted Solar Asset Balance in each state and the Aggregate Discounted Solar Asset Balance
$_____________
9.    Line 1 times 50.0%
$_____________
10.    Line 8 minus Line 9 (enter $0 if less than $0)
$_____________
 
 
11.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer reside in any one of the two states in the United States with either the highest or the second highest concentrations of Host Customers measured by the aggregate Discounted Solar Asset Balance in each state and the Aggregate Discounted Solar Asset Balance
$_____________
12.    Line 1 times 75.0%
$_____________
13.    Line 11 minus Line 12 (enter $0 if less than $0)
$_____________
 
 
14.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer reside in any one of the three states in the United States with either the highest, second highest or third highest concentrations of Host Customers measured by the aggregate Discounted Solar Asset Balance in each state and the Aggregate Discounted Solar Asset Balance
$_____________
15.    Line 1 times 85.0%
$_____________
16.    Line 14 minus Line 15 (enter $0 if less than $0)
$_____________

B-1-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


17.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer was a resident of Puerto Rico, Guam or the Northern Mariana Islands at the time of origination
$_____________
18.    Line 1 times 20.0%
$_____________
19.    Line 17 minus Line 18 (enter $0 if less than $0)
$_____________
20.    [Reserved] 
$_____________
21.    [Reserved] 
$_____________
22.    [Reserved]
$_____________
23.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer was a resident of Guam at the time of origination
$_____________
24.    Line 1 times 7.5%
$_____________
25.    Line 23 minus Line 24 (enter $0 if less than $0)
$_____________
26.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer was a resident of the Northern Mariana Islands at the time of origination
$_____________
27.    Line 1 times 1.5%
$_____________
28.    Line 26 minus Line 27 (enter $0 if less than $0)
$_____________
29.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets with Credit Card Receivables
$_____________
30.    Line 1 times 2.5%
$_____________
31.    Line 29 minus Line 30 (enter $0 if less than $0)
$_____________
32.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets that are Final Stage Solar Assets
$_____________
33.    Line 1 times 20.0%
$_____________
34.    Line 32 minus Line 33 (enter $0 if less than $0)
$_____________
35.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets that are Substantial Stage Solar Assets
$_____________
36.    Line 1 times 20.0%
$_____________
37.    Line 35 minus Line 36 (enter $0 if less than $0)
$_____________
38.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets that are Final Stage Solar Assets or Substantial Stage Solar Assets
$_____________
39.    Line 1 times 35.0%
$_____________
40.    Line 38 minus Line 39 (enter $0 if less than $0)
$_____________
41.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets for which the related PV System includes an Energy Storage System
$_____________
42.    Line 1 times 50.0%
$_____________
43.    Line 41 minus Line 42 (enter $0 if less than $0)
$_____________

B-1-6

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


44.    The aggregate Discounted Solar Asset Balance of all Eligible Solar Assets relating to any one Host Customer which exceeds the lesser of (i) one percent (1.00%) the Maximum Facility Amount and (ii) the U.S. Dollar equivalent of 1.5 million Swiss Francs (calculated at the rate of exchange at which, in accordance with normal banking procedures, the Administrative Agent could purchase with U.S. Dollars, Swiss Francs in New York City, New York, at the close of business on the day prior to such date of determination)
$_____________
45.    The sum of Line 4 plus Line 7 plus Line 10 plus Line 13 plus Line 16 plus Line 19 plus Line 22 plus Line 25 plus Line 28 plus Line 31 [plus Line 34 plus Line 37]2 plus Line 40 plus Line 43 plus Line 44 (the “Excess Concentration Amount”)
$_____________



















_________________
1 For the purpose of calculating the Excess Concentration Amount, Prepaid Solar Assets shall be deemed to have a Discounted Solar Asset Balance equal to [***].
2 For the purpose of calculating the Excess Concentration Amount, Lines 34, 37 and 40 shall not be included during the period commencing on the Closing Date or the effective date of a Takeout Transaction and ending ninety (90) days thereafter.

B-1-7

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT B‑2
FORM OF NOTICE OF BORROWING
__________ ___, 20__
To:    Credit Suisse AG, New York Branch, as Administrative Agent Class A Funding Agent and Class B Funding Agent
11 Madison Avenue, 3rd Floor
New York, NY 10010
Attention:    Patrick Duggan
    Patrick Hart
Wells Fargo Bank, National Association, as Paying Agent
600 S. 4th Street, MAC N9300-061
Minneapolis, MN 55479
Attention: Corporate Trust Services – Asset Backed Administration,
E-mail: ctsabsservicer@wellsfargo.com
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of September 6, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Sunnova TEP Holdings, LLC (the “Borrower”), Credit Suisse AG, New York Branch, as Administrative Agent for the financial institutions that may from time to time become parties thereto as Lenders (in such capacity, the “Administrative Agent”), the Lenders, Wells Fargo Bank, National Association, as Paying Agent and U.S. Bank National Association, as Verification Agent. Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.
A: In accordance with Section 2.4 of the Credit Agreement, the Borrower hereby requests that the Class A Lenders provide Class A Advances based on the following criteria:
1.    Aggregate principal amount of Class A Advances requested: $[____________]
2.    Allocated amount of such Class A Advances to be paid by the Class A Lenders in each Class A Lender Group:
CS Lender Group    $[_______________]
[_______________]    $_______________
3.    $_______________ should be transferred to the Liquidity Reserve Account

B-2-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


4.    $_______________ should be transferred to the Supplemental Reserve Account
Account(s) to which Class A Funding Agents should wire the balance of the requested funds:
Bank Name: [_______________]
ABA No.: [_______________]
Account Name: [_______________]
Account No.: [_______________]
Reference: [_______________]
5.    Attached to this notice as Exhibit A is the Borrowing Base Certificate in connection with these Class A Advances and a related Schedule of Solar Assets.
B: In accordance with Section 2.4 of the Credit Agreement, the Borrower hereby requests that the Class B Lenders provide Class B Advances based on the following criteria:
1.    Aggregate principal amount of Class B Advances requested: $[____________]
2.    Allocated amount of such Class B Advances to be paid by the Class B Lenders in each Class B Lender Group:
CS Lender Group    $[_______________]
[_____________]     $_______________
3.    $_______________ should be transferred to the Liquidity Reserve Account
4.    $_______________ should be transferred to the Supplemental Reserve Account
Account(s) to which Class B Funding Agents should wire the balance of the requested funds:
Bank Name: [_______________]
ABA No.: [_______________]
Account Name: [_______________]
Account No.: [_______________]
Reference: [_______________]
5.    Attached to this notice as Exhibit B is the Borrowing Base Certificate in connection with these Class B Advances and a related Schedule of Solar Assets.

B-2-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


C: In accordance with Section 3.2 of the Credit Agreement, the Borrower hereby certifies that no Amortization Event, Event of Default, Potential Amortization Event or Potential Default has occurred and is continuing or would result from any borrowing of any Advance or from the application of the proceeds therefrom.
Very truly yours,
SUNNOVA TEP HOLDINGS, LLC, as Borrower
By:

Name:
Title:

B-2-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



EXHIBIT A
Borrowing Base Certificate
[see attached]

B-2-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



EXHIBIT B
Borrowing Base Certificate
[see attached]




B-2-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT C
[RESERVED]


C-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT D-1
FORM OF CLASS A LOAN NOTE
CLASS A LOAN NOTE
Up to $[***]    [●], 2019
New York, New York
Reference is made to that certain Credit Agreement, dated as of September 6, 2019 (as may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among SUNNOVA TEP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA TE MANAGEMENT, LLC, a Delaware limited liability company, as Facility Administrator, CREDIT SUISSE AG, NEW YORK BRANCH, as Administrative Agent for the Lenders (including any Conduit Lender) that may become parties thereto, the Lenders, Wells Fargo Bank, National Association, as Paying Agent, and U.S. Bank National Association, as Verification Agent. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.
FOR VALUE RECEIVED, the Borrower hereby promises to pay CREDIT SUISSE AG, NEW YORK BRANCH, as Class A Funding Agent, for the benefit of the Class A Lenders in its Class A Lender Group (the “Class A Loan Note Holder”) on the Maturity Date or such earlier date as provided in the Credit Agreement, in immediately available funds in lawful money of the United States the principal amount of up to [***] DOLLARS ($[***]) or, if less, the aggregate unpaid principal amount of all Class A Advances made by the Class A Lenders in the Class A Loan Note Holder’s Class A Lender Group to the Borrower pursuant to the Credit Agreement together with all accrued but unpaid interest thereon.
The Borrower also agrees to pay interest in like money to the Class A Loan Note Holder, for the benefit of the Class A Lenders in its Class A Lender Group, on the unpaid principal amount of each such Class A Advance from time to time from the date hereof until payment in full thereof at the rate or rates and on the dates set forth in the Credit Agreement.
This Class A Loan Note is one of the Loan Notes referred to in, and is entitled to the benefits of, the Credit Agreement, which, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein and is secured by the Collateral.

D-1-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


In the event of any inconsistency between the provisions of this Class A Loan Note and the provisions of the Credit Agreement, the Credit Agreement will prevail.
THIS CLASS A LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5‑1401 AND 5‑1402 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS CLASS A LOAN NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS CLASS A LOAN NOTE, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS CLASS A LOAN NOTE OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS CLASS A LOAN NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS CLASS A LOAN NOTE.
This Class A Loan Note may be transferred or assigned by the holder hereof at any time, subject to compliance with the Credit Agreement and any applicable law. This Class A Loan Note shall be binding upon the Borrower and shall inure to the benefit of the holder hereof and its successors and assigns. The obligations and liabilities of the Borrower hereunder may not be assigned to any Person without the prior written consent of the holder hereof. Any such assignment in violation of this paragraph shall be void and of no force or effect.

D-1-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Demand, presentment, protest and notice of nonpayment and protest are hereby waived by the Borrower.
[Signature page follows.]


D-1-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


IN WITNESS WHEREOF, this Class A Loan Note has been duly executed and delivered on behalf of the Borrower by its duly authorized officer on the date and year first written above.


SUNNOVA TEP HOLDINGS, LLC, as Borrower



By:    ____________________________________
Name:
Title:    



D-1-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT D-2
FORM OF CLASS B LOAN NOTE
CLASS B LOAN NOTE
Up to $[***]    [●], 2019
New York, New York
Reference is made to that certain Credit Agreement, dated as of September 6, 2019 (as may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among SUNNOVA TEP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA TE MANAGEMENT, LLC, a Delaware limited liability company, as Facility Administrator, CREDIT SUISSE AG, NEW YORK BRANCH, as Administrative Agent for the Lenders (including any Conduit Lender) that may become parties thereto, the Lenders, Wells Fargo Bank, National Association, as Paying Agent, and U.S. Bank National Association, as Verification Agent. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.
FOR VALUE RECEIVED, the Borrower hereby promises to pay CREDIT SUISSE AG, NEW YORK BRANCH, as Class B Funding Agent, for the benefit of the Class B Lenders in its Class B Lender Group (the “Class B Loan Note Holder”) on the Maturity Date or such earlier date as provided in the Credit Agreement, in immediately available funds in lawful money of the United States the principal amount of up to [***] DOLLARS ($[***]) or, if less, the aggregate unpaid principal amount of all Class B Advances made by the Class B Lenders in the Class B Loan Note Holder’s Class B Lender Group to the Borrower pursuant to the Credit Agreement together with all accrued but unpaid interest thereon.
The Borrower also agrees to pay interest in like money to the Class B Loan Note Holder, for the benefit of the Class B Lenders in its Class B Lender Group, on the unpaid principal amount of each such Class B Advance from time to time from the date hereof until payment in full thereof at the rate or rates and on the dates set forth in the Credit Agreement.
This Class B Loan Note is one of the Loan Notes referred to in, and is entitled to the benefits of, the Credit Agreement, which, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein and is secured by the Collateral.

D-2-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


In the event of any inconsistency between the provisions of this Class B Loan Note and the provisions of the Credit Agreement, the Credit Agreement will prevail.
THIS CLASS B LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5‑1401 AND 5‑1402 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS CLASS B LOAN NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS CLASS B LOAN NOTE, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS CLASS B LOAN NOTE OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS CLASS B LOAN NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS CLASS B LOAN NOTE.
This Class B Loan Note may be transferred or assigned by the holder hereof at any time, subject to compliance with the Credit Agreement and any applicable law. This Class B Loan Note shall be binding upon the Borrower and shall inure to the benefit of the holder hereof and its successors and assigns. The obligations and liabilities of the Borrower hereunder may not be assigned to any Person without the prior written consent of the holder hereof. Any such assignment in violation of this paragraph shall be void and of no force or effect.

D-2-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Demand, presentment, protest and notice of nonpayment and protest are hereby waived by the Borrower.
[Signature page follows.]


D-2-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


IN WITNESS WHEREOF, this Class B Loan Note has been duly executed and delivered on behalf of the Borrower by its duly authorized officer on the date and year first written above.



SUNNOVA TEP HOLDINGS, LLC, as Borrower



By:    ____________________________________
Name:
Title:


D-2-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT E
COMMITMENTS

Class A Commitments:
 
 
The Class A Aggregate Commitment
Credit Suisse AG, Cayman Islands Branch
$[***]
Total:
$87,500,000
Class B Commitments:
 
 
The Class B Aggregate Commitment
Credit Suisse AG, Cayman Islands Branch
$[***]
Total:
$12,500,000



E-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT F
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (the “Assignment Agreement”) is dated as of the Effective Date set forth below and is entered into by and between the Assignor identified in item 1 below (the “Assignor”) and the Assignee identified in item 2 below (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit 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 Agreement as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a [Class A][Class B] Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor 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 [Class A][Class B] Lender) against any Person, whether known or unknown, arising under or in connection with the Credit 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 Assignor to the Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Each such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment Agreement, without representation or warranty by the Assignor.
1.    Assignor:    ________________________________
2.
Assignee:    ________________________________
3.
Administrative Agent:    Credit Suisse AG, New York Branch

F-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


4.
Credit Agreement:    Credit Agreement, dated as of September 6, 2019, by and among Sunnova TEP Holdings, LLC, a Delaware limited liability company, Sunnova TE Management, LLC, a Delaware limited liability company, Credit Suisse AG, New York Branch, as Administrative Agent for the Lenders (including any Conduit Lender) that may become parties thereto, the Lenders, Wells Fargo Bank, National Association, as Paying Agent, and U.S. Bank National Association, as Verification Agent
6.
Assigned Interest:
Assignor
Assignee
Type of Loans Assigned (Class A or Class B)
Aggregate Amount of Loans for all Lenders
Amount of Loans Assigned
Percentage Assigned of
Loans
 
 
 
$
$
%
[Signature pages follow]

F-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Effective Date: ________________, 20__
The terms set forth in this Assignment Agreement are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By    
Name    
Title    
ASSIGNEE
[NAME OF ASSIGNEE]
By    
Name    
Title    
Accepted:
CREDIT SUISSE AG, New York Branch,
as Administrative Agent

By    
Name    
Title    


By    
Name    
Title    

F-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AGREEMENT
SECTION 1.
REPRESENTATIONS AND WARRANTIES.
Section 1.1.    Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment Agreement and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Transaction Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Transaction Documents or any collateral thereunder, (iii) the financial condition of the Borrower or any other Person obligated in respect of any Transaction Document, or (iv) the performance or observance by the Borrower or any other Person of any of their respective obligations under any Transaction Document.
Section 1.2.    Assignee. The 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 Agreement and to consummate the transactions contemplated hereby and to become a [Class A][Class B]Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 10.8 of the Credit Agreement (subject to such consents, if any, as may be required under Section 10.8 of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a [Class A][Class B]Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a [Class A][Class B] Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to the Credit Agreement, 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 Agreement and to purchase the 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 Agreement and to purchase the Assigned Interest, and (vii) attached to the

F-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Assignment Agreement is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, 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 Transaction Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Transaction Documents are required to be performed by it as a Lender.
SECTION 2.
PAYMENTS.
From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to, on or after the Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves. 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 Assignee.
SECTION 3.
GENERAL PROVISIONS.
This Assignment Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment Agreement 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 Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment Agreement. This Assignment Agreement shall be governed by, and construed in accordance with, the law of the State of New York.


F-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT G
FORM OF SOLAR SERVICE AGREEMENT
[SEE ATTACHED]

G-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



EXHIBIT H

FORM OF NOTICE OF DELAYED FUNDING
Sunnova TEP Holdings, LLC
20 Greenway Plaza, Suite 475
Houston, TX 77046
Re:    Notice of Potential For Delayed Funding
Reference is made to the Credit Agreement, dated as of September 6, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Sunnova TEP Holdings, LLC (the “Borrower”), Credit Suisse AG, New York Branch, as Administrative Agent for the financial institutions that may from time to time become parties thereto as Lenders (in such capacity, the “Administrative Agent”), the Lenders, Wells Fargo Bank, National Association, as Paying Agent and U.S. Bank National Association, as Verification Agent. Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.
Pursuant to Section 2.4(E) of the Credit Agreement, [ ], as a Non-Conduit Lender, hereby notifies the Borrower that it has incurred external costs, fees or expenses directly related to and as a result of the “liquidity coverage ratio” under Basel III in respect of its Commitments under the Credit Agreement and/or its interests in the Loan Notes.
Sincerely,
[____]
By:     
Name:
Title:

I-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



EXHIBIT I

DELAYED FUNDING NOTICE
Sunnova TEP Holdings, LLC
20 Greenway Plaza, Suite 475
Houston, TX 77046
Re:    Notice of Potential For Delayed Funding
Reference is made to the Credit Agreement, dated as of September 6, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Sunnova TEP Holdings, LLC (the “Borrower”), Credit Suisse AG, New York Branch, as Administrative Agent for the financial institutions that may from time to time become parties thereto as Lenders (in such capacity, the “Administrative Agent”), the Lenders, Wells Fargo Bank, National Association, as Paying Agent and U.S. Bank National Association, as Verification Agent. Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.
Pursuant to Section 2.4(E) of the Credit Agreement, [_____], as a Non-Conduit Lender, hereby notifies the Borrower of its intent to fund its amount of the Advance related to the Notice of Borrowing delivered by the Borrower on [_____], on a Business Day that is before [_____]3, rather than on the date specified in such Notice of Borrowing.
Sincerely,
[____]
By:     
Name:
Title:


__________________________
3 Thirty-five days following the date of delivery by such Non-Conduit Lender of this Delayed Funding Notice.

I-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT J
UNDERWRITING AND REASSIGNMENT CREDIT POLICY
[SEE ATTACHED]


J-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE I
ELIGIBILITY CRITERIA -
REPRESENTATIONS AND WARRANTIES AS TO SOLAR ASSETS
1.
Accuracy of Schedule of Solar Assets. Each entry with respect to the Solar Asset set forth on the Schedule of Solar Assets is complete, accurate, true and correct in all material respects and does not omit any necessary information that makes such entry misleading, including, if such Solar Asset is a Substantial Stage Solar Asset, the amount disbursed to channel partners for services rendered in respect of Substantial Stage Solar Asset.
2.
Form of Solar Service Agreement. The related Solar Service Agreement is substantially in the form of one of the Parent’s standard forms of Solar Service Agreement attached as Exhibit G to this Agreement (as such Exhibit may be modified after the Closing Date in accordance with Section 5.1(X) of the Agreement). The related Solar Service Agreement provides that an Approved Installer has designed, procured and installed, or will design, procure and install, a PV System at the property specified in such Solar Service Agreement and the Host Customer agrees to purchase electric energy produced by such PV System or lease such PV System. At the time of installation, such Approved Installer was properly licensed and had the required expertise to design, procure and install the related PV System.
3.
Modifications to Solar Service Agreement. The terms of the related Solar Service Agreement have not been amended, waived, extended, or modified in any manner inconsistent with the Customer Collection Policy.
4.
Host Customer Payments in U.S. Dollars. The related Host Customer is obligated per the terms of the related Solar Service Agreement to make payments in U.S. dollars to the owner of the related Solar Service Agreement or its designee.
5.
Host Customer FICO Score. As of the date of the Solar Service Agreement, the related Host Customer has a FICO of at least [***].
6.
Weighted Average FICO Score. After giving effect to the Solar Asset’s inclusion in the Collateral, the weighted average FICO score (determined as of the dates of the related Solar Service Agreements) for Eligible Solar Assets will be at least [***].
7.
Absolute and Unconditional Obligation. The related Solar Service Agreement is by its terms an absolute and unconditional obligation of the Host Customer to pay for electricity generated and delivered or that will be generated and delivered by the related PV System to such Host Customer after the related PV System has received Permission to Operate, and the payment obligations under the related Solar Service Agreement do not provide for offset

Schedule I-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


for any reason, including without limitation non‑payment or non‑performance by the Parent or any assignee thereof under any Customer Warranty Agreement or Performance Guaranty.
8.
Non‑cancelable; Prepayable. The related Solar Service Agreement is non‑cancelable and prepayable by the Host Customer, if at all, only with a mandatory prepayment amount equal to or greater than an amount determined by the discounting of all remaining projected Host Customer Payments at a pre‑determined discount rate of not more than 6% per annum.
9
Freely Assignable. (a) Ownership of the related PV System is freely assignable to a Financing Fund or SAP, as applicable, and a security interest in such PV System may be granted by SAP, without the consent of any Person, except any such consent as has already been obtained.
(b) The related Solar Service Agreement and the rights with respect to the related Solar Assets (other than the PV System) are freely assignable to a Financing Fund or SAP, as applicable, and a security interest in such Solar Assets may be granted by SAP, without the consent of any Person, except any such consent as has already been obtained.
10.
Legal Compliance. The origination of the related Solar Service Agreement and related PV Systems, as installed, was in compliance (or in the case of a Substantial Stage Solar Asset, will be in compliance) in all material respects with respect to the applicable federal, state and local laws and regulations including those relating to usury, truth‑in‑lending, consumer credit protection and disclosure laws at the time such Solar Service Agreement was originated or such PV System was installed (or in the case of a Substantial Stage Solar Asset, will be installed), as applicable.
11.
Legal, Valid and Binding Agreement. The related Solar Service Agreement is the legal, valid and binding payment obligation of the related Host Customer, enforceable against such related Host Customer in accordance with its terms, except as such enforceability may be limited in the future by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally, and except as such enforceability may be limited in the future by general principles of equity (whether considered in a suit at law or in equity).
12.
No Delinquencies, Defaults or Terminations. The related Solar Service Agreement is not a Delinquent Solar Asset or a Defaulted Solar Asset and the related PV System is not a Terminated Solar Asset. Furthermore, the Host Customer associated with the related Solar Service Agreement is not a Host Customer for any other Solar Service Agreement that was

Schedule I-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


originated, acquired and/or serviced by the Parent or any Affiliate thereof that would meet the definition of either Delinquent Solar Asset or Defaulted Solar Asset.
13.
Minimum Payments Made. (i) Except in the case of a Substantial Stage Solar Asset or a Final Stage Solar Asset, either a minimum of one payment due under the related Solar Service Agreement has been made or the related Host Customer’s first payment under the related Solar Service Agreement has not been made because such payment is not yet due but such payment is due in the calendar month no later than the first full calendar month immediately following the later of (a) the related Transfer Date or (b) the date that such Solar Asset receives Permission to Operate and (ii) solely in the case of a Substantial Stage Solar Asset or a Final Stage Solar Asset, the related Host Customer’s first payment under the related Solar Service Agreement has not been made because such payment is not yet due but such payment is due in the calendar month that is no later than one hundred twenty (120) days after the Transfer Date with respect to such Substantial Stage Solar Asset or Final Stage Solar Asset or no later than thirty (30) days after such Transfer Date.
14.
PV System and Solar Service Agreement Status. The related PV System has not been turned off due to a Host Customer delinquency under the Solar Service Agreement.
15.
Affiliate Host Customers. Solar Service Agreements comprising no more than 0.25% of the Aggregate Discounted Solar Asset Balance as of the Closing Date (with respect to the Initial Solar Assets) and as of the most recent Transfer Date (as to all Eligible Solar Assets then owned by a Financing Fund or SAP) are related to Host Customers that are Persons who are employees of the Parent, the Borrower or any of their respective Affiliates.
16.
No Adverse Selection. No selection procedures reasonably believed by the Parent or Borrower to be adverse to the Lenders were utilized in selecting such Solar Asset and the related Solar Service Agreement from among the Eligible Solar Assets directly owned by the Parent or its Affiliates.
17.
Full Force and Effect. The related Solar Service Agreement is in full force and effect in accordance with its respective terms, except as may be limited in the future by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally, and except as such enforceability may be limited in the future by general principles of equity (whether considered in a suit at law or in equity).
18.
Ordinary Course of Business. The related Solar Service Agreement relates to the sale of power from or the leasing of a PV System, and such Solar Service Agreement was originated or acquired consistent with the ordinary course of business of the Parent.

Schedule I-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


19.
PV System. Except in the case of a Substantial Stage Solar Asset, the related PV System was properly delivered to and installed for the related Host Customer in good repair, without defects and in satisfactory order. Except in the case of a Substantial Stage Solar Asset, the related Host Customer has accepted the related PV System, and no related Host Customer has notified the Parent or any Affiliate thereof of any existing defects therein which is not in the process of being investigated, addressed or repaired by the Parent or any Affiliate thereof. Except in the case of a Substantial Stage Solar Asset, the Solar Photovoltaic Panels, Inverters and Energy Storage Systems with respect to the related PV System were manufactured by an Approved Vendor at the time of installation.
20.
No Defenses Asserted. The related Solar Service Agreement has not been satisfied, subordinated or rescinded and no lawsuit is pending with respect to such related Solar Service Agreement.
21.
Insurance. With respect to the related PV System (other than if such PV System is related to a Substantial Stage Solar Asset), the Parent has obtained and does maintain insurance in amounts and coverage consistent with the Parent’s policies. The Parent’s policies in respect of amounts, coverage and monitoring compliance thereof are consistent with insurance broker recommendations based on probable maximum loss projections and with the Parent’s historic loss experience, taking into account what is commercially reasonable and available in the market on commercially reasonable terms. All such required insurance is in full force and effect.
22.
Taxes and Governmental Charges. The transfer, assignment and the pledge of the Collateral by the Borrower and SAP pursuant to the Security Agreement and the Pledge Agreement is not subject to and will not result in any Tax payable by the Borrower to any federal, state or local government except as has been paid or provided for. No Tax is owed in connection with any period prior to the applicable Cut-Off Date or with respect to the sale, contribution or assignment of Conveyed Property by the applicable Assignor to the Seller, by the Seller to the Borrower or by the Borrower to SAP, except as has been paid or provided for.
23.
Governing Law of Solar Service Agreement. The related Solar Service Agreement is governed by the laws of a state or territory 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, pledge or assignment of the related Solar Service Agreement under any of the Transaction Documents, including any exchange for refund in accordance with the Transaction Documents.

Schedule I-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


24.
No Unpaid Fees. Except in the case of a Substantial Stage Solar Asset or a Final Stage Solar Asset, there are no unpaid fees owed to third parties relating to the origination of the related Solar Service Agreement and installation of the related PV System.
25.
Payment Terms of Solar Service Agreement. The related Solar Service 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 Solar Service Agreement.
26.
PBI Payments.
a.
All applications, forms and other filings required to be submitted in connection with the procurement of PBI Payments have been properly made in all material respects under applicable law, rules and regulations and the related PBI Obligor 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.
b.
All conditions to the payment of PBI Payments by the related PBI Obligor (including but not limited to the size of the PV Systems, final site visits, provision of data, installation of metering, proof of project completion, production data and execution and delivery of final forms and related agreements (including all applications, forms and other filings and any written reservation approvals, Interconnection Agreements and REC purchase agreements, if required, each, a “Performance Based Incentive Agreement”)) have been satisfied or approved, as applicable, and the PBI Obligor’s payment obligation is an absolute and unconditional obligation of the PBI Obligor that is not, by the terms of the related Performance Based Incentive Agreement, subject to offset for any reason.
c.
Copies of all PBI Documents and the Performance Based Incentive Agreement, if any, for PBI Payments have been delivered to the Verification Agent as of the Closing Date (as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset).
d.
To the extent the rights to receive PBI Payments and the related Performance Based Incentive Agreement, if any, are not freely assignable without the consent of the related PBI Obligor, or if consent or notice to any Person is required for the grant of a security interest, such consent will have been obtained or notice will have been given as of the Closing Date (as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset). The PBI Payments are not subject to any

Schedule I-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


law, rule or regulation which would make unlawful the sale, transfer, pledge or assignment of any rights to the PBI Payments within the regulations set forth with respect to such PBI Payments. Immediately prior to the transfer of the rights to the PBI Payments and the related Performance Based Incentive Agreement, if any, to a Financing Fund or the Borrower, TEP Developer or the Seller, as applicable, had full legal and equitable title to such rights, free and clear of all Liens except for Permitted Liens and a Financing Fund or SAP, as applicable, acquired full legal and equitable title to such PBI Payments and the related Performance Based Incentive Agreement, free and clear of all Liens, except for Permitted Liens or Permitted Equity Liens. To the extent that notice is required, upon completion of the assignment of a Performance Based Incentive Agreement to a Financing Fund or SAP, as applicable, the Parent or an affiliate thereof delivered notice to the PBI Obligor indicating that such Financing Fund or SAP, as applicable, is the owner of the related PV System and the payee of the PBI Payment.
e.
If a Performance Based Incentive Agreement is required by the laws, rules or regulations governing the obligations of the PBI Obligor to pay the PBI Payments, such Performance Based Incentive Agreement is, to the best of the knowledge of the Parent, 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).
f.
The transfer, assignment and pledge of the rights to the PBI Payments is not subject to and will not result in any tax, fee or governmental charge payable by the Borrower to any federal, state or local government, except as paid.
27.
Host Customer. The related Solar Services Agreement was either originated or acquired by the Parent in the ordinary course of business and in accordance with its Underwriting and Reassignment Credit Policy.
28.
Warranties. All Manufacturer Warranties relating to the related Solar Service Agreement and the related PV System are in full force and effect and can be enforced by a Financing Fund, SAP or the Manager (other than with respect to those Manufacturer Warranties that are no longer being honored by the relevant manufacturer with respect to all customers generally, and except as such enforceability may be limited in the future by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights

Schedule I-6

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


generally, and except as such enforceability may be limited in the future by general principles of equity (whether considered in a suit at law or in equity).
29.
True Lease. The related Solar Service Agreement in the form of a Lease Agreement is a “true” lease, as defined in Article 2‑A of the UCC.
30.
UCC. The related Solar Service Agreement and rights to PBI Payments constitute “general intangibles”, “accounts” or “chattel paper” within the meaning of the applicable UCC and no paper originals with respect to any “chattel paper” or single authoritative copy with respect to “electronic chattel paper” exists. The PV Systems constitute “Equipment” within the meaning of the applicable UCC. Upon the filing of all appropriate financing statements in the proper filing offices in the appropriate jurisdictions, the Administrative Agent will have a first priority perfected security interest in and to the Solar Service Agreements, the rights to PBI Payments and the PV Systems, subject to Permitted Liens and in each case related solely to the SAP Solar Assets.
31.
Fixture Filing. The terms of the related Solar Service Agreement provide that the parties thereto agree that the related PV System is not a fixture. The Parent or an Affiliate thereof has filed (or in the case of a Substantial Stage Solar Asset, will file) a protective UCC fixture filing or, with respect to Guam, its jurisdictional equivalent, in respect of the related PV System; provided, that (i) certain of such UCC fixture filings or such equivalent filings have been temporarily released in order to assist the applicable Host Customer in a pending refinancing of such Host Customer’s mortgage loan or sale of the related property and (ii) as a result, such UCC fixture filings or equivalent filings may not have been filed or maintained in a manner that would provide priority under the UCC over a conflicting interest of an encumbrancer or owner of the real property subject to such UCC fixture filing or equivalent filing.
32.
Host Customer Residency. The related Host Customer is a resident of one of the 50 states of the United States, the District of Columbia or an Approved U.S. Territory.
33.
PV System. The related PV System was installed (or in the case of a Substantial Stage Solar Asset, will be installed) on a single‑family residential property and one or more of the Host Customers (i) that is an individual that is not deceased and is not a governmental entity, a business, a corporation, institution or other legal entity (a "natural person"); provided, that 5.00% of the Aggregate Discounted Solar Asset Balance may relate to Host Customers that are a limited liability company, corporation, trust, partnership or other legal entity if (A) the Parent has determined that the controlling member of the limited liability company, controlling stockholder of the corporation, trustee of the trust, general partner of the

Schedule I-7

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


partnership or other equivalent controlling person the legal entity is a natural person and (B) the Parent has performed the same underwriting process in connection with such natural person as it applies to Host Customers that are natural persons; (ii) that voluntarily entered into such Solar Service Agreement and not as a result of fraud or identity theft, and (iii) who owns the real property on which the PV System is installed in one of the 50 states of the United States, the District of Columbia or an Approved U.S. Territory; provided that in the case where the Host Customer is a natural person, the residence may be owned by a limited liability company, corporation, trust, partnership or other legal entity for which the Parent has determined that the Host Customer is the controlling member, controlling stockholder, trustee, general partner or other equivalent controlling person). No related Host Customer has notified the Parent or any Affiliate thereof of any damage or other casualty affecting the PV system or home and neither the Parent nor any Affiliate thereof is aware of any other event that has occurred, in each case, that would affect the value or performance of the Solar Asset or the PV System. All parts and materials furnished in connection with the related PV System which are material to the solar energy production performance of such PV System, including but not limited to the Solar Photovoltaic Panels and Inverters, are (or in the case of a Substantial Stage Solar Asset, will be) newly manufactured with a manufacturer date no more than 12 months prior to the date the Solar Asset was originated.
34.
Hedged SRECs. With respect to all Solar Assets for which the related Host Customer is a resident of either New Jersey or Massachusetts, as of the date that is 120 days from the Closing Date, the Projected SREC Hedge Ratio determined for the SREC Years 2019, 2020, 2021 and 2022 does not exceed 85%.
35.
Maximum Solar Asset Tenor. The original term to maturity of the Solar Asset does not exceed 300 months.
36.
Host Customer Solvency: (i) The Host Customer is not a debtor in a bankruptcy case as of the Closing Date (in the case of the Initial Solar Assets) or the related Transfer Date (in the case of Additional Solar Assets), and (ii) the Host Customer has not commenced any litigation or asserted any claim in writing challenging the validity or enforceability of the related Solar Service Agreement.
37.
No Impairment. Neither the Parent nor any of its Affiliates has done anything to impair the rights of the Borrower, the Administrative Agent or the Lenders in the Collateral or payments with respect thereto.

Schedule I-8

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


38.
Ownership. A Financing Fund or SAP, as applicable, has full legal and equitable title to the related PV System and related Solar Service Agreement, in each case free and clear of all Liens except for Permitted Liens and Permitted Equity Liens.
39.
Final Stage Solar Asset. If such Solar Asset is a Final Stage Solar Asset, such Solar Asset will not be a Final Stage Solar Asset for more than 150 days since the date such Solar Asset first constituted a Final Stage Solar Asset.
40.
Substantial Stage Solar Asset. If such Solar Asset is a Substantial Stage Solar Asset, (i) such Solar Asset will not be a Substantial Stage Solar Asset for more than 90 days (or 120 days if the related Host Customer is located in the East Region) since the Parent or an Affiliate thereof has issued a “notice to proceed” confirming the related Host Customer signed the related Solar Service Agreement, a channel partner submitted a final design proposal and such proposal was approved by the Parent or an Affiliate thereof and (ii) the related Host Customer has not cancelled the installation of the Solar Asset notwithstanding receipt of the related “notice to proceed.”
41.
Puerto Rico Solar Asset. If such Solar Asset is a Puerto Rico Solar Asset, the related PV System relies on one or more Energy Storage Systems and does not rely on the operation of the utility grid in order to operate.
42.
Hedged SREC Payments.
a.
All applications, forms and other filings required to be submitted in connection with the procurement of Hedged SREC Payments have been properly made in all material respects under applicable law, rules and regulations and the related Eligible Hedged SREC Counterparty has provided a written reservation approval (which may be in the form of electronic mail from the related Eligible Hedged SREC Counterparty) for the payment of Hedged SREC Payments.
b.
All conditions to the payment of Hedged SREC Payments by the related Eligible Hedged SREC Counterparty have been satisfied or approved, as applicable, and the Eligible Hedged SREC Counterparty’s payment obligation is an absolute and unconditional obligation of the Eligible Hedged SREC Counterparty that is not, by the terms of the related Hedged SREC Agreement, subject to offset for any reason.
c.
Copies of all Hedged SREC Agreements with respect to Hedged SREC Payments have been delivered to the Verification Agent as of the Closing Date (as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset).

Schedule I-9

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


d.
To the extent that the rights to receive Hedged SREC Payments and the related Hedged SREC Agreement, if any, are not freely assignable without the consent of the Eligible Hedged SREC Counterparty, or if consent of or notice to any Person is required for the grant of a security interest, such consent will have been obtained or notice will have been given as of the Closing Date (as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset). The Hedged SREC Payments are not subject to any law, rule or regulation which would make unlawful the sale, transfer, pledge or assignment of any rights to the Hedged SREC Payments within the regulations set forth with respect to such Hedged SREC Payments. Immediately prior to the transfer of the rights to the Hedged SREC Payments and the related Hedged SREC Agreement to the Borrower, TEP Developer had full legal and equitable title to such rights, free and clear of all Liens except for Permitted Liens and the Borrower acquired full legal and equitable title to such Hedged SREC Payments and the related Hedged SREC Agreement, free and clear of all Liens, except for Permitted Liens, Permitted Equity Liens and security interest granted to the Administrative Agent. To the extent notice is required, upon completion of the assignment of a Hedged SREC Agreement to the Borrower, TEP Developer delivered notice to the Eligible Hedged SREC Counterparty indicating that the Borrower is the owner of the related PV System and the payee of the Hedged SREC Payment.
e.
If a Hedged SREC Agreement is required by the laws, rules or regulations governing the obligations of the Eligible Hedged SREC Counterparty to pay the Hedged SREC Payments, such Hedged SREC Agreement is, to the best of the knowledge of the Parent, the legal valid and binding payment obligation of the Eligible Hedged SREC Counterparty, enforceable against such Eligible Hedged SREC Counterparty 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).
f.
The transfer, assignment and pledge of the rights to the Hedged SREC Payments is not subject to and will not result in any tax, fee or governmental charge payable by the Borrower to any federal, state or local government, except as paid.
43.
Delivery of Solar Service Agreement. The related Solar Service Agreement and any amendments or modifications have been converted into an electronic (.pdf) form (an “Electronic Copy”) and delivered to the Verification Agent.  The related original (or “authoritative copy” for purposes of the UCC) of the Solar Service Agreement and any amendments or modifications have been destroyed on or before the Closing Date

Schedule I-10

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset) in compliance with the Parent’s document storage policies or, if not destroyed, no other Person has or could obtain possession or control thereof in a manner that would enable such Person to claim priority over the lien of the Administrative Agent.
44.
Financing Funds/SAP.
a.
Each Tax Equity Facility Document to which any Tax Equity Party is a party is a legal, valid and binding obligation of such Tax Equity Party, enforceable against such Tax Equity Party in accordance with its terms, except as such enforceability may be limited in the future by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally, and except as such enforceability may be limited in the future by general principles of equity (whether considered in a suit at law or in equity). None of the Tax Equity Facility Documents to which a Tax Equity Party is a party has been amended or modified since the effective date of such Tax Equity Facility Documents other than as set forth on Schedule VIII. No Tax Equity Party is party to any material contract, agreement or other undertaking except the Tax Equity Facility Documents and any other contract, agreement or undertaking previously disclosed in writing to the Administrative Agent.
b.
All Tax Equity Facility Documents 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 PV Systems owned by a Financing Fund or the PV Systems owned by SAP or on the legality, validity or enforceability of the Tax Equity Facility Documents.
c.
None of the Managing Members, the Financing Funds or SAP has any indebtedness or other obligations or liabilities, direct or contingent other than as permitted under the Transaction Documents. The Managing Members have full legal and equitable title to the Managing Member Interests free and clear of all Liens.
d.
No loan to the Managing Members, the Financing Funds or SAP made or indebtedness incurred prior to the related Closing Date remains outstanding.
e.
Each of the Managing Members and SAP is a limited liability company that is disregarded for federal income tax purposes.

Schedule I-11

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


f.
None of the Managing Members, the Financing Funds or SAP is in breach or default under or with respect to any contractual obligation.
g.
None of the Managing Members, the Financing Funds or SAP has conducted any business other than the business contemplated by the Tax Equity Facility Documents.
h.
No event has occurred under the Tax Equity Facility Documents that would allow a Tax Equity Investor or another member to remove, or give notice of removal of, the related Managing Member, nor has a Managing Member given or received notice of an action, claim or threat of removal.
i.
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 of the Managing Member Distributions.
j.
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 a Financing Fund, SAP or a Managing Member, or against any of their 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 Solar Assets or on the legality, validity or enforceability of any of the Transaction Documents or any of the Tax Equity Facility Documents.
k.
No notice or action challenging the tax structure, tax basis validity, tax characterization or tax-related legal compliance of the Tax Equity Facility or the tax benefits associated with the Tax Equity Facility is ongoing or has been resolved in a manner adverse to the Tax Equity Facility or a Managing Member, in each case, that would reasonably be expected to have a material adverse effect on the Tax Equity Facility or a Managing Member.
l.
The only holders of equity interests in the Financing Funds are the Managing Members and Tax Equity Investors and other than the Purchase Options there are no outstanding obligations of the Managing Members or a Tax Equity Investor to repurchase, redeem, or otherwise acquire any membership or other equity interests in the Managing Members and a Tax Equity Investor, as applicable, 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 Managing Members and a Tax Equity Investor, as applicable. The class or classes

Schedule I-12

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


of membership interests that a Financing Fund is authorized to issue and has issued are expressly set forth in its Financing Fund LLCA.
m.
Each of the Financing Funds and SAP 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 each of the Financing Funds and SAP 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 Financing Funds and SAP, as applicable, are in good faith contesting the same, so long as such contest is pursued in accordance with the requirements of each applicable Tax Equity Facility Document. There is no action, suit, proceeding, investigation, audit or claim now pending by a taxing authority regarding any taxes relating to the Financing Funds or SAP that could, if made, individually or in the aggregate have a Material Adverse Effect.
n.
The Borrower has delivered to the Administrative Agent the most recent financial statements (including the notes thereto) prepared in respect of the Financing Funds and SAP pursuant to the requirements of the Tax Equity Facility Documents, and such financial statements (if any) (a) fairly present in all material respects the financial condition of the Financing Funds and SAP, as applicable, as of the date thereof and (b) have been prepared in accordance with the requirements of Tax Equity Facility Documents. Such financial statements and notes thereto disclose all direct or contingent material liabilities of the Financing Funds and SAP as of the dates thereof, including liabilities for taxes, material commitments and debt.
o.
The Financing Funds or SAP, as applicable, is party to each Solar Service Agreement in respect of each PV System owned by it.
45.
Savings Product. If such Solar Asset is a Host Customer Solar Asset, the related Solar Service Agreement is a "savings product" (as such term is defined in the Underwriting and Reassignment Credit Policy).



Schedule I-13

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE II
THE COLLECTION ACCOUNT, THE SUPPLEMENTAL RESERVE ACCOUNT, THE LIQUIDITY RESERVE ACCOUNT, THE SAP REVENUE ACCOUNT, THE TAKEOUT TRANSACTION ACCOUNT, THE BORROWER’S ACCOUNT AND THE TEP COLLATERAL ACCOUNT

Collection Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Account No.:    [***]
Account Name:    [***]
FFC:    [***]
Supplemental Reserve Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Account No.:    [***]
Account Name:    [***]
FFC:    [***]
Liquidity Reserve Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Acct:    [***]
Account Name:    [***]
FFC:    [***]
SAP Revenue Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Account No.:    [***]
Account Name:    [***]
FFC:    [***]
Takeout Transaction Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Account No.:    [***]
Account Name:    [***]
FFC:    [***]

Schedule II-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Borrower’s Account
Bank Name:    Texas Capital Bank
ABA No.:    [***]
Account No.:    [***]
Account Name:    [***]
Reference:    [***]
TEP Collateral Account4 



















__________________
4 To be completed upon opening of the TEP Collateral Account.

Schedule II-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE III
[RESERVED]


Schedule III-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE IV
SCHEDULED HEDGED SREC PAYMENTS
[On file with the Administrative Agent]




Schedule IV-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE V
SCHEDULED HOST CUSTOMER PAYMENTS
[On file with the Administrative Agent]


Schedule V-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE VI

SCHEDULED PBI PAYMENTS
[On file with the Administrative Agent]

Schedule VI-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE VII
SCHEDULED MANAGING MEMBER DISTRIBUTIONS
[On file with the Administrative Agent]

Schedule VII-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



SCHEDULE VIII

TAX EQUITY DEFINITIONS
Financing Funds
1.
Sunnova TEP IV-A, LLC, a Delaware limited liability company (“TEP IV-A”)
2.
Sunnova TEP IV-B, LLC, a Delaware limited liability company (“TEP IV-B”)
Financing Fund LLCAs
1.
With respect to TEP IV-A, the Amended and Restated Limited Liability Company Agreement, dated as of August 16, 2019, entered into between the applicable Managing Member and the applicable Tax Equity Investor (the “TEP IV-A LLCA”)
2.
With respect to TEP IV-B, the Amended and Restated Limited Liability Company Agreement, dated as of December 31, 2019, entered into between the applicable Managing Member and the applicable Tax Equity Investor (the “TEP IV-B LLCA”)
Management Agreements
1.
Management Agreement, dated as of August 16, 2019, by and between the Manager and TEP IV-A (“TEP IV-A Management Agreement”)
2.
Management Agreement, dated as of December 31, 2019, by and between the Manager and TEP IV-B (“TEP IV-B Management Agreement”)
Managers
1.
Sunnova TE Management, LLC, a Delaware limited liability company
Managing Members
1.
Sunnova TEP IV-A Manager, LLC, a Delaware limited liability company
2.
Sunnova TEP IV-B Manager, LLC, a Delaware limited liability company
Managing Member Interests
1.
The Class B Interest in TEP IV-A
2.
To the extent the TEP IV-A Purchase Option is exercised, the Class A Interest in TEP IV-A
3.
The Class B Interest in TEP IV-B
4.
To the extent the TEP IV-B Purchase Option is exercised, the Class A Interest in TEP IV-B
Master Purchase Agreements
1.
Master Purchase Agreement, dated as of August 16, 2019, between Sunnova TEP Developer, LLC and TEP IV-A (“TEP IV-A MPA”)
2.
Development and Purchase Agreement, dated as of December 31, 2019, by and between Sunnova TEP Developer, LLC and TEP IV-B (“TEP IV-B DPA”)
Purchase Options
1.
“TEP IV-A Purchase Option” means the right of the applicable Managing Member or its designated Affiliate to purchase the related Tax Equity Investor’s interest in TEP IV-A
2.
“TEP IV-B Purchase Option” means the right of the applicable Managing Member to purchase the related Tax Equity Investor’s interest in TEP IV-B

Schedule VIII-1


[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Servicing Agreements
1.
Servicing Agreement, dated as of August 16, 2019, by and among the Manager, TEP IV-A and GreatAmerica Portfolio Services Group LLC (“TEP IV-A Servicing Agreement”)
2.
Servicing Agreement, dated as of December 31, 2019, by and among the Manager, TEP IV-B and GreatAmerica Portfolio Services Group LLC (“TEP IV-B Servicing Agreement”)
Tax Equity Financing Documents
TEP IV-A
1.
Guaranty, dated as of August 16, 2019, by Parent for the benefit of the applicable Tax Equity Investor
2.
TEP IV-A Management Agreement
3.
TEP IV-A Servicing Agreement
4.
TEP IV-A MPA
5.
TEP IV-A LLCA
6.
Deposit Account Control Agreement, dated as of August 16, 2019, by and between TEP IV-A, the applicable Tax Equity Investor, and Texas Capital Bank, N.A., a national banking association
TEP IV-B
1.
Guaranty, dated as of December 31, 2019, by Parent for the benefit of the applicable Tax Equity Investor
2.
TEP IV-B Management Agreement
3.
TEP IV-B Servicing Agreement
4.
TEP IV-B DPA
5.
TEP IV-B LLCA
6.
Blocked Account Control Agreement, dated as of December 31, 2019, by and among TEP IV-B, the applicable Tax Equity Investor, and JPMorgan Chase Bank, N.A., a national banking association
Tax Equity Investors
1.
With respect to TEP IV-A, JPM Capital Corporation, a Delaware corporation
2.
With respect to TEP IV-B, BAL Investment & Advisory, Inc., a Delaware corporation


Schedule VIII-1


[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE IX
SAP FINANCING DOCUMENTS
1.
Management Agreement, dated as of September 6, 2019, by and between Manager and SAP.
Servicing Agreement, dated as of September 6, 2019, by and among GreatAmerica Portfolio Services Group LLC, Manager and SAP.

Schedule IX-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE X
SAP NTP FINANCING DOCUMENTS
1.
Master Distribution Agreement, dated as of December 31, 2019, by and among SAP, Borrower, TEP Resources and Seller.



Schedule X

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Exhibit B
Form of Underwriting and Reassignment Credit Policy

The information in this exhibit has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

[Exhibit B is maintained within the books and records of the Company]




[Exhibit B]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Exhibit C

TEP II Payoff Date Amendments

[see attached]

[Exhibit C]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.
EXHIBIT C
FINAL VERSION




CREDIT AGREEMENT
dated as of September 6, 2019
among
SUNNOVA TEP HOLDINGS, LLC,
as Borrower
SUNNOVA TE MANAGEMENT, LLC,
as Facility Administrator
CREDIT SUISSE AG, NEW YORK BRANCH,
as Administrative Agent for the financial institutions
that may from time to time become parties hereto as Lenders
LENDERS
from time to time party hereto
FUNDING AGENTS
from time to time party hereto
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Paying Agent
and
U.S. BANK NATIONAL ASSOCIATION,
as Verification Agent




[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


TABLE OF CONTENTS
SECTION    HEADING    PAGE
ARTICLE I
CERTAIN DEFINITIONS    1
Section 1.1.
Certain Definitions    1
Section 1.2.
Computation of Time Periods    1
Section 1.3.
Construction    1
Section 1.4.
Accounting Terms    2
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES    2
Section 2.1.
Establishment of the Credit Facility    2
Section 2.2.
The Advances    2
Section 2.3.
Use of Proceeds    3
Section 2.4.
Making the Advances    3
Section 2.5.
Fees    6
Section 2.6.
Reduction/Increase of the Commitments    6
Section 2.7.
Repayment of the Advances    7
Section 2.8.
Certain Prepayments    13
Section 2.9.
Mandatory Prepayments of Advances    14
Section 2.10.
[Reserved]    14

-i-

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 2.11.
Interest    14
Section 2.12.
Breakage Costs; Increased Costs; Capital Adequacy; Illegality; Additional Indemnifications    14
Section 2.13.
Payments and Computations    16
Section 2.14.
Payment on Non‑Business Days    16
Section 2.15.
[Reserved]    16
Section 2.16.
Extension of the Scheduled Commitment Termination Date    17
Section 2.17.
Taxes    17
Section 2.18.
Request for Borrowing Exceeding Aggregate Commitment    21
ARTICLE III
CONDITIONS OF LENDING AND CLOSING    22
Section 3.1.
Conditions Precedent to Closing    22
Section 3.2.
Conditions Precedent to the Advances    25
Section 3.3.
Conditions Precedent to Acquisition of Additional Managing Members    27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES    27
Section 4.1.
Representations and Warranties of the Borrower    27
ARTICLE V
COVENANTS    32

-ii-

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 5.1.
Affirmative Covenants    32
Section 5.2.
Negative Covenants    43
Section 5.3.
Covenants Regarding the Solar Asset Owner Membership Interests    47
ARTICLE VI
EVENTS OF DEFAULT    49
Section 6.1.
Events of Default    49
Section 6.2.
Remedies    51
Section 6.3.
Class B Lender Purchase Option    52
Section 6.4.
Sale of Collateral    53
ARTICLE VII
THE ADMINISTRATIVE AGENT AND FUNDING AGENTS    54
Section 7.1.
Appointment; Nature of Relationship    54
Section 7.2.
Powers    55
Section 7.3.
General Immunity    55
Section 7.4.
No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc.    55
Section 7.5.
Action on Instructions of Lenders    55
Section 7.6.
Employment of Administrative Agents and Counsel    56
Section 7.7.
Reliance on Documents; Counsel    56

-iii-

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 7.8.
The Administrative Agent’s Reimbursement and Indemnification    56
Section 7.9.
Rights as a Lender    56
Section 7.10.
Lender Credit Decision    57
Section 7.11.
Successor Administrative Agent    57
Section 7.12.
Transaction Documents; Further Assurances    57
Section 7.13.
Collateral Review    58
Section 7.14.
Funding Agent Appointment; Nature of Relationship    58
Section 7.15.
Funding Agent Powers    58
Section 7.16.
Funding Agent General Immunity    59
Section 7.17.
Funding Agent Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc.    59
Section 7.18.
Funding Agent Action on Instructions of Lenders    59
Section 7.19.
Funding Agent Employment of Administrative Agents and Counsel    59
Section 7.20.
Funding Agent Reliance on Documents; Counsel    60
Section 7.21.
Funding Agent’s Reimbursement and Indemnification    60
Section 7.22.
Funding Agent Rights as a Lender    60
Section 7.23.
Funding Agent Lender Credit Decision    60
Section 7.24.
Funding Agent Successor Funding Agent    61

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 7.25.
Funding Agent Transaction Documents; Further Assurances    61
ARTICLE VIII
ADMINISTRATION AND SERVICING OF THE COLLATERAL    61
Section 8.1.
Facility Administration Agreement    61
Section 8.2.
Accounts    63
Section 8.3.
Adjustments    73
ARTICLE IX
THE PAYING AGENT    74
Section 9.1.
Appointment    74
Section 9.2.
Representations and Warranties    74
Section 9.3.
Limitation of Liability of the Paying Agent    74
Section 9.4.
Certain Matters Affecting the Paying Agent    75
Section 9.5.
Indemnification    80
Section 9.6.
Successor Paying Agent    81
ARTICLE X
MISCELLANEOUS    82
Section 10.1.
Survival    82
Section 10.2.
Amendments, Etc.    82
Section 10.3.
Notices, Etc.    83

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 10.4.
No Waiver; Remedies    83
Section 10.5.
Indemnification    83
Section 10.6.
Costs, Expenses and Taxes    84
Section 10.7.
Right of Set‑off; Ratable Payments; Relations Among Lenders    85
Section 10.8.
Binding Effect; Assignment    86
Section 10.9.
GOVERNING LAW    88
Section 10.10.
Jurisdiction    88
Section 10.11.
Waiver of Jury Trial    89
Section 10.12.
Section Headings    89
Section 10.13.
Tax Characterization    89
Section 10.14.
Execution    89
Section 10.15.
Limitations on Liability    89
Section 10.16.
Confidentiality    89
Section 10.17.
Limited Recourse    91
Section 10.18.
Customer Identification ‑ USA Patriot Act Notice    91
Section 10.19.
Paying Agent Compliance with Applicable Anti‑Terrorism and Anti‑Money Laundering Regulations    92
Section 10.20.
Non‑Petition    92
Section 10.21.
No Recourse    92

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 10.22.
[Reserved]    92
Section 10.23.
Additional Paying Agent Provisions    92
Section 10.24.
Acknowledgement Regarding Any Supported QFCs    92


SCHEDULE I
—    Eligibility Criteria
SCHEDULE II
—    The Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, the Takeout Transaction Account, and the Borrower’s Account and the TEP Collateral Account
SCHEDULE III
—    [Reserved]
SCHEDULE IV
—    Scheduled Hedged SREC Payments
SCHEDULE V
—    Scheduled Host Customer Payments
SCHEDULE VI
—    Scheduled PBI Payments
SCHEDULE VII
—    Scheduled Managing Member Distributions
SCHEDULE VIII
—    Tax Equity Financing Documents
SCHEDULE IX
—    SAP Financing Documents
SCHEDULE X
—    SAP NTP Financing Documents


EXHIBIT A
—    Defined Terms
EXHIBIT B‑1
—    Form of Borrowing Base Certificate
EXHIBIT B‑2
—    Form of Notice of Borrowing
EXHIBIT C
—    [Reserved]
EXHIBIT D-1
—    Form of Class A Loan Note
EXHIBIT D-2
—    Form of Class B Loan Note
EXHIBIT E
—    Commitments
EXHIBIT F
—    Form of Assignment Agreement
EXHIBIT G
—    Form of Solar Service Agreement
EXHIBIT H
—    Form of Notice of Delayed Funding
EXHIBIT I
—    Delayed Funding Notice
EXHIBIT J
—    Form of Underwriting and Reassignment Credit Policy


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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.





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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this “Agreement”) is entered into as of September 6, 2019, by and among SUNNOVA TEP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA TE MANAGEMENT, LLC, a Delaware limited liability company, as Facility Administrator (in such capacity, the “Facility Administrator”), the financial institutions from time to time parties hereto (each such financial institution (including any Conduit Lender), a “Lender” and collectively, the “Lenders”), each Funding Agent representing a group of Lenders, CREDIT SUISSE AG, NEW YORK BRANCH (“CSNY”), as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders, WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Paying Agent (as defined below), and U.S. BANK NATIONAL ASSOCIATION, as Verification Agent (as defined below).
RECITALS
WHEREAS, the Borrower has requested that the Lenders provide loans to Borrower in connection with its ownership interest in the Solar Asset Owner Member Interests; and
WHEREAS, the Lenders are willing to provide such loans upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows:
ARTICLE I

CERTAIN DEFINITIONS
Section 1.1.    Certain Definitions. Capitalized terms used but not otherwise defined herein have the meanings given to them in Exhibit A attached hereto.
Section 1.2.    Computation of Time Periods. In this Agreement, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each means “to but excluding” and the word “through” means “through and including.” Any references to completing an action on a non-Business Day (including any payments), shall be automatically extended to the next Business Day
Section 1.3.    Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (A) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein), (B) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (C) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (D) all references herein to Sections, Schedules and Exhibits shall be construed to refer to Sections of, and Schedules and Exhibits to, this Agreement, (E) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all real property, tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and interests in any of the foregoing, (F) any reference to a statute, rule or regulation is to that statute, rule or regulation as now enacted or as the same may from time to time be amended, re‑enacted or expressly replaced and (G) “or” is not exclusive. References to “Managing Member” in this Agreement shall be deemed to include all entities comprising such defined term unless the context requires otherwise. “References to “Manager” in this Agreement shall be deemed to include all entities comprising such defined term unless the context requires otherwise.
Section 1.4.    Accounting Terms. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited financial statements, except as otherwise specifically prescribed herein.
ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES
Section 2.1.    Establishment of the Credit Facility. On the Closing Date, and subject to and upon the terms and conditions set forth in this Agreement and the other Transaction Documents, the Administrative Agent and the Lenders agreed to establish the credit facility set forth in this Agreement for the benefit of the Borrower.
Section 2.2.    The Advances. (A) Subject to the terms and conditions set forth herein, each Non-Conduit Lender in a Class A Lender Group agrees, severally and not jointly, to make one or more loans (each such loan, a “Class A Advance”) to the Borrower, from time to time during the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Availability Period, in an amount, for each Class A Lender Group, equal to its Class A Lender Group Percentage of the aggregate Class A Advances requested by the Borrower pursuant to Section 2.4; provided that the Class A Advances made by any Class A Lender Group shall not exceed its Class A Lender Group Percentage of the lesser of (i) the Class A Aggregate Commitment effective at such time and (ii) the Class A Borrowing Base at such time; provided, further, that a Non-Conduit Lender in a Class A Lender Group shall be deemed to have satisfied its obligation to make a Class A Advance hereunder (solely with respect to such Class A Advance) to the extent any Conduit Lender in such Lender Group funds such Class A Advance in place of such Non-Conduit Lender in accordance with this Agreement, it being understood that such Conduit Lender may fund a Class A Advance in its sole discretion.
(B)    Subject to the terms and conditions set forth herein, each Non-Conduit Lender in a Class B Lender Group agrees, severally and not jointly, to make one or more loans (each such loan, a “Class B Advance”) to the Borrower, from time to time during the Availability Period, in an amount, for each Class B Lender Group, equal to its Class B Lender Group Percentage of the aggregate Class B Advances requested by the Borrower pursuant to Section 2.4; provided that the Class B Advances made by any Class B Lender Group shall not exceed its Class B Lender Group Percentage of the lesser of (i) the Class B Aggregate Commitment effective at such time and (ii) the Class B Borrowing Base at such time; provided, further, that a Non-Conduit Lender in a Class B Lender Group shall be deemed to have satisfied its obligation to make a Class B Advance hereunder (solely with respect to such Class B Advance) to the extent any Conduit Lender in such Lender Group funds such Class B Advance in place of such Non-Conduit Lender in accordance with this Agreement, it being understood that such Conduit Lender may fund a Class B Advance in its sole discretion.
Section 2.3.    Use of Proceeds. Proceeds of the Advances shall only be used by the Borrower to (i) purchase Solar Assets and/or Solar Asset Owner Member Interests from the Seller under the Sale and Contribution Agreement, (ii)  make deposits into the Liquidity Reserve Account (up to the Liquidity Reserve Account Required Balance), (iii) make deposits into the Supplemental Reserve Account (up to the Supplemental Reserve Account Required Balance), (iv) make distributions to the Parent and (v) pay certain fees and expenses incurred in connection with establishment of the credit facility set forth in this Agreement.
Section 2.4.    Making the Advances. (A) Except as otherwise provided herein, the Borrower may request that the Lenders make Advances to the Borrower by the delivery to the Administrative Agent, each Funding Agent, the Paying Agent and, so long as it remains a Lender hereunder, the CS Conduit Lender, not later than 1:00 P.M. (New York City time) two (2) Business Days prior to the proposed Funding Date of a written notice of such request substantially in the form of Exhibit B-2 attached hereto (each such notice, a “Notice of Borrowing”) together with a duly completed

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Borrowing Base Certificate signed by a Responsible Officer of the Borrower. Any Notice of Borrowing or Borrowing Base Certificate received by the Administrative Agent, the Funding Agents and the Paying Agent after the time specified in the immediately preceding sentence shall be deemed to have been received by the Administrative Agent, the Funding Agents and the Paying Agent on the next Business Day, and to the extent that results in the proposed Funding Date being earlier than two (2) Business Days after the date of delivery of such Notice of Borrowing, then the date specified in such Notice of Borrowing as the proposed Funding Date of an Advance shall be deemed to be the Business Day immediately succeeding the proposed Funding Date of such Advance specified in such Notice of Borrowing. The proposed Funding Date specified in a Notice of Borrowing shall be no earlier than two (2) Business Days after the date of delivery of such Notice of Borrowing and may be up to a maximum of thirty (30) days after the date of delivery of such Notice of Borrowing. Unless otherwise provided herein, each Notice of Borrowing shall be irrevocable. The aggregate principal amount of the Class A Advance and Class B Advance requested by the Borrower for any Funding Date shall not be less than the lesser of (x) $1,000,000 and (y) the remaining amount necessary in order for the Borrower to fully utilize all available Commitments. If the Administrative Agent delivers a written notice (including by electronic mail) to the Borrower contesting the Borrower’s calculations or any statement within such Notice of Borrowing, it shall promptly inform the Borrower. The Borrower may then deliver an amended Notice of Borrowing to the Administrative Agent, the Funding Agents and the Paying Agent or, by written notice, rescind the Notice of Borrowing.
(B)     The Notice of Borrowing shall specify (i) the aggregate amount of Class A Advances requested together with the allocated amount of Class A Advances to be paid by each Class A Lender Group based on its respective Class A Lender Group Percentage, (ii) the aggregate amount of Class B Advances requested together with the allocated amount of Class B Advances to be paid by each Class B Lender Group based on its respective Class B Lender Group Percentage and (iii) the Funding Date; provided that the amount of Class A Advances to Class B Advances requested shall be determined on a pro rata basis based on the Class A Aggregate Commitment and Class B Aggregate Commitment as of the proposed Funding Date.
(C)    With respect to the Advances to be made on the Closing Date, each Lender shall pay the amount of its Advance by wire transfer of such funds to the Borrower’s Account no later than 4:00 P.M. (New York City time) on the Closing Date.
(D)     With respect to the Advances to be made on any Funding Date, other than the initial Advance to be made on the Closing Date, upon a determination by the Administrative Agent that all conditions precedent to the Advances to be made on such Funding Date set forth in Article III have been satisfied or otherwise waived, each Lender shall fund the amount of its Advance by wire

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


transfer of such funds in accordance with the Borrower’s written instructions initiated no later than 2:00 P.M. (New York City time) on such Funding Date.
(E)    Notwithstanding the foregoing, if any Non-Conduit Lender who shall have previously notified the Borrower in writing, in substantially the form of Exhibit H hereto, that it has incurred any external cost, fee or expense directly related to and as a result of the “liquidity coverage ratio” under Basel III in respect of its Commitment hereunder or any liquidity agreement between such Non-Conduit Lender and the Conduit Lender, or its interest in the Advances, such Non-Conduit Lender may, upon receipt of a Notice of Borrowing pursuant to Section 2.4(A), notify the Borrower in writing by 5:00 P.M. (New York City time) two (2) Business Days prior to the Funding Date specified in such Notice of Borrowing, in substantially the form of Exhibit I hereto (a “Delayed Funding Notice”), of its intent to fund (or, if applicable and if such Conduit Lender so agrees in its sole discretion, have its Conduit Lender, if applicable, fund all or part of) its allocated amount of the related Advance in an amount that would, if combined with all other requested Advances within the past thirty-five (35) days, exceed $20,000,000 (such amount, the “Delayed Amount”) on a Business Day that is on or before the thirty-fifth (35th) day following the date of delivery of such Non-Conduit Lender of such Delayed Funding Notice (the “Delayed Funding Date”) rather than on the date specified in such Notice of Borrowing. If any Non-Conduit Lender provides a Delayed Funding Notice to the Borrower following the delivery by the Borrower of a Notice of Borrowing, the Borrower may revoke such Notice of Borrowing by delivering written notice of the same to the Administrative Agent and the Funding Agents by 12:00 P.M. (New York city time) on the Business Day preceding the related Funding Date. No Non-Conduit Lender that has provided a Delayed Funding Notice in respect of an Advance (a “Delayed Funding Lender”) shall be considered to be in default of its obligation to fund its Delayed Amount pursuant to Section 2.4(D) hereunder unless and until it has failed to fund the Delayed Amount on or before the Delayed Funding Date. A Delayed Funding Lender is not obliged to fund until thirty-five (35) days have elapsed since the funding request. For the avoidance of doubt, a Delayed Funding Lender shall be required to fund its Delayed Amount regardless of the occurrence of an Amortization Event, Event of Default, Potential Amortization Event or Potential Default which occurs during the period from and including the related Funding Date to and including the related Delayed Funding Date, unless such Amortization Event, Event of Default, Potential Amortization Event or Potential Default relates to an Insolvency Event with respect to the Borrower.
(F)    If (i) one or more Delayed Funding Lenders provide a Delayed Funding Notice to the Borrower in respect of a Notice of Borrowing and (ii) the Borrower shall not have revoked the Notice of Borrowing prior to the Business Day preceding such Funding Date, the Administrative Agent shall, by no later than 12:00 P.M. (New York City time) on the Business Day preceding such Funding Date, direct each Lender Group and each Non-Conduit Lender that is not a Delayed Funding Lender with respect to such Funding Date (each a “Non-Delayed Funding Lender”) to fund an

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


additional portion of such Advance on such Funding Date equal to such Non-Delayed Funding Lender’s proportionate share (based upon such Non-Delayed Funding Lender’s Commitment relative to the sum of the Commitments of all Non-Delayed Funding Lenders) of the aggregate Delayed Amounts with respect to such Funding Date; provided, that in no event shall a Non-Delayed Funding Lender be required to fund any amounts in excess of its Commitment. Subject to Section 2.4(D), in the case of a Non-Delayed Funding Lender that is a Non-Conduit Lender, such Non-Conduit Lender hereby agrees, or, in the case of a Non-Delayed Funding Lender that is a Lender Group, the Conduit Lender in such Lender Group may agree, in its sole discretion, and the Non-Conduit Lenders in such Lender Group hereby agree, to fund such portion of the Advance on such Funding Date.
(G)    After the Non-Delayed Funding Lenders fund a Delayed Amount on any Funding Date in accordance with Section 2.4(F), the Delayed Funding Lender in respect of such Delayed Amount will be obligated to fund an amount equal to the excess, if any, of (a) such Delayed Amount over (b) the amount, if any, by which the portion of any principal distribution amount paid to such Non-Delayed Funding Lenders pursuant to Section 2.7 or any decrease to the outstanding principal balance made in accordance with Section 2.8, on any date during the period from and including such Funding Date to but excluding the Delayed Funding Date for such Delayed Amount, was greater than what it would have been had such Delayed Amount been funded by such Delayed Funding Lender on such Funding Date (the “Delayed Funding Reimbursement Amount”) with respect to such Delayed Amount on or before its Delayed Funding Date, irrespective of whether the Borrower would be able to satisfy the conditions set forth in Section 3.2(A) to an Advance, in an amount equal to such Delayed Funding Reimbursement Amount on such Delayed Funding Date. Such Delayed Funding Lender shall fund such Delayed Funding Reimbursement Amount on such Delayed Funding Date by paying such amount to the Administrative Agent in immediately available funds, and the Administrative Agent shall distribute such funds to each such Non-Delayed Funding Lender, pro rata based on the relative amount of such Delayed Amount funded by such Non-Delayed Funding Lender on such Funding Date pursuant to Section 2.4(F).
Section 2.5.    Fees.
(A)    Facility Administrator Fee. Subject to the terms and conditions of the Facility Administration Agreement, the Borrower shall pay the Facility Administrator Fee to the initial Facility Administrator and after the resignation or replacement of the initial Facility Administrator, the Borrower shall pay the Facility Administrator Fee to a Successor Facility Administrator appointed in accordance with the Facility Administration Agreement.
(B)    Verification Agent Fee. Subject to the terms and conditions of the Verification Agent Agreement, the Borrower shall pay to the Verification Agent the Verification Agent Fee.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(C)    Paying Agent Fee. Subject to the terms and conditions of the Paying Agent Fee Letter, the Borrower shall pay to the Paying Agent the Paying Agent Fee.
(D)    Unused Line Fees. Solely during the Availability Period, the Borrower agrees to pay to each Funding Agent, for the benefit of the Non-Conduit Lender in its Lender Group and as consideration for the Commitment of such Non-Conduit Lender in such Lender Group unused line fees in Dollars (the “Unused Line Fee”) for the period from the Closing Date to the last day of the Availability Period, computed as (a) the Unused Line Fee Percentage multiplied by (b) the average Unused Portion of the Commitments with respect to such Lender Group during a calendar quarter. Accrued Unused Line Fees shall be due and payable in arrears (from available Collections as set forth and in the order of priority established pursuant to Section 2.7) on the Payment Date immediately following the last day of the applicable calendar quarter for which such fee was calculated and on the last day of the Availability Period.
(E)    Payment of Fees. The fees set forth in Section 2.5(A), (B), (C) and (D) shall be payable on each Payment Date by the Borrower from Distributable Collections as set forth in and in the order of priority established pursuant to Section 2.7(B). Notwithstanding anything to the contrary herein or in any Transaction Document, the fees referred to in this Section 2.5 shall not constitute “Confidential Information.”
(F)    Amendment Fee.     Commencing on the Amendment Closing Date and thereafter, the Borrower shall pay to the Administrative Agent a fee of $10,000 in connection with each amendment (or group of related amendments effective of the same date) to the Transaction Documents requested by it, which fee shall be in addition to the reimbursement of costs and expenses associated therewith that is provided for in Section 10.6 hereof. For the avoidance of doubt, any consent to a Proposed Form delivered by the Administrative Agent pursuant to Section 5.1(X) shall not give rise to the obligation to pay the amendment fee set forth in this Section 2.5(F) so long as no amendment to any Transaction Document is required in connection with such Proposed Form as determined by the Administrative Agent in its sole discretion.
Section 2.6.    Reduction/Increase of the Commitments.
(A)    The Borrower may, on any Business Day, upon written notice given to the Administrative Agent and each of the Funding Agents not later than ten (10) Business Days prior to the date of the proposed action (which notice may be conditioned upon any event), terminate in whole or reduce in part, on a pro rata basis based on its Lender Group Percentage, the Unused Portion of the Commitments with respect to each Lender Group (and on a pro rata basis with respect to each Non-Conduit Lender in such Lender Group); provided, that (i) any partial reduction shall be in the amount of $1,000,000 or an integral multiple thereof and (ii) any Unused Portion of the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Commitments so reduced may not be increased again without the written consent of the related Non-Conduit Lenders in such Lender Group.
(B)    The Borrower may, on any Business Day upon written notice given to the Administrative Agent and each of the Funding Agents, request an increase, on a pro rata basis based on its Lender Group Percentage, of the Commitments of the Non-Conduit Lender(s) in each Lender Group; provided, that any increase shall be at least equal to $5,000,000 or an integral multiple thereof but shall in no event cause the Aggregate Commitment to exceed the Maximum Facility Amount, the Class A Aggregate Commitment to exceed the Class A Maximum Facility Amount or the Class B Aggregate Commitment to exceed the Class B Maximum Facility Amount. Each Non-Conduit Lender shall, within five (5) Business Days of receipt of such request, notify the Administrative Agent and the Administrative Agent shall in turn notify the Borrower in writing (with copies to the other members of the applicable Lender Group) whether or not each Non-Conduit Lender has, in its sole discretion, agreed to increase its Commitment. If a Non-Conduit Lender does not send any notification to the Administrative Agent within such five (5) Business Day period, such Non-Conduit Lender shall be deemed to have declined to increase its Commitment. Any increase in Commitments agreed to pursuant to this Section 2.6(B) may be reduced by a Non-Conduit Lender, at any time, upon five Business Days’ written notice to the Borrower from the Administrative Agent (with copies to the other members of the applicable Lender Group) setting forth the amount of such reduction; provided, however, that such Commitment may not be reduced to an amount less than such Non-Conduit Lender’s initial Commitment on the Closing Date (if such reduction is prior to a Takeout Transaction) or to an amount less than such Non-Conduit Lender’s Commitment on or after a Takeout Transaction (if such reduction is on or after a Takeout Transaction), but may be reduced to an amount that is less than the then Aggregate Outstanding Advances.
Section 2.7.    Repayment of the Advances. (A) Notwithstanding any other provision to the contrary, the outstanding principal balance of the Advances and the other Obligations owing under this Agreement, together with all accrued but unpaid interest thereon, shall be due and payable in full, if not due and payable earlier, on the Maturity Date. For the avoidance of doubt, amounts borrowed and repaid hereunder may be reborrowed in accordance with the terms hereof.
(B)    On any Business Day, the Borrower may direct the Paying Agent to, and on each Payment Date, the Borrower shall direct the Paying Agent to, subject to Section 2.7(D), apply all amounts on deposit in the Collection Account (including (x)(1)(a) Collections deposited therein during the related Collection Period and (b) any amounts due during the related Collection Period but deposited into the Collection Account within ten (10) Business Days after the end of such Collection Period that the Facility Administrator (at its option) has determined (with written notice thereof to the Paying Agent (with a copy to the Administrative Agent and the Borrower)) to be

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


treated as if such amounts were on deposit in the Collection Account at the end of such Collection Period, (2) amounts deposited therein from the Liquidity Reserve Account or the Supplemental Reserve Account, in each case in accordance with Section 8.2 or (3) any amounts deposited therein by the Seller or the Parent pursuant to the Sale and Contribution Agreement or the Parent Guaranty, respectively, but (y) excluding Collections deposited therein in the current Collection Period except as necessary to make distributions pursuant to clauses (i) through (iii) of this Section or as otherwise determined by the Facility Administrator pursuant to clause (x)(1)(a) above) (the “Distributable Collections”), to the Obligations in the following order of priority based solely on information contained in (I) with respect to any Payment Date, the Facility Administrator Report for such related Collection Period or, if no Facility Administrator Report is available, solely as directed in writing by the Administrative Agent or (II) with respect to any other Business Day, including the date of closing for a Takeout Transaction, on which the Borrower requests an application and distribution of funds in the Collection Account (and/or Takeout Transaction Account, if applicable), an interim Facility Administrator Report or such other report in form and substance reasonably satisfactory to the Administrative Agent (as confirmed by the Administrative Agent via an email sent to the Paying Agent) and the Paying Agent relating to the Distributable Collections and proceeds of a Takeout Transaction, if applicable, that is delivered by the Facility Administrator (which the Facility Administrator hereby agrees to deliver at the request of the Administrative Agent):
(xviii)first (Service Providers), ratably, (a) to the Paying Agent (1) the Paying Agent Fee and (2)(x) any accrued and unpaid Paying Agent Fees with respect to prior Payment Dates plus (y) out-of-pocket expenses and indemnities of the Paying Agent incurred and not reimbursed in connection with its obligations and duties under this Agreement; provided that the aggregate payments to the Paying Agent reimbursement for clauses (2)(y) will be limited to $50,000 per calendar year so long as no Event of Default or Amortization Event has occurred pursuant to this Agreement (unless otherwise approved by the Majority Lenders and, if such reimbursement amount is to be increased, the Majority Class B Lenders (the approval of the Majority Class B Lenders not to be unreasonably withheld, conditioned or delayed if otherwise approved by the Majority Lenders); provided that if the Majority Class B Lenders have not affirmatively disapproved such increase in writing within five (5) Business Days of receiving notice of such increase and the Majority Lenders have otherwise approved such increase, such increase shall be deemed approved); (b) to the Facility Administrator, the Facility Administrator Fee, and (c) to the Verification Agent, the Verification Agent Fee;
(xix)    second (Hedge Agreement Payments and Class A Interest Distribution Amount), on a pari passu basis (a) to the Qualifying Hedge Counterparty under each Hedge Agreement, the payment of all amounts which are due and payable by the Borrower to such Qualifying Hedge Counterparty on such date (other than fees, expenses,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


termination payments, indemnification payments, tax payments or other similar amounts), pursuant to the terms of the applicable Hedge Agreement (net of all amounts which are due and payable by such Qualifying Hedge Counterparty to the Borrower on such date pursuant to the terms of such Hedge Agreement) and (b) to each Class A Funding Agent, for the benefit of and on behalf of the Class A Lenders in its Class A Lender Group, the Class A Interest Distribution Amount then due (allocated among the Class A Lender Groups based on their Class A Lender Group Percentages) until paid in full;
(xx)    third (Class B Interest Distribution Amount (Non-Event of Default)), so long as no Event of Default has occurred and is continuing, to each Class B Funding Agent, for the benefit of and on behalf of the Class B Lenders in its Class B Lender Group, the Class B Interest Distribution Amount then due (allocated among the Class B Lender Groups based on their Class B Lender Group Percentages) until paid in full;
(xxi)    fourth (Unused Line Fee), first, to each Class A Funding Agent, for the benefit of and on behalf of the related Non-Conduit Lender(s) in its Lender Group, the payment of the Unused Line Fee then due (allocated among the Lender Groups based on their Lender Group Percentages) until paid in full and second, to each Class B Funding Agent, for the benefit of and on behalf of the related Non-Conduit Lender(s) in its Lender Group, the payment of the Unused Line Fee then due (allocated among the Lender Groups based on their Lender Group Percentages) until paid in full;
(xxii)    fifth (Liquidity Reserve Account), if the amount on deposit in the Liquidity Reserve Account is less than the Liquidity Reserve Account Required Balance and no Amortization Event has occurred and is continuing, to the Liquidity Reserve Account until the amount on deposit in the Liquidity Reserve Account shall equal the Liquidity Reserve Account Required Balance;
(xxiii)    sixth (Supplemental Reserve Account), to the Supplemental Reserve Account, the Supplemental Reserve Account Deposit, if any;
(xxiv)seventh (Class A Borrowing Base Deficiency), to the extent required under Section 2.9 in connection with a Class A Borrowing Base Deficiency, to each Class A Funding Agent, on behalf of the Class A Lenders in its Class A Lender Group, for the prepayment and reduction of the outstanding principal amount of any Class A Advances, an amount equal to the amount necessary to cure such Class A Borrowing Base Deficiency (allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages) plus, to the extent not paid as provided above, accrued and unpaid interest on the Class A Advances prepaid until paid in full;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(xxv)eighth (Class B Interest Distribution Amount (Event of Default)), if an Event of Default has occurred and is continuing, to each Class B Funding Agent, for the benefit of and on behalf of the Class B Lenders in its Class B Lender Group, the Class B Interest Distribution Amount then due (allocated among the Class B Lender Groups based on their Class B Lender Group Percentages) until paid in full;
(xxvi)    ninth (Class B Borrowing Base Deficiency), to the extent required under Section 2.9 in connection with a Class B Borrowing Base Deficiency, to each Class B Funding Agent, on behalf of the Class B Lenders in its Class B Lender Group, for the prepayment and reduction of the outstanding principal amount of any Class B Advances, an amount equal to the amount necessary to cure such Class B Borrowing Base Deficiency (allocated ratably among the Class B Lender Groups based on their Class B Lender Group Percentages) plus, to the extent not paid as provided above, accrued and unpaid interest on the Class B Advances prepaid until paid in full;
(xxvii)    tenth (Qualifying Hedge Counterparty Breakage and Amortization Period Class A Lender Obligations), on a pari passu basis (a) to the Administrative Agent for the account of the Hedge Counterparty under each Hedge Agreement, all payments which arose due to a default by the Borrower or due to any prepayments of amounts under such Hedge Agreement and all fees, expenses, indemnification payments, tax payments or other amounts (to the extent not previously paid hereunder) which are due and payable by the Borrower to such Hedge Counterparty on such date, pursuant to the terms of the applicable Hedge Agreement (net of all amounts which are due and payable by such Qualifying Hedge Counterparty to the Borrower on such date pursuant to the terms of such Hedge Agreement) and (b) during the Amortization Period, to the Administrative Agent and each Class A Funding Agent on behalf of itself and the Class A Lenders in its related Class A Lender Group, all remaining amounts, for application to the principal balance of the outstanding Class A Advances and the aggregate amount of all Obligations then due from the Borrower to the Administrative Agent, such Class A Funding Agent and each such Class A Lender in the Class A Lender Group (allocated among such Obligations as selected by the Administrative Agent; provided that payment of the principal balance of outstanding Class A Advances shall be allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages) until paid in full;
(xxviii)    eleventh (Amortization Period Class B Lender Obligations), during the Amortization Period, to the Administrative Agent and each Class B Funding Agent on behalf of itself and the Class B Lenders in its related Class B Lender Group, all remaining amounts, for application to the payment of the principal balance of the outstanding Class B Advances and the aggregate amount of all Obligations then due from the Borrower to the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Administrative Agent, such Class B Funding Agent and each such Class B Lender in the Class B Lender Group (allocated among such Obligations as selected by the Administrative Agent; provided that payment of the principal balance of outstanding Class B Advances shall be allocated ratably among the Class B Lender Groups based on their Class B Lender Group Percentages) until paid in full;
(xxix)twelfth (Lender Fees and Expenses), first, to the Administrative Agent and each Class A Funding Agent on behalf of itself and the Class A Lenders in its related Class A Lender Group, the payment of all Breakage Costs, all Liquidation Fees and all other amounts (other than those already provided for above) due and payable by the Borrower to the Administrative Agent, such Class A Funding Agent and such Class A Lenders (solely in their capacity as a Class A Lender) hereunder or under any other Transaction Document until paid in full and second, to each Class B Funding Agent on behalf of itself and the Class B Lenders in its related Class B Lender Group, the payment of all Breakage Costs, all Liquidation Fees and all other amounts (other than those already provided for above) due and payable by the Borrower to such Class B Funding Agent and such Class B Lenders (solely in their capacity as a Class B Lender) hereunder or under any other Transaction Document until paid in full;
(xxx)thirteenth (All Other Obligations), to the Administrative Agent on behalf of any applicable party, the ratable payment of all other Obligations that are past due and/or payable on such date;
(xxxi)fourteenth (Service Provider Indemnities), ratably, to the Paying Agent, the Verification Agent and/or the Facility Administrator, any indemnification, expenses, fees or other obligations owed to the Paying Agent, the Verification Agent and/or the Facility Administrator, respectively (including out-of-pocket expenses and indemnities of the Paying Agent and the Verification Agent not paid pursuant to clause (i) above and any Facility Administrator Fees, Paying Agent Fees or Verification Agent Fees not paid pursuant to clause (i) above), pursuant to the Transaction Documents;
(xxxii)fifteenth (Class A Principal Prepayments; Class B Principal Prepayments), ratably, unless an Event of Default or Amortization Event has occurred and is continuing, then, sequentially, as specified in Section 2.8(A), (a) to each Class A Funding Agent on behalf of its related Class A Lender Group, to the prepayment of Class A Advances in accordance with Sections 2.8(A), 2.11, 2.12(A) and 2.13 (allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages), and (b) to each Class B Funding Agent on behalf of its related Class B Lender Group, to the prepayment of Class B Advances in accordance with Sections 2.8(A), 2.11, 2.12(A) and 2.13 (allocated ratably among the Class B Lender Groups based on their Class B Lender Group Percentages);

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(xxxiii)sixteenth (Eligible Letter of Credit Bank), to each Eligible Letter of Credit Bank or other party as directed by the Facility Administrator (a) any fees and expenses related to a Letter of Credit and (b) any amounts which have been drawn under a Letter of Credit and any interest due thereon; and
(xxxiv)seventeenth (Remainder), all Distributable Collections remaining in the Collection Account after giving effect to the preceding distributions in this Section 2.7(B), to the Borrower’s Account (to cover any other expenses of the Borrower) and (x) prior to the satisfaction of the covenant set forth in Section 5.1(W), otherwise to the Collection Account and (y) after satisfaction of the covenant set forth in Section 5.1(W), otherwise to the TEP Collateral Account or to make distributions on behalf of the Borrower).
(C)    After giving effect to the application of Distributable Collections in accordance with Section 2.7(B) on any Business Day, if any, the Paying Agent shall, subject to Sections 2.7(D) and 2.8(B), apply all amounts on deposit in the Takeout Transaction Account on such Business Day representing net proceeds of any Takeout Transaction to the Obligations in the following order of priority:
(vii)first (Interest), (a) first, to each Class A Funding Agent, on behalf of the Class A Lenders in its Class A Lender Group, the excess, if any, of the Class A Interest Distribution Amount accrued with respect to the amount of Class A Advances prepaid on such day (allocated among the Class A Lender Groups based on their Class A Lender Group Percentages) with respect to the related Interest Accrual Period over the amount distributed (or distributable) to the Class A Funding Agent on such day pursuant to Section 2.7(B)(ii)(b) and (b) second, to each Class B Funding Agent, for the benefit of and on behalf of the Class B Lenders in its Class B Lender Group, the excess, if any, of the Class B Interest Distribution Amount accrued with respect to the amount of Class B Advances prepaid on such day (allocated among the Class B Lender Groups based on their Class B Lender Group Percentages) with respect to the related Interest Accrual Period over the amount distributed (or distributable) to the Class B Funding Agent on such day pursuant to Section 2.7(B)(iii);
(viii)    second (Liquidation Fees and Other Obligations Owing to Administrative Agents, Lenders and Funding Agents), (a) first, to each Funding Agent on behalf of the Lenders in its related Lender Group, for application to the aggregate amount of all Liquidation Fees accrued with respect to the amount of Advances prepaid on such day (other than those already provided for pursuant to this Section 2.7(C)) then due and payable by the Borrower (allocated ratably among the Class A Lender Groups and the Class B Lender Groups based on the percentage of the Aggregate Outstanding Advances funded by each such Lender Group and within each Lender Group based on their applicable Lender Group Percentages) until paid in full, (b) second, ratably, to the Administrative Agent and each

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Class A Funding Agent, on behalf of itself and the Class A Lenders in its related Class A Lender Group, the aggregate amount of all Obligations accrued with respect to the amount of Class A Advances prepaid on such day (other than those provided for in other clauses of this Section 2.7(C)) then due and payable by the Borrower to the Administrative Agent, such Class A Funding Agent and such Class A Lenders (solely in its capacity as a Class A Lender) hereunder or under any other Transaction Document until paid in full, and (c) third, to each Class B Funding Agent, on behalf of itself and the Class B Lenders in its related Class B Lender Group, the aggregate amount of all Obligations accrued with respect to the amount of Class B Advances prepaid on such day (other than those provided for in other clauses of this Section 2.7(C)) then due and payable by the Borrower to such Class B Funding Agent or such Class B Lenders (solely in its capacity as a Class B Lender) hereunder or under any other Transaction Document until paid in full;
(ix)    third (Principal), so long as no Event of Default or Amortization Event has occurred and is continuing, pro rata based on amounts then due to the Class A Lenders and the Class B Lenders, and if an Event of Default or Amortization Event has occurred and is continuing, sequentially, (a) to each Class A Funding Agent on behalf of its related Class A Lender Group, to the prepayment of Class A Advances in accordance with Sections 2.8(A), 2.11, 2.12(A) and 2.13 (allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages) and (b) to each Class B Funding Agent on behalf of its related Class B Lender Group, to the prepayment of Class B Advances in accordance with Sections 2.8(A), 2.11, 2.12(A) and 2.13 (allocated ratably among the Class B Lender Groups based on their Class B Lender Group Percentages);
(x)    fourth (Qualifying Hedge Counterparty and Eligible Hedged SREC Counterparty Payments), ratably to (a) to the Administrative Agent for the account of the Qualifying Hedge Counterparty under each Hedge Agreement, all payments that are due and payable by the Borrower to such Qualifying Hedge Counterparty on such date arising as a result of the prepayment of Advances in connection with such Takeout Transaction (including all fees, expenses, indemnification payments, tax payments, termination payments and other amounts), pursuant to the terms of the applicable Hedge Agreement (net of all amounts which are due and payable by such Qualifying Hedge Counterparty to the Borrower on such date pursuant to the terms of such Hedge Agreement) and (b) to the Eligible Hedged SREC Counterparty under each Hedged SREC Agreement, all payments that are due and payable by the Borrower under such Hedged SREC Agreement on such date arising as a result of the prepayment of Advances in connection with such Takeout Transaction (including all fees, expenses, indemnification payments, tax payments, termination payments and other amounts), pursuant to the terms of the applicable Hedged SREC Agreement;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(xi)fifth (Eligible Letter of Credit Bank), to the Eligible Letter of Credit Bank or other party as directed by the Facility Administrator (a) any fees and expenses related to a Letter of Credit and (b) any amounts which have been drawn under a Letter of Credit and any interest due thereon; and
(xii)sixth (Remainder), to the Collection Account, all proceeds of such Takeout Transaction remaining in the Takeout Transaction Account for application in accordance with Section 2.7(B).
(D)    Notwithstanding anything to the contrary set forth in this Section 2.7 or Section 8.2, the Paying Agent shall not be obligated to make any determination or calculation with respect to the payments or allocations to be made pursuant to either of such Sections, and in making the payments and allocations required under such Sections, the Paying Agent shall be entitled to rely exclusively and conclusively upon the information in the latest Facility Administrator Report (or such other report or direction signed by the Administrative Agent) received by the Paying Agent pursuant to either such Section prior to the applicable payment date. Any payment direction to be acted upon by the Paying Agent pursuant to either such Section on a payment date other than a Payment Date shall be delivered to the Paying Agent at least two (2) Business Days prior to the date on which any payment is to be made.
Section 2.8.    Certain Prepayments. (A)    The Borrower (through the Paying Agent pursuant to Section 2.7(B) and as otherwise permitted in this Agreement) may at any time upon written notice to the Administrative Agent, the Funding Agents and the Paying Agent, and subject to the priority of payments set forth in Section 2.7(B), prepay all or any portion of the balance of the principal amount of the Class A Advances or the Class B Advances based on the outstanding principal amounts thereof, which notice shall be given at least three (3) Business Days prior to the proposed date of such prepayment. Each such prepayment (which need not be on a Payment Date) shall be accompanied by (a) the payment of all accrued but unpaid interest on the amounts to be so prepaid and (b) any Liquidation Fee in connection with such prepayment if such prepayment is not made on a Payment Date. Prepayments made in accordance with this Section shall be applied to the outstanding principal amount of Class A Advances and Class B Advances (i) in the absence of an Event of Default or Amortization Event, ratably and (ii) otherwise, sequentially.
(B)    The Borrower shall deposit all proceeds of any Takeout Transaction (net of reasonable fees, taxes, commissions, premiums and expenses incurred by the Borrower in connection with such Takeout Transaction so long as such deposit is greater than or equal to the Minimum Payoff Amount) into the Takeout Transaction Account, and the Administrative Agent shall apply such proceeds to prepay the applicable Class A Advances and Class B Advances made in respect of the Collateral that is subject to such Takeout Transaction and make other related

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


payments in accordance with Sections 2.7(B) and 2.7(C), including any such payments due to the Paying Agent.
Section 2.9.    Mandatory Prepayments of Advances. On any date that the Borrower either (a) obtains knowledge that (i) as of any prior Funding Date, any prior Payment Date or date on which a prepayment was made in accordance with Section 2.8 or (ii) in connection with the delivery of a Borrowing Base Certificate for an upcoming Funding Date, Payment Date or date on which a prepayment is to made in accordance with Section 2.8, or (b) receives notice from the Administrative Agent (with calculations set forth in reasonable detail), that as of any Funding Date, Payment Date or date on which a prepayment is made in accordance with Section 2.8, (i) the aggregate outstanding principal amount of all Class A Advances exceeds the lesser of (x) the amount of the Class A Aggregate Commitment in effect as of such date (without giving effect to or treating as outstanding any Advance that was approved pursuant to Section 2.18) and (y) the Class A Borrowing Base (the occurrence of any such excess being referred to herein as a “Class A Borrowing Base Deficiency”), or (ii) the aggregate outstanding principal amount of all Class B Advances exceeds the lesser of (x) the amount of the Class B Aggregate Commitment in effect as of such date (without giving effect to or treating as outstanding any Advance that was approved pursuant to Section 2.18) and (y) the Class B Borrowing Base (the occurrence of any such excess being referred to herein as a “Class B Borrowing Base Deficiency” and together with the Class A Borrowing Base Deficiency, a “Borrowing Base Deficiency”), the Borrower shall pay to the Class A Funding Agent and/or Class B Funding Agent, as applicable, for the account of its Lender Group the amount of any such excess (to be applied to the reduction of the applicable Advances ratably among all applicable Lender Groups based on their Lender Group Percentages to the extent necessary to cure such Borrowing Base Deficiency), together with accrued but unpaid interest on the amount required to be so prepaid to the date of such prepayment and any Liquidation Fee in connection with such prepayment if such prepayment is not made on a Payment Date.
Section 2.10.    [Reserved].
Section 2.11.    Interest. The makers of the Advances shall be entitled to the applicable Interest Distribution Amount payable on each Payment Date in accordance with Sections 2.7(B) and 2.7(C).
Section 2.12.    Breakage Costs; Liquidation Fees; Increased Costs; Capital Adequacy; Illegality; Additional Indemnifications    .
(A)    Breakage Costs and Liquidation Fees. (i) If any Advance is not made on the date specified by the Borrower for any reason other than default by the Lenders, the Borrower hereby agrees to pay Breakage Costs, if any, and (ii) the Borrower agrees to pay all Liquidation Fees associated with a reduction of the principal balance of a Class A Advance or Class B Advance at

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


any time. The Borrower shall not be responsible for any Liquidation Fees or any other loss, cost, or expenses arising at the time of, and arising solely as a result of, any assignment made pursuant to Section 10.8 and the reallocation of any portion of a Class A Advance or Class B Advance of the applicable Lender making such assignment unless, in each case, such assignment is requested by the Borrower.
(B)    Increased Costs. If any Change in Law (a) shall subject any Lender, the Administrative Agent or any Affiliate thereof (each of which, an “Affected Party”) to any Taxes (other than (x) Indemnified Taxes, (y) Taxes described in clauses (ii) through (iv) of the definition of Excluded Taxes and (z) Connection Income Taxes) on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, (b) shall impose, modify or deem applicable any reserve requirement (including any reserve requirement imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Affected Party, or (c) shall impose any other condition affecting the Collateral or the rights of any Lender and the Administrative Agent hereunder, the result of which is to increase the cost to any Affected Party under this Agreement or to reduce the amount of any sum received or receivable by an Affected Party under this Agreement, then on the next Payment Date after written demand by such Affected Party, such Affected Party shall receive such additional amount or amounts as will compensate such Affected Party for such additional or increased cost incurred or such reduction suffered to the extent such additional or increased costs or reduction are incurred or suffered in connection with the Collateral, any obligation to make Advances hereunder, any of the rights of such Lender or the Administrative Agent hereunder, or any payment made hereunder in accordance with Section 2.7(B); provided, that the Borrower shall not be required to compensate such Affected Party for any portion of such additional or increased cost or such reduction that is incurred more than one hundred eighty (180) days prior to any such demand (except that, if the event giving rise to such additional or increased cost or such reduction is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof).
(C)    Capital Adequacy. If any Change in Law has or would have the effect of reducing the rate of return on the capital of any Affected Party as a consequence of its obligations hereunder or arising in connection herewith to a level below that which any such Affected Party could have achieved but for such Change in Law (taking into consideration the policies of such Affected Party with respect to capital adequacy) by an amount deemed by such Affected Party to be material, then from time to time, then on the next Payment Date after written demand by such Affected Party (which demand shall be accompanied by a statement setting forth the basis for such demand), such Affected Party shall receive such additional amount or amounts as will compensate such Affected Party for such reduction in accordance with Section 2.7(B); provided, that the Borrower shall not be required to compensate such Affected Party for any portion of such additional amount or amounts

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


that are incurred more than one hundred eighty (180) days prior to any such demand (except that, if the event giving rise to such additional amount or amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof).
(D)    Compensation. If as a result of any event or circumstance similar to those described in Section 2.12(A), 2.12(B), or 2.12(C), any Affected Party is required to compensate a bank or other financial institution providing liquidity support, credit enhancement or other similar support to such Affected Party in connection with this Agreement or the funding or maintenance of Advances hereunder, then on the next Payment Date after written demand by such Affected Party, such Affected Party shall receive such additional amount or amounts as may be necessary to reimburse such Affected Party for any amounts paid by it; provided, that the Borrower shall not be required to compensate such Affected Party for any portion of such additional amount or amounts that are incurred more than one hundred eighty (180) days prior to any such demand (except that, if the event giving rise to such additional amount or amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof).
(E)    Calculation. In determining any amount provided for in this Section 2.12, the Affected Party may use any reasonable averaging and attribution methods. Any Affected Party making a claim under this Section 2.12 shall submit to the Borrower a certificate as to such additional or increased cost or reduction, which certificate shall be conclusive absent manifest error.
Section 2.13.    Payments and Computations. (A) The Borrower (through the Paying Agent pursuant to Sections 2.7(B) and 2.7(C) and as otherwise permitted in this Agreement) shall make each payment and prepayment hereunder and under the Advances in respect of principal, interest, expenses, indemnities, fees or other Obligations due from the Borrower not later than 4:00 P.M. (New York City time) on the day when due in U.S. Dollars to the related Funding Agent at its address referred to in Section 10.3 or to such account provided by such Funding Agent in immediately available, same‑day funds. Payments on Obligations may also be made by application of funds in the Collection Account or the Takeout Transaction Account as provided in Section 2.7(B) or 2.7(C), as applicable, or the TEP Collateral Account. All computations of interest for Advances made under the Base Rate shall be made by the applicable Funding Agent on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed (including the first day but excluding the last day) occurring in the period for which such interest is payable. All other computations of fees and interest provided hereunder shall be made on the basis of a 360-day year and actual days elapsed (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by a Funding Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(B)    All payments to be made in respect of fees, if any, due to the Administrative Agent from the Borrower hereunder shall be made on the date when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without setoff, counterclaim or other deduction of any nature (other than with respect to Taxes pursuant to Section 2.17), and an action therefor shall immediately accrue. The Borrower agrees that, to the extent there are insufficient funds in the Administrative Agent’s Account, to make any payment under this clause (B) when due, the Borrower shall immediately pay to the Administrative Agent all amounts due that remain unpaid.
Section 2.14.    Payment on Non‑Business Days‑. Whenever any payment hereunder or under the Advances shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest.
Section 2.15.    [Reserved]    .
Section 2.16.    Extension of the Scheduled Commitment Termination Date     . No earlier than ninety (90) days, and no later than sixty (60) days, prior to the then Scheduled Commitment Termination Date, the Borrower may deliver written notice to the Administrative Agent and each Funding Agent requesting an extension of such Scheduled Commitment Termination Date. The Administrative Agent shall respond to such request no later than thirty (30) days following the date of its receipt of such request, indicating whether it is considering such request and preliminary conditions precedent to any extension of the Scheduled Commitment Termination Date as the Administrative Agent determines to include in such response. The Administrative Agent’s failure to respond to a request delivered by the Borrower pursuant to this Section 2.16 shall not be deemed to constitute any agreement by the Administrative Agent to any such extension. The granting of any extension of the Scheduled Commitment Termination Date requested by the Borrower shall be in the mutual discretion of the Borrower and the Administrative Agent (on behalf of the Lenders with the consent of all Lender Groups).
Section 2.17.    Taxes.
(A)    Defined Terms. For purposes of this Section 2.17 the term “applicable Law” includes FATCA.
(B)    Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower under any Transaction Document shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(C)    Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of a Funding Agent timely reimburse it for the payment of, any Other Taxes.
(D)    Indemnification by the Borrower. The Borrower shall indemnify each Recipient, within ten days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified 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 the Borrower by a Recipient (with a copy to each Funding Agent), or by a Funding Agent on its own behalf or on behalf of a Recipient, shall be conclusive absent manifest error.
(E)    Indemnification by the Lenders. Each Non-Conduit Lender shall severally indemnify each Funding Agent, within ten days after demand therefor, for (i) any Indemnified Taxes attributable to such Non-Conduit Lender (but only to the extent that the Borrower has not already indemnified such Funding Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), and (ii) any Excluded Taxes attributable to such Non-Conduit Lender, in each case, that are payable or paid by a Funding Agent in connection with any Transaction 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 Non-Conduit Lender by its Funding Agent shall be conclusive absent manifest error. Each Non-Conduit Lender hereby authorizes its Funding Agent to set off and apply any and all amounts at any time owing to such Non-Conduit Lender under any Transaction Document or otherwise payable by such Funding Agent to the Non-Conduit Lender from any other source against any amount due to such Funding Agent under this paragraph (E).

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(F)    Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section 2.17, the Borrower shall deliver to each Funding Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to such Funding Agent.
(G)    Status of Recipients. (i) Any Recipient that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall deliver to the Borrower, the Paying Agent and the related Funding Agent, at the time or times reasonably requested by the Borrower, the Paying Agent or such Funding Agent, such properly completed and executed documentation reasonably requested by the Borrower, the Paying Agent or such Funding Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Recipient, if reasonably requested by the Borrower, the Paying Agent or the related Funding Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower, the Paying Agent or such Funding Agent as will enable the Borrower, the Paying Agent or such Funding Agent to determine whether or not such Recipient 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 clauses (ii)(a), (ii)(b) and (ii)(d) below) shall not be required if in the Recipient’s reasonable judgment such completion, execution or submission would subject such Recipient to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Recipient.
(ii)    Without limiting the generality of the foregoing,
(a)    any Recipient that is a U.S. Person shall deliver to the Borrower, the Paying Agent and the related Funding Agent on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower, the Paying Agent or such Funding Agent), executed originals of Internal Revenue Service Form W‑9 certifying that such Recipient is exempt from U.S. federal backup withholding tax;
(b)    any Recipient that is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Borrower, the Paying Agent and the related Funding Agent (in such number of copies as shall be requested by the Borrower, the Paying Agent or such Funding Agent) on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower, the Paying Agent or such Funding Agent), whichever of the following is applicable:

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(1)    in the case of a Recipient 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 Transaction Document, executed originals of Internal Revenue Service Form W‑8BEN or W‑8BEN‑E 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 Transaction Document, Internal Revenue Service Form W‑8BEN or W‑8BEN‑E 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;
(2)    executed copies of Internal Revenue Service Form W‑8ECI;
(3)    in the case of a Recipient claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Internal Revenue Code, (x) a certificate to the effect that such Recipient is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of Internal Revenue Service Form W‑8BEN or W‑8BEN‑E; or
(4)    to the extent a Recipient is not the beneficial owner, executed originals of Internal Revenue Service Form W‑8IMY, accompanied by Internal Revenue Service Form W‑8ECI, Internal Revenue Service Form W‑8BEN or W‑8BEN‑E, a U.S. Tax Compliance Certificate, Internal Revenue Service Form W‑9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Recipient is a partnership and one or more direct or indirect partners of such Recipient are claiming the portfolio interest exemption, such Recipient may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner;
(c)    any Recipient which is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Borrower, the Paying Agent and the related Funding Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower, the Paying Agent or such Funding 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

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


to permit the Borrower, the Paying Agent or such Funding Agent to determine the withholding or deduction required to be made; and
(d)    if a payment made to a Recipient under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Recipient were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Recipient shall deliver to the Borrower, the Paying Agent and the related Funding Agent at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower, the Paying Agent or such Funding Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower, the Paying Agent or such Funding Agent as may be necessary for the Borrower, the Paying Agent and such Funding Agent to comply with their obligations under FATCA and to determine that such Recipient has complied with such Recipient’s obligations under FATCA or to determine the amount, if any, 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.
Each Recipient agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower, the Paying Agent and the related Funding Agent in writing of its legal inability to do so.
(H)    Forms for Paying Agent. The Administrative Agent and each Funding Agent shall deliver to the Paying Agent on or before the first Payment Date, executed originals of Internal Revenue Service Form W‑9 or W‑8, as applicable, certifying that the Administrative Agent or such Funding Agent is exempt from U.S. federal backup withholding tax. The Administrative Agent and each Funding Agent agrees that if such Internal Revenue Service Form previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or promptly notify the Paying Agent and the Borrower in writing of its legal inability to do so.
(I)    Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.17 (including by the payment of additional amounts pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out‑of‑pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (I) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (I), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (I) the payment of which would place the indemnified party in a less favorable net after‑Tax position than the indemnified party 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 indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(J)    Survival. Each party’s obligations under this Section 2.17 shall survive the resignation or replacement of a Funding Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Transaction Document.
Section 2.18.    Request for Borrowing Exceeding Aggregate Commitment    .
(A)     Notice. The Borrower may, from time to time during the Availability Period, prior to the issuance of a Notice of Borrowing, send a written notice to the Administrative Agent (who shall promptly forward the same to each Lender Group) setting forth the Borrower’s intent to request a borrowing that will cause the Aggregate Outstanding Advances to exceed the Aggregate Commitment (but not the Maximum Facility Amount) then in effect. Such notice shall be sent no later than five (5) Business Days prior to the date on which the Borrower intends to send the related Notice of Borrowing and shall set forth the amount by which the sum of the Aggregate Outstanding Advances (after giving effect to such borrowing) will exceed the Aggregate Commitment and the related Funding Date.
(B)     Approval/Disapproval. Upon receipt of the notice described in Section 2.18(A) by the Administrative Agent, the Administrative Agent shall, no later than five (5) Business Days after receipt thereof, obtain the written approval or disapproval of each Non-Conduit Lender regarding the requested Advances, which approval shall be granted or not granted in the sole discretion of the Non-Conduit Lenders. If the making of the requested Advances is approved, the Borrower shall, in accordance with procedures set forth in Section 2.4, send the related Notice of Borrowing. Any approved Advances to be made by the Lenders in the related Lender Group shall be funded within such Lender Group pursuant to any allocation as agreed to by all of the members of such Lender Group. If the making of the requested Advances is not approved, then the Borrower shall, prior to sending its Notice of Borrowing, modify the same in a manner sufficient to ensure that the requested borrowing does not cause the Aggregate Outstanding Advances to exceed the Aggregate Commitment then in effect, as applicable.
(C)     Commitment. For the avoidance of doubt, if the making of an Advance by a Lender Group that would cause the Aggregate Outstanding Advances to exceed the Aggregate Commitment, as applicable, is approved, each Non-Conduit Lender’s Commitment shall be increased solely to the extent such Non-

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Conduit Lender approved the Advance. Each Non-Conduit Lender’s Commitment shall otherwise remain as set forth on Exhibit E unless increased and/or reduced from time to time in accordance with Section 2.6 or amended in connection with assignments made by a Non-Conduit Lender pursuant to Section 10.8. Moreover, the Borrower must go through the procedures described in Sections 2.18(A) and (B) each time a request for an Advance is made which would cause the sum of all outstanding Advances to exceed the Aggregate Commitment, as applicable.
(D)     Nothing set forth in this Section 2.18 requires a Conduit Lender to make any Advance; provided, however, a Conduit Lender may, in its sole discretion, make the Advance requested pursuant to this Section 2.18 for its Lender Group. Any Advance approved pursuant to this Section 2.18 shall be made pursuant to and in accordance with Sections 2.2 and 2.4.
ARTICLE III

CONDITIONS OF LENDING AND CLOSING
Section 3.1.    Conditions Precedent to Closing. The following conditions shall be satisfied on or before the Closing Date:
(A)    Closing Documents. The Administrative Agent shall have received each of the following documents, in form and substance satisfactory to Administrative Agent, duly executed, and each such document shall be in full force and effect, and all consents, waivers and approvals necessary for the consummation of the transactions contemplated thereby shall have been obtained:
(xvi)
this Agreement;
(xvii)
a Loan Note for each Lender Group that has requested the same;
(xviii)
the Contribution Agreement;
(xix)
the Sale and Contribution Agreement;
(xx)
the SAP Contribution Agreement;
(xxi)
the Security Agreement;
(xxii)
the Pledge Agreement;
(xxiii)
the Subsidiary Guaranty;
(xxiv)
the Facility Administration Agreement;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(xxv)
the Verification Agent Agreement;
(xxvi)
the Parent Guaranty;
(xxvii)
the Tax Equity Investor Consents;
(xxviii)
each Fee Letter;
(xxix)
the Verification Agent Fee Letter; and
(xxx)
the Paying Agent Fee Letter.
(B)    Secretary’s Certificates. The Administrative Agent shall have received: (i) a certificate from the Assistant Secretary of the Verification Agent, and the Paying Agent, (ii) a certificate from the Secretary of each of the Parent, Intermediate Holdco, the Seller, the Facility Administrator, the Managing Members, SAP, the Borrower and each Affiliate thereof that is party to a Transaction Document (a) attesting to the resolutions of such Person’s members, managers or other governing body authorizing its execution, delivery, and performance of this Agreement and the other Transaction Documents to which it is a party, (b) authorizing specific Responsible Officers for such Person to execute the same, and (c) attesting to the incumbency and signatures of such specific Responsible Officers; (iii) copies of governing documents, as amended, modified, or supplemented prior to the Closing Date of each of the Parent, Intermediate Holdco, the Seller, the Facility Administrator, the Managing Members, SAP, the Borrower and each Affiliate thereof that is party to a Transaction Document, in each case certified by a Responsible Officer of such Person; and (iv) a certificate of status with respect to each of the Parent, Intermediate Holdco, the Seller, the Facility Administrator, the Managing Members, SAP, the Borrower and each Affiliate thereof that is party to a Transaction Document dated within fifteen (15) days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such entity, which certificate shall indicate that such entity is in good standing in such jurisdiction.
(C)    Legal Opinions. The Administrative Agent shall have received customary opinions from (i) counsel (which may be in-house counsel) to Paying Agent and Verification Agent addressing authorization and enforceability of the Transaction Documents and other corporate matters and (ii) counsel to the Parent, Intermediate Holdco, the Seller, the Facility Administrator, the Managing Members, SAP, the Borrower and each Affiliate thereof that is party to a Transaction Document addressing (a) authorization and enforceability of the Transaction Documents and other corporate matters, (b) security interest and UCC matters, (c) substantive consolidation matters and (d) true sale matters.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(D)    No Material Adverse Effect. Since December 31, 2018 there has been no Material Adverse Effect.
(E)    Know Your Customer Information. The Administrative Agent and the Paying Agent shall have received all documentation and other information required by regulatory authorities under applicable “Know Your Customer” and anti‑money laundering rules and regulations, including the Patriot Act.
(F)    Payment of Fees. The Borrower shall have paid all fees previously agreed in writing to be paid on or prior to the Closing Date.
(G)    Evidence of Insurance. The Administrative Agent shall have received certification evidencing coverage under the insurance policies referred to in Section 5.1(L).
(H)    TEP II Transaction Documents and Opinions. The Administrative Agent shall have received (i) an amendment to the TEP II Credit Agreement and other TEP II Transaction Documents, in each case, in form and substance satisfactory to the Administrative Agent and (ii) customary opinions from counsel to the Parent and its Affiliates addressing substantive consolidation matters related to amendments referred to in clause (i).
(I)    [Reserved].
(J)    Taxes. The Administrative Agent shall have received a certificate from the Borrower that all sales, use and property taxes, and any other taxes in connection with any period prior to the Closing Date, that are due and owing with respect to each Solar Asset and/or Solar Asset Owner Member Interest have been paid or provided for by the Parent.
(K)    Closing Date Certificate of the Borrower. The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower (in his or her capacity as such) in form satisfactory to Administrative Agent certifying that its representations and warranties set forth in the Transaction Documents to which it is a party are true and correct in all material respects as of the Closing Date (except to the extent such representations and warranties expressly relate to any earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date).
(L)    UCC Search Results. Administrative Agent shall have received the results of a recent search of all effective UCC financing statements (or equivalent filings) made with respect to the Assignors, the Seller, the Borrower, SAP, the Managing Members and

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


the Financing Funds in all appropriate jurisdictions together with copies of all such filings disclosed by such search.
(M)    UCC Financing Statements. The Borrower shall have duly filed proper financing statements (or the equivalent thereof in any applicable foreign jurisdiction, as applicable), on or before the Closing Date, under the UCC with the Delaware Secretary of State and any other applicable filing office in any applicable jurisdiction that the Administrative Agent deems necessary or desirable in order to perfect the Administrative Agent’s interests in the Collateral. The Borrower shall have filed proper financing statement amendments (or the equivalent thereof in any applicable foreign jurisdiction, as applicable), if any, necessary to release all security interests and other rights of any Person in the Collateral previously granted by the Borrower or any of its affiliates;
(N)    Accounts. The Administrative Agent shall have received evidence reasonably satisfactory to it that the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, the Takeout Transaction Account and the Borrower’s Account have been established.
(O)    Tax Equity Facility Due Diligence. The Administrative Agent shall be satisfied with the results of any due diligence of the Financing Funds, the SAP Financing Documents, the Tax Equity Financing Documents and the transactions contemplated by the SAP Financing Documents and Tax Equity Financing Documents, including receipt of fully executed Tax Equity Financing Documents and any related Tax Loss Insurance Policy, in its sole discretion.
Section 3.2.    Conditions Precedent to All Advances. (A) Except as otherwise expressly provided below, the obligation of each Non-Conduit Lender to make or participate in each Advance (including the initial Advances made on the Closing Date) shall be subject, at the time thereof, to the satisfaction of the following conditions:
(i)    Funding Documents. The Administrative Agent shall have received, no later than two (2) Business Days prior to the Funding Date, a completed Notice of Borrowing and a Borrowing Base Certificate, each in form and substance satisfactory to the Administrative Agent.
(ii)    Solar Assets. All conditions to the acquisition of Solar Assets by the respective Financing Fund under the applicable Tax Equity Financing Documents have been satisfied and all conditions to the acquisition of Solar Assets by the Seller, the Borrower and SAP under the Contribution Agreement, the Sale and Contribution Agreement, the SAP

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Contribution Agreement, and the SAP NTP Financing Documents, as applicable, have been satisfied.
(iii)    Managing Members. All conditions to the acquisition of Managing Members by the Seller and the Borrower under the Contribution Agreement, the Sale and Contribution Agreement and Section 3.3 shall have been satisfied.
(iv)    Representations and Warranties. All of the representations and warranties of the Borrower, the Seller, Intermediate Holdco, the Parent and the initial Facility Administrator contained in this Agreement or any other Transaction Document that relate to the eligibility of the Solar Assets shall be true and correct as of the Funding Date and all other representations and warranties of the Borrower, the Seller, Intermediate Holdco, the Parent, the Managing Members, SAP and the initial Facility Administrator contained in this Agreement or any other Transaction Document shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality, in which case such representations and warranties shall be true and correct in all respects) as of the Funding Date (or such earlier date or period specifically stated in such representation or warranty).
(v)    No Defaults; Solvency. The Administrative Agent shall have received a certification that no Amortization Event, Event of Default, Potential Amortization Event or Potential Default has occurred and is continuing or would result from any borrowing of any Advance or from the application of the proceeds therefrom and after giving effect to such Advance or from the application of the proceeds therefrom, the Borrower will be Solvent.
(vi)    Verification Agent Certificate. The Administrative Agent shall have received the A-1 Verification Agent Certification (or, in respect of the initial Advance, the Closing Date Verification Agent Certification) in respect of the Solar Assets from the Verification Agent pursuant to the Verification Agent Agreement.
(vii)    Hedge Requirements. The Borrower shall be in compliance with all applicable Hedge Requirements.
(viii)    Liquidity Reserve. The amount on deposit in the Liquidity Reserve Account shall not be less than the Liquidity Reserve Account Required Balance, taking into account the application of the proceeds of the Advances on the Funding Date.
(ix)        Aggregate Commitment/No Borrowing Base Deficiency. After giving effect to such Advance, the Aggregate Outstanding Advances shall not exceed the Aggregate Commitment in effect as of such Funding Date unless the Borrower shall have, pursuant to

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


the procedures set forth in Section 2.18, received the written approval of the Non-Conduit Lenders with respect to such Advance, such approval to be granted by each Non-Conduit Lender in its sole discretion. After giving effect to such Advance, there should not exist a Class A Borrowing Base Deficiency or a Class B Borrowing Base Deficiency.
(x)     Availability Period. The Commitment Termination Date shall not have occurred, nor shall it occur as a result of making such Advance, nor has the Availability Period ended.
(xi)        Updated Schedules. The Borrower shall have provided the Administrative Agent an updated Schedule IV, an updated Schedule V, an updated Schedule VI and an updated Schedule VII to reflect the Scheduled Hedged SREC Payments, Scheduled Host Customer Payments, Scheduled PBI Payments and Scheduled Managing Member Distributions as of such Funding Date.
(xii)    Other Documents. The Borrower shall have provided the Administrative Agent with all documents reasonably requested by the Administrative Agent related to the Solar Assets being financed by the Borrower (indirectly through its ownership of the Solar Asset Owner Member Interests) on such Funding Date.
    

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(B)    Each Notice of Borrowing submitted by the Borrower after the Closing Date shall be deemed to be a representation and warranty that the conditions specified in this Section 3.2 have been satisfied on and as of the date of the applicable Notice of Borrowing.
Section 3.3.    Conditions Precedent to Acquisition of Additional Managing Members. As a condition to the acquisition of a Managing Member after the Closing Date, the Borrower shall have provided the Administrative Agent with all documents reasonably requested by the Administrative Agent related to the such Managing Member and the related Financing Fund.
ARTICLE IV

REPRESENTATIONS AND WARRANTIES
Section 4.1.    Representations and Warranties of the Borrower. The Borrower represents and warrants to the Administrative Agent and each Lender as of the Closing Date, as of each Funding Date, and with respect to paragraphs (A), (B), (F), (G), (I), (K), and (L) through (S) as of each Payment Date, as follows:
(A)    Organization; Corporate Powers. Each Relevant Party (i) is a duly organized and validly existing limited liability company, in good standing under the laws of the State of Delaware, (ii) has the limited liability company power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage, and (iii) is duly qualified and is authorized to do business in all jurisdictions where it is required to be so qualified or authorized.
(B)    Authority and Enforceability. Each Relevant Party has the limited liability company or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Transaction Documents to which it is party and has taken all necessary company or other organizational action to authorize the execution, delivery and performance of the Transaction Documents to which it is party. Each Relevant Party has duly executed and delivered each Transaction Document to which it is party and each Transaction Document to which it is party constitutes the legal, valid and binding agreement and obligation of the respective Relevant Party enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).
(C)    Government Approvals. No order, consent, authorization, approval, license, or validation of, or filing recording, registration with, or exemption by, any Governmental

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Authority is required to authorize or is required as a condition to: (i) the execution, delivery and performance by a Relevant Party of any Transaction Document to which it is a party or any of its obligations thereunder or (ii) the legality, validity, binding effect or enforceability of any Transaction Document to which such Relevant Party is a party.
(D)    Litigation. There are no material actions, suits or proceedings, pending or threatened in writing with respect to any Relevant Party.
(E)    Applicable Law, Contractual Obligations and Organizational Documents. Neither the execution, delivery and performance by any Relevant Party of the Transaction Documents to which it is party nor compliance with the terms and provisions thereof (i) will contravene any provision of any law, statute, rule, regulation, order, writ, injunction or decree of any Governmental Authority applicable to such Relevant Party or its properties and assets, (ii) will conflict with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under or result in the creation or imposition of (or the obligation to create or impose) any Lien (other than the Liens created pursuant to the Security Agreement, the Pledge Agreement or Permitted Liens) upon any of the property or assets of the Borrower pursuant to the terms of any contract, or (iii) will breach any provision of the certificate of formation or the operating agreement of such Relevant Party and will, for each of subsection (i), (ii) and (iii), result in a Material Adverse Effect.
(F)    Use of Proceeds. Proceeds of the Class A Advances and the Class B Advances have been used only as permitted under Section 2.3. No part of the proceeds of the Class A Advances or the Class B Advances will be used directly or indirectly to purchase or carry Margin Stock, or to extend credit to others for the purpose of purchasing or carrying any Margin Stock, in violation of any of the provisions of Regulations T, U or X of the Board of Governors of the Federal Reserve System. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. At no time would more than 25% of the value of the assets of the Borrower that are subject to any “arrangement” (as such term is used in Section 221.2(g) of such Regulation U) hereunder be represented by Margin Stock.
(G)    Accounts. The names and addresses of the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, the Takeout Transaction Account, and the Borrower’s Account and the TEP Collateral Account are specified on Schedule II attached hereto, as updated pursuant to Section 5.1(Q). Other than accounts on Schedule II attached hereto, the Borrower does not have any other accounts. The Borrower has directed, or has caused to be directed (i) each Financing Fund, each Managing Member and SAP to make all payments in respect of the Managing Member

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Distributions and the SAP Distributions, as applicable, to the Collection Account and (ii) related Hedged SREC Payments related to the Solar Assets and received by the Borrower to the Collection Account and, to the extent any Hedged SREC Payments are deposited by the relevant obligor in another account, has caused such payments to be deposited into the Collection Account no later than two (2) Business Days after receipt.
(H)    ERISA. None of the assets of the Borrower are or, prior to the repayment of all Obligations, will be subject to Title I of ERISA, Section 4975 of the Internal Revenue Code, or, by reason of any investment in the Borrower by any governmental plan, as the case may be, any other federal, state, or local provision similar to Section 406 of ERISA or Section 4975 of the Internal Revenue Code. Neither the Borrower nor any of its ERISA Affiliates has maintained, participated or had any liability in respect to any Plan during the past six (6) years which could reasonably be expected to subject the Borrower or any of its ERISA Affiliates to any tax, penalty or other liabilities. No ERISA Event has occurred or is reasonably likely to occur. With respect to any Plan which is a Multi-Employer Plan, no such Multi-Employer Plan is, or to the knowledge of the Relevant Parties reasonably like to occur, in reorganization or insolvent as defined in Title IV of ERISA Borrower and the Lenders, take any.
(I)    Taxes. Each Relevant Party has timely filed (or had filed on its behalf) all federal state, provincial, territorial, foreign and other Tax returns and reports required to be filed under applicable law, and has timely paid (or had paid on its behalf) all federal state, foreign and other Taxes levied or imposed upon it or its properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate actions diligently conducted and for which adequate reserves have been provided in accordance with GAAP. No Lien or similar adverse claim has been filed, and no claim is being asserted, with respect to any such Tax due from any Relevant Party or with respect to any Solar Assets. Any Taxes due and payable by any Relevant Party or its predecessors in interest in connection with the execution and delivery of this Agreement and the other Transaction Documents and the transfers and transactions contemplated hereby or thereby have been paid or shall have been paid if and when due. Except to the extent provided in the Tax Equity Financing Documents, no Relevant Party is liable for Taxes payable by any other Person.
(J)    Material Agreements. The Borrower has not defaulted under the Transaction Documents, any similar agreements entered into in connection with a Takeout Transaction or any other material agreement to which the Borrower is a party and to the Borrower’s knowledge, there is no breach or default by a counterparty to such Transaction Documents, similar agreements entered into in connection with the Takeout Transaction or any other material agreement to which the Borrower is a party.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(K)    Accuracy of Information. The written information (other than financial projections, forward looking statements, and information of a general economic or industry specific nature) that has been made available to the Paying Agent, the Verification Agent, the Administrative Agent or any Lender by or on behalf of the Borrower or any Affiliate thereof in connection with the transactions hereunder including any written statement or certificate of factual information, when taken as a whole, does not, when furnished, 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 in the light of the circumstances under which such statements are made (giving effect to all supplements and updates thereto).
(L)    No Material Adverse Effect. Since the date of delivery of the latest audited financial statements for a fiscal year of SEI pursuant to Section 5.1(A)(i), there has been no Material Adverse Effect.
(M)    Investment Company Act. No Relevant Party is an “investment company” or an “affiliated person” of or “promoter” or “principal underwriter” for an “investment company” as such terms are defined in the 1940 Act, nor is any Relevant Party otherwise subject to regulation thereunder and no Relevant Party relies solely on the exemption from the definition of “investment company” in Section 3(c)(1) and/or 3(c)(7) of the 1940 Act (although such exemptions may be available).
(N)    Covered Fund. No Relevant Party is a “covered fund” under Section 13 of the Bank Holding Company Act of 1956, as amended
(O)    Properties; Security Interest. The Borrower has good title to all of its properties and assets necessary in the ordinary conduct of its business, free and clear of Liens other than Permitted Liens and Permitted Equity Liens. Once executed and delivered, the Security Agreement and the Pledge Agreement create, as security for the Obligations, a valid and enforceable and (coupled with this Agreement and the taking of all actions required thereunder and under the Security Agreement and the Pledge Agreement for perfection) perfected security interest in and Lien on all of the Collateral, in favor of the Administrative Agent, for the benefit of the Secured Parties, superior to and prior to the rights of all third persons and subject to no other Liens, except for Permitted Liens.
(P)    Subsidiaries. The Borrower does not have, and shall not have, any Subsidiaries (other than the Managing Members and SAP), and does not and shall not otherwise own or hold, directly or indirectly, any Capital Stock of any other Person (other than in the case of Capital Stock of the Managing Members and SAP).

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(Q)    Valid Transfer. The Contribution Agreement creates a valid sale, transfer or assignment from the applicable Assignor to the Seller of all right, title and interest of such Assignor in and to the Conveyed Property in each case conveyed to Seller thereunder. The Sale and Contribution Agreement creates a valid sale, transfer and/or assignment from the Seller to the Borrower of all right, title and interest of the Seller in and to the Conveyed Property in each case conveyed to the Borrower thereunder. The SAP Contribution Agreement creates a valid transfer and/or assignment from the Borrower to SAP of all right title and interest of the Borrower in and to the Conveyed Property in each case conveyed to SAP thereunder.
(R)    Purchases of Solar Assets. The Borrower has given reasonably equivalent value to the Seller (which may include additional Capital Stock in the Borrower) in consideration for the transfer to the Borrower by the Seller of the Conveyed Property conveyed to the Borrower under the Sale and Contribution Agreement, and no such transfer has been made for or on account of an antecedent debt owed by the Seller to the Borrower.
(S)    OFAC and Patriot Act. Neither any Relevant Party nor, to the knowledge of any Relevant Party, any of its officers, directors or employees appears on the Specially Designated Nationals and Blocked Persons List published by the Office of Foreign Assets Control (“OFAC”) or is otherwise a person with which any U.S. person is prohibited from dealing under the laws of the United States, unless authorized by OFAC. No Relevant Party conducts business or completes transactions with the governments of, or persons within, any country under economic sanctions administered and enforced by OFAC. No Relevant Party will directly or indirectly use the proceeds from this Agreement, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person to fund any activities of or business with any person that, at the time of such funding, is the subject of economic sanctions administered or enforced by OFAC, or is in any country or territory that, at the time of such funding or facilitation, is the subject of economic sanctions administered or enforced by OFAC. No Relevant Party is in violation of Executive Order No. 13224 or the Patriot Act.
(T)    Foreign Corrupt Practices Act. Neither the Relevant Parties nor, to the knowledge of the Relevant Parties, any of its directors, officers, agents or employees, has used any of the proceeds of any Advance (i) for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) to make any direct or indirect unlawful payment to any government official or employee from corporate funds, (iii) to violate any provision of the U.S. Foreign Corrupt Practices Act of 1977 or similar law of a jurisdiction in which a Relevant Party conducts its business and to which they are lawfully

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


subject, or (iv) to make any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
(U)    Eligibility. Each Solar Asset listed on the Schedule of Solar Assets most recently delivered to the Administrative Agent was an Eligible Solar Asset as of such date of delivery of such Schedule of Solar Assets.
(V)    Beneficial Ownership Certification. The information included in any Beneficial Ownership Certification delivered by the Borrower is true and correct in all respects.
ARTICLE V

COVENANTS
Section 5.1.    Affirmative Covenants. The Borrower covenants and agrees that, until all Obligations (other than contingent obligations not then due) hereunder have been paid in full and the Commitments have been terminated:
(A)    Reporting Requirements. The Borrower will furnish to the Administrative Agent for delivery to each Lender and, in the case of subclause (v)(a) below and the Paying Agent:
(i)    within (a) the earlier of (x) one hundred eighty (180) days after the close of each fiscal year of SEI (beginning with the fiscal year ending December 31, 2019) and (y) such earlier period as required by Applicable Law, the unqualified (provided, however explanatory language added to the auditor’s standard report shall not constitute a qualification) audited financial statements for such fiscal year that include the consolidated balance sheet of SEI and its consolidated subsidiaries as of the end of such fiscal year, the related consolidated statements of income, of stockholders’ equity and of cash flows for such fiscal year, in each case, setting forth comparative figures for the preceding fiscal year (it being acknowledged that such requirement with respect to SEI may be satisfied by the filing of the appropriate report on Form 10-K with the Securities and Exchange Commission), and, beginning with the fiscal year ending December 31, 2019, the assets and liabilities of the Parent and the Borrower as of the end of such fiscal year presented in a note or schedule to such financial statements of SEI, and in each case prepared in accordance with GAAP, and audited by a Nationally Recognized Accounting Firm selected by SEI and (b) the earlier of (x) sixty (60) days after the end of each of the first three quarters of its

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


fiscal year and (y) such earlier period as required by Applicable Law, the unaudited consolidated balance sheets and income statements for such fiscal quarter on a year‑to‑date basis for SEI and its consolidated subsidiaries (it being acknowledged that such requirement with respect to SEI may be satisfied by the filing of the appropriate report on Form 10-Q with the Securities and Exchange Commission);
(ii)    if, at any time, Sunnova Management is the Facility Administrator, but is not a subsidiary of SEI, within (a) the earlier of (x) 180 days after the end of each of its fiscal years (beginning with the fiscal year ending December 31, 2019) and (y) such earlier period as required by Applicable Law, a copy of the unqualified (provided, however explanatory language added to the auditor’s standard report shall not constitute a qualification) audited consolidated financial statements for such year for Sunnova Management, containing financial statements for such year and prepared by a Nationally Recognized Accounting Firm selected by Sunnova Management and (b) the earlier of (x) sixty (60) days after the end of each of its fiscal quarters and (y) such earlier period as required by Applicable Law, the unaudited consolidated balance sheets and income statements for such fiscal quarter on a year‑to‑date basis for Sunnova Management;
(iii)    at any time that Sunnova Management is the Facility Administrator, within one hundred eighty (180) days after the end of each of its fiscal years (beginning with the fiscal year ending December 31, 2019), a report to the Administrative Agent prepared by a Qualified Service Provider containing such firm’s conclusions with respect to an examination of certain information relating to Sunnova Management’s compliance with its obligations under the Transaction Documents (including, without limitation, such firm’s conclusions with respect to an examination of the calculations of amounts set forth in certain of Sunnova Management’s reports delivered hereunder and pursuant to the Facility Administration Agreement during the prior calendar year and Sunnova Management’s source records for such amounts), in form and substance satisfactory to the Administrative Agent;
(iv)    as soon as possible, and in any event within five (5) Business Days, after the Borrower or any of their ERISA Affiliates knows or has reason to know that an ERISA Event has occurred, deliver to the Lenders a certificate of a responsible officer of the Borrower setting forth the details of such ERISA Event, the action that the Borrower or the ERISA Affiliate proposes to take with respect thereto, and, when known, any action taken or threatened by the Internal Revenue Service, Department of Labor or the Pension Benefit Guaranty Corporation;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(v)    (a) promptly, and in any event within five (5) Business Days, after a Responsible Officer of any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator (if it is an Affiliate of the Borrower) or the Parent obtains knowledge thereof, notice of the occurrence of any event that constitutes an Event of Default, a Potential Default, an Amortization Event or a Potential Amortization Event, which notice shall specify the nature thereof, the period of existence thereof and what action the Borrower propose to take with respect thereto and (b) promptly, and in any event within five (5) Business Days after a Responsible Officer of any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator (if it is an Affiliate of the Borrower) or the Parent obtains knowledge thereof, notice of any other development concerning any litigation, governmental or regulatory proceeding (including environmental law) or labor matter (including ERISA Event) pending or threatened in writing against the (1) Borrower or (2) Parent or SEI that, in the case of this clause (2), individually or in the aggregate, if adversely determined, would reasonably be likely to have a material adverse effect on (1) the ability of the Parent to perform its obligations under the Parent Guaranty, or (2) the business, operations, financial condition, or assets of the SEI or Parent;
(vi)    promptly, and in any event within five (5) Business Days after a Responsible Officer of any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator (if it is an Affiliate of the Borrower) or the Parent obtains knowledge thereof, notice of the occurrence of any event that constitutes a default, an event of default or any event that would permit the acceleration of any obligation under a Sunnova Credit Facility; and
(vii)    promptly, and in any event within five (5) Business Days, after receipt thereof by any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator, the Managing Members, the Financing Funds, the Manager (if it is an Affiliate of the Borrower) or the Parent, copies of all material notices, requests, and other documents (excluding regular periodic reports) delivered or received by the Borrower, the Seller, Intermediate Holdco, the Facility Administrator, the Managing Members, the Financing Funds, the Manager (if it is an Affiliate of the Borrower) or the Parent under or in connection with the Sale and Contribution Agreement, the SAP Contribution Agreement, the Tax Equity Financing Documents, the SAP NTP Financing Documents or the SAP Financing Documents;
(viii)    promptly, and in any event within five (5) Business Days, after receipt thereof by any of the Borrower, the Seller, Intermediate Holdco, the Facility Administrator (if it is an Affiliate of the Borrower) or the Parent, copies of all notices

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


and other documents delivered or received by the Borrower with respect to any material tax Liens on Solar Assets (either individually or in the aggregate);
(ix)    on each Funding Date and on each other day on which SAP or a Financing Fund either acquires or disposes of Solar Assets that is included in the Borrowing Base, an updated Schedule IV, an updated Schedule V, an updated Schedule VI and an updated Schedule VII, in each case, to reflect such acquisition or disposition of Solar Assets on such date;
(x)    on each Funding Date on which the Borrower acquires a Managing Member from the Seller, an updated Schedule VIII to reflect such acquisition of such Managing Member on such date; and
(xi)    subject to any confidentiality requirements of the Securities and Exchange Commission, promptly after receipt thereof by SEI or any Subsidiary, copies of each notice or other correspondence received from the Securities and Exchange Commission concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of SEI or any Subsidiary which could reasonably be expected to result in Material Adverse Effect.
(B)    Solar Asset Reporting. The Borrower shall
(i)    enforce the provisions of each Management Agreement and Servicing Agreement which require the Manager to deliver any reports to a Financing Fund or SAP; and
(ii)    enforce the provisions of the Facility Administration Agreement which require the Facility Administrator to deliver any reports (including the Facility Administrator Report and any Borrowing Base Certificate setting forth detailed calculations of the Borrowing Base) to the Administrative Agent, each Funding Agent and the Paying Agent; and
(iii)    within 20 Business Days of the Closing Date, cause to be delivered to the Administrative Agent an A-1 Verification Agent Certification with respect to the Solar Assets relating to the initial Advance; and
(iv)    on the Scheduled Commitment Termination Date, cause to be delivered to the Administrative Agent an A-2 Verification Agent Certification with respect to all Solar Assets included in the Borrowing Base.
(C)    UCC Matters; Protection and Perfection of Security Interests. The Borrower agrees to notify the Administrative Agent in writing of any change (i) in its legal name,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(ii) in its identity or type of organization or corporate structure, or (iii) in the jurisdiction of its organization, in each case, within ten (10) days of such change. The Borrower agrees that from time to time, at its sole cost and expense, it will promptly execute and deliver all further instruments and documents, and take all further action necessary or reasonably required by the Administrative Agent (a)  to complete all assignments from Assignors to the Seller under the Contribution Agreement, from the Seller to the Borrower under the Sale and Contribution Agreement and from the Borrower to SAP under the SAP Contribution Agreement, (b) to perfect, protect or more fully evidence the Administrative Agent’s security interest in the Collateral, or (c) to enable the Administrative Agent to exercise or enforce any of its rights hereunder, under the Security Agreement or under any other Transaction Document. Without limiting the Borrower’s obligation to do so, the Borrower hereby irrevocably authorizes the filing of such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or reasonably required by the Administrative Agent. The Borrower hereby authorizes the Administrative Agent to file one or more financing or continuation statements, and amendments thereto and assignments thereof, naming the Borrower as debtor, relative to all or any of the Collateral now existing or hereafter arising without the signature of the Borrower where permitted by law. A carbon, photographic or other reproduction of the Security Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement.
(D)    Access to Certain Documentation and Information Regarding the Solar Assets. The Borrower shall permit (and, as applicable, shall cause the Facility Administrator, the Managing Members, SAP and the Verification Agent to permit) the Administrative Agent (and, as applicable, the Verification Agent) or its duly authorized representatives or independent contractors, upon reasonable advance notice to the Borrower (and, as applicable, the Facility Administrator, the Managing Members, SAP and the Verification Agent), (i) access to documentation that the Borrower, the Facility Administrator, the Managing Members, SAP or the Verification Agent, as applicable, may possess regarding the Solar Assets, (ii) to visit the Borrower, the Facility Administrator, the Managing Members, SAP or the Verification Agent, as applicable, and to discuss their respective affairs, finances and accounts (as they relate to their respective obligations under this Agreement and the other Transaction Documents) with the Borrower, the Facility Administrator, the Managing Members, SAP or the Verification Agent, as applicable, their respective officers, and independent accountants (subject to such accountants’ customary policies and procedures), and (iii) to examine the books of account and records of the Borrower, the Verification Agent, the Facility Administrator, the Managing Members, or SAP, as applicable as they relate to the Solar Assets, to make copies thereof or extracts therefrom, in each case, at such reasonable times and during regular business hours of the Borrower, the Verification Agent, the Facility

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Administrator, the Managing Members, or SAP as applicable; provided that, upon the existence of an Event of Default, the Class B Lenders shall have the same rights of access, inspection and examination as the Administrative Agent under this Section 5.1(D). The frequency of the granting of such access, such visits and such examinations, and the party to bear the expense thereof, shall be governed by the provisions of Section 7.13 with respect to the reviews of the Borrower’ business operations described in such Section 7.13. The Administrative Agent (and, as applicable, the Verification Agent and the Class B Lenders) shall and shall cause their representatives or independent contractors to use commercially reasonable efforts to avoid interruption of the normal business operations of the Borrower, the Verification Agent, the Facility Administrator, the Managing Members or SAP, as applicable. Notwithstanding anything to the contrary in this Section 5.1(D), (i) none of the Borrower, the Verification Agent, the Facility Administrator, the Managing Members or SAP will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (x) constitutes non‑financial trade secrets or non‑financial proprietary information, (y) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by law or any binding confidentiality agreement, or (z) is subject to attorney‑client or similar privilege or constitutes attorney work product and (ii) the Borrower shall have the opportunity to participate in any discussions with the Borrower’s independent accountants.
(E)    Existence and Rights; Compliance with Laws. The Borrower shall preserve and keep in full force and effect each Relevant Party’s limited liability company existence, and any material rights, permits, patents, franchises, licenses and qualifications. The Borrower shall comply, and cause each other Relevant Party to, comply with all applicable laws and maintain in place all permits, licenses, approvals and qualifications required for each of them to conduct its business activities to the extent that the lack of compliance thereof would result in a Material Adverse Effect.
(F)    Books and Records. The Borrower shall maintain, and cause (if any are Affiliates of the Borrower) the Facility Administrator to maintain, proper and complete financial and accounting books and records. The Borrower shall cause the Financing Funds and SAP to maintain with respect to Solar Assets accounts and records as to each Solar Asset that are proper, complete, accurate and sufficiently detailed so as to permit (i) the reader thereof to know as of the most recently ended calendar month the status of each Solar Asset including payments made and payments owing (and whether or not such payments are past due), and (ii) reconciliation of payments on each Solar Asset and the amounts from time to time deposited in respect thereof in the Collection Account, if applicable.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(G)    Taxes. The Borrower shall pay, or cause to be paid, when due all Taxes imposed upon any Relevant Party or any of its properties or which they are required to withhold and pay over, and provide evidence of such payment to the Administrative Agent if requested; provided, that no Relevant Party shall be required to pay any such Tax that is being contested in good faith by proper actions diligently conducted if (i) they have maintained adequate reserves with respect thereto in accordance with GAAP and (ii) in the case of a Tax that has or may become a Lien against any of the Collateral, such proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax.
(H)    Maintenance of Properties. The Borrower shall ensure that each Relevant Party’s material properties and equipment used or useful in each of their business in whomsoever’s possession they may be, are kept in reasonably good repair, working order and condition, normal wear and tear excepted, and that from time to time there are made in such properties and equipment all needful and proper repairs, renewals, replacements, extensions, additions, betterments and improvements thereto, in each case, to the extent and in the manner customary for companies in similar businesses.
(I)    ERISA. The Borrower shall deliver to the Administrative Agent such certifications or other evidence from time to time prior to the repayment of all Obligations and the termination of all Commitments, as requested by the Administrative Agent in its sole discretion, that (i) no Relevant Party is an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA or a plan within the meaning of Section 4975 of the Internal Revenue Code, or a “governmental plan” within the meaning of Section 3(32) of ERISA, (ii) no Relevant Party is subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans, and (iii)  assets of the Borrower do not constitute “plan assets” within the meaning of 29 C.F.R. Section 2510.3‑101, as modified in application by Section 3(42) of ERISA of any “benefit plan investor” as defined in Section 3(42) of ERISA.
(J)    Use of Proceeds. The Borrower will only use the proceeds of the Class A Advances and the Class B Advances as permitted under Section 2.3.
(K)    Change of State of Organization; Collections; Names, Etc. (i) In respect of each Assignor, the Seller, the Facility Administrator, the Managing Members, the Financing Funds and SAP, the Borrower shall notify the Administrative Agent, the Paying Agent and the Verification Agent in writing of any change (a) in such entity’s legal name, (b) in such entity’s identity or type of organization or corporate structure, or (c) in the jurisdiction of such entity’s organization, in each case, within ten (10) days of such change; and

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(ii)    in the event that the Borrower or any Affiliated Entity thereof receives any Collections directly, the Borrower shall hold, or cause such Affiliated Entity to hold, all such Collections in trust for the benefit of the Secured Parties and deposit, or cause such Affiliated Entity to deposit, such amounts into the Collection Account, as soon as practicable, but in no event later than two (2) Business Days after its receipt thereof.
(L)    Insurance. The Borrower shall maintain or cause to be maintained by the Facility Administrator pursuant to the Facility Administration Agreement and by the Manager pursuant to the Managements Agreements, at the Facility Administrator's and the Manager's own expenses, insurance coverage (i) by such insurers and in such forms and amounts and against such risks as are generally consistent with the insurance coverage maintained by the Borrower, Facility Administrator, the Manager, the Managing Members, the Financing Funds and SAP as of the Closing Date or (ii) as is customary, reasonable and prudent in light of the size and nature of the Borrower’s, the Facility Administrator’s, the Manager’s, the Manager Member’s, the Financing Funds’ and SAP’s respective businesses as of any date after the Closing Date. The Borrower shall be deemed to have complied with this provision if one of its Affiliates has such policy coverage and, by the terms of any such policies, the coverage afforded thereunder extends to the Borrower. Upon the request of the Administrative Agent at any time subsequent to the Closing Date, the Borrower shall cause to be delivered to the Administrative Agent, a certification evidencing the Borrower’s, the Facility Administrator’s, the Manager’s, the Manager Member’s, the Financing Funds’ and SAP’s coverage under any such policies.
(M)    Maintenance of Independent Director. The Borrower shall maintain at least one individual to serve as an independent director (an “Independent Director”) of the Borrower, (i) which is not, nor at any time during the past six (6) years has been, (a) a direct or indirect beneficial owner, a partner (whether direct, indirect or beneficial), customer or supplier of the Borrower or any of its Affiliates, (b) a manager, officer, employee, member, stockholder, director, creditor, Affiliate or associate of the Borrower or any of its Affiliates (other than as an independent officer, director, member or manager acting in a capacity similar to that set forth herein), (c) a person related to, or which is an Affiliate of, any person referred to in clauses (a) or (b), or (d) a trustee, conservator or receiver for any Affiliate of the Borrower or any of its Affiliates, (ii) which shall have had prior experience as an independent director for a corporation or limited liability company whose charter documents required the unanimous consent of all independent directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy, and (iii) which shall have at least three (3) years of employment experience with one or more entities with a national reputation and presence

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities, and is currently employed by such an entity.
(N)    The Sale and Contribution Agreement. The Borrower shall make such reasonable requests for information and reports or for action under the Sale and Contribution Agreement to the Seller as the Administrative Agent may reasonably request to the extent that the Borrower is entitled to do the same thereunder.
(O)    Management Agreement/Servicing Agreement. The Borrower shall cause the Managing Members to direct the Financing Funds and SAP to keep in full force and effect each Management Agreement and Servicing Agreement or such equivalent replacement agreements such that O&M Services and Servicing Services are provided in respect of the Solar Assets in a manner consistent with the Tax Equity Financing Documents and the SAP Financing Documents and with the same degree of care that the Parent and its Affiliates use to provide similar services to Solar Assets not owned by a Financing Fund or SAP.
(P)    Maintenance of Separate Existence. The Borrower shall take all reasonable steps to continue its identity as a separate legal entity and to make it apparent to third Persons that it is an entity with assets and liabilities distinct from those of the Affiliated Entities or any other Person, and that it is not a division of any of the Affiliated Entities or any other Person. In that regard the Borrower shall:
(i)    maintain its limited liability company existence, make independent decisions with respect to its daily operations and business affairs, not amend, modify, terminate or fail to comply with the provisions of its organizational documents, not merge into or consolidate with any Person, or dissolve, terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure, and, other than pursuant to the terms of the limited liability company agreement of the Borrower, not be controlled in making such decisions by any other Affiliated Entity or any other Person;
(ii)    maintain its assets in a manner which facilitates their identification and segregation from those of any of the other Affiliated Entities;
(iii)    except as expressly otherwise permitted hereunder, conduct all intercompany transactions or enter into any contract or agreement with the other Affiliated Entities except upon terms and conditions that are intrinsically fair and

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


substantially similar to those that would be available on an arm’s length basis with unaffiliated third parties;
(iv)    not assume or guarantee any obligation of any of the other Affiliated Entities, nor have any of its obligations assumed or guaranteed by any other Affiliated Entity, pledge its assets for the benefit of any other Affiliated Entity, or hold itself out as responsible for the debts of any other Affiliated Entity or for the decisions or actions with respect to the business and affairs of any other Affiliated Entity;
(v)    except as expressly otherwise permitted hereunder or contemplated under any of the other Transaction Documents, the SAP Financing Documents, the SAP NTP Financing Documents or the Tax Equity Financing Documents, not permit the commingling or pooling of its funds or other assets with the assets of any other Affiliated Entity or make any loans or advances to any other Affiliated Entity;
(vi)    maintain separate deposit and other bank accounts to which no other Affiliated Entity has any access;
(vii)    compensate (either directly or through reimbursement of its allocable share of any shared expenses) all employees, consultants and agents, and Affiliated Entities, to the extent applicable, for services provided to the Borrower by such employees, consultants and agents or Affiliated Entities, in each case, either directly from the Borrower’s own funds or indirectly through documented capital contributions from Parent or any other direct or indirect parent of the Borrower;
(viii)    have agreed with each of the other relevant Affiliated Entities to allocate among themselves, through documented intercompany transactions, including documented capital contributions from Parent or any other direct or indirect parent of the Borrower, shared overhead and corporate operating services and expenses which are not reflected in documentation in connection with a Takeout Transaction (including the services of shared employees, consultants and agents and reasonable legal and auditing expenses) on the basis of actual use or the value of services rendered, and otherwise on a basis reasonably related to actual use or the value of services rendered;
(ix)    pay for its own account, directly from the Borrower’s own funds or indirectly through documented capital contributions from Parent or any other direct or indirect parent of the Borrower, its own liabilities, including, without limitation, for accounting and payroll services, rent, lease and other expenses (or its allocable

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


share of any such amounts provided by one or more other Affiliated Entity) and not have such liabilities or operating expenses (or the Borrower’s allocable share thereof) paid by any of the Affiliated Entities; provided, that Parent or another Affiliated Entity shall be permitted to pay the initial organizational expenses of the Borrower;
(x)    conduct its business (whether in writing or orally) solely in its own name through its duly authorized officers, employees and agents, including the Facility Administrator, hold itself out to the public as a legal entity separate and distinct from any other Affiliated Entity, and correct any known misunderstanding regarding its separate identity;
(xi)    maintain a sufficient number of employees in light of its contemplated business operations, and maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xii)    maintain its books, records, resolutions and agreements as official records, and shall maintain all of its books, records, financial statements and bank accounts separate from those of any other Affiliated Entity, and shall not permit its assets to be listed on the financial statement of any other Affiliated Entity; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such affiliates and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such affiliates or any other Person and (ii) such assets shall be listed on the Borrower’s own separate balance sheet;
(xiii)    except as provided in the limited liability company agreement of the Borrower, not acquire obligations or securities of any other Affiliated Entities, or identify its members or the other Affiliated Entities, as applicable, as a division or part of it;
(xiv)    file its own tax returns unless prohibited by Applicable Law from doing so (except that the Borrower may file or may include its filing as part of a consolidated federal tax return, to the extent required and/or permitted by Applicable Law, provided that, there shall be an appropriate notation indicating the separate existence of the Borrower and its assets and liabilities); and

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(xv)    otherwise practice and adhere to corporate formalities such as complying with its organizational documents and member and Facility Administrator resolutions, the holding of regularly scheduled meetings of members and Facility Administrator, use stationery, invoices and checks separate from those of any other Affiliated Entity, and maintaining complete and correct books and records and minutes of meetings and other proceedings of its members and Facility Administrator.
(Q)    Updates to Account Schedule. Schedule II attached hereto shall be updated by the Borrower and delivered to the Administrative Agent immediately to reflect any changes as to which the notice, the opening of the TEP Collateral Account and other requirements specified in Section 5.2(K) have been satisfied.
(R)    Deposits into the Accounts. (i) The Borrower shall (a) direct, or cause to be directed, all Collections other than Collections related to SAP Solar Assets to the Collection Account and all Collections related to SAP Solar Assets to the SAP Revenue Account, (b) direct, or cause to be directed, all Eligible Hedged SREC Counterparties to make all related Hedged SREC Payments directly into the Collection Account and, to the extent any Hedged SREC Payments are deposited by the relevant obligor in another account, cause such payments to be deposited into the Collection Account no later than two (2) Business Days after receipt, and (c) deposit or cause to be deposited all net proceeds of a Takeout Transaction into the Takeout Transaction Account in accordance with Section 2.7(C).
(ii)    The Borrower shall not and shall not permit the Managing Members or SAP to deposit into or otherwise credit (or cause to be deposited or credited), or consent to or fail to object to any such deposit or credit of, cash or cash proceeds other than Collections into the Collection Account or the SAP Revenue Account.
(S)    Hedging. The Borrower shall collectively at all times satisfy the Hedge Requirements.
(T)    Update to Solar Assets. The Borrower shall notify the Facility Administrator and the Administrative Agent in writing of any additions or deletions to the Schedule of Solar Assets, no later than each Funding Date and each Payment Date (which in the case of the update delivered on any Payment Date shall be prepared as of the last day of the related Collection Period).
(U)    Notice to Seller and Parent. The Borrower shall promptly notify the Seller and the Parent of a breach of Section 4.1(U) and shall require the Seller or the Parent to cure

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


such breach or pay the Liquidated Damages Amount for such Defective Solar Asset pursuant to and in accordance with the Sale and Contribution Agreement or the Parent Guaranty, as applicable.
(V)    Government Approvals. The Borrower shall promptly obtain all orders, consents, authorizations, approvals, licenses and validations of, or file recordings, register with, or obtain exemption from, any Governmental Authority required as a condition to the performance of its obligations under any Transaction Document.
(W)     TEP Collateral Account. Within sixty (60) days of the Closing Date (i) the Borrower shall cause TEP Resources to establish and, subject to the last sentence of this Section, maintain an account (the “TEP Collateral Account”) to hold Distributable Collections pursuant to Section 2.7(B)(xvii) and Sunnova TEP II Developer, LLC to establish and maintain an account to hold "Distributable Collections" (as defined in the TEP II Credit Agreement) pursuant to Section 2.7(b)(xvii) of the TEP II Credit Agreement, (ii) such accounts shall be subject to an account control agreement pursuant to which the Administrative Agent shall be granted control (as defined in Section 9‑104 of the UCC) in favor of Administrative Agent, in form and substance satisfactory to Administrative Agent and (iii) the Administrative Agent shall have received customary opinions from counsel to each Affiliate of the Borrower that is a party to such account control agreement regarding the Administrative' s Agent security interest in such accounts. Upon the repayment in full of the Obligations (under and as defined in the TEP II Credit Agreement), other than contingent obligations which by their express terms survive termination of the TEP II Transaction Documents and for which no claim has yet been made, the TEP Collateral Account may be closed and the Borrower shall have no further obligations under this Section.
(X)        Deviations from Approved Forms. The Borrower shall provide or shall cause the Seller to provide, to the Administrative Agent all proposed forms of Solar Service Agreements which deviate in any material respect from a form attached hereto as Exhibit G (each such form a “Proposed Form”) and shall provide notice to the Administrative Agent regarding the cessation of a form of Solar Service Agreement attached hereto as Exhibit G or previously delivered hereunder. The Administrative Agent shall use its best efforts to notify the Borrower in writing within ten (10) Business Days of receipt of a Proposed Form of its objection or approval of the terms of such Proposed Form. Upon the written approval of the Administrative Agent, such approval not to be unreasonably withheld or delayed, Exhibit G shall be deemed to be amended to include such Proposed Form as a Solar Service Agreement in addition to the other forms attached or previously delivered hereunder. The Borrower shall, no less frequently than once per calendar quarter, provide or shall cause the Seller to provide, to the Administrative Agent all forms of Solar Service Agreements that

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


incorporate changes which do not deviate materially from a form attached hereto as Exhibit G. Upon receipt of such forms of Solar Service Agreements, Exhibit G shall be deemed to be amended to include such forms in addition to the other forms attached or previously delivered hereunder.
(Y)        Beneficial Owner Certification. Promptly following any request therefor, the Borrower shall provide such information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” requirements under the Patriot Act, the Beneficial Ownership Regulation or other applicable anti-money laundering laws.
Section 5.2.    Negative Covenants. The Borrower covenants and agrees that, until all Obligations (other than contingent obligations not then due) hereunder have been paid in full, the Borrower will not:
(A)    Business Activities. (x) Conduct any business other than:
(i)    the acquisition from time to time of any or all right, title and (direct or indirect) interest in and to Solar Assets and Solar Asset Owner Subsidiaries and all rights and interests thereunder or relating thereto pursuant to the Sale and Contribution Agreement;
(ii)    the conveyance from time to time of Solar Asset Owner Member Interests in connection with a Takeout Transaction and the conveyance of Solar Assets to SAP;
(iii)    the execution and delivery by the Borrower from time to time of purchase agreements, in form and substance satisfactory to the Administrative Agent, related to the sale of securities by the Borrower or any of their Affiliates in connection with a Takeout Transaction;
(iv)    the performance by the Borrower of all of its obligations under the aforementioned agreements and under this Agreement and any documentation related thereto;
(v)    the preparation, execution and delivery of any and all other documents and agreements as may be required in connection with the performance of the activities of the Borrower approved above; and

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(vi)    to engage in any lawful act or activity and to exercise any powers permitted under the Delaware Limited Liability Company Act that are reasonably related, incidental, necessary, or advisable to accomplish the foregoing; or
(y)     permit the Managing Members or SAP to conduct any business other than the transactions contemplated by the Tax Equity Financing Documents.
Notwithstanding the foregoing, after the Closing Date and at any time on or prior to the earlier of (a) the Maturity Date and (b) the date on which all Obligations (other than contingent obligations not then due) of the Borrower hereunder have been paid in full, the Borrower shall not, without the prior written consent of the Administrative Agent, the Majority Lenders and the Majority Class B Lenders (consent by the Majority Class B Lenders to not be unreasonably withheld, conditioned or delayed if otherwise approved by the Majority Lenders; provided that if the Majority Class B Lenders have not affirmatively disapproved such transaction in writing within five (5) Business Days of receiving notice of such transaction and the Majority Lenders have otherwise approved such transaction, such transaction shall be deemed approved), (1) purchase or otherwise acquire any Solar Assets or Solar Asset Owner Subsidiaries, or interests therein, except for acquisitions from the Seller pursuant to and in accordance with the Sale and Contribution Agreement, (2) convey or otherwise dispose of any Collateral or interests therein, other than permitted under Sections 5.2(A)(ii) or 5.2(E) or the SAP Contribution Agreement, or (3) establish any Subsidiaries; provided, that notwithstanding this paragraph, the Borrower may continue to own directly or indirectly interests in the Financing Funds and SAP, which shall purchase and acquire Solar Assets in accordance with the terms of the SAP Financing Documents, the SAP NTP Financing Documents or the Tax Equity Financing Documents, as applicable.
(B)    Sales, Liens, Etc. Except as permitted hereunder (i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Lien upon or with respect to, the Collateral or any portion thereof, or upon or with respect to the Collection Account or any other account owned by or in the name of the Borrower to which any Collections are sent, or assign any right to receive income in respect thereof, or (ii) create or suffer to exist any Lien upon or with respect to any of its properties, whether now owned or hereafter acquired, or assign any right to receive income, to secure or provide for the payment of any Indebtedness of any Person or for any other reason; provided that notwithstanding anything to the contrary herein, this Section 5.2(B) shall not prohibit (x) any Lien that constitutes a Permitted Lien or a Permitted Equity Lien, (y) a SAP Transfer or (z) so long as notice is given to Administrative Agent under any Facility Administrator Report of any of the following, any actions permitted under Sections 5.2(A)(ii).

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(C)    Indebtedness. Incur or assume any Indebtedness, except Permitted Indebtedness.
(D)    Loans and Advances. Make any loans or advances to any Person.
(E)    Dividends, Etc. Declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any interest in Borrower, or purchase, redeem or otherwise acquire for value any interest in the Affiliated Entities or any rights or options to acquire any such interest to any Person that is not the Borrower, except:
(i)    transfers, dividends or other distributions of Marketable RECs;
(ii)    transfers, dividends or other distributions of Transferable Assets to the Seller pursuant to the Sale and Contribution Agreement;
(iii)    distributions of cash by the Borrower to the TEP Collateral Account or the Borrower's Account in accordance with Section 2.7(B)(xvii); or
(iv)     distributions of Solar Assets that were Substantial Stage Solar Assets or Final Stage Solar Assets in accordance with a SAP Transfer.
provided, that the distributions described in subsection (i) of clause (E) shall not be permitted if either an Event of Default or Potential Default would result therefrom unless all outstanding Obligations (other than contingent liabilities for which no claims have been asserted) have been irrevocably paid in full with all accrued but unpaid interest thereon and any related Liquidation Fees; provided further, that nothing in this Section 5.2(E) shall prohibit or limit any Financing Fund Contributions.
(F)    Mergers, Etc. Merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets of, any Person, except in connection with the acquisition or sale of Solar Assets or Solar Asset Owner Subsidiaries and similar property pursuant to the Sale and Contribution Agreement, in connection with a Takeout Transaction or an acquisition or sale where all Obligations have been paid in full with all accrued but unpaid interest thereon and any related Liquidation Fees.
(G)    Investments. Make any investment of capital in any Person either by purchase of stock or securities, contributions to capital, property transfer or otherwise or acquire or

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


agree to acquire by any manner any business of any Person except pursuant to the transactions contemplated herein and in the SAP Financing Documents, the SAP NTP Financing Documents or the Tax Equity Financing Documents.
(H)    Change in Organizational Documents. Amend, modify or otherwise change any of the terms or provisions in its organizational documents as in effect on the date hereof without the consent of the Administrative Agent, the Majority Lenders and, to the extent such amendment, modification or change could reasonably be expected to materially and adversely affect the Class B Lenders in a manner disproportionate to the Class A Lenders, the Majority Class B Lenders.
(I)    Transactions with Affiliates. Enter into, or be a party to, any transaction with any of its Affiliates, except (i) the transactions contemplated by the Transaction Documents, the SAP Financing Documents, the SAP NTP Financing Documents, the Tax Equity Financing Documents or any similar conveyance agreement entered into in connection with a Takeout Transaction or SAP Transfer, (ii) any other transactions (including the lease of office space or computer equipment or software by the Borrower from an Affiliate and the sharing of employees and employee resources and benefits) (a) in the ordinary course of business or as otherwise permitted hereunder, (b) pursuant to the reasonable requirements and purposes of the Borrower’s business, (c) upon fair and reasonable terms (and, to the extent material, pursuant to written agreements) that are consistent with market terms for any such transaction, and (d) permitted by Sections 5.2(B), (C), (E) or (F), (iii) employment and severance arrangements and health, disability and similar insurance or benefit plans between the Borrower and its directors, officers, employees in the ordinary course of business, and (iv) the payment of customary fees and reasonable out of pocket costs to, and indemnities provided on behalf of, directors, managers, consultants, officers and employees of any parent entity of the Borrower to the extent attributable to the ownership or operation of the Borrower.
(J)    Addition, Termination or Substitution of Accounts. Add, terminate or substitute, or consent to the addition, termination or substitution of, the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, or the Takeout Transaction Account or the TEP Collateral Account unless the Administrative Agent, the Majority Lenders and the Majority Class B Lenders shall have consented thereto (consent by the Majority Class B Lenders to not be unreasonably withheld, conditioned or delayed if otherwise approved by the Administrative Agent; provided that if the Majority Class B Lenders have not affirmatively disapproved such addition, termination or substitution in writing within five (5) Business Days of receiving notice of such addition, termination or substitution and the Administrative Agent has otherwise approved such

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


addition, termination or substitution, such addition, termination or substitution shall be deemed approved) after having received at least thirty (30) days’ prior written notice thereof. Notwithstanding the foregoing, the Borrower neither has nor shall have any control over the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account, or the Takeout Transaction Account or the TEP Collateral Account. For the avoidance of doubt, any Financing Fund Contributions shall not be controlled or distributed through the Paying Agent Accounts.
(K)    Collections. (i) Deposit at any time Collections into any bank account other than in accordance with Section 5.1(R), (ii) make any change to the payment instructions to a Financing Fund, a Managing Member or SAP in respect of the Solar Asset Owner Member Interests to any other destination other than the Collection Account, (iii)  make any change to the payment instructions to any Eligible Hedged SREC Counterparty or direct any Eligible Hedged SREC Counterparty to make any Hedged SREC Payments to go to any destination other than the Collection Account, or (iv) permit the assets of any Person (other than the Borrower) to be deposited into the Collection Account.
(L)    Amendments to Transaction Documents. Without the consent of the Administrative Agent and subject to Section 10.2, amend, modify or otherwise change any of the terms or provisions of any Transaction Document other than (i) supplements identifying Solar Assets and/or Solar Asset Owner Subsidiaries to be transferred in in accordance with the Sale and Contribution Agreement, (ii) supplements identifying Solar Assets to be financed in connection with each Funding Date, (iii) amendments, supplements or other changes in accordance with the terms of the applicable Transaction Document, the SAP Financing Documents, the SAP NTP Financing Documents or Tax Equity Financing Document, and (iv) amendments, supplements or other changes with respect to exhibits and schedules to any Transaction Document, the SAP Financing Documents, the SAP NTP Financing Documents or Tax Equity Financing Document that would not reasonably be expected to have a material adverse effect on the value, enforceability, or collectability of the Collateral or adversely affect Collections.
(M)    Bankruptcy of Tax Equity Parties. Without the consent of the Administrative Agent, the Borrower shall not, directly or indirectly, cause the institution of bankruptcy or insolvency proceedings against a Tax Equity Party.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 5.3.    Covenants Regarding the Solar Asset Owner Member Interests    . The Borrower covenants and agrees, that, until all Obligations (other than contingent obligations not then due) hereunder have been paid in full, the Borrower shall:
(M)determine whether or not to exercise each Purchase Option in accordance with the Purchase Standard. The Borrower will make such determination, and if it determines to do so, will exercise such Purchase Option, no later than 60 days following the related Call Date in accordance with the terms and conditions of the related Financing Fund LLCA. Such determination will take into account whether sufficient funds are available in the Supplemental Reserve Account to pay the related Purchase Option Price, and if such funds are not then available in the Supplemental Reserve Account, the Borrower shall make a determination, in accordance with the Purchase Standard, whether to exercise such Purchase Option as soon thereafter as such funds are available in the Supplemental Reserve Account. Upon the Borrower’s exercise and completion of a Purchase Option, the Borrower shall (i) instruct the related Financing Fund to pay all distributions to be made by such Financing Fund to the Borrower in respect of the Managing Member Interests and the Tax Equity Investor Interests directly to the Collection Account and deliver to the Administrative Agent the original certificate of the related Managing Member Interests and the related Tax Equity Investor Interests together with instruments of transfer executed in blank, (ii) cause the Managing Members to execute and deliver to the Administrative Agent an Accession Agreement to the Pledge Agreement covering the Tax Equity Investor Interest acquired pursuant to the Purchase Option, and (iii) cause the Managing Members to amend the related Financing Fund LLCA to require such Financing Fund to have at all times an Independent Director;
(N)(x) cause the Managing Members (i) to cause each Financing Fund to make all Managing Member Distributions directly to the Collection Account and (ii) to deliver to the Administrative Agent for deposit into the Collection Account any Managing Member Distributions received by the Managing Members and (y) cause SAP to (i) make all SAP Distributions directly to the Collection Account and (ii) to deliver to the Administrative Agent for deposit into the Collection Account any SAP Distributions received by SAP;
(O)cause each of the Managing Members and SAP to comply with the provisions of its operating agreement and not to take any action that would cause the Managing Members to violate the provisions of the related Financing Fund LLCA;
(P)cause each of the Managing Members and SAP to maintain all material licenses and permits required to carry on its business as now conducted and in accordance with the provisions of the Transaction Documents, except to the extent the failure to do so

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


could not reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;
(Q)not permit or consent to the admission of any new member of the Managing Members or SAP other than a successor independent member in accordance with the provisions of their respective operating agreements;
(R)cause the Managing Members not to permit or consent to the admission of any new member of a Financing Fund other than pursuant to the exercise of a Purchase Option by the Managing Member;
(S)cause the Managing Members not to make any material amendment to a Financing Fund LLCA that could reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders and cause the Managing Members and SAP not to make any material amendment to their respective operating agreements that could reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;
(T)cause the Managing Members on its own behalf and on behalf of each Financing Fund (i) to comply with and enforce the provisions of the Tax Loss Insurance Policies and (ii) not to consent to any amendment to a Tax Loss Insurance Policy to the extent that such amendment could reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;
(U)cause the Managing Members to cause each Financing Fund to (i) comply with the provisions of each respective Financing Fund LLCA and (ii) not take any action that would violate the provisions of such Financing Fund LLCA, and cause the Managing Members and SAP to not to make any material amendment to their respective operating agreement that could reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;
(V)    cause the Managing Members to cause each Financing Fund and cause the Managing Members and SAP to maintain all material licenses and permits required to carry on its business as now conducted and in accordance with the provisions of the SAP Financing Documents, the SAP NTP Financing Documents and the Tax Equity Financing Documents, except to the extent the failure to do so could not reasonably be expected to have a material adverse effect on the interests of the Administrative Agent or the Lenders;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(W)cause the Managing Members to cause the related Financing Funds not to incur any indebtedness or sell, dispose of or other encumber any of its assets other than as permitted by the Transaction Documents; and
(X)cause the Managing Members to obtain the consent of the Administrative Agent for any action taken under Section 6.2(b) of each Financing Fund LLCA or any action that could reasonably be expected to cause a Material Adverse Effect.
ARTICLE VI

EVENTS OF DEFAULT
Section 6.1.    Events of Default. The occurrence of any of the following specified events shall constitute an event of default under this Agreement (each, an “Event of Default”):
(A)    Non‑Payment. (i) The Borrower shall fail to make any required payment of principal (including any payment required to be made to cure a Class A Borrowing Base Deficiency or a Class B Borrowing Base Deficiency) or interest when due hereunder and such failure shall continue unremedied for two (2) Business Days after the day such payment is due or (ii) the Borrower shall fail to pay the Aggregate Outstanding Advances by the Maturity Date, or (iii) the Borrower shall fail to make any required payment on any other Obligation when due hereunder or under any other Transaction Document and such failure under this sub‑clause (iii) shall continue unremedied for five (5) Business Days after the earlier of (a) written notice of such failure shall have been given to the Borrower by the Administrative Agent or any Lender or (b) the date upon which a Responsible Officer of the Borrower obtained knowledge of such failure.
(B)    Representations. Any representation or warranty made or deemed made by the Borrower (other than pursuant to Section 4.1(U) hereof or, with respect to the Parent only, Section 4.1(L) hereof), the Seller, the Parent, the Facility Administrator, the Managing Members or SAP herein or in any other Transaction Document (after giving effect to any qualification as to materiality set forth therein, if any) shall prove to have been inaccurate in any material respect when made and such defect, to the extent it is capable of being cured, is not cured within thirty (30) days from the earlier of the date of receipt by the Borrower, the Parent, the Seller, the Facility Administrator, the Managing Members or SAP as the case may be, of written notice from the Administrative Agent of such failure by the Borrower, the Parent, the Facility Administrator, the Seller, the Managing Members or SAP, as the case may be, of such failure.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(C)    Covenants. The Borrower, the Seller, the Facility Administrator, the Managing Members or SAP shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or in any other Transaction Document which has not been cured within thirty (30) days from the earlier of the date of receipt by the Borrower, the Facility Administrator, the Managing Members or SAP, as the case may be, of written notice from the Administrative Agent of such failure by the Borrower, the Facility Administrator, the Managing Members or SAP, as the case may be, of such failure.
(D)    Validity of Transaction Documents. This Agreement or any other Transaction Document shall (except in accordance with its terms), in whole or in part, cease to be (i) in full force and effect and/or (ii) the legally valid, binding and enforceable obligation of the Seller, the Borrower, the Parent, the Facility Administrator, a Managing Member or SAP.
(E)    Insolvency Event. An Insolvency Event shall have occurred with respect to Parent, the Seller, Borrower, the Facility Administrator, a Managing Member, SAP or a Financing Fund.
(F)    Breach of Parent Guaranty; Failure to Pay Liquidated Damages Amounts. Any failure by Parent to perform under the Parent Guaranty; provided that a breach by Parent of the Financial Covenants is not an Event of Default hereunder, or any failure of TEP Developer or TEP Resources to pay Liquidated Damages Amounts pursuant to the Sale and Contribution Agreements.
(G)    ERISA Event. Either (i) any ERISA Event shall have occurred or (ii) the assets of the Borrower become subject to Title I of ERISA, Section 4975 of the Internal Revenue Code, or, by reason of any investment in the Borrower by any governmental plan, as the case may be, any other federal, state, or local provision similar to Section 406 of ERISA or Section 4975 of the Internal Revenue Code.
(H)    Borrowing Base Deficiency. A Class A Borrowing Base Deficiency or a Class B Borrowing Base Deficiency continues for more than two (2) Business Days.
(I)    Security Interest. The Administrative Agent, for the benefit of the Lenders, ceases to have a first priority perfected security interest in Collateral having a value in excess of $150,000 and such failure shall continue unremedied for more than five (5) Business Days unless such Liens with a higher priority than Agent’s Liens are Permitted Liens or Permitted Equity Liens; provided that if such cessation in security interest is due to Agent’s actions, then no Event of Default shall be deemed to occur under this Section 6.1(I).

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(J)    Judgments. There shall remain in force, undischarged, unsatisfied, and unstayed for more than thirty (30) consecutive days, any final non‑appealable judgment against any Relevant Party in excess of $250,000 or the Parent in excess of $1,000,000, in each case over and above the amount of insurance coverage available from a financially sound insurer that has not denied coverage.
(K)    1940 Act. Any Relevant Party becomes, or becomes controlled by, an entity required to register as an “investment company” under the 1940 Act.
(L)    Hedging. Failure of the Borrower to maintain Hedge Agreements satisfying the Hedge Requirements and such failure continues for five (5) Business Days or any Hedge Counterparty ceases to be a Qualifying Hedge Counterparty and such Hedge Counterparty is not replaced with a Qualifying Hedge Counterparty within ten Business Days.
(M)    Change of Control. The occurrence of a Change of Control.
(N)    Financing Fund Material Adverse Effect. The occurrence of any event that results in a Material Adverse Effect (as defined in the Financing Fund LLCA) with respect to a Managing Member or a Financing Fund.
(O)    Replacement of Manager. The Manager resigns, removed or is replaced under a Management Agreement or a Servicing Agreement and, in each case, a replacement Manager, acceptable to the Administrative Agent has not accepted an appointment under such agreement within 60 days of such resignation or removal.
(P)    Parent Material Adverse Effect. A representation or warranty made or deemed made by the Borrower pursuant to Section 4.1(L) hereof regarding the Parent shall prove to have been inaccurate in any material respect when made and such defect, to the extent it is capable of being cured, is not cured within ninety (90) days from the earlier of the date of receipt by the Borrower of written notice from the Administrative Agent of such failure by the Borrower.
(Q)    Resignation or Removal of Managing Member. A Managing Member resigns or is removed under a Financing Fund LLCA.
(R)     Cross Default. The occurrence of an “Event of Default” under the TEP II Credit Agreement. [Reserved].

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(S)     TEP IV-B Tax Loss Insurance Policy. TEP IV-B (or Parent or an affiliate thereof on behalf of such Financing Fund) fails to procure a Tax Loss Insurance Policy by February 28, 2020.
Section 6.2.    Remedies. If any Event of Default shall then be continuing, the Administrative Agent (i) may, in its discretion, or (ii) shall, upon the written request of the Majority Lenders, by written notice to the Borrower and the Lenders, take any or all of the following actions, without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against the Borrower in any manner permitted under applicable law:
(A)    declare the Commitments terminated, whereupon the Commitment of each Lender shall forthwith terminate immediately without any other notice of any kind;
(B)    declare the principal of and any accrued interest in respect of the Class A Advances, the Class B Advances and all other Obligations owing hereunder and thereunder to be, whereupon the same shall become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; provided, that, upon the occurrence of an Insolvency Event with respect to the Borrower, the principal of and any accrued interest in respect of the Advances and all other Obligations owing hereunder shall be immediately due and payable without any notice to the Borrower or Lenders;
(C)    if the Facility Administrator is Sunnova Management, replace the Facility Administrator with a Successor Facility Administrator in accordance with the Facility Administration Agreement; and/or
(D)    foreclose on and liquidate the Collateral or to the extent permitted by the Tax Equity Financing Documents, the Solar Assets owned by a Financing Fund, and pursue all other remedies available under the Security Agreement, the Pledge Agreement, the Subsidiary Guaranty and the other Transaction Documents, subject to the terms of the Tax Equity Financing Documents.
Section 6.3.    Class B Lender Purchase Option (A) If an Event of Default other than an Event of Default described in Section 6.1(E) shall occur and be continuing and the Administrative Agent shall not have declared all Obligations under this Agreement or any of the other Transaction Documents to be immediately due and payable, the Class B Lenders shall have the option at any time to purchase all (but not less than all) of the Class A Advances then outstanding and all related Obligations owing by the Borrower to the Class A Lenders (solely in such capacity) from the Class A Lenders (the “Class B Lender Purchase Option”) with the consent of all the Class A Lenders. At any time that the Class B Lender Purchase Option is available to the Class B Lenders, any Class

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


B Lender may request that the Class A Lenders provide such Class B Lender with a statement setting forth the aggregate amount of all the Class A Advances then outstanding and all related Obligations owed by the Borrower to the Class A Lenders (solely in such capacity). Within ten (10) Business Days after the receipt of such statement, the requesting Class B Lender shall provide written notice to the Class A Lenders whether such Class B Lender would like to exercise the Class B Lender Purchase Option. Upon receipt of a notice that a Class B Lender would like to exercise the Class B Lender Purchase Option, the Class A Lenders shall promptly notify such Class B Lender whether the Class A Lenders will consent to a sale. If any or all of the Class B Lenders shall have elected to exercise the Class B Lender Purchase Option and the Class A Lenders shall have consented to a sale, the Class A Lenders and applicable Class B Lenders shall agree to a purchase and sale date and make such purchase and sale in accordance with Section 6.3(C); provided that the Class A Lenders shall retain all rights to be indemnified or held harmless by the Borrower in accordance with the terms hereof for claims accruing prior to such sale date.
(B)    If an Event of Default shall occur and be continuing and the Majority Lenders shall have declared an Event of Default that has not been waived, the Class B Lenders shall have the option at any time to exercise the Class B Lender Purchase Option. Any or all of the Class B Lenders may exercise such Class B Lender Purchase Option upon written notice to the Class A Lenders, which notice shall be irrevocable. On the date specified by the participating Class B Lenders in such notice (which shall not be more than ten (10) Business Days after the receipt by the Class A Lenders of such notice), the Class A Lenders shall sell to the Class B Lenders, and the Class B Lenders shall purchase from the Class A Lenders, the Class A Advances then outstanding and all Obligations owed by the Borrower to the Class A Lenders (solely in such capacity) in accordance with Section 6.3(C); provided that the Class A Lenders shall retain all rights to be indemnified or held harmless by the Borrower in accordance with the terms hereof for claims accruing prior to such sale date.
(C)     Upon the date of a purchase and sale pursuant to this Section 6.3, the Class B Lenders shall (i) pay to the Class A Lenders as the purchase price therefor the full amount of all the Class A Advances and all Obligations owed by the Borrower to the Class A Lenders (solely in such capacity) then outstanding and unpaid including principal, interest, fees, any Liquidation Fee as in effect on the date thereof and expenses, including attorneys’ fees and legal expenses, (ii) reimburse the Class A Lenders for any loss, cost, damage or expense (including attorneys’ fees and legal expenses) in connection with any commissions, fees, costs or expenses related to any checks or other payments provisionally credited to the Obligations owing to the Class A Lenders (solely in such capacity), and/or as to which the Class A Lenders have not yet received final payment (and, in each case, all of such payments shall be made without offset, deduction or defense), (iii) reimburse the Class A Lenders for the amount of all liabilities (without duplication) that such Class A Lenders have incurred in the nature of indemnification obligations of the Borrower hereunder which have

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


resulted in any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) to the Class A Lenders, and (iv) agree to indemnify and hold harmless the Class A Lenders from and against any loss, liability, claim, damage or expense (including fees and expenses of legal counsel) arising out of any claim asserted by a third party as a direct result of any acts by the Class B Lenders occurring after the date of such purchase. The Class A Lenders shall provide a reasonably detailed statement of the purchase price and other sums set forth in clauses (i) through (iii) above to the Class B Lenders, and the Class B Lenders shall remit such purchase price and other sums in clauses (i) through (iii) above by wire transfer in federal funds to such bank account of the Class A Lenders as the Class A Lenders may designate in writing to the Class B Lenders for such purpose. Interest shall be calculated through the Business Day on which such purchase and sale shall occur if the amounts so paid by the Class B Lenders to the bank account designated by the Class A Lenders are received in such bank account prior to 1:00 p.m., New York time and interest shall be calculated to and include the next Business Day if the amounts so paid by the Class B Lenders to the bank account designated by the Class A Lenders are received in such bank account later than 1:00 p.m., New York time. Such purchase shall be expressly made without representation or warranty of any kind by the Class A Lenders as to the Obligations owing to the Class A Lenders (solely in such capacity) or otherwise and without recourse to the Class A Lenders, except that the Class A Lenders shall represent and warrant: (a) the amount of Obligations owing to the Class A Lenders (solely in such capacity) being purchased and that the purchase price and other sums payable by the Class B Lenders are true, correct and accurate amounts, (b) that the Class A Lenders shall convey the Obligations owing to the Class A Lenders (solely in such capacity) free and clear of any Liens or encumbrances of the Class A Lenders or created or suffered by the Class A Lenders, (c) as to all claims made or threatened in writing against the Class A Lenders related to the Obligations owing to the Class A Lenders (solely in such capacity), and (d) the Class A Lenders are duly authorized to assign the Obligations owing to the Class A Lenders (solely in such capacity).
Section 6.4.    Sale of Collateral (A) The power to effect any sale of any portion of the Collateral upon the occurrence and during the continuance of an Event of Default pursuant to this Article VI, the Security Agreement and the Pledge Agreement shall not be exhausted by any one or more sales as to any portion of the Collateral remaining unsold, but shall continue unimpaired until all Collateral shall have been sold or until all Obligations (other than contingent obligations not then due) hereunder have been paid in full. The Administrative Agent acting on its own or through an agent, may from time to time postpone any sale by public announcement made at the time and place of such sale.
(B)    Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent may, in its discretion, and shall, upon the written request of the Majority Lenders, by written notice to the Borrower and the Lenders sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Administrative Agent’s offices or

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


elsewhere, for cash, on credit (including pursuant to a “credit sale” to a Lender or an assignee thereof) or for future delivery, and upon such other terms as the Administrative Agent may require. Notwithstanding the foregoing, prior to the consummation of any sale of the Collateral pursuant to this Article VI and any other Transaction Document (either private or public), the Administrative Agent shall first offer the Class B Lenders the opportunity to purchase the Collateral for a purchase price equal to the greater of (x) the fair market value of the Collateral and (y) the aggregate outstanding principal balance of the Class A Advances, plus accrued interest thereon and fees owed thereto (such right, the “Right of First Refusal”). If the Class B Lenders do not exercise the Right of First Refusal within two (2) Business Days of receipt thereof, then the Administrative Agent shall sell the Collateral as otherwise set forth in this Section 6.4 and pursuant to the other Transaction Documents; provided, further, that if the Class B Lenders do not exercise the Right of First Refusal and the Administrative Agent elects to sell the Collateral in a private sale to a third party, then prior to the sale thereof, the Administrative Agent shall offer the Class B Lenders the opportunity to purchase the Collateral for the purchase price being offered by such third party, and the Class B Lenders shall have two (2) Business Days to accept such offer.
ARTICLE VII

THE ADMINISTRATIVE AGENT AND FUNDING AGENTS
Section 7.1.    Appointment; Nature of Relationship. The Administrative Agent is appointed by the Funding Agents and the Lenders (and by each Qualifying Hedge Counterparty by execution of a Qualifying Hedge Counterparty Joinder, if applicable) as the Administrative Agent hereunder and under each other Transaction Document, and each of the Funding Agents and the Lenders and each Qualifying Hedge Counterparty irrevocably authorizes the Administrative Agent to act as the contractual representative of such Funding Agent and such Lender and such Qualifying Hedge Counterparty with the rights and duties expressly set forth herein and in the other Transaction Documents. The Administrative Agent agrees to act as such contractual representative upon the express conditions contained in this Article VII. Notwithstanding the use of the defined term “Administrative Agent,” it is expressly understood and agreed that the Administrative Agent shall not have any fiduciary responsibilities to any Funding Agent or Lender or any Qualifying Hedge Counterparty by reason of this Agreement and that the Administrative Agent is merely acting as the representative of the Funding Agents, the Lenders and each Qualifying Hedge Counterparty with only those duties as are expressly set forth in this Agreement and the other Transaction Documents. In its capacity as the Funding Agents’, the Lenders’ and each Qualifying Hedge Counterparty’s contractual representative, the Administrative Agent (A) does not assume any fiduciary duties to any of the Funding Agents, the Lenders or any Qualifying Hedge Counterparty, (B) is a “representative” of the Funding Agents, the Lenders and each Qualifying Hedge Counterparty within the meaning of Section 9‑102 of the UCC as in effect in the State of New York, and (C) is acting

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Transaction Documents. Each of the Funding Agents, the Lenders and each Qualifying Hedge Counterparty agree to assert no claim against the Administrative Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Funding Agent, each Lender and each Qualifying Hedge Counterparty waives.
Section 7.2.    Powers. The Administrative Agent shall have and may exercise such powers under the Transaction Documents as are specifically delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto. The Administrative Agent shall have no implied duties or fiduciary duties to the Funding Agents, the Lenders or to any Qualifying Hedge Counterparty, or any obligation to the Funding Agents, the Lenders or any Qualifying Hedge Counterparty to take any action hereunder or under any of the other Transaction Documents except any action specifically provided by the Transaction Documents required to be taken by the Administrative Agent.
Section 7.3.    General Immunity. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower, the Funding Agents, the Lenders, or any Qualifying Hedge Counterparty for any action taken or omitted to be taken by it or them hereunder or under any other Transaction Document or in connection herewith or therewith except to the extent such action or inaction is found in a final non‑appealable judgment by a court of competent jurisdiction to have arisen solely from (A) the gross negligence or willful misconduct of such Person or (B) breach of contract by such Person with respect to the Transaction Documents.
Section 7.4.    No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc.. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (A) any statement, warranty or representation made in connection with any Transaction Document or any borrowing hereunder, (B) the performance or observance of any of the covenants or agreements of any obligor under any Transaction Document, (C) the satisfaction of any condition specified in Article III, except receipt of items required to be delivered solely to the Administrative Agent, (D) the existence or possible existence of any Potential Default or Event of Default, or (E) the validity, effectiveness or genuineness of any Transaction Document or any other instrument or writing furnished in connection therewith. The Administrative Agent shall not be responsible to any Funding Agent, any Lender or any Qualifying Hedge Counterparty for any recitals, statements, representations or warranties herein or in any of the other Transaction Documents, for the perfection or priority of any of the Liens on any of the Collateral, or for the execution, effectiveness, genuineness, validity, legality, enforceability, collectability, or sufficiency of this Agreement or any of the other Transaction Documents or the transactions contemplated thereby, or for the financial condition of any guarantor of any or all of the Obligations, the Borrower or any of its respective Affiliates.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 7.5.    Action on Instructions of Lenders. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Transaction Document in accordance with written instructions signed by the Majority Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders and on all holders of Loan Notes. The Administrative Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Transaction Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.
Section 7.6.    Employment of Administrative Agents and Counsel. The Administrative Agent may execute any of its duties as the Administrative Agent hereunder and under any other Transaction Document by or through employees, agents, and attorneys‑in‑fact and shall not be answerable to the Funding Agents, the Lenders or any Qualifying Hedge Counterparty, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys‑in‑fact selected by it with reasonable care. The Administrative Agent shall be entitled to advice of counsel concerning the contractual arrangement between the Administrative Agent and the Funding Agents, the Lenders or any Qualifying Hedge Counterparty and all matters pertaining to the Administrative Agent’s duties hereunder and under any other Transaction Document.
Section 7.7.    Reliance on Documents; Counsel. The Administrative Agent shall be entitled to rely upon any Class A Loan Note, Class B Loan Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and, in respect to legal matters, upon the opinion of counsel selected by the Administrative Agent, which counsel may be employees of the Administrative Agent.
Section 7.8.    The Administrative Agent’s Reimbursement and Indemnification. The Non-Conduit Lenders agree to reimburse and indemnify (on a pro rata basis based on the Class A Lender Group Percentages and the Class B Lender Group Percentages, as applicable) the Administrative Agent (A) for any amounts not reimbursed by the Borrower for which the Administrative Agent is entitled to reimbursement by the Borrower under the Transaction Documents, (B) for any other reasonable and documented expenses incurred by the Administrative Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Transaction Documents, and (C) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of the Transaction Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents, provided, that no Lender shall be liable for any of the foregoing to the extent

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


any of the foregoing is found in a final non‑appealable judgment by a court of competent jurisdiction to have arisen solely from the gross negligence or willful misconduct of the Administrative Agent.
Section 7.9.    Rights as a Lender. With respect to its Commitment and Advances made by it and the Loan Notes (if any) issued to it, in its capacity as a Lender, the Administrative Agent shall have the same rights and powers hereunder and under any other Transaction Document as any Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders,” as applicable, shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity. The Administrative Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Transaction Document, with the Borrower or any of its Affiliates in which such Person is not prohibited hereby from engaging with any other Person.
Section 7.10.    Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Transaction Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender 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 and the other Transaction Documents.
Section 7.11.    Successor Administrative Agent. The Administrative Agent may resign at any time by giving written notice thereof to the Lenders, the Funding Agents, each Qualifying Hedge Counterparty, the Verification Agent, the Paying Agent and the Borrower and the Administrative Agent may be removed at any time for cause by written notice received by the Administrative Agent from the Majority Lenders. Upon any such resignation or removal, the Lenders shall have the right to appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Lenders and shall have accepted such appointment within thirty (30) days after the exiting Administrative Agent’s giving notice of resignation or receipt of notice of removal, then the exiting Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent (but only if such successor is reasonably acceptable to each Lender) or petition a court of competent jurisdiction to appoint a successor Administrative Agent. Upon the acceptance of any appointment as the Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the exiting Administrative Agent, and the exiting Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents. After any exiting

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Article VII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent hereunder and under the other Transaction Documents.
Section 7.12.    Transaction Documents; Further Assurances. (A) Each Non-Conduit Lender, each Funding Agent and each Qualifying Hedge Counterparty authorizes the Administrative Agent to enter into each of the Transaction Documents to which it is a party and each Lender, each Funding Agent and each Qualifying Hedge Counterparty authorizes the Administrative Agent to take all action contemplated by such documents in its capacity as Administrative Agent. Each Lender, each Funding Agent and each Qualifying Hedge Counterparty agrees that no Lender, no Funding Agent and no Qualifying Hedge Counterparty, respectively, shall have the right individually to seek to realize upon the security granted by any Transaction Document, it being understood and agreed that such rights and remedies may be exercised solely by the Administrative Agent for the benefit of the Lenders, the Funding Agents and each Qualifying Hedge Counterparty upon the terms of the Transaction Documents.
(B)    Any Funding Agent may (in their sole discretion and expense), at any time, have their Advances rated by Moody’s, S&P, DBRS, Inc., A.M. Best or Kroll Bond Rating Agency, Inc. Any such rating shall not be a condition precedent to closing the credit facility or the making of the Advances as set forth in this Agreement. The Borrower, Sunnova Management, and the Parent shall provide reasonable assistance to obtain such rating. For the avoidance of doubt, any such rating shall not be a condition precedent to the exercise of any rights of the Borrower or Sunnova Management under this Agreement. Any costs or fees associated with the rating of the Advances shall be borne by the Funding Agent and the Lenders.
Section 7.13.    Collateral Review. (A) Prior to the occurrence of an Event of Default, the Administrative Agent and/or its designated agent may not more than one (1) time during any given twelve (12) month period (at the expense of the Borrower), upon reasonable notice, perform (i) reviews of the Facility Administrator’s and/or Borrower’s business operations and (ii) audits of the Collateral, in all cases, the scope of which shall be determined by the Administrative Agent.
(B)    After the occurrence of and during the continuance of an Event of Default, the Administrative Agent or its designated agent may, in its sole discretion regarding frequency (at the expense of the Borrower), upon reasonable notice, perform (i) reviews of the Facility Administrator’s and/or Borrower’s business operations and (ii) audits or any other review of the Collateral, in all cases, the scope of which shall be determined by the Administrative Agent.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 7.14.    Funding Agent Appointment; Nature of Relationship. Each Funding Agent is appointed by the Lenders in its Lender Group as their agent hereunder, and such Lenders irrevocably authorize such Funding Agent to act as the contractual representative of such Lenders with the rights and duties expressly set forth herein and in the other Transaction Documents. Each Funding Agent agrees to act as such contractual representative upon the express conditions contained in this Article VII. Notwithstanding the use of the defined term “Administrative Agent,” it is expressly understood and agreed that no Funding Agent shall have any fiduciary responsibilities to any Lender by reason of this Agreement and that each Funding Agent is merely acting as the representative of the Lenders in its Lender Group with only those duties as are expressly set forth in this Agreement and the other Transaction Documents. In its capacity as the related Lenders’ contractual representative, each Funding Agent (A) does not assume any fiduciary duties to any of the Lenders, (B) is a “representative” of the Lenders in its Lender Group within the meaning of Section 9‑102 of the UCC as in effect in the State of New York and (C) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Transaction Documents. Each of the Lenders agrees to assert no claim against their Funding Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender waives.
Section 7.15.    Funding Agent Powers. Each Funding Agent shall have and may exercise such powers under the Transaction Documents as are specifically delegated to such Funding Agent by the terms thereof, together with such powers as are reasonably incidental thereto. No Funding Agent shall have any implied duties or fiduciary duties to the Lenders in its Lender Group, or any obligation to such Lenders to take any action hereunder or under any of the other Transaction Documents except any action specifically provided by the Transaction Documents required to be taken by such Funding Agent.
Section 7.16.    Funding Agent General Immunity. Neither any Funding Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower, the Lenders or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Transaction Document or in connection herewith or therewith except to the extent such action or inaction is found in a final non‑appealable judgment by a court of competent jurisdiction to have arisen solely from (A) the gross negligence or willful misconduct of such Person or (B) breach of contract by such Person with respect to the Transaction Documents.
Section 7.17.    Funding Agent Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc. Neither any Funding Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (A) any statement, warranty or representation made in connection with any Transaction Document or any borrowing hereunder, (B) the performance or observance of any of the covenants or agreements of any obligor

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


under any Transaction Document, (C) the satisfaction of any condition specified in Article III, except receipt of items required to be delivered solely to the Administrative Agent, (D) the existence or possible existence of any Potential Default, Event of Default, Potential Amortization Event or Amortization Event, or (E) the validity, effectiveness or genuineness of any Transaction Document or any other instrument or writing furnished in connection therewith. No Funding Agent shall be responsible to any Lender for any recitals, statements, representations or warranties herein or in any of the other Transaction Documents, for the perfection or priority of any of the Liens on any of the Collateral, or for the execution, effectiveness, genuineness, validity, legality, enforceability, collectability, or sufficiency of this Agreement or any of the other Transaction Documents or the transactions contemplated thereby, or for the financial condition of any guarantor of any or all of the Obligations, the Borrower or any of their respective Affiliates.
Section 7.18.    Funding Agent Action on Instructions of Lenders. Each Funding Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Transaction Document in accordance with written instructions signed by each of the Lenders in its Lender Group, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of such Lenders. Each Funding Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Transaction Document unless it shall first be indemnified to its satisfaction by the Lenders in its Lender Group pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.
Section 7.19.    Funding Agent Employment of Agents and Counsel. Each Funding Agent may execute any of its duties as a Funding Agent hereunder by or through employees, agents, and attorneys‑in‑fact and shall not be answerable to the Lenders in its Lender Group, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys‑in‑fact selected by it with reasonable care. Each Funding Agent, at the expense of the Non-Conduit Lenders, shall be entitled to advice of counsel concerning the contractual arrangement between such Funding Agent and the Lenders in its Lender Group and all matters pertaining to such Funding Agent’s duties hereunder and under any other Transaction Document.
Section 7.20.    Funding Agent Reliance on Documents; Counsel. Each Funding Agent shall be entitled to rely upon any Loan Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and, in respect to legal matters, upon the opinion of counsel selected by such Funding Agent, which counsel may be employees of such Funding Agent.
Section 7.21.    Funding Agent’s Reimbursement and Indemnification. The Non-Conduit Lenders in each Lender Group agree to reimburse and indemnify (on a pro rata basis based upon the applicable Lender Group Percentages) the Funding Agent in their Lender Group (A) for any

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


amounts not reimbursed by the Borrower for which such Funding Agent is entitled to reimbursement by the Borrower under the Transaction Documents, (B) for any other reasonable and documented expenses incurred by such Funding Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Transaction Documents, and (C) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against such Funding Agent in any way relating to or arising out of the Transaction Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents, provided, that no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non‑appealable judgment by a court of competent jurisdiction to have arisen solely from the gross negligence or willful misconduct of such Funding Agent.
Section 7.22.    Funding Agent Rights as a Lender. With respect to its Commitment and Advances made by it and the Loan Notes (if any) issued to it, in its capacity as a Lender, each Funding Agent shall have the same rights and powers hereunder and under any other Transaction Document as any Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders,” as applicable, shall, unless the context otherwise indicates, include such Funding Agent in its individual capacity. Each Funding Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Transaction Document, with the Borrower or any of their Affiliates in which such Person is not prohibited hereby from engaging with any other Person.
Section 7.23.    Funding Agent Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon its Funding Agent or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Transaction Documents. Each Lender also acknowledges that it will, independently and without reliance upon its Funding Agent or any other Lender 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 and the other Transaction Documents.
Section 7.24.    Funding Agent Successor Funding Agent. Any Funding Agent may resign at any time by giving written notice thereof to the Lenders in its Lender Group, the Administrative Agent and the Borrower, and such Funding Agent may be removed at any time for cause by written notice received by the Lenders in its Lender Group. Upon any such resignation or removal, the Lenders in a Lender Group shall have the right to appoint a successor Funding Agent. If no successor Funding Agent shall have been so appointed by such Lenders and shall have accepted such

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


appointment within thirty 30 days after the exiting Funding Agent’s giving notice of resignation or receipt of notice of removal, then the exiting Funding Agent may appoint, on behalf of the Lenders in its Lender Group, a successor Funding Agent (but only if such successor is reasonably acceptable to each such Lender) or petition a court of competent jurisdiction to appoint a successor Funding Agent. Upon the acceptance of any appointment as a Funding Agent hereunder by a successor Funding Agent, such successor Funding Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the exiting Funding Agent, and the exiting Funding Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents. After any exiting Funding Agent’s resignation hereunder as Funding Agent, the provisions of this Article VII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Funding Agent hereunder and under the other Transaction Documents. Notwithstanding any provision in this Section 7.24 to the contrary, any Funding Agent that has provided notice of its resignation or has been provided notice of its removal shall be required to serve as Funding Agent until its successor has assumed such role.
Section 7.25.    Funding Agent Transaction Documents; Further Assurances. Each Lender authorizes the Funding Agent in its Lender Group to enter into each of the Transaction Documents to which it is a party and each Lender authorizes the Funding Agent in its Lender Group to take all action contemplated by such documents in its capacity as Funding Agent.
ARTICLE VIII

ADMINISTRATION AND SERVICING OF THE COLLATERAL
Section 8.1.    Management Agreements/Servicing Agreements/Facility Administration Agreement .
(A)    Each Management Agreement, duly executed counterparts of which have been delivered to the Administrative Agent, sets forth the covenants and obligations of the Manager with respect to the Solar Assets and other matters addressed in the Management Agreements, and reference is hereby made to the Management Agreements for a detailed statement of said covenants and obligations of the Manager thereunder. The Borrower shall cause the Manager (to the extent an Affiliate of the Borrower) and each Relevant Party that is party to a Management Agreement to (i) perform and observe all of the material terms, covenants and conditions of each Management Agreement and (ii) promptly notify the Administrative Agent of any notice to Borrower, a Managing Member or SAP of any material default under any Management Agreement.
(B)    Each Servicing Agreement, duly executed counterparts of which have been delivered to the Administrative Agent, sets forth the covenants and obligations of the Manager with respect

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to the Solar Assets and other matters addressed in the Servicing Agreement, and reference is hereby made to the Servicing Agreements for a detailed statement of said covenants and obligations of the Manager thereunder. The Borrower shall cause the Manager (to the extent an Affiliate of the Borrower) and each Relevant Party that is party to a Servicing Agreement to (i) perform and observe all of the material terms, covenants and conditions of each Servicing Agreement and (ii) promptly notify the Administrative Agent of any notice to Borrower, a Managing Member or SAP of any material default under any Servicing Agreement.
(C)     The Facility Administration Agreement, duly executed counterparts of which have been delivered to the Administrative Agent, sets forth the covenants and obligations of the Facility Administrator with respect to the Collateral and other matters addressed in the Facility Administration Agreement, and reference is hereby made to the Facility Administration Agreement for a detailed statement of said covenants and obligations of the Facility Administrator thereunder. The Borrower agrees that (i) the Administrative Agent, in its name or (to the extent required by law) in the name of the Borrower, may (but is not, unless so directed and indemnified by the Majority Lenders, required to) enforce all rights of the Borrower under the Facility Administration Agreement for and on behalf of the Lenders whether or not an Event of Default has occurred and is continuing and (ii) upon the occurrence and during the continuation of an Event of Default, the Majority Class B Lenders may request that the Administrative Agent, in the Administrative Agent’s name or (to the extent required by law) in the name of the Borrower, and the Administrative Agent may (but is not required to) enforce all rights of such Borrower under the Facility Administration Agreement for an on behalf of the Lenders.
(B)    Promptly following a request from the Administrative Agent (acting at the direction of the Majority Lenders or, upon the occurrence and during the continuation of an Event of Default, the Majority Class B Lenders) to do so, the Borrower shall take all such lawful action as the Administrative Agent may request to compel or secure the performance and observance by the Facility Administrator of each of its obligations to the Borrower and with respect to the Collateral under or in connection with the Facility Administration Agreement in accordance with the terms thereof, and in effecting such request shall exercise any and all rights, remedies, powers and privileges lawfully available to the Borrower under or in connection with the Facility Administration Agreement to the extent and in the manner directed by the Administrative Agent, including the transmission of notices of default on the part of the Facility Administrator thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Facility Administrator of each of its obligations under the Facility Administration Agreement.
(C)    The Borrower shall not waive any default by the Facility Administrator under the Facility Administration Agreement without the written consent of the Administrative Agent, the Majority Lenders and the Majority Class B Lenders (consent by the Majority Class B Lenders to

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not be unreasonably withheld, conditioned or delayed if otherwise approved by the Majority Lenders; provided that if the Majority Class B Lenders have not affirmatively disapproved such waiver in writing within five (5) Business Days of receiving notice of such waiver and the Majority Lenders have otherwise approved such waiver, such waiver shall be deemed approved).
(D)    The Administrative Agent does not assume any duty or obligation of the Borrower under the Facility Administration Agreement and the rights given to the Administrative Agent thereunder are subject to the provisions of Article VII.
(E)    The Borrower has not and will not provide any payment instructions to any of the Managing Members, SAP or a Financing Fund that are inconsistent with the Facility Administration Agreement or this Agreement.
(F)    With respect to the Facility Administrator’s obligations under Section 3.3 of the Facility Administration Agreement, the Administrative Agent shall not have any responsibility to the Borrower, the Facility Administrator or any party hereunder to make any inquiry or investigation as to, and shall have no obligation in respect of, the terms of any engagement of an independent accountant by the Facility Administrator; provided that the Administrative Agent shall be authorized, upon receipt of written direction from Facility Administrator directing the Administrative Agent, to execute any acknowledgment or other agreement with the independent accountant required for the Administrative Agent to receive any of the reports or instructions provided for herein, which acknowledgment or agreement may include, among other things, (i) acknowledgement that the Facility Administrator has agreed that the procedures to be performed by the independent accountant are sufficient for the Borrower’s purposes, (ii) acknowledgment that the Administrative Agent has agreed that the procedures to be performed by an independent accountant are sufficient for the Administrative Agent’s purposes and that the Administrative Agent’s purposes is limited solely to receipt of the report, (iii) releases by the Administrative Agent (on behalf of itself and the Lenders) of claims against the independent accountant and acknowledgement of other limitations of liability in favor of the independent accountant, and (iv) restrictions or prohibitions on the disclosure of information or documents provided to it by such firm of independent accountants (including to the Lenders). Notwithstanding the foregoing, in no event shall the Administrative Agent be required to execute any agreement in respect of the independent accountant that the Administrative Agent determines adversely affects it in its individual capacity or which is in a form that is not reasonably acceptable to the Administrative Agent.

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Section 8.2.    Accounts.
(A)    Establishment. The Borrower has established and shall maintain or cause to be maintained:
(i)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, the “Collection Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Borrower and the Secured Parties;
(ii)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, being the “Supplemental Reserve Account”), bearing a designation clearly indicating that the funds deposited therein as described below are held for the benefit of the Borrower and the Secured Parties;
(iii)     for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, being the “Liquidity Reserve Account”), bearing a designation clearly indicating that the funds deposited therein as described below are held for the benefit of the Borrower and the Secured Parties;
(iv)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, being the “SAP Revenue Account”), bearing a designation clearly indicating that the funds deposited therein as described below are held for the benefit of the Borrower and the Secured Parties; and
(v)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule II attached hereto, being the “Takeout Transaction Account”, and together with the Collection Account, the Supplemental Reserve Account, the Liquidity Reserve Account, the SAP Revenue Account and the Takeout Transaction Account, each a “Paying Agent Account” and collectively the “Paying Agent Accounts”), bearing a designation clearly indicating that the funds deposited therein as described below are held for the benefit of the Borrower and the Secured Parties.
(B)    [Reserved].

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(C)    Deposits and Withdrawals from the Liquidity Reserve Account. Deposits into, and withdrawals from, the Liquidity Reserve Account shall, subject to Section 2.7(D), be made in the following manner:
(i)    On the Closing Date, the Borrower shall deliver to the Paying Agent for deposit into the Liquidity Reserve Account, an amount equal to the Liquidity Reserve Account Required Balance as of such date;
(ii)    From the proceeds of Advances hereunder, the Borrower shall deliver to the Paying Agent for deposit into the Liquidity Reserve Account amounts necessary to maintain on deposit therein an amount equal to or in excess of the Liquidity Reserve Account Required Balance as of the date of each such Advance, and on each Payment Date, the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to deposit into the Liquidity Reserve Account from available Collections (as set forth and in the order of priority established pursuant to Section 2.7(B)), funds in the amount required under Section 2.7(B), and the Borrower may, at its option, deposit additional funds into the Liquidity Reserve Account;
(iii)    If on any Payment Date (without giving effect to any withdrawal from the Liquidity Reserve Account) available funds on deposit in the Collection Account would be insufficient to make the payments due and payable on such Payment Date pursuant to Sections 2.7(B)(i) through (iii), the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report delivered pursuant to Section 3.1 of the Facility Administration Agreement, to withdraw from the Liquidity Reserve Account an amount equal to the lesser of such insufficiency and the amount on deposit in the Liquidity Reserve Account and deposit such amount into the Collection Account and apply such amount to payments set forth in Sections 2.7(B)(i) through (iii);
(iv)    Upon the occurrence of an Event of Default, the Administrative Agent (or the Facility Administrator with the written consent of the Administrative Agent) shall cause the Paying Agent, by providing written direction to the Paying Agent, to withdraw all amounts on deposit in the Liquidity Reserve Account and deposit such amounts into the Collection Account for distribution in accordance with Section 2.7(B);
(v)    On the earliest to occur of (a) the Maturity Date, (b) an Amortization Event (other than an Event of Default) and (c) the date on which the outstanding balance of the Advances is reduced to zero, the Administrative Agent shall cause the Paying Agent, by providing written direction to the Paying Agent, in the case of subclauses (a) and (b), and the Facility Administrator or the Borrower shall cause the Paying Agent, by providing written

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direction to the Paying Agent, in the case of subclause (c), to withdraw all amounts on deposit in the Liquidity Reserve Account and deposit such amounts into the Collection Account to be paid in accordance with Section 2.7(B);
(vi)    Unless an Event of Default or an Amortization Event has occurred and is continuing, on any Payment Date, if, as set forth on the Facility Administrator Report, amounts on deposit in the Liquidity Reserve Account are greater than the Liquidity Reserve Account Required Balance (after giving effect to all other distributions and disbursements on such Payment Date), the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to withdraw funds in excess of the Liquidity Reserve Account Required Balance from the Liquidity Reserve Account and disburse such amounts into the TEP CollateralBorrower’s Account; and
(vii)    On any Payment Date, if, as set forth on the Facility Administrator Report, the amount of funds in the Liquidity Reserve Account and in the Collection Account is equal to or greater than the aggregate outstanding balance of Advances (whether or not then due and payable) and all other amounts due and payable hereunder, then the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to withdraw all funds from the Liquidity Reserve Account and deposit such amounts into the Collection Account to pay all such amounts and the aggregate outstanding balance of all Advances (whether or not then due and payable).
Notwithstanding anything in this Section 8.2(C) to the contrary, in lieu of or in substitution for moneys otherwise required to be deposited to the Liquidity Reserve Account, the Borrower (or the Facility Administrator on behalf of the Borrower) may deliver or cause to be delivered to the Paying Agent a Letter of Credit; provided that any deposit into the Liquidity Reserve Account required to be made by the Borrower (or the Facility Administrator on behalf of the Borrower) after the replacement of amounts on deposit in the Liquidity Reserve Account with a Letter of Credit shall be made by the Borrower (or the Facility Administrator on behalf of the Borrower) by way of cash deposits to the Liquidity Reserve Account as provided in Section 2.7(B) or pursuant to the Borrower’s (or the Facility Administrator’s on behalf of the Borrower) causing an increase in the Letter of Credit or the delivery to the Paying Agent of an additional Letter of Credit.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Liquidity Reserve Account, and if any withdrawals from the Liquidity Reserve Account will be required under this Section 8.2(C) or otherwise, the Administrative Agent (or the Borrower with the written consent of the Administrative Agent) shall, no later than three (3) Business Days prior to the applicable Payment Date or payment date, direct the Paying Agent in writing to draw on the Letter of Credit, which direction shall provide the required draw amount. The Administrative Agent (or the Borrower

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with the written consent of the Administrative Agent) shall direct the Paying Agent to submit the drawing documents to the applicable Eligible Letter of Credit Bank no later than 5:00 P.M. (New York City time) on the second (2nd) Business Day after the Paying Agent receives such direction. Upon the receipt of the proceeds of any such drawing, the Paying Agent shall deposit such proceeds into the Liquidity Reserve Account. Any (A) references in the Transaction Documents to amounts on deposit in the Liquidity Reserve Account or amounts in or credited to the Liquidity Reserve Account shall include or be deemed to include the aggregate available amount of the Letters of Credit delivered to the Paying Agent pursuant to this Section 8.2(C), and (B) Letter of Credit delivered by the Borrower (or the Facility Administrator on behalf of the Borrower) to the Paying Agent pursuant to this Section 8.2(C) shall be held as an asset of the Liquidity Reserve Account and valued for purposes of determining the amount on deposit in the Liquidity Reserve Account at the amount as of any date then available to be drawn on such Letter of Credit.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Liquidity Reserve Account, then: (i) if the Letter of Credit is scheduled to expire by its terms and ten (10) days prior to the scheduled expiration date such Letter of Credit has not been extended or replaced, then the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall on such tenth (10th) day prior to the scheduled expiration date notify the Paying Agent in writing of such failure to extend or replace the Letter of Credit, and the Paying Agent shall, submit the drawing documents delivered to it by the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent to the Eligible Letter of Credit Bank no later than 5:00 P.M. (New York City time) on the second (2nd) Business Day prior to the scheduled expiration date and draw the full amount of such Letter of Credit and deposit the proceeds of such drawing into the Liquidity Reserve Account, and (ii) if the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent notifies the Paying Agent in writing that the financial institution issuing the Letter of Credit ceases to be an Eligible Letter of Credit Bank or a Responsible Officer of the Paying Agent otherwise receives written notice that the financial institution issuing the Letter of Credit ceases to be an Eligible Letter of Credit Bank, then the Paying Agent shall, no later than the second (2nd) Business Day after receipt of any such written notice by a Responsible Officer of the Paying Agent submit the drawing documents delivered to it by the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent to draw the full amount of such Letter of Credit and deposit the proceeds of such drawing into the Liquidity Reserve Account.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Liquidity Reserve Account, the stated amount of the Letter of Credit may be reduced from time to time, to the extent of any reduction in the dollar amount of the Liquidity Reserve Account Required Balance. Each month upon receipt by the Paying Agent of the Facility Administrator Report if such Facility Administrator Report shows a reduction in the Liquidity Reserve Account Required Balance, then

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the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall, prior to the related Payment Date, direct the Paying Agent to send the Eligible Letter of Credit Bank a letter in the form provided in the Letter of Credit to reduce the stated amount of the Letter of Credit. The Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall ensure that the letter submitted shall provide for the reduction to be effective as of the close of business on the related Payment Date. The reduction shall be in the amount shown on the Facility Administrator Report as the Liquidity Reserve Account “reductions” and the remaining stated amount of the Letter of Credit shall be equal to the Liquidity Reserve Account Required Balance “ending required amount” as shown on the Facility Administrator Report. Any drawing on the Letter of Credit may be reimbursed by the Borrower only from amounts remitted to the Borrower pursuant to clauses (xvi) or (xvii) of Section 2.7(B) or clauses (v) or (vi) of Section 2.7(C).
Notwithstanding the foregoing or any other provision to the contrary in this Agreement or any other Transaction Document, in no event shall the Paying Agent be required to report, track, calculate or monitor the value, available amount or any other information regarding any Letter of Credit for any party hereto or beneficiary of or under the Liquidity Reserve Account, except as expressly required pursuant to this Section 8.2(C).
(D)    Deposits and Withdrawals from the Supplemental Reserve Account. Deposits into, and withdrawals from, the Supplemental Reserve Account shall, subject to Section 2.7(D), be made in the following manner:
(i)    On each Payment Date, to the extent of Distributable Collections and in accordance with and subject to the priority of payments set forth in Section 2.7(B), the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to deposit into the Supplemental Reserve Account an amount equal to the Supplemental Reserve Account Deposit until the amount on deposit equals the Supplemental Reserve Account Required Balance.
(ii)    On each Payment Date, the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to deposit into the Supplemental Reserve Account from available Collections (as set forth and in the order of priority established pursuant to Section 2.7(B)), funds in the amount required under Section 2.7(B), if any, and the Borrower may, at its option, deposit additional funds into the Supplemental Reserve Account;
(iii)    The Paying Agent shall release funds from the Supplemental Reserve Account to pay the following amounts upon direction from the Facility Administrator set

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forth in an Officer’s Certificate (no more than once per calendar month) in the following order of priority:
(d)
the costs (inclusive of labor costs) of replacement of any Inverter that no longer has the benefit of a Manufacturer Warranty and for which (1) the Manager is not obligated under the related Management Agreement to cover the replacement costs of such Inverter (or if so obligated, has failed to pay such costs) and the related Financing Fund has insufficient funds to pay replacement costs for such Inverter or (2) the Facility Administrator in its role as Manager has paid under the related Management Agreement;
(e)
the amount of any deductible in connection with each claim paid by the Tax Loss Insurer under the related Tax Loss Insurance Policy plus the amount of the difference, if any, between (1) the amount of a Tax Loss Indemnity and (2) the sum of the amount of proceeds of a Tax Loss Insurance Policy received by a Financing Fund, as loss payee under such Tax Loss Insurance Policy with respect to the Tax Loss Indemnity and the amount of any deductible in connection therewith; and
(f)
each Purchase Option Price when due and payable under the terms of a Financing Fund LLCA upon exercise by the related Managing Member of the related Purchase Option.
(iv)    Unless an Event of Default or an Amortization Event has occurred and is continuing, on any Payment Date, if, as set forth on the Facility Administrator Report, amounts on deposit in the Supplemental Reserve Account are greater than the Supplemental Reserve Account Required Balance (after giving effect to all other distributions and disbursements and all releases and withdrawals on such Payment Date), the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to withdraw funds in excess of the Supplemental Reserve Account Required Balance from the Supplemental Reserve Account and disburse such amounts into the TEP CollateralBorrower’s Account;
(v)    If on any Payment Date (after giving effect to any withdrawals from the Liquidity Reserve Account) available funds on deposit in the Collection Account would be insufficient to pay the interest payments or other amounts due and payable pursuant to Sections 2.7(B)(i) through (iii) on such Payment Date, the Facility Administrator shall direct the Paying Agent, based on the Facility Administrator Report, to withdraw from the

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Supplemental Reserve Account an amount equal to the lesser of such insufficiency and the amount on deposit in the Supplemental Reserve Account and deposit such amount into the Collection Account and apply such amount to payments set forth in Sections 2.7(B)(i) through (iii); and
(vi)    If on any Payment Date, the Borrower has provided notice to the Administrative Agent that (1) a Managing Member has irrevocably provided notice to the related Tax Equity Investor that it will not exercise the related Purchase Option or (2) the period in which such Purchase Option may be exercised under the related Financing Fund LLCA has expired and cannot be extended, the Borrower may direct the Paying Agent, to withdraw from the Supplemental Reserve Account any amounts on deposit therein in respect of clause (ii)(a) of the definition of “Supplemental Reserve Account Required Balance” and deposit such amounts into the Collection Account for application in accordance with Section 2.7; and
(vii)    On the date on which the Aggregate Outstanding Advances are reduced to zero, the Administrative Agent shall cause the Paying Agent, pursuant to a written direction, to withdraw all amounts on deposit in the Supplemental Reserve Account and deposit such amounts into the Collection Account to be paid in accordance with Section 2.7(B).
Notwithstanding anything in this Section 8.2(D) to the contrary, in lieu of or in substitution for moneys otherwise required to be deposited to the Supplemental Reserve Account, the Borrower (or the Facility Administrator on behalf of the Borrower) may deliver or cause to be delivered to the Paying Agent a Letter of Credit; provided that any deposit into the Supplemental Reserve Account required to be made by the Borrower (or the Facility Administrator on behalf of the Borrower) after the replacement of amounts on deposit in the Supplemental Reserve Account with a Letter of Credit shall be made by the Borrower (or the Facility Administrator on behalf of the Borrower) by way of cash deposits to the Supplemental Reserve Account as provided in Section 2.7(B) or pursuant to the Borrower’s (or the Facility Administrator’s on behalf of the Borrower) causing an increase in the Letter of Credit or the delivery to the Paying Agent of an additional Letter of Credit.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Supplemental Reserve Account, and if any withdrawals from the Supplemental Reserve Account will be required under this Section 8.2(D) or otherwise, the Administrative Agent (or the Borrower with the written consent of the Administrative Agent) shall, no later than three (3) Business Days prior to the applicable Payment Date or payment date, direct the Paying Agent in writing to draw on the Letter of Credit, which direction shall provide the required draw amount. The Administrative Agent (or the Borrower with the written consent of the Administrative Agent) shall direct the Paying Agent to submit the drawing documents to the applicable Eligible Letter of Credit Bank no later than 5:00

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P.M. (New York City time) on the second (2nd) Business Day after the Paying Agent receives such direction. Upon the receipt of the proceeds of any such drawing, the Paying Agent shall deposit such proceeds into the Supplemental Reserve Account. Any (A) references in the Transaction Documents to amounts on deposit in the Supplemental Reserve Account or amounts in or credited to the Supplemental Reserve Account shall include or be deemed to include the aggregate available amount of the Letters of Credit delivered to the Paying Agent pursuant to this Section 8.2(D), and (B) Letter of Credit delivered by the Borrower (or the Facility Administrator on behalf of the Borrower) to the Paying Agent pursuant to this Section 8.2(D) shall be held as an asset of the Supplemental Reserve Account and valued for purposes of determining the amount on deposit in the Supplemental Reserve Account at the amount as of any date then available to be drawn on such Letter of Credit.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Supplemental Reserve Account, then: (i) if the Letter of Credit is scheduled to expire by its terms and ten (10) days prior to the scheduled expiration date such Letter of Credit has not been extended or replaced, then the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall on such tenth (10th) day prior to the scheduled expiration date notify the Paying Agent in writing of such failure to extend or replace the Letter of Credit, and the Paying Agent shall, submit the drawing documents delivered to it by the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent to the Eligible Letter of Credit Bank no later than 5:00 P.M. (New York City time) on the second (2nd) Business Day prior to the scheduled expiration date and draw the full amount of such Letter of Credit and deposit the proceeds of such drawing into the Supplemental Reserve Account, and (ii) if the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent notifies the Paying Agent in writing that the financial institution issuing the Letter of Credit ceases to be an Eligible Letter of Credit Bank or a Responsible Officer of the Paying Agent otherwise receives written notice that the financial institution issuing the Letter of Credit ceases to be an Eligible Letter of Credit Bank, then the Paying Agent shall, no later than the second (2nd) Business Day after receipt of any such written notice by a Responsible Officer of the Paying Agent submit the drawing documents delivered to it by the Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent to draw the full amount of such Letter of Credit and deposit the proceeds of such drawing into the Supplemental Reserve Account.
If at any time a Letter of Credit is held by the Paying Agent as an asset of the Supplemental Reserve Account, the stated amount of the Letter of Credit may be reduced from time to time, to the extent of any reduction in the dollar amount of the Supplemental Reserve Account Required Balance. Each month upon receipt by the Paying Agent of the Facility Administrator Report if such Facility Administrator Report shows a reduction in the Supplemental Reserve Account Required Balance, then the Borrower (or the Facility Administrator on behalf of the Borrower) or the

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Administrative Agent shall, prior to the related Payment Date, direct the Paying Agent to send the Eligible Letter of Credit Bank a letter in the form provided in the Letter of Credit to reduce the stated amount of the Letter of Credit. The Borrower (or the Facility Administrator on behalf of the Borrower) or the Administrative Agent shall ensure that the letter submitted shall provide for the reduction to be effective as of the close of business on the related Payment Date. The reduction shall be in the amount shown on the Facility Administrator Report as the Supplemental Reserve Account “reductions” and the remaining stated amount of the Letter of Credit shall be equal to the Supplemental Reserve Account Required Balance “ending required amount” as shown on the Facility Administrator Report. Any drawing on the Letter of Credit may be reimbursed by the Borrower only from amounts remitted to the Borrower pursuant to clauses (xvi) or (xvii) of Section 2.7(B) or clauses (v) or (vi) of Section 2.7(C).
Notwithstanding the foregoing or any other provision to the contrary in this Agreement or any other Transaction Document, in no event shall the Paying Agent be required to report, track, calculate or monitor the value, available amount or any other information regarding any Letter of Credit for any party hereto or beneficiary of or under the Supplemental Reserve Account, except as expressly required pursuant to this Section 8.2(D).
    (E)    Deposits and Withdrawals from the SAP Revenue Account. Deposits into the SAP Revenue Account shall be made consistent with Section 5.1(R). The Paying Agent shall withdraw all amounts on deposit in the SAP Revenue Account in excess of $25,000 on the first Business Day of each calendar month and remit such amounts to the Collection Account. The Manager shall be permitted to withdraw up to $25,000 in the aggregate during each Collection Period from the SAP Revenue Account to pay Operational Amounts in accordance with the related SAP Financing Documents. On the date on which the Aggregate Outstanding Advances are reduced to zero, the Administrative Agent shall cause the Paying Agent, pursuant to a written direction, to withdraw all amounts on deposit in the SAP Revenue and deposit such amounts into the Collection Account to be paid in accordance with Section 2.7(B).
(F)    Paying Agent Account Control. (i) Each Paying Agent Account shall be established and at all times maintained with the Paying Agent which shall act as a “securities intermediary” (as defined in Section 8-102 of the UCC) and a “bank” (as defined in Section 9-102 of the UCC) hereunder (in such capacities, the “Securities Intermediary”) with respect to each Paying Agent Account. The Paying Agent hereby confirms that, as of the Closing Date, the account numbers of each of the Paying Agent Accounts are as described on Schedule II attached hereto.
(ii)    Each Paying Agent Account shall be a “securities account” as defined in Section 8-501 of the UCC and shall be maintained by the Paying Agent as a securities intermediary for and in the name of the Borrower, subject to the lien of the Administrative

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Agent, for the benefit of the Secured Parties.  The Paying Agent shall treat the Administrative Agent as the “entitlement holder” (within the meaning of Section 8-102(a)(7) of the UCC) in respect of all “financial assets” (within the meaning of Section 8-102(a)(9) of the UCC) credited to the Paying Agent Accounts.
(iii)    The Paying Agent hereby confirms and agrees that:
(a)    the Paying Agent shall not change the name or account number of any Paying Agent Account without the prior written consent of the Administrative Agent and the Borrower;
(b)    all securities or other property underlying any financial assets (as hereinafter defined) credited to a Paying Agent Account shall be registered in the name of the Paying Agent, indorsed to the Paying Agent or indorsed in blank or credited to another securities account maintained in the name of the Paying Agent, and in no case will any financial asset credited to a Paying Agent Account be registered in the name of the Borrower or any other Person, payable to the Borrower or specially indorsed to the Borrower or any other Person, except to the extent the foregoing have been specially indorsed to the Administrative Agent, for the benefit of the Secured Parties, or in blank;
(c)    all property transferred or delivered to the Paying Agent pursuant to this Agreement will be credited to the appropriate Borrower Account in accordance with the terms of this Agreement;
(d)    each Paying Agent Account is an account to which financial assets are or may be credited, and the Paying Agent shall, subject to the terms of this Agreement, treat each of the Borrower and the Facility Administrator as entitled to exercise the rights that comprise any financial asset credited to each such Paying Agent Account; and
(e)    notwithstanding the intent of the parties hereto, to the extent that any Paying Agent Account shall be determined to constitute a “deposit account” within the meaning of Section 9-102(a)(29) of the UCC, such Paying Agent Account shall be subject to the exclusive control of the Administrative Agent, for the benefit of the Secured Parties, and the Paying Agent will comply with instructions originated by the Administrative Agent directing disposition of the funds in such Paying Agent Account, without further consent by the Borrower or the Facility Administrator; provided that, notwithstanding the foregoing, the Administrative Agent hereby

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


authorizes the Paying Agent to honor withdrawal, payment, transfer or other instructions directing disposition of the funds in the Collection Account received from the Borrower or the Facility Administrator, on its behalf, pursuant to Section 2.7 or this Section 8.2.
(iv)    The Paying Agent hereby agrees that each item of property (including, without limitation, any investment property, financial asset, security, instrument or cash) credited to any Paying Agent Account shall be treated as a “financial asset” within the meaning of Section 8-102(a)(9) of the UCC.
(v)    If at any time the Paying Agent shall receive an “entitlement order” (as defined in Section 8-102(a)(8) of the UCC) (an “Entitlement Order”) from the Administrative Agent (i.e., an order directing a transfer or redemption of any financial asset in any Paying Agent Account), or any “instruction” (within the meaning of Section 9-104 of the UCC), originated by the Administrative Agent, the Paying Agent shall comply with such Entitlement Order or instruction without further consent by the Borrower, the Facility Administrator or any other Person. Neither the Facility Administrator nor the Borrower shall make any withdrawals from any Paying Agent Account, except pursuant to Section 2.7 or this Section 8.2.
(vi)    In the event that the Paying Agent has or subsequently obtains by agreement, by operation of law or otherwise a security interest in any Paying Agent Account or any financial assets, funds, cash or other property credited thereto or any security entitlement with respect thereto, the Paying Agent hereby agrees that such security interest shall be subordinate to the security interest of the Administrative Agent, for the benefit of the Secured Parties. Notwithstanding the preceding sentence, the financial assets, funds, cash or other property credited to any Paying Agent Account will not be subject to deduction, set-off, banker’s lien, or any other right in favor of any Person other than the Administrative Agent, for the benefit of the Secured Parties (except that the Paying Agent may set-off (i) all amounts due to the Paying Agent in its capacity as securities intermediary in respect of customary fees and expenses for the routine maintenance and operation of the Paying Agent Accounts, and (ii) the face amount of any checks that have been credited to the Paying Agent Accounts but are subsequently returned unpaid because of uncollected or insufficient funds).
(vii)    Regardless of any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the “bank’s jurisdiction” (within the meaning of Section 9-304 of the UCC) and the “security intermediary’s jurisdiction” (within the meaning of Section 8-110 of the UCC).

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(viii)    If, at any time, the Paying Agent resigns, is removed hereunder or ceases to meet the eligibility requirements of an Eligible Institution, the Facility Administrator, for the benefit of the Administrative Agent and the Lenders, shall within thirty (30) days establish a new Collection Account, Supplemental Reserve Account, Liquidity Reserve Account, the SAP Revenue Account, and Takeout Transaction Account meeting the conditions specified above with an Eligible Institution reasonably acceptable to the Administrative Agent and transfer any cash and/or any investments held therein or with respect thereto to such new Collection Account, Supplemental Reserve Account, Liquidity Reserve Account, SAP Revenue Account, or Takeout Transaction Account, as applicable. From the date such new Collection Account, Supplemental Reserve Account, Liquidity Reserve Account, SAP Revenue Account, or Takeout Transaction Account is established, it shall be the “Collection Account,” “Supplemental Reserve Account,” “Liquidity Reserve Account,” “SAP Revenue Account,” or “Takeout Transaction Account” hereunder, as applicable.
(G)    Permitted Investments. Prior to an Event of Default, the Facility Administrator (and after an Event of Default, the Administrative Agent) may direct each banking institution at which the Collection Account, the Liquidity Reserve Account, Supplemental Reserve Account, SAP Revenue Account, or Takeout Transaction Account shall be established, in writing, to invest the funds held in such accounts in one or more Permitted Investments. Absent such written direction, such funds shall remain uninvested. All investments of funds on deposit in the Collection Account, the Liquidity Reserve Account, Supplemental Reserve Account, SAP Revenue Account, or Takeout Transaction Account shall be uninvested so that such funds will be available on the Business Day immediately preceding the date on which the funds are to be disbursed from such account, unless otherwise expressly set forth herein. All interest derived from such Permitted Investments shall be deemed to be “investment proceeds” and shall be deposited into such account to be distributed in accordance with the requirements hereof. The taxpayer identification number associated with the Collection Account, the Liquidity Reserve Account, Supplemental Reserve Account, SAP Revenue Account, and Takeout Transaction Account shall be that of the Borrower, and the Borrower shall report for federal, state and local income tax purposes the income, if any, earned on funds in such accounts.
Section 8.3.    Adjustments. If the Facility Administrator makes a mistake with respect to the amount of any Collection or payment and deposits, pays or causes to be deposited or paid, an amount that is less than or more than the actual amount thereof, the Facility Administrator shall appropriately adjust the amounts subsequently deposited into the applicable account or paid out to reflect such mistake for the date of such adjustment. Any Eligible Solar Asset in respect of which a dishonored check is received shall be deemed not to have been paid.

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ARTICLE IX

THE PAYING AGENT
Section 9.1.    Appointment. The appointment of Wells Fargo Bank, National Association is hereby confirmed by the other parties hereto (other than the Verification Agent) as Paying Agent, and accepts such appointment subject to the terms of this Agreement.
Section 9.2.    Representations and Warranties. The Paying Agent represents to the other parties hereto as follows:
(A)    Organization; Corporate Powers. The Paying Agent is duly incorporated and validly existing under the laws of the jurisdiction of its incorporation and has all requisite power and authority to conduct its business, to own its property and to execute, deliver and perform all of its obligations under this Agreement, and no license, permit, consent or approval, is required to be obtained, effective or given by the Paying Agent to enable it to perform its obligations hereunder.
(B)    Authority. The execution, delivery and performance by the Paying Agent of this Agreement have been duly authorized by all necessary action on the part of the Paying Agent.
(C)    Enforcement. This Agreement constitutes the legal, valid and binding obligation of the Paying Agent, enforceable against the Paying Agent in accordance with its terms except as such enforcement may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and general principles of equity, regardless of whether such enforcement is sought at equity or at law.
(D)    No Conflict. The Paying Agent is not in violation of any law, rule, or regulation governing the banking or trust powers of the Paying Agent applicable to it or any indenture, lease, loan or other agreement to which the Paying Agent is a party or by which it or its assets may be bound or affected, except for such laws, rules or regulations or indentures, leases, loans or other agreements the violation of which would not have a material adverse effect on the Paying Agent’s abilities to perform its obligations in accordance with the terms of this Agreement.
Section 9.3.    Limitation of Liability of the Paying Agent. Notwithstanding anything contained herein to the contrary, this Agreement has been executed by Wells Fargo Bank, National Association, not in its individual capacity, but solely as the Paying Agent, and in no event shall Wells Fargo Bank, National Association have any liability for the representations, warranties,

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covenants, agreements or other obligations of the other parties hereto or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the party responsible therefor.
Section 9.4.    Certain Matters Affecting the Paying Agent. Notwithstanding anything herein to the contrary:
(A)    The Paying Agent undertakes to perform such duties and only such duties as are specifically set forth in this Agreement. The Paying Agent shall not have any duties or responsibilities except those expressly set forth in this Agreement.
(B)    The Paying Agent shall not be subject to any fiduciary or other implied duties, obligations or covenants regardless of whether an Event of Default has occurred and is continuing.
(C)    The Paying Agent shall not be liable for any action taken or any error of judgment made in good faith by an officer or officers of the Paying Agent, unless it shall be conclusively determined by the final judgment of a court of competent jurisdiction not subject to appeal or review that the Paying Agent was grossly negligent or acted with willful misconduct in ascertaining the pertinent facts.
(D)    The Paying Agent shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with any direction given or certificate or other document delivered to the Paying Agent under this Agreement or any other Transaction Document.
(E)    None of the provisions of this Agreement or any other Transaction Document shall require the Paying Agent to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.
(F)    The Paying Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties, and shall be under no obligation to inquire as to the adequacy, content, accuracy or sufficiency of any such information or be under any obligation to make any calculation (or re-calculation), certification, or verification in respect of any such information and shall not be liable for

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any loss that may be occasioned thereby. The Paying Agent may also, but shall not be required to, 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.
(G)    Whenever in the administration of the provisions of this Agreement or any other Transaction Document the Paying Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action to be taken hereunder, such matter may, in the absence of gross negligence, willful misconduct or bad faith on the part of the Paying Agent, be deemed to be conclusively proved and established by a certificate delivered to the Paying Agent hereunder, and such certificate, in the absence of gross negligence, willful misconduct or bad faith on the part of the Paying Agent, shall be full warrant to the Paying Agent for any action taken, suffered or omitted by it under the provisions of this Agreement or any other Transaction Document.
(H)    The Paying Agent, at the expense of the Borrower, may consult with counsel, and the advice or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or opinion of counsel; provided however that such costs of counsel are reasonable and documented. Before the Paying Agent acts or refrains from acting hereunder, it may require and shall be entitled to receive an Officer’s Certificate and/or an opinion of counsel, the costs of which (including the Paying Agent's reasonable and documented attorney's fees and expenses) shall be paid by the party requesting that the Paying Agent act or refrain from acting. The Paying Agent shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or opinion of counsel.
(I)    The Paying Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, entitlement order, approval or other paper or document.
(J)    Except as provided expressly in Section 8.2(G) hereof, the Paying Agent shall have no obligation to invest and reinvest any cash held in any of the accounts hereunder in the absence of a timely and specific written investment direction pursuant to the terms of this Agreement. In no event shall the Paying Agent be liable for the selection of investments or for investment losses incurred thereon. The Paying Agent shall have no liability in respect of losses incurred as a result of the liquidation of any investment prior to its stated maturity or the failure of another party to timely provide a written investment direction pursuant to the terms of this Agreement. Investments in any Permitted Investments are not obligations or recommendations of, or endorsed or guaranteed by, the Paying Agent

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or its Affiliates. The Paying Agent and its Affiliates may provide various services for Permitted Investments and may be paid fees for such services. Each party hereto understands and agrees that proceeds of the sale of investments of the funds in any account maintained with the Paying Agent will be deposited by the Paying Agent into the applicable accounts on the Business Day on which the Paying Agent receives appropriate instructions hereunder, if such instructions received by the Paying Agent prior to the deadline for same day sale of such investments. If the Paying Agent receives such instructions after the applicable deadline for the sale of such investments, such proceeds will be deposited by the Paying Agent into the applicable account on the next succeeding Business Day. The parties hereto agree that notifications after the completion of purchases and sales of investments shall not be provided by the Paying Agent hereunder, and the Paying Agent shall make available, upon request and in lieu of notifications, periodic account statements that reflect such investment activity. No statement shall be made available if no investment activity has occurred during such period.
(K)    The Paying Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any action or omission on the part of any agent, attorney, custodian or nominee so appointed.
(L)    Any corporation or entity into which the Paying Agent may be merged or converted or with which it may be consolidated, or any corporation or entity resulting from any merger, conversion or consolidation to which the Paying Agent shall be a party, or any corporation or entity succeeding to the business of the Paying Agent shall be the successor of the Paying Agent hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.
(M)    In no event shall the Paying Agent be liable for punitive, special, indirect or consequential loss or damage of any kind whatsoever (including lost profits), even if the Paying Agent has been advised of such loss or damage and regardless of the form of action.
(N)    In no event shall the Paying Agent be liable for any failure or delay in the performance of its obligations under this Agreement or any related documents because of circumstances beyond the Paying Agent’s control, including a failure, termination, or suspension of a clearing house, securities depositary, settlement system or central payment system in any applicable part of the world or acts of God, flood, war (whether declared or undeclared), civil or military disturbances or hostilities, nuclear or natural catastrophes,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


political unrest, explosion, severe weather or accident, earthquake, terrorism, fire, riot, labor disturbances, strikes or work stoppages for any reason, embargo, government action, including any laws, ordinances, regulations or the like (whether domestic, federal, state, county or municipal or foreign) which delay, restrict or prohibit the providing of the services contemplated by this Agreement or any other Transaction Document or any related documents, or the unavailability of communications or computer facilities, the failure of equipment or interruption of communications or computer facilities, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility, or any other causes beyond the Paying Agent’s control whether or not of the same class or kind as specified above.
(O)    Knowledge of the Paying Agent shall not be attributed or imputed to any affiliate, line of business, or other division of Wells Fargo Bank, National Association (and vice versa).
(P)    The right of the Paying Agent to perform any permissive or discretionary act enumerated in this Agreement or any other Transaction Document shall not be construed as a duty.
(Q)    Absent gross negligence, bad faith or willful misconduct (in each case as conclusively determined by a court of competent jurisdiction pursuant to a final order or verdict not subject to appeal) on the part of, Wells Fargo Bank, National Association in acting in each of its capacities under this Agreement and the related Transaction Documents shall not constitute impermissible self-dealing or a conflict of interest, and the parties hereto hereby waive any conflict of interest presented by such service. Wells Fargo Bank, National Association may act as agent for, provide banking, custodial, collateral agency, verification and other services to, and generally engage in any kind of business, with others to the same extent as if Wells Fargo Bank, National Association, were not a party hereto. Nothing in this Agreement or any other Transaction Document shall in any way be deemed to restrict the right of Wells Fargo Bank, National Association to perform such services for any other person or entity, and the performance of such services for others will not, in and of itself, be deemed to violate or give rise to any duty or obligation to any party hereto not specifically undertaken by Wells Fargo Bank, National Association hereunder or under any other Transaction Document.
(R)    The Paying Agent shall not be responsible for preparing or filing any reports or returns relating to federal, state or local income taxes with respect to this Agreement or any other Transaction Document other than for the Paying Agent’s compensation.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(S)    The Paying Agent shall not be deemed to have notice or knowledge of, or be required to act based on, any event or information (including any Event of Default, Amortization Event or any other default and including the sending of any notice) unless a Responsible Officer of the Paying Agent has actual knowledge or shall have received written notice thereof. In the absence of such actual knowledge or receipt of such notice, the Paying Agent may conclusively assume that none of such events have occurred and the Paying Agent shall not have any obligation or duty to determine whether any Event of Default, Amortization Event or any other default has occurred. The delivery or availability of reports or other documents to the Paying Agent (including publicly available reports or documents) shall not constitute actual or constructive knowledge or notice of information contained in or determinable from those reports or documents, except for such information provided to be delivered under this Agreement to the Paying Agent; and knowledge or information acquired by any Responsible Officer of the Paying Agent in any of its respective capacities hereunder or under any other document related to this transaction, provided that the foregoing shall not relieve the Person acting as Paying Agent, as applicable, from its obligations to perform or responsibility for the manner of performance of its duties in a separate capacity under the Transaction Documents.
(T)     Except as otherwise provided in this Article IX:
(i)    except as expressly required pursuant to the terms of this Agreement, the Paying Agent shall not be required to make any initial or periodic examination of any documents or records for the purpose of establishing the presence or absence of defects, the compliance by the Borrower or any other Person with its representations and warranties or for any other purpose except as expressly required pursuant to the terms of this Agreement;
(ii)    whether or not therein expressly so provided, every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Paying Agent shall be subject to the provisions of this Article IX;
(iii)    the Paying Agent shall not have any liability with respect to the acts or omissions of any other Person, and may assume compliance by each of the other parties to the Transaction Documents with their obligations thereunder unless a Responsible Officer of the Paying Agent is notified of any such noncompliance in writing;
(iv)    under no circumstances shall the Paying Agent be personally liable for any representation, warranty, covenant, obligation or indebtedness of any other party to the Transaction Documents (other than Wells Fargo Bank, National Association in any of its capacities under the Transaction Documents);

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(v)    the Paying Agent shall not be held responsible or liable for or in respect of, and makes no representation or warranty with respect to (A) any recording, filing or depositing of this Agreement or any agreement referred to herein or any financing statement, continuation statement or amendments to a financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any re-recording, refiling or redepositing of any thereof, or (B) the existence, genuineness, value or protection of any collateral, for the legality, enforceability, effectiveness or sufficiency of the Transaction Documents or for the monitoring, creation, maintenance, enforceability, existence, status, validity, priority or perfection of any security interest, lien or collateral or the performance of any collateral; and
(vi)    the Paying Agent shall not be required to take any action hereunder if it shall have reasonably determined, or shall have been advised by its counsel, that such action is likely to result in liability on the part of the Paying Agent or is contrary to the terms hereof or any other Transaction Document to which it is a party or is not in accordance with applicable laws.
(U)    It is expressly understood and agreed by the parties hereto that the Paying Agent (i) has not provided nor will it provide in the future, any advice, counsel or opinion regarding the tax, financial, investment, securities law or insurance implications and consequences of the consummation, funding and ongoing administration of this Agreement and the matters contemplated herein, including, but not limited to, income, gift and estate tax issues, and the initial and ongoing selection and monitoring of financing arrangements, (ii) has not made any investigation as to the accuracy of any representations, warranties or other obligations of any other party to this Agreement or the other Transaction Documents or any other document or instrument and shall not have any liability in connection therewith and (iii) has not prepared or verified, or shall be responsible or liable for, any information, disclosure or other statement in any disclosure or offering document delivered in connection with this Agreement or the other Transaction Documents.
(V)    The recitals contained herein shall not be taken as the statements of the Paying Agent, and the Paying Agent does not assume any responsibility for their correctness. The Paying Agent does not make any representation regarding the validity, sufficiency or enforceability of this Agreement or the other Transaction Documents or as to the perfection or priority of any security interest therein, except as expressly set forth in Section 9.2(C).
(W)    In the event that (i) the Paying Agent is unsure as to the application or interpretation of any provision of this Agreement or any other Transaction Document, (ii)

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this Agreement is silent or is incomplete as to the course of action that the Paying Agent is required or permitted to take with respect to a particular set of facts, or (iii) more than one methodology can be used to make any determination or calculation to be performed by the Paying Agent hereunder, then the Paying Agent may give written notice to the Administrative Agent requesting written instruction and, to the extent that the Paying Agent acts or refrains from acting in good faith in accordance with any such written instruction, the Paying Agent shall not be personally liable to any Person. If the Paying Agent shall not have received such written instruction within ten (10) calendar days of delivery of notice to the Administrative Agent (or within such shorter period of time as may reasonably be specified in such notice or as may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking any action, and shall have no liability to any Person for such action or inaction.
(X)    The Paying Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement or any other Transaction Document or to institute, conduct or defend any litigation hereunder or thereunder or in relation hereto or thereto at the request, order or direction of any of any Person, unless such Person with the requisite authority shall have offered to the Paying Agent security or indemnity satisfactory to the Paying Agent against the costs, expenses and liabilities (including the reasonable and documented fees and expenses of the Paying Agent's counsel and agents) which may be incurred therein or thereby.
(Y)    The Paying Agent shall have no duty (i) to maintain or monitor any insurance or (ii) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Collateral.
(Z)    Notwithstanding anything to the contrary in this Agreement, the Paying Agent shall not be required to take any action that is not in accordance with applicable law.
Section 9.5.    Indemnification. The Borrower and the Facility Administrator (for so long as the Facility Administrator is an Affiliate of the Borrower) agree, jointly and severally, to reimburse and indemnify, defend and hold harmless the Paying Agent, in its individual and representative capacities, and its officers, directors, agents and employees (collectively, the “Paying Agent Indemnified Parties”) against any and all fees, costs, damages, losses, suits, claims, judgments, liabilities, obligations, penalties, actions, expenses (including the reasonable and documented fees and expenses of counsel and court costs) or disbursements of any kind and nature whatsoever, regardless of the merit, which may be imposed on, incurred by or demanded, claimed or asserted against any of them in any way directly or indirectly relating to or arising out of or in connection

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with this Agreement or any other Transaction Document or any other document delivered in connection herewith or therewith or the transactions contemplated hereby or thereby, or the enforcement of any of the terms hereof or thereof or of any such other documents, including in connection with any enforcement (including any action, claim or suit brought) by any Paying Agent Indemnified Party of its rights hereunder or thereunder (including rights to indemnification), provided, that none of the Borrower or the Facility Administrator shall be liable for any of the foregoing to the extent arising from the gross negligence, willful misconduct or bad faith of the Paying Agent, as determined by the final judgment of a court of competent jurisdiction, no longer subject to appeal or review. The provisions of this Section 9.5 shall survive the discharge, termination or assignment of this Agreement or any related agreement or the earlier of the resignation or removal of the Paying Agent. This Section 9.5 shall not apply with respect to Taxes other than any Taxes that represent losses, liabilities, claims and damages arising from any non-Tax Proceeding. The Paying Agent Indemnified Parties’ reasonable and documented expenses are intended as expenses of administration.
Section 9.6.    Successor Paying Agent. The Paying Agent may resign at any time by giving at least thirty (30) days’ prior written notice thereof to the other parties hereto; provided, that no such resignation shall become effective until a successor Paying Agent that is satisfactory to the Administrative Agent and, to the extent no Event of Default or Amortization Event has occurred and is continuing, the Borrower, has been appointed hereunder. The Paying Agent may be removed at any time for cause by at least thirty (30) days’ prior written notice received by the Paying Agent from the Administrative Agent. Upon any such resignation or removal, the Administrative Agent shall have the right to appoint a successor Paying Agent that is satisfactory to the Borrower (unless an Event of Default or Amortization Event has occurred and is continuing). If no successor Paying Agent shall have been so appointed and shall have accepted such appointment within thirty (30) days after the exiting Paying Agent’s giving notice of resignation or receipt of notice of removal, then the exiting Paying Agent may, at the sole expense (including all fees, costs and expenses (including attorneys’ reasonable and documented fees and expenses) incurred in connection with such petition) of the Borrower, petition a court of competent jurisdiction to appoint a successor Paying Agent. Upon the acceptance of any appointment as the Paying Agent hereunder by a successor Paying Agent, such successor Paying Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the exiting Paying Agent, and the exiting Paying Agent shall be discharged from its duties and obligations hereunder. After any exiting Paying Agent’s resignation hereunder, the provisions of this Article IX shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Paying Agent hereunder. If the Paying Agent consolidates with, merges or converts into, or transfers or sells all or substantially all its corporate trust business or assets to, another Person, the resulting, surviving or transferee Person without any further act shall be the successor Paying Agent.

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ARTICLE X

MISCELLANEOUS
Section 10.1.    Survival. All representations and warranties made by the Borrower and the Facility Administrator herein and all indemnification obligations of the Borrower and the Facility Administrator hereunder shall survive, and shall continue in full force and effect, after the making and the repayment of the Advances hereunder and the termination of this Agreement.
Section 10.2.    Amendments, Etc.     (A) No amendment to or waiver of any provision of this Agreement, nor consent to any departure therefrom by the parties hereto, shall in any event be effective unless the same shall be in writing and signed by the Administrative Agent, on behalf of the Lenders and each Funding Agent, and the Borrower; provided that no such amendment or waiver shall (i) reduce the amount of or extend the maturity of any Advance or reduce the rate or extend the time of payment of interest thereon, or reduce or alter the timing of any other amount payable to any Lender hereunder, including amending or modifying any of the definitions related to such terms, in each case without the consent of the Lenders affected thereby, (ii) reduce the percentage specified in the definition of the Majority Class B Lenders without the written consent of all Class B Lenders, (iii) reduce the percentage specified in the definition of the Majority Lenders without the written consent of all Lenders, (iv) amend, modify or waive any provision of Sections 7.14 through 7.25 hereof without the written consent of all Funding Agents, (v) modify or amend this Agreement in a manner that could reasonably be expected to materially and adversely affect the Class B Lenders in a manner (economic or otherwise) disproportionate to the Class A Lenders, without the consent of the Class B Lenders, (vi) affect the rights or duties of the Paying Agent, Verification Agent or Facility Administrator under this Agreement without the written consent of such Paying Agent, Verification Agent or Facility Administrator, respectively, or (vii) amend or modify any provision of Section 6.1 or Section 6.2 without the consent of all Lenders. The Borrower agrees to provide notice to each party hereto of any amendments to or waivers of any provision of this Agreement; provided that the Borrower shall provide the Conduit Lender with prompt written notice of any amendment to any provision of this Agreement, prior to such amendment becoming effective.
(B)    Notwithstanding the foregoing or any other provision of this Agreement or any other Transaction Document to the contrary, the Administrative Agent, on behalf of the Lenders and each Funding Agent, and the Borrower may enter into an amendment hereto for the purpose of subdividing the Advances into separate tranches or reallocating the outstanding principal balance of the Advances among the Class A Advances and the Class B Advances; provided, no such amendment may be executed without the consent of all Lenders affected thereby; provided further, that such amendment shall be at the expense of

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the Lender or Lenders requesting such amendment and that none of the Borrower, Paying Agent or the Administrative Agent need enter into such amendment and no Lender need consent to such amendment if it would have a Material Adverse Effect on the payments, economics or obligations of any such party. Subject to the preceding sentence, each of the Borrower and the Facility Administrator agree to cooperate in effecting any amendment pursuant to this Section 10.2(B).
(C)    Notwithstanding anything to the contrary set forth in this Section 10.2, the consent of the Administrative Agent shall not be required for any amendment made in accordance with Sections 5.1(A)(ix) and (x).
Section 10.3.    Notices, Etc.. All notices and other communications provided for hereunder shall be in writing and mailed or delivered by courier or facsimile: (A) if to the Borrower, to the Borrower, at its address at 20 Greenway Plaza, Suite 475, Houston, TX 77046. Attention: Chief Financial Officer and Treasurer, Facsimile: (281) 985‑9907, email address: treasury@sunnova.com; notices@sunnova.com; (B) if to the Facility Administrator, at its address at 20 Greenway Plaza, Suite 475, Houston, TX 77046, Attention: Chief Financial Officer and Treasurer, Facsimile: (281) 985‑9907, email address: treasury@sunnova.com; notices@sunnova.com; (C)  if to the Administrative Agent, the CS Funding Agent, the CS  Non-Conduit Lender or the Class B Lender, at its address at Credit Suisse AG, New York Branch, 11 Madison Avenue, 4th Floor, New York, NY 10010; Conduit and Warehouse Financing (212) 538‑2007; email address: list.afconduitreports@creditsuisse.com; abcp.monitoring@creditsuisse.com; (D) if to the CS Conduit Lender, at its address at Mountcliff Funding LLC, c/o 20 Gates Management LLC, 120 West 45th Street, Suite 3700, New York, NY 10036, Attention: 20 Gates Management / Mountcliff Funding, E-Mail: mountcliff@20gates.com; (E) if to the Paying Agent, at its address at 600 S. 4th Street, MAC N9300-061, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services – Asset-Backed Administration, E-mail: ctsabsservicer@wellsfargo.com; and (F) in the case of any party, at such address or other address as shall be designated by such party in a written notice to each of the other parties hereto. Notwithstanding the foregoing, each Facility Administrator Report described in Section 5.1(B) and the Borrowing Base Certificate described in Section 2.4 may be delivered by electronic mail; provided, that such electronic mail is sent by a Responsible Officer and each such Facility Administrator Report or the Borrowing Base Certificate is accompanied by an electronic reproduction of the signature of a Responsible Officer of the Borrower. All such notices and communications shall be effective, upon receipt, provided, that notice by facsimile or email shall be effective upon electronic or telephonic confirmation of receipt from the recipient.
Section 10.4.    No Waiver; Remedies. No failure on the part of the Administrative Agent or any Lender to exercise, and no delay in exercising, any right hereunder or under the Loan Notes shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude

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any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
Section 10.5.    Indemnification. The Borrower agrees to indemnify the Administrative Agent, the Paying Agent, the Successor Facility Administrator, the Verification Agent, each Lender, and their respective Related Parties (collectively, the “Indemnitees”) from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses (including court costs and fees and expenses of counsel and of enforcing the Borrower’s indemnification obligations hereunder) to which such Indemnitee may become subject arising out of, resulting from or in connection with any claim, litigation, investigation or proceeding (each, a “Proceeding” (including any Proceedings under environmental laws)) relating to the Transaction Documents or any other agreement, document, instrument or transaction related thereto, the use of proceeds thereof and the transactions contemplated hereby, regardless of whether any Indemnitee is a party thereto and whether or not such Proceedings are brought by the Borrower, its equity holders, affiliates, creditors or any other third party, and to reimburse each Indemnitee upon written demand therefor (together with reasonable back‑up documentation supporting such reimbursement request) for any reasonable and documented legal or other out‑of‑pocket expenses incurred in connection with investigating or defending any of the foregoing of one law firm to all such Indemnitees, taken as a whole, and, in the case of a conflict of interest, of one additional counsel to the affected Indemnitee taken as a whole (and, if reasonably necessary, of one local counsel and/or one regulatory counsel in any material relevant jurisdiction); provided, that the foregoing indemnity and reimbursement obligation will not, as to any Indemnitee, apply to (A) losses, claims, damages, liabilities or related expenses (i) to the extent they are found in a final non‑appealable judgment of a court of competent jurisdiction to arise from the willful misconduct, bad faith or gross negligence of, or with respect to Indemnitees other than the Paying Agent or the Verification Agent, material breach of the Transaction Documents by, such Indemnitee or any of its affiliates or controlling persons or any of the officers, directors, employees, advisors or agents of any of the foregoing or (ii) arising out of any claim, litigation, investigation or proceeding that does not involve an act or omission of the Borrower or any of their Affiliates and that is brought by such Indemnitee against another Indemnitee (other than an Indemnitee acting in its capacity as Paying Agent, agent, arranger or any other similar role in connection with the Transaction Documents) or (B) any settlement entered into by such Indemnitee without the Borrower’s written consent (such consent not to be unreasonably withheld or delayed). This Section 10.5 shall not apply with respect to Taxes other than any Taxes that represent losses, liabilities, claims and damages arising from any non‑Tax Proceeding. The provisions of this Section 10.5 shall survive the discharge, termination or assignment of this Agreement or any related agreement or the earlier of the resignation or removal of the Paying Agent or the Verification Agent. Notwithstanding anything to the contrary in this Section 10.5, the provisions of this Section shall be applied without prejudice to, and the provisions shall not have the effect of diminishing, the rights of the Paying Agent and any Paying Agent Indemnified Parties under Section 9.5 of this

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Agreement or any other provision of any Transaction Document providing for the indemnification of any such Persons.
Section 10.6.    Costs, Expenses and Taxes. The Borrower agrees to pay all reasonable and documented costs and expenses in connection with the preparation, execution, delivery, filing, recording, administration, modification, amendment or waiver of this Agreement, the Loan Notes and the other documents to be delivered hereunder, including the reasonable fees and out‑of‑pocket expenses of counsel for the Administrative Agent and the Paying Agent with respect thereto and with respect to advising the Administrative Agent and the Paying Agent as to their respective rights and responsibilities under this Agreement and the other Transaction Documents. The Borrower further agrees to pay on demand all costs and expenses, if any (including reasonable and documented counsel fees and expenses) (A) in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Loan Notes and the other documents to be delivered hereunder and (B) incurred by the Administrative Agent or the Paying Agent in connection with the transactions described herein and in the other Transaction Documents, or any potential Takeout Transaction, including in any case reasonable and documented counsel fees and expenses in connection with the enforcement of rights under this Section 10.6. Without limiting the foregoing, the Borrower acknowledges and agrees that the Administrative Agent or its counsel may at any time after an Event of Default shall have occurred and be continuing, engage professional consultants selected by the Administrative Agent to conduct additional due diligence with respect to the transactions contemplated hereby, including (A) review and independently assess the existing methodology employed by the Borrower in allocating Collections with respect to the Collateral, assess the reasonableness of the methodology for the equitable allocation of those Collections and make any recommendations to amend the methodology, if appropriate, (B) review the financial forecasts submitted by the Borrower to the Administrative Agent and assess the reasonableness and feasibility of those forecasts and make any recommendations based on that review, if appropriate, and (C) verify the asset base of the Borrower and the Borrower’s valuation of their assets, as well as certain matters related thereto. The reasonable and documented fees and expenses of such professional consultants, in accordance with the provisions of this Section 10.6, shall be at the sole cost and expense of the Borrower. In addition, the Borrower shall pay any and all Other Taxes and agrees to save the Administrative Agent, the Paying Agent and each Lender harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such Other Taxes.
Section 10.7.    Right of Set‑off; Ratable Payments; Relations Among Lenders‑. (A) Upon the occurrence and during the continuance of any Event of Default, and subject to the prior payment of Obligations owed to the Paying Agent, each of the Administrative Agent and the Lenders are hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any

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time held by and other indebtedness incurred pursuant to this Agreement at any time owing to the Administrative Agent or such Lender to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and the Loan Notes, whether or not the Administrative Agent or such Lenders shall have made any demand under this Agreement or the Loan Notes and although such obligations may be unmatured. The Administrative Agent and each Lender agrees promptly to notify the Borrower after any such set‑off and application; provided that the failure to give such notice shall not affect the validity of such set‑off and application. The rights of the Administrative Agent and the Lenders under this Section 10.7(A) are in addition to other rights and remedies (including other rights of set‑off) which the Administrative Agent and the Lenders may have.
(B)    If any Lender, whether by setoff or otherwise, has payment made to it upon its Advances in a greater proportion than that received by any other Lender, such other Lender agrees, promptly upon demand, to purchase a portion of the Advances held by the Lenders so that after such purchase each Lender will hold its ratable share of Advances. If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon written demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in proportion to the obligations owing to them. In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made.
(C)    Except with respect to the exercise of set‑off rights of any Lender in accordance with Section 10.7(A), the proceeds of which are applied in accordance with this Agreement, each Lender agrees that it will not take any action, nor institute any actions or proceedings, against the Borrower or any other obligor hereunder or with respect to any Collateral or Transaction Document, without the prior written consent of the other Lenders or, as may be provided in this Agreement or the other Transaction Documents, at the direction of the Administrative Agent.
(D)    The Lenders are not partners or co‑venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender.
Section 10.8.    Binding Effect; Assignment. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the Paying Agent, the Verification Agent and the Administrative Agent and each Lender, and their respective successors and assigns, except that the Borrower shall not have the right assign to their rights hereunder or any interest herein without the prior written consent of the Administrative Agent and the Lenders, and any assignment by Borrower in violation of this Section 10.8 shall be null and void. Any Lender may at any time, without the consent of the Borrower or the Administrative Agent, assign all or any portion of its rights and obligations under

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


this Agreement and any Loan Note to a Federal Reserve Bank and each Conduit Lender may assign its rights and obligations under this Agreement to a Program Support Provider; provided, that no such assignment or pledge shall release the transferor Lender from its obligations hereunder. Each Lender may assign to one or more banks or other entities all or any part or portion of, or may grant participations to one or more banks or other entities in all or any part or portion of its rights and obligations hereunder (including, without limitation, its Commitment, its Loan Notes or its Advances); provided that during the Availability Period, no Lender may transfer or assign any portion of its rights and obligations under this Agreement or any Loan Note to a Disqualified Lender; provided further that each such assignment (A) shall be substantially in the form of Exhibit F hereto or any other form reasonably acceptable to the Administrative Agent and (B) shall either be made (i) to a Permitted Assignee or (ii) to a Person that is acceptable to the Administrative Agent in its reasonable discretion (such consent not to be unreasonably withheld or delayed) unless an Event of Default or Amortization Event shall have occurred and be continuing.
(b)    If any assignment or participation is made to a Disqualified Lender in violation of this Section 10.8, the Borrower may upon notice to the applicable Disqualified Lender and the Administrative Agent, (A) purchase or prepay the Advances held by such Disqualified Lender by paying the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Lender paid to acquire such Advances, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder and/or (B) require such Disqualified Lender to assign, without recourse (in accordance with and subject to the restrictions contained in this Section 10.8), all of its interest, rights and obligations under this Agreement to one or more banks or other entities at the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Lender paid to acquire such interests, rights and obligations, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder.
Disqualified Lenders (A) will not, absent an Event of Default or consent from the Borrower (x) have the right to receive financial reports that are not publicly available, Facility Administrator Reports or other reports or confidential information provided to Lenders by the Borrower or the Administrative Agent (other than Tax reporting information with respect to the Advances), (y) attend or participate in meetings with the Borrower attended by the Lenders and the Administrative Agent, or (z) access any electronic site maintained by the Borrower or Administrative Agent to provide Lenders with confidential information or confidential communications from counsel to or financial advisors of the Administrative Agent and (B) (x) for purposes of any consent to any amendment, waiver or modification of, or any action under, and for the purpose of any direction to the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) under this Agreement or any other Transaction Document, each Disqualified Lender will be deemed to have consented in the same proportion as the Lenders that are not Disqualified

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Lenders consented to such matter, and (y) for purposes of voting on any plan of reorganization or plan of liquidation, each Disqualified Lender party hereto hereby agrees (1) not to vote on such plan, (2) if such Disqualified Lender does vote on such plan notwithstanding the restriction in the foregoing clause (1), such vote will be deemed not to be in good faith and shall be “designated” pursuant to Section 1126(e) of the Bankruptcy Code (or any similar provision in any other debtor relief laws), and such vote shall not be counted in determining whether the applicable class has accepted or rejected such plan in accordance with Section 1126(c) of the Bankruptcy Code (or any similar provision in any other debtor relief laws) and (3) not to contest any request by any party for a determination by the a bankruptcy court (or other applicable court of competent jurisdiction) effectuating the foregoing clause (2).
(c)    Upon, and to the extent of, any assignment (unless otherwise stated therein) made by any Lender hereunder, the assignee or purchaser of such assignment shall be a Lender hereunder for all purposes of this Agreement and shall have all the rights, benefits and obligations (including the obligation to provide documentation pursuant to Section 2.17(G)) of a Lender hereunder. Each Funding Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices a register (the “Register”) for the recordation of the names and addresses of the Lenders in its Lender Group, the outstanding principal amounts (and accrued interest) of the Advances owing to each Lender in its Lender Group pursuant to the terms hereof from time to time and any assignment of such outstanding Advances. The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall 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. The Register shall be available for inspection by the Borrower, the Paying Agent and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(d)    Any Lender may, without the consent of the Borrower, sell participation interests in its Advances and obligations hereunder (each such recipient of a participation a “Participant”); provided that after giving effect to the sale of such participation, such Lender’s obligations hereunder and rights to consent to any waiver hereunder or amendment hereof shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, all amounts payable to such Lender hereunder and all rights to consent to any waiver hereunder or amendment hereof shall be determined as if such Lender had not sold such participation interest, and the Borrower and the Administrative Agent and the other parties hereto shall continue to deal solely and directly with such Lender and not be obligated to deal with such participant. The Participant shall have no right to affect such Lender’s vote or action with respect to any matter requiring such Lender’s vote or action under this Agreement. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the outstanding principal amounts (and accrued interest) of each Participant’s interest in the Advances or other obligations under the Transaction

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of 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 Transaction Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, or other obligation is in registered form under Section 5f.103‑1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant 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 shall have no responsibility for maintaining a Participant Register. Each recipient of a participation shall, to the fullest extent permitted by law, have the same rights, benefits and obligations (including the obligation to provide documentation pursuant to Section 2.17(G)), hereunder with respect to the rights and benefits so participated as it would have if it were a Lender hereunder, except that no Participant shall be entitled to receive any greater payment under Sections 2.11 or 2.17 than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.
(e)    Notwithstanding any other provision of this Agreement to the contrary, (i) a Lender may pledge as collateral, or grant a security interest in, all or any portion of its rights in, to and under this Agreement to a security trustee in connection with the funding by such Lender of Advances without the consent of the Borrower; provided that no such pledge or grant shall release such Lender from its obligations under this Agreement and (ii) a Conduit Lender may at any time, without any requirement to obtain the consent of the Administrative Agent or the Borrower, pledge or grant a security interest in all or any portion of its rights (including, without limitation, rights to payment of capital and yield) under this Agreement to a collateral agent or trustee for its commercial paper program.
Section 10.9.    GOVERNING LAW. THIS AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5‑1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
Section 10.10.    Jurisdiction. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK (NEW YORK COUNTY) OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
Section 10.11.    Waiver of Jury Trial. ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS AGREEMENT.
Section 10.12.    Section Headings. All section headings are inserted for convenience of reference only and shall not affect any construction or interpretation of this Agreement.
Section 10.13.    Tax Characterization. The parties hereto intend for the transactions effected hereunder to constitute a loan for U.S. federal income tax purposes.
Section 10.14.    Execution. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed 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 a signature page to this Agreement by facsimile or by e‑mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 10.15.    Limitations on Liability. None of the members, managers, general or limited partners, officers, employees, agents, shareholders, directors, Affiliates or holders of limited liability company interests of or in the Borrower shall be under any liability to the Administrative Agent or the Lenders, respectively, any of their successors or assigns, or any other Person for any action

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


taken or for refraining from the taking of any action in such capacities or otherwise pursuant to this Agreement or for any obligation or covenant under this Agreement, it being understood that this Agreement and the obligations created hereunder shall be, to the fullest extent permitted under applicable law, with respect to the Borrower, solely the limited liability company obligations of the Borrower. The Borrower and any member, manager, partner, officer, employee, agent, shareholder, director, Affiliate or holder of a limited liability company interest of or in the Borrower may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person (other than the Borrower) respecting any matters arising hereunder.
Section 10.16.    Confidentiality. (A)  Except as otherwise provided herein, the Fee Letters (including such information set forth in any engagement letter, term sheet or proposal prior to the Closing Date that contains fees similar in nature to those in the Fee Letters) (collectively, “Confidential Information”) are confidential. Each of the Borrower, the Facility Administrator, the Paying Agent and the Verification Agent agrees:
(i)    to keep all Confidential Information confidential and to disclose Confidential Information only to those Affiliates, officers, employees, agents, accountants, equity holders, legal counsel and other representatives of the Borrower or its Affiliates (collectively, “Representatives”) who have a need to know such Confidential Information for the purpose of assisting in the negotiation, completion and administration of this Facility;
(ii)    to use the Confidential Information only in connection with the Facility and not for any other purpose; and
(iii)    to maintain and keep in force procedures reasonably designed to cause its Representatives to comply with these provisions and to be responsible for any failure of any Representative to follow those procedures. The provisions of this section 10.16(A) shall not apply to Confidential Information that (a) has been approved for release by written authorization of the appropriate party, or (b) is or hereafter becomes (through a source other than the Borrower, the Facility Administrator, the Paying Agent, the Verification Agent or their respective Affiliates or Representatives) generally available to the public and shall not prohibit the disclosure of Confidential Information to the extent required by applicable Law or by any Governmental Authority or to the extent necessary in connection with the enforcement of any Transaction Document.
The Borrower and the Facility Administrator agree not to provide copies of the Transaction Documents to any prospective investor in, or prospective lender to, the Borrower and the Facility Administrator without the prior written consent of the Administrative Agent, which shall not be unreasonably withheld, delayed or conditioned. For the avoidance of doubt, Borrower and the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Facility Administrator or any other affiliate of Parent may provide copies of the Transaction Documents to any potential investor or equity holder in Parent or its affiliates, provided that each such Person shall have been instructed to keep the same confidential in accordance with this Section 10.16.
(B)    Each Lender, each Funding Agent, and the Administrative Agent agrees to maintain the confidentiality of all nonpublic information with respect to the parties herein or any other matters furnished or delivered to it pursuant to or in connection with this Agreement or any other Transaction Document; provided, that such information may be disclosed (i) to such party’s Affiliates or such party’s or its Affiliates’ officers, directors, employees, agents, accountants, legal counsel and other representatives (collectively “Lender Representatives”), in each case, who have a need to know such information for the purpose of assisting in the negotiation, completion and administration of the Facility and on a confidential basis, (ii) to any permitted assignee of or participant in, or any prospective assignee of or participant in, the Facility or any of its rights or obligations under this Agreement, in each case on a confidential basis, (iii) to any financing source, dealer, hedge counterparty or other similar party in connection with financing or risk management activities related to the Facility, (iv) to any Commercial Paper rating agency (including by means of a password protected internet website maintained in connection with Rule 17g‑5), (v) to the extent required by applicable Law or by any Governmental Authority, and (vi) to the extent necessary in connection with the enforcement of any Transaction Document.
The provisions of this Section 10.16(B) shall not apply to information that (i) is or hereafter becomes (through a source other than the applicable Lender, Funding Agent or the Administrative Agent or any Lender Representative associated with such party) generally available to the public, (ii) was rightfully known to the applicable Lender, applicable Funding Agent or the Administrative Agent or any Lender Representative or was rightfully in their possession prior to the date of its disclosure pursuant to this Agreement, (iii) becomes available to the applicable Lender, applicable Funding Agent or the Administrative Agent or any Lender Representative from a third party unless to their knowledge such third party disclosed such information in breach of an obligation of confidentiality to the applicable Lender, applicable Funding Agent or the Administrative Agent or any Lender Representative, (iv) has been approved for release by written authorization of the parties whose information is proposed to be disclosed, or (v) has been independently developed or acquired by any Lender, any Funding Agent or the Administrative Agent or any Lender Representative without violating this Agreement. The provisions of this Section 10.16 shall not prohibit any Lender, any Funding Agent or the Administrative Agent from filing with or making available to any judicial, governmental or regulatory agency or providing to any Person with standing any information or other documents with respect to the Facility as may be required by applicable Law or requested by such judicial, governmental or regulatory agency.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 10.17.    Limited Recourse. All amounts payable by the Borrower on or in respect of the Obligations shall constitute limited recourse obligations of the Borrower secured by, and payable solely from and to the extent of, the Collateral; provided that (A) the foregoing shall not limit in any manner the ability of the Administrative Agent or any other Lender to seek specific performance of any Obligation (other than the payment of a monetary obligation in excess of the amount payable solely from the Collateral), (B) the provisions of this Section 10.17 shall not limit the right of any Person to name the Borrower as party defendant in any action, suit or in the exercise of any other remedy under this Agreement or the other Transaction Documents and (C) when any portion of the Collateral is transferred in a transfer permitted under and in accordance with this Agreement, the security interest in and Lien on such Collateral shall automatically be released, and the Lenders under this Agreement will no longer have any security interest in, lien on, or claim against such Collateral. No recourse shall be sought or had for the obligations of the Borrower against any Affiliate, director, officer, shareholder, manager or agent of the Borrower other than as specified in the Transaction Documents.
Section 10.18.    Customer Identification ‑ USA Patriot Act Notice‑. The Administrative Agent and each Lender hereby notifies the Borrower and the Facility Administrator that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107‑56, signed into law October 26, 2001) (the “Patriot Act”), and the Administrative Agent’s and each Lender’s policies and practices, the Administrative Agent and the Lenders are required to obtain, verify and record certain information and documentation that identifies the Borrower and the Facility Administrator, which information includes the name and address of the Borrower and such other information that will allow the Administrative Agent or such Lender to identify the Borrower in accordance with the Patriot Act.
Section 10.19.    Paying Agent Compliance with Applicable Anti‑Terrorism and Anti‑Money Laundering Regulations‑‑. In order to comply with laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including, but not limited to those relating to funding of terrorist activities and money laundering, the Paying Agent is required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Paying Agent. Accordingly, each of the parties agrees to provide to the Paying Agent upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Paying Agent to comply with such laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including, but not limited to those relating to funding of terrorist activities and money laundering.
Section 10.20.    Non‑Petition‑. 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 of any state of the United States or of any other jurisdiction

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


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 Section 10.20 and the parties’ respective obligations under this Section 10.20 shall survive the termination of this Agreement.
Section 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 a Conduit Lender hereunder shall be without recourse of any kind to such Conduit Lender. A Conduit Lender shall have no liability or obligation hereunder unless and until such Conduit Lender has received such amounts pursuant to this Agreement. In addition, the parties hereto hereby agree that (i) a Conduit Lender shall have no obligation to pay the parties hereto any amounts constituting fees, reimbursement for expenses or indemnities (collectively, “Expense Claims”) and such Expense Claims shall not constitute a claim (as defined in Section 101 of Title 11 of the Bankruptcy Code or similar laws of another jurisdiction) against such Conduit Lender, unless or until such Conduit Lender has received amounts sufficient to pay such Expense Claims pursuant to this Agreement and such amounts are not required to pay the outstanding indebtedness of such Conduit Lender and (ii) no recourse shall be sought or had for the obligations of a Conduit Lender hereunder against any Affiliate, director, officer, shareholders, manager or agent of such Conduit Lender.
(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.
Section 10.22.    [Reserved].
Section 10.23.    Additional Paying Agent Provisions. The parties hereto acknowledge that the Paying Agent shall not be required to act as a “commodity pool operator” as defined in the Commodity Exchange Act, as amended, or be required to undertake regulatory filings related to this Agreement in connection therewith.
Section 10.24.    Acknowledgement Regarding Any Supported QFCs.     To the extent that the Transaction Documents provide support, through a guarantee or otherwise, for Hedge Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Transaction Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Transaction Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Transaction Documents were governed by the laws of the United States or a state of the United States.
[Signature Pages Follow]


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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.


SUNNOVA TEP HOLDINGS, LLC, as Borrower



By:    ____________________________________
Name:
Title:    


SUNNOVA TE MANAGEMENT, LLC, as Facility Administrator



By:    ____________________________________
Name:
Title:    
CREDIT SUISSE AG, New York Branch,
as Administrative Agent and as a Funding Agent
By:
_________________________________
Name:
Title:
By:
_________________________________
Name:
Title:



[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


CREDIT SUISSE AG, Cayman Islands Branch,
as a Lender
By:
_________________________________
Name:
Title:
By:
_________________________________
Name:
Title:


[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



MOUNTCLIFF FUNDING LLC, as a Conduit Lender
By:
_________________________________
Name:
Title:


[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


WELLS FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity but solely as Paying Agent
By:
_________________________________
Name:
Title:


[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


U.S. BANK NATIONAL ASSOCIATION,
as Verification Agent
By:
_________________________________
Name:
Title:


[Signature Page to Sunnova TEP IV Warehouse Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT A
DEFINED TERMS
“1940 Act” shall mean the Investment Company Act of 1940, as amended.
“A-1 Verification Agent Certification” shall have the meaning set forth in Section 4(a) of the Verification Agent Agreement.
“A-2 Verification Agent Certification” shall have the meaning set forth in Section 4(b) of the Verification Agent Agreement.
“Accession Agreement” shall mean (i) a Security Agreement Supplement in the form of Exhibit B to the Security Agreement, (ii) a Pledge Agreement Joinder in the form of Exhibit A to the Pledge Agreement, (iii) a Joinder Agreement in the form of Exhibit C to the Verification Agent Agreement, (iv) Guaranty Supplement in the form of Exhibit A to the Subsidiary Guaranty and (v) an Subsidiary Supplement in the form of Exhibit A to the Parent Guaranty.
“Additional Solar Assets” shall mean each Eligible Solar Asset that is acquired by a Financing Fund or SAP after the Closing Date and during the Availability Period.
“Adjusted LIBOR Rate” shall mean a rate per annum equal to the rate (rounded upwards, if necessary, to the next higher 1/100 of 1%) obtained by dividing (i) LIBOR by (ii) a percentage equal to 100% minus the reserve percentage (rounded upward to the next 1/100th of 1%) in effect on such day and applicable to the Non-Conduit Lender for which this rate is calculated under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “eurocurrency liabilities”). The Adjusted LIBOR Rate shall be adjusted automatically as of the effective date of any change in such reserve percentage.
“Administrative Agent” shall have the meaning set forth in the introductory paragraph hereof.
“Administrative Agent’s Account” shall mean the Administrative Agent’s bank account designated by the Administrative Agent from time to time by written notice to the Borrower.
“Advance” shall mean, individually or collectively, as the context may require, a Class A Advance and/or a Class B Advance.
“Affected Party” shall have the meaning set forth in Section 2.12(B).

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Affiliate” shall mean, with respect to any Person, any other Person that (i) directly or indirectly controls, is controlled by, or is under direct or indirect common control with such Person, or, (ii) is an officer or director of such Person, and in the case of any Lender that is an investment fund, the investment advisor thereof and any investment fund having the same investment advisor. A Person shall be deemed to be “controlled by” another Person if such other Person possesses, directly or indirectly, power to (a) vote 50% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managing partners of such other Person, or (b) direct or cause the direction of the management and policies of such other Person whether by contract or otherwise.
“Affiliated Entity” shall mean any of the Parent, the Facility Administrator (if the Facility Administrator is an Affiliate of the Borrower), the Seller, and any of their respective direct or indirect Subsidiaries and/or Affiliates, whether now existing or hereafter created, organized or acquired.
“Aggregate Commitment” shall mean, on any date of determination, the sum of the Commitments then in effect. The Aggregate Commitment as of the Closing Date shall be equal to $100,000,000.
“Aggregate Discounted Solar Asset Balance” shall mean, on any date of determination, the sum of the Discounted Solar Asset Balances for the Managing Member Interests, the SAP Solar Assets and any Hedged SREC Solar Assets. Any Managing Member Interests, SAP Solar Assets or Hedged SREC Solar Assets that would otherwise be duplicated in computing this sum shall only be counted once.
“Aggregate Outstanding Advances” shall mean, as of any date of determination, the sum of (i) the aggregate principal balance of all Class A Advances outstanding plus (ii) the aggregate principal balance of all Class B Advances outstanding.
“Agreement” shall have the meaning set forth in the introductory paragraph hereof.
“A.M. Best” shall mean A. M. Best Company, Inc. and any successor rating agency.
“Amortization Event” shall mean the occurrence of the any of the following events:
(xii)a Facility Administrator Termination Event;
(xiii)the Solar Asset Payment Level is less than 88.0%;
(xiv)the Managing Member Distributions Payment Level is less than 88.0%;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(xv)the Default Level is greater than 0.75%;
(xvi)an Event of Default (whether or not cured by a Tax Equity Investor);
(xvii)a Tax Loss Insurance Policy ceases to be of full force and effect or ceases to meet the requirements of the related Tax Equity Facility;
(xviii)if Sunnova Management is the Facility Administrator and the sum of (a) the net cash provided by operating activities of Sunnova Management, as reported in any set of quarterly financial statements delivered pursuant to Section 5(q)(ii) of the Parent Guaranty plus (b) unrestricted cash on hand held by Sunnova Management as of the date of such financial statements, shall be negative (for purposes of this clause (viii), the term “net cash” and “operating activities” shall have the meanings attributable to such terms under GAAP); provided, that if (x) on or prior to the date that is fifteen (15) Business Days after the date on which it is determined that such amount is negative, the Parent Guarantor's equity holders, any of their Affiliates and any other Person makes an equity investment to Sunnova Management in cash in an amount not less than such shortfall, and such cash, if so designated by Sunnova Management, be included as unrestricted cash, and (y) any such action described in subclause (x) is communicated to the Administrative Agent in writing, then no Amortization Event shall be deemed to have occurred or be continuing;
(xix)Parent breaches any of the Financial Covenants and such breach has not been cured in accordance with Section 5(r) of the Parent Guaranty;
(xx)the amounts on deposit in the Liquidity Reserve Account are at any time less than the Liquidity Reserve Account Required Balance and such deficit is not cured by the earlier of the next Payment Date or the next Funding Date;
(xxi)the amounts on deposit in the Supplemental Reserve Account are at any time less than the Supplemental Reserve Account Required Balance and such deficit is not cured by the earlier of the next Payment Date or the next Funding Date; or
(xxii)the occurrence of a default under a Sunnova Credit Facility.
“Amortization Period” shall mean the period commencing at the end of the Availability Period.
“Ancillary Solar Service Agreements” shall mean in respect of each Eligible Solar Asset, all agreements and documents ancillary to the Solar Service Agreement associated with such Eligible

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Solar Asset, which are entered into with a Host Customer in connection therewith, including any Customer Warranty Agreement.
“Applicable Law” shall mean all applicable laws of any Governmental Authority, including, without limitation, laws relating to consumer leasing and protection and any ordinances, judgments, decrees, injunctions, writs and orders or like actions of any Governmental Authority and rules and regulations of any federal, regional, state, county, municipal or other Governmental Authority.
“Approved Installer” shall mean an installer approved by the Parent to design, procure and install PV Systems on the properties of Host Customers and listed on the Parent’s list of approved installers as of the time of installation of an applicable PV System.
“Approved U.S. Territory” shall initially mean Puerto Rico, Guam and the Northern Mariana Islands and shall mean any other territory of the United States which the Administrative Agent has, in its sole discretion, approved as an Approved U.S. Territory, by providing a written notice to the Borrower regarding the same.
“Approved Vendor” shall mean a manufacturer of Solar Photovoltaic Panels, Inverters or Energy Storage Systems for PV Systems that was approved by the Parent and listed on the Parent’s list of approved vendors as of the time of installation of an applicable PV System.
“Assignor” shall mean each of Parent, Intermediate Holdco, Sunnova Inventory Holdings, Sunnova Inventory Pledgor and TEP Inventory, as assignors of Solar Assets and/or Solar Asset Owner Subsidiaries pursuant to the Contribution Agreement.
“Availability Period” shall mean the period from the Closing Date until the earlier to occur of (i) the Commitment Termination Date, and (ii) an Amortization Event.
“Bank Base Rate” shall mean, with respect to any Lender for any day, a rate per annum equal to the Base Rate with respect to such Lender on such date.
“Bankruptcy Code” shall mean the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., as amended.
“Base Rate” shall mean, with respect to any Lender for any day, a rate per annum equal to the greater of (i) the prime rate of interest announced publicly by a Funding Agent with respect to its Lender Group (or the Affiliate of such Lender or Funding Agent, as applicable, that announces such rate) as in effect at its principal office from time to time, changing when and as said prime rate changes (such rate not necessarily being the lowest or best rate charged by such Person) or, if such Lender, Funding Agent or Affiliate thereof does not publicly announce the prime rate of interest,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


as quoted in The Wall Street Journal on such day and (ii) the sum of (a) 0.50% and (b) the rate 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, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by such Funding Agent with respect to such Lender Group from three Federal funds brokers of recognized standing selected by it.
“Base Case Model” shall mean a computer model agreed to by a Managing Member and the related Tax Equity Investor showing the expected economic results from ownership of the PV Systems owned by the related Financing Fund and the assumptions to be used in calculating when the such Tax Equity Investor has reached its target internal rate of return, which is attached as an exhibit to the related Financing Fund LLCA.
“Base Reference Banks” shall mean the principal London offices of Standard Chartered Bank, Lloyds TSB Bank, Royal Bank of Scotland, Deutsche Bank and the investment banking division of Barclays Bank PLC or such other banks as may be appointed by the Administrative Agent with the approval of the Borrower.
“Basel III” shall mean Basel III: A global regulatory framework for more resilient banks and banking systems prepared by the Basel Committee on Banking Supervision, and all national implementations thereof.

“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation, which certification shall be substantially similar in form and substance to the form of Certification Regarding Beneficial Owners of Legal Entity Customers published jointly, in May 2018, by the Loan Syndications and Trading Association and Securities Industry and Financial Markets Association.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“BHC Act Affiliate” has the meaning assigned to the term "affiliate" in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Borrower” shall have the meaning set forth in the introductory paragraph hereof.
“Borrower’s Account” shall mean (i) the bank account of the Borrower, described on Schedule II attached hereto, for the benefit of the Borrower or (ii) such other account as may be designated by the Borrower from time to time by at least ten (10) Business Days’ prior written

A-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


notice to the Administrative Agent and the Lenders, so long as such other account is acceptable to the Administrative Agent in its sole and absolute discretion.
“Borrowing Base” shall mean the Class A Borrowing Base and/or the Class B Borrowing Base, as applicable.
“Borrowing Base Certificate” shall mean the certificate in the form of Exhibit B‑1 attached hereto.
“Borrowing Base Deficiency” shall have the meaning set forth in Section 2.9.
“Borrowing Base Step-up Period” shall mean the period from and including December 2, 2019 to and excluding the earliest of (x) the date on which a Takeout Transaction is first effected after December 2, 2019, (y) the date on which all Obligations (as defined in the TEP II Credit Agreement) are paid in full and all Commitments (as defined in the TEP II Credit Agreement) are terminated under the TEP II Credit Agreement and (z) March 31, 2020.
“Breakage Costs” shall mean, with respect to a failure by the Borrower, for any reason resulting from Borrower’s failure (but excluding any failures to borrow resulting from a Lender default under this Agreement), to borrow any proposed Advance on the date specified in the applicable Notice of Borrowing (including without limitation, as a result of the Borrower’s failure to satisfy any conditions precedent to such borrowing) after providing such Notice of Borrowing, the resulting loss, cost, expense or liability incurred by reason of the liquidation or reemployment of deposits, actually sustained by the Administrative Agent, any Lender or any Funding Agent; provided, however, that the Administrative Agent, such Lender or such Funding Agent shall use commercially reasonable efforts to minimize such loss or expense and shall have delivered to the Borrower a certificate as to the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error. For the avoidance of doubt, if a Lender does not make an advance and the Borrower has met all conditions precedent required under Article III or Lender has breached this Agreement, then any Breakage Costs shall be borne by Lender.
“Business Day” shall mean any day other than Saturday, Sunday and any other day on which commercial banks in New York, New York, Minnesota or California are authorized or required by law to close.
“Calculation Date” shall mean with respect to a Payment Date, the close of business on the last day of the related Collection Period.
“Call Date” shall mean, with respect to a Purchase Option, the earliest date on which such Purchase Option may be exercised.

A-6

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Capital Stock” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents, including membership interests (however designated, whether voting or non‑voting) of equity of such Person, including, if such Person is a partnership, partnership interests (whether general or limited) or any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership, but in no event will Capital Stock include any debt securities convertible or exchangeable into equity unless and until actually converted or exchanged.
“Carrying Cost” shall mean, as of any date of determination, the sum of (i) the weighted average Swap Rate as of such date of determination, (ii) the weighted average Class A Usage Fee Rate and Class B Usage Fee Rate as of such date of determination and (iii) 0.10%.
“Change in Law” shall mean (i) the adoption or taking effect of any Law after the date of this Agreement, (ii) any change in Law or in the administration, interpretation, application or implementation thereof by any Governmental Authority after the date of this Agreement, (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority after the date of this Agreement or (iv) compliance by any Affected Party, by any lending office of such Affected Party or by such Affected Party’s holding company, if any, with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided, that notwithstanding anything herein to the contrary, (a) the Dodd‑Frank Act, (b) Basel III and (c) all requests, rules, guidelines and directives under either of the Dodd‑Frank Act or Basel III or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date implemented, enacted, adopted or issued.
“Change of Control” shall mean, the occurrence of one or more of the following events:
(i)    any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of SEI or Parent to any Person or group of related Persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (a “Group”), other than, in each case, any such sale, lease, exchange or transfer to a Person or Group that is, prior to such, lease, exchange or transfer, an Affiliate of SEI and is controlled (as that term is used in the definition of Affiliate) by SEI;
(ii)    the approval by the holders of Capital Stock of SEI, Parent, Intermediate Holdco, Sunnova Inventory Pledgor, TEP Inventory, the Seller, TEP Resources, the Borrower or any Subsidiary of the Borrower of any plan or proposal for the liquidation or dissolution of such Person;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(iii)    any Person or Group shall become the owner, directly or indirectly, beneficially or of record, of shares representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of SEI, other than any Person that is a Permitted Investor or Group that is controlled by a Permitted Investor provided that any transfers or issuances of equity of SEI on or after the Closing Date to, among or between a Permitted Investor or any Affiliate thereof, shall not constitute a “Change of Control” for purposes of this clause (iii);
(iv)     SEI shall cease to directly own all of the Capital Stock in Parent;
(v)     Parent shall cease to directly own all of the Capital Stock in Intermediate Holdco;
(vi)     Intermediate Holdco shall cease to directly own all of the Capital Stock in Sunnova Inventory Pledgor;
(vii)     Sunnova Inventory Pledgor shall cease to directly own all of the Capital Stock in TEP Inventory;
(viii)     TEP Inventory shall cease to directly own all of the Capital Stock in Seller;
(ix)     Seller shall cease to directly own all of the Capital Stock in TEP Resources;
(x)     TEP Resources shall cease to directly own all of the Capital Stock in the Borrower; or
(xi)    the Borrower shall cease to own all of the Capital Stock in a Managing Member or SAP other than in connection with a Takeout Transaction pursuant to which 100% of the outstanding Capital Stock of such Managing Member or SAP is sold.
“Class A Advance” shall have the meaning set forth in Section 2.2.
“Class A Aggregate Commitment” shall mean, on any date of determination, the sum of the Class A Commitments then in effect. The Class A Aggregate Commitment as of the Closing Date shall be equal to $87,500,000. For the avoidance of doubt, any Class A Advance approved or funded pursuant to Section 2.18 herein shall be deemed to increase the Commitment of the Non-Conduit Lender approving such Class A Advance.
“Class A Borrowing Base” shall mean, as of any date of determination, the product of (x)(a) the Aggregate Discounted Solar Asset Balance minus (b) the Excess Concentration Amount

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


times (y)(a) with respect to Solar Assets other than Puerto Rico Solar Assets or Substantial Stage Solar Assets included in clause (x), [***]%, (b) with respect to Puerto Rico Solar Assets other than Substantial Stage Solar Assets included in clause (x), [***]%, and (c) with respect to Substantial Stage Solar Assets included in clause (x), (i) during the Borrowing Base Step-up Period, [***]% and (ii) at all times after the Borrowing Base Step-up Period, [***]%.
“Class A Borrowing Base Deficiency” shall have the meaning set forth in Section 2.9.
“Class A Commitment” shall mean the obligation of a Non-Conduit Lender to fund a Class A Advance on the Closing Date, as set forth on Exhibit E attached hereto.
“Class A Funding Agent” shall mean a Person appointed as a Class A Funding Agent for a Class A Lender Group pursuant to Section 7.14.
“Class A Interest Distribution Amount” shall mean, with respect to the Class A Advances on any date of determination, an amount equal to the sum of (i) the product of (a) the daily average outstanding principal balance of all Class A Advances during the related period (including any related Interest Accrual Period), (b) the actual number of days in such period (including any related Interest Accrual Period), divided by 360, 365 or 366, as applicable, and (c) the Class A Usage Fee Rate and (ii) any unpaid Class A Interest Distribution Amounts from prior Payment Dates plus, to the extent permitted by law, interest thereon at the Class A Usage Fee Rate for the related Interest Accrual Period. For the avoidance of doubt, the Class A Interest Distribution Amount shall not constitute “Confidential Information.”
“Class A Lender” shall mean a Lender that has funded a Class A Advance.
“Class A Lender Group” shall mean with respect to any Class A Advances, any group consisting of related Conduit Lenders, Non-Conduit Lenders and Funding Agents.
“Class A Lender Group Percentage” shall mean, for any Class A Lender Group, the percentage equivalent of a fraction (expressed out to five decimal places), the numerator of which is, with respect to each Class A Lender Group, the Class A Commitment of all Non-Conduit Lenders in such Class A Lender Group, and the denominator of which is the Class A Aggregate Commitment.
“Class A Loan Note” shall mean each Class A Loan Note of the Borrower in the form of Exhibit D-1 attached hereto, payable to a Class A Funding Agent for the benefit of the Class A Lenders in such Class A Funding Agent’s Class A Lender Group, in the aggregate face amount of up to such Class A Lender Group’s portion of the Class A Maximum Facility Amount, evidencing the aggregate indebtedness of the Borrower to the Class A Lenders in such Funding Agent’s Class

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


A Lender Group, as the same be amended, restated, supplemented or otherwise modified from time to time.
“Class A Maximum Facility Amount” shall mean $131,250,000.
“Class A Unused Portion of the Commitments” shall mean, with respect to the Class A Lenders on any day, the excess of (x) the Class A Aggregate Commitment as of such day as of 5:00 P.M. (New York City time) on such day, over (y) the sum of the aggregate outstanding principal balance of the Class A Advances as of 5:00 P.M. (New York City time) on such day.
“Class A Usage Fee Rate” shall mean the greater of (x) zero and (y) sum of (i) the Cost of Funds and (ii) the Class A Usage Fee Margin.
“Class A Usage Fee Margin” shall have the meaning set forth in the Fee Letter referred to in clause (i) of the definition thereof.
“Class B Advance” shall have the meaning set forth in Section 2.2
“Class B Aggregate Commitment” shall mean, on any date of determination, the sum of the Class B Commitments then in effect. The Class B Aggregate Commitment as of the Closing Date shall be equal to $12,500,000. For the avoidance of doubt, any Class B Advance approved or funded pursuant to Section 2.18 herein shall be deemed to increase the Commitment of the Non-Conduit Lender approving such Class B Advance.
“Class B Borrowing Base” shall mean, as of any date of determination, the product of (x)(a) the Aggregate Discounted Solar Asset Balance minus (b) the Excess Concentration Amount times (y)(a) with respect to Solar Assets other than Puerto Rico Solar Assets or Substantial Stage Solar Assets included in clause (x), [***]%, (b) with respect to Puerto Rico Solar Assets other than Substantial Stage Solar Assets included in clause (x), [***]%, and (c) with respect to Substantial Stage Solar Assets included in clause (x), (i) during the Borrowing Base Step-up Period, [***]% and (ii) at all times after the Borrowing Base Step-up Period, [***]%.
“Class B Borrowing Base Deficiency” shall have the meaning set forth in Section 2.9.
“Class B Commitment” shall mean the obligation of a Non-Conduit Lender to fund a Class B Advance on the Closing Date, as set forth on Exhibit E attached hereto.
“Class B Funding Agent” shall mean a Person appointed as a Class B Funding Agent for a Class B Lender Group pursuant to Section 7.14.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Class B Interest Distribution Amount” shall mean, with respect to the Class B Advances on any date of determination, an amount equal to the sum of (i) the product of (a) the daily average outstanding principal balance of all Class B Advances during the related period (including any related Interest Accrual Period), (b) the actual number of days in such period (including any related Interest Accrual Period), divided by 360, 365 or 366, as applicable, and (c) the Class B Usage Fee Rate and (ii) any unpaid Class B Interest Distribution Amounts from prior Payment Dates plus, to the extent permitted by law, interest thereon at the Class B Usage Fee Rate for the related Interest Accrual Period. For the avoidance of doubt, the Class B Interest Distribution Amount shall not constitute “Confidential Information.”
“Class B Lender” shall mean a Lender that has funded a Class B Advance.
“Class B Lender Group” shall mean with respect to any Class B Advances, any group consisting of related Conduit Lenders, Non-Conduit Lenders and Funding Agents.
“Class B Lender Group Percentage” shall mean, for any Class B Lender Group, the percentage equivalent of a fraction (expressed out to five decimal places), the numerator of which is, with respect to each Class B Lender Group, the Class B Commitment of all Non-Conduit Lenders in such Class B Lender Group, and the denominator of which is the Class B Aggregate Commitment.
“Class B Loan Note” shall mean each Class B Loan Note of the Borrower in the form of Exhibit D-2 attached hereto, payable to a Class B Funding Agent for the benefit of the Class B Lenders in such Class B Funding Agent’s Class B Lender Group, in the aggregate face amount of up to such Class B Lender Group’s portion of the Class B Maximum Facility Amount, evidencing the aggregate indebtedness of the Borrower to the Class B Lenders in such Class B Funding Agent’s Class B Lender Group, as the same be amended, restated, supplemented or otherwise modified from time to time.
“Class B Maximum Facility Amount” shall mean $18,750,000.
“Class B Unused Portion of the Commitments” shall mean, with respect to the Class B Lenders on any day, the excess of (x) the Class B Aggregate Commitment as of such day as of 5:00 P.M. (New York City time) on such day, over (y) the sum of the aggregate outstanding principal balance of the Class B Advances as of 5:00 P.M. (New York City time) on such day.
“Class B Usage Fee Margin” shall have the meaning set forth in the Fee Letter referred to in clause (i) of the definition thereof.
“Class B Usage Fee Rate” shall mean the sum of (i) the Cost of Funds and (ii) the Class B Usage Fee Margin.

A-11

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Closing Date” shall mean September 6, 2019.
“Closing Date Verification Agent Certification” shall have the meaning set forth in Section 4(c) of the Verification Agent Agreement.
“Collateral” shall mean the Pledged Collateral (as defined in the Pledge Agreement) and have the meaning set forth in the Security Agreement, as applicable.
“Collection Account” shall have the meaning set forth in Section 8.2(A)(i).
“Collection Period” shall mean, with respect to a Payment Date, the three calendar months preceding the month in which such Payment Date occurs; provided that with respect to the first Payment Date, the Collection Period will be the period from and including the Closing Date to the end of the calendar quarter preceding such Payment Date.
“Collections” shall mean, all distributions and payments received in respect of the Solar Asset Owner Member Interests and other cash proceeds thereof. Without limiting the foregoing, “Collections” shall include any amounts payable to the Borrower with respect to the Eligible Solar Assets (i) under any Hedge Agreement entered into in connection with this Agreement or (ii) in connection with the disposition of any Collateral.
“Commercial Paper” shall mean commercial paper, money market notes and other promissory notes and senior indebtedness issued by or on behalf of a Conduit Lender.
“Commitment” shall mean, individually or collectively, as the context may require, the Class A Commitments and the Class B Commitments, as applicable.
“Commitment Termination Date” shall mean the earliest to occur of (i) the Scheduled Commitment Termination Date and (ii) the date of any voluntary termination of the facility by the Borrower.
“Conduit Lender” shall mean the CS Conduit Lender and each financial institution identified as such that may become a party hereto.
“Confidential Information” shall have the meaning set forth in Section 10.16(A).
“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

A-12

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Contribution Agreement” shall mean, collectively, (a) that Contribution Agreement, dated as of the Closing Date, by and among the Assignors and the Seller, (b) that certain Contribution and Assignment Agreement, dated as of the Closing Date, by and among Parent, TEP Inventory and the Seller, and (c) that certain Transfer Agreement, dated as of December 31, 2019, by and among Parent, TEP Inventory and the Seller.
“Conveyed Property” shall have the meaning set forth in the Sale and Contribution Agreement.
“Corporate Trust Office” shall mean, with respect to the Paying Agent, the corporate trust office thereof at which at any particular time its corporate trust business with respect to the Transaction Documents is conducted, which office at the date of the execution of this instrument is located at 600 S. 4th Street, MAC N9300-061, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services – Asset-Backed Administration, or at such other address as such party may designate from time to time by notice to the other parties to this Agreement.
“Cost of Funds” shall mean, (i) with respect to the Class A Advances for any Interest Accrual Period, interest accrued on such Class A Advances during such Interest Accrual Period at the Adjusted LIBOR Rate for such Interest Accrual Period or, if the Adjusted LIBOR Rate is not available, the Base Rate and (ii) with respect to the Class B Advances for any Interest Accrual Period, interest accrued on such Class B Advances during such Interest Accrual Period at the Adjusted LIBOR Rate for such Interest Accrual Period or, if the Adjusted LIBOR Rate is not available, the Base Rate.
“Covered Entity” means any of the following: (i) a "covered entity" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii)    a "covered bank" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a "covered FSI" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Covered Party” shall have the meaning set forth in Section 10.24 hereof.
“Credit Card Receivable” shall mean Host Customer Payments that are made via credit card.
“CS Conduit Lender” shall mean Mountcliff Funding LLC.
“CS Lender Group” shall mean a group consisting of the CS Conduit Lender, the CS Non-Conduit Lender and CSNY, as a Funding Agent for such Lenders.
“CS Non-Conduit Lender” shall mean Credit Suisse AG, Cayman Islands Branch.

A-13

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“CSNY” shall have the meaning set forth in the introductory paragraph hereof.
“Customer Collection Policy” shall mean the initial Manager’s internal collection policy as described in each Management Agreement; provided that from and after the appointment of a Successor Manager pursuant to such Management Agreement, the “Customer Collection Policy” shall mean the collection policy of such Successor Manager for servicing assets comparable to the Borrower Solar Assets (as defined in such Management Agreement).
“Customer Warranty Agreement” shall mean any separate warranty agreement provided by Parent to a Host Customer (which may be an exhibit to a Solar Service Agreement) in connection with the performance and installation of the related PV System (which may include a Performance Guaranty).
“Cut‑off Date” shall mean, (i) for each Solar Asset acquired on the Closing Date, the date that is three (3) Business Days prior to the Closing Date, and (ii) for any Additional Solar Asset, the date specified as such in the related Schedule of Solar Assets.
“Default Level” shall mean, for any Collection Period, the quotient (expressed as a percentage) of (i) the sum of the Discounted Solar Asset Balances of all Eligible Solar Assets that became Defaulted Solar Assets during such Collection Period and that did not repay all past due portions of a contractual payment due under the related Solar Service Agreement by the end of such Collection Period, divided by (ii) the Aggregate Discounted Solar Asset Balance on the first day of such Collection Period.
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“Defaulted Solar Asset” shall mean a Solar Asset for which the related Host Customer is more than 120 days past due on any portion of a contractual payment due under the related Solar Service Agreement; provided, however, once such amounts are paid in full by the Host Customer such Solar Asset shall no longer be a “Defaulted Solar Asset”. For the avoidance of doubt, any past due amounts owed by an original Host Customer after reassignment to or execution of a replacement Solar Service Agreement with a new Host Customer shall not cause the Solar Asset to be deemed to be a Defaulted Solar Asset.
“Defective Solar Asset” shall mean a Solar Asset with respect to which it is determined by the Administrative Agent (acting at the written direction of the Majority Lenders, such direction not to be unreasonably withheld, condition or delayed) or the Facility Administrator, at any time, that the Borrower breached as of the Transfer Date for such Solar Asset the representation in Section

A-14

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


4.1(U), unless such breach has been waived, in writing, by the Administrative Agent, acting at the direction of the Majority Lenders.
“Delayed Amount” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Date” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Lender” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Notice” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Reimbursement Amount” shall have the meaning set forth in Section 2.4(G).
“Delinquent Solar Asset” shall mean a Solar Asset for which the related Host Customer is more than 90 days past due on any portion of a contractual payment due under the related Solar Service Agreement; provided, however, once such amounts are paid in full by the Host Customer such Solar Asset shall no longer be a “Delinquent Solar Asset”.
“Discount Rate” shall mean, as of any date of determination, the greater of (i) 6.00% per annum and (ii) the Carrying Cost, in each case, determined as of such date of determination.
“Discounted Solar Asset Balance” shall mean, as of any date of determination (x)(i) with respect to the Managing Member Interests or the SAP Solar Assets (other than a Substantial Stage Solar Asset), the present value of the remaining and unpaid stream of Net Cash Flow on or after such date of determination, based upon discounting such Net Cash Flow to such date of determination at an annual rate equal to the Discount Rate, (ii) with respect to a Hedged SREC Solar Asset, the present value of the remaining and unpaid stream of Scheduled Hedged SREC Payments for such Hedged SREC Solar Asset on or after such date of determination, based upon discounting such Scheduled Hedged SREC Payments to such date of determination at an annual rate equal to the Discount Rate, and (iii) with respect to a Substantial Stage Solar Asset, the amount actually disbursed to channel partners for services rendered in respect of such Substantial Stage Solar Asset; provided, however, that in the case of either (i) or (ii), any Transferable Solar Asset will be deemed to have a Discounted Solar Asset Balance equal to [***], and (y) for purposes of determining the Default Level respect to a Host Customer Solar Asset, the present value of the remaining and unpaid stream of Net Scheduled Payments for such Host Customer Solar Asset for the period beginning on such date of determination and ending on the date of the last Net Scheduled Payment for such Host Customer Solar Asset shall be based upon discounting such Net Scheduled Payments to such date of determination at an annual rate equal to the Discount Rate.

A-15

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Disqualified Entity” shall have the meaning set forth in the Tax Equity Financing Documents.
“Disqualified Lender” shall mean any financial institution or other Persons identified in writing, prior to the Closing Date, by the Borrower to the Administrative Agent and any known Affiliate thereof clearly identifiable on the basis of its name (in each case, other than any Affiliate that is primarily engaged in, or that advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course and with respect to which such financial institution or other Person does not, directly or indirectly, possess the power to direct or cause the direction of the investment policies of such entity); provided that in no event shall a Lender designated under this Agreement as of the Closing Date be designated as a Disqualified Lender. The Borrower may from time to time update the list of Disqualified Lenders provided to the Administrative Agent prior to the Closing Date to (x) include identified Affiliates of financial institutions or other Persons identified pursuant to the preceding sentence; provided that such updates shall not apply retroactively to disqualify parties that have previously acquired an assignment or participation interest in the Commitment or (y) remove one or more Persons as Disqualified Lenders (in which case such removed Person or Persons shall no longer constitute Disqualified Lenders).
“Distributable Collections” shall have the meaning set forth in Section 2.7(B).
“Dodd‑Frank Act” shall mean the Dodd‑Frank Wall Street Reform and Consumer Protection Act.
“Dollar,” “Dollars,” “U.S. Dollars” and the symbol “$” shall mean the lawful currency of the United States.
“East Region” shall mean the states of New York, New Jersey, Massachusetts, Connecticut, Pennsylvania, Rhode Island, Maryland, Florida, and South Carolina and any other territory of the United States consented to in writing by the Administrative Agent.
“East Region Substantial Stage Date Solar Asset Reserve Amount” shall mean, as of any date of determination, the product of (i) 9/3 times (ii) the sum of the Class A Interest Distribution Amount and the Class B Interest Distribution Amount due and payable on the immediately succeeding Payment Date times (iii) the ratio of (x) the aggregate principal balance of all Advances related to Substantial Stage Solar Assets the Obligor of which is located in the East Region as of such date divided by (y) the Aggregate Outstanding Advances as of such date; provided, however, that solely for the purpose of determining the East Region Substantial Stage Date Solar Asset Reserve Amount as of the Closing Date, the East Region Substantial Stage Date Solar Asset Reserve Amount

A-16

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


shall be an amount reasonably calculated by the Administrative Agent and provided to the Borrower prior to the Closing Date.
“Effective Advance Rate” shall mean, as of any date of determination, the ratio of the Aggregate Outstanding Advances to the Aggregate Discounted Solar Asset Balance.
“Eligible Facility Administrator” shall mean Sunnova Management or any other operating entity which, at the time of its appointment as Facility Administrator, (i) is legally qualified and has the capacity to service the Solar Assets or provide administrative services to the Borrower, and (ii) prior to such appointment, is approved in writing by the Administrative Agent as having demonstrated the ability to professionally and competently service the Collateral and/or a portfolio of assets of a nature similar to the Eligible Solar Assets in accordance with high standards of skill and care.
“Eligible Hedged SREC Counterparty” shall mean (i) [reserved], (ii) any entity rated, or guaranteed (such guaranty to be acceptable to the Administrative Agent in its sole discretion) by an entity rated, investment grade by any of Moody’s, Standard & Poor’s, Fitch, Inc., DBRS, Inc. or Kroll Bond Rating Agency, Inc. and (iii) such other parties which are agreed to in writing by the Administrative Agent to be Eligible Hedged SREC Counterparties.
“Eligible Institution” shall mean a commercial bank or trust company having capital and surplus of not less than $[***] in the case of U.S. banks and $[***] (or the U.S. dollar equivalent as of the date of determination) in the case of foreign banks; provided that a commercial bank which does not satisfy the requirements set forth above shall nonetheless be deemed to be an Eligible Institution for purposes of holding any deposit account or any other account so long as such commercial bank is a federally or state chartered depository institution subject to regulations regarding fiduciary funds on deposit substantially similar to 12 C.F.R. § 9.10(b) and such account is maintained as a segregated trust account with the corporate trust department of such bank.
“Eligible Letter of Credit Bank” means a financial institution (a) organized in the United States, (b) having total assets in excess of $[***] and with a long term rating of at least “A-” by S&P or “A3” by Moody’s and a short term rating of at least “A-1” by S&P or “P-1” by Moody’s, and (c) approved by the Administrative Agent acting on the instructions of the Majority Lenders (such approval not to be unreasonably delayed withheld or delayed).
“Eligible Solar Asset” shall mean, on any date of determination, a Solar Asset:
(i)    which meets all of the criteria specified in Schedule I;

A-17

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(ii)    for which the legal title to the Host Customer Payments, PBI Payments, Energy Storage System Incentives, and Hedged SREC Payments related thereto is vested solely in a Financing Fund or SAP; and
(iii)    was acquired by a Financing Fund or SAP pursuant to the related SAP NTP Financing Documents, Tax Equity Financing Documents or the SAP Contribution Agreement, as applicable, and has not been sold or encumbered by the related Financing Fund or SAP except as permitted hereunder (with respect to Permitted Liens and Permitted Equity Liens) and under the applicable SAP Financing Documents, SAP NTP Financing Documents or Tax Equity Financing Documents.
“Energy Storage System” shall mean an energy storage system to be used in connection with a PV System, including all equipment related thereto (including any battery management system, wiring, conduits and any replacement or additional parts included from time to time).
“Energy Storage System Incentives” shall mean payments paid by a state or local Governmental Authority, based in whole or in part on the size of an Energy Storage System, made as an inducement to the owner thereof.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA, as in effect at the Closing Date and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.
“ERISA Affiliate” shall mean each Person (as defined in Section 3(9) of ERISA), which together with the Borrower, would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Internal Revenue Code or Section 4001(a)(14) or 4001(b)(1) of ERISA.
“ERISA Event” shall mean (i) that a Reportable Event has occurred with respect to any Single‑Employer Plan; (ii) the institution of any steps by the Borrower or any ERISA Affiliate, the Pension Benefit Guaranty Corporation or any other Person to terminate any Single‑Employer Plan or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, a Single‑Employer Plan; (iii) the institution of any steps by the Borrower or any ERISA Affiliate to withdraw from any Multi‑Employer Plan or Multiple Employer Plan or written notification of the Borrower or any ERISA Affiliate concerning the imposition of withdrawal liability; (iv) a non‑exempt “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code in connection with any Plan; (v) the cessation of operations at a facility of the Borrower or

A-18

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (vi) with respect to a Single‑Employer Plan, a failure to satisfy the minimum funding standard under Section 412 of the Internal Revenue Code or Section 302 of ERISA, whether or not waived; (vii) the conditions for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to a Single‑Employer Plan; (viii) a determination that a Single‑Employer Plan is or is expected to be in “at‑risk” status (within the meaning of Section 430(i)(4) of the Internal Revenue Code or Section 303(i)(4) of ERISA); (ix) the insolvency of or commencement of reorganization proceeding with respect to a Multi Employer Plan or written notification that a Multi‑Employer Plan is in “endangered” or “critical” status (within the meaning of Section 432 of the Internal Revenue Code or Section 305 of ERISA); or (x) the taking of any action by, or the threatening of the taking of any action by, the Internal Revenue Service, the Department of Labor or the Pension Benefit Guaranty Corporation with respect to any of the foregoing.
“Event of Default” shall mean any of the Events of Default described in Section 6.1.
“Event of Loss” shall mean the occurrence of an event with respect to a PV System if such PV System is damaged or destroyed by fire, theft or other casualty and such PV System has become inoperable because of such event.
“Excess Concentration Amount” shall mean the dollar amount specified as such on Schedule III of a Borrowing Base Certificate; provided, that for the periods (i) commencing on the Closing Date and ending one hundred eighty (180) days thereafter and (ii) commencing on the effective date of a Takeout Transaction and ending ninety (90) days thereafter, lines 34, 37 and 40 thereof shall not be included in the calculation of the Excess Concentration Amount.
“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (a) 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 applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) that are Other Connection Taxes, (ii) 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 pursuant to a Law in effect on the date on which (a) such Lender acquires such interest in the Loan or (b) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, 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, (iii) Taxes attributable to such Recipient’s failure to comply with Section 2.17(G) and (iv) any U.S. federal withholding Taxes imposed under FATCA.

A-19

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Expected Amortization Profile” shall mean the expected amortization schedule of any outstanding Advance or any Advance that has been requested pursuant to Section 2.4, as the context may require, as of the applicable date of determination as determined by the Administrative Agent using its proprietary model and in consultation with the Borrower.
“Expense Claim” shall have the meaning set forth in Section 10.21.
“Facility” shall mean this Agreement together with all other Transaction Documents.
“Facility Administration Agreement” shall mean the Facility Administration Agreement, dated as of the Closing Date, by and among the Borrower, the Facility Administrator and the Administrative Agent, as amended, restated, modified and/or supplemented from time to time in accordance with its terms.
“Facility Administrator” shall have the meaning set forth in the introductory paragraph hereof.
“Facility Administrator Fee” shall have the meaning set forth in Section 2.1(b) of the Facility Administration Agreement.
“Facility Administrator Report” shall have the meaning set forth in the Facility Administration Agreement.
“Facility Administrator Termination Event” shall have the meaning set forth in Section 7.1 of the Facility Administration Agreement.
“Facility Maturity Date” shall mean November 21, 2022.
“FATCA” shall mean Sections 1471 through 1474 of the Internal Revenue 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 interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code, and any intergovernmental agreements between the United States and another country which modify the provisions of the foregoing.
“FATCA Withholding Tax” means any withholding or deduction required pursuant to FATCA.
“Fee Letters” shall mean (i) that certain fee letter agreement, dated as of the Closing Date, entered into by and among the Administrative Agent and the Borrower, as the same be amended, restated, supplemented or otherwise modified from time to time, and (ii) any other fee letter between

A-20

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


the Borrower and any other Lender or other Person, as the same be amended, restated, supplemented or otherwise modified from time to time.
“Final Stage Solar Asset” shall mean a Solar Asset for which the related PV System is fully installed but has not received Permission to Operate.
“Final Stage Solar Asset Reserve Amount” shall mean, as of any date of determination, the product of (i) 5/3 times (ii) the sum of the Class A Interest Distribution Amount and the Class B Interest Distribution Amount due and payable on the immediately succeeding Payment Date times (iii) the ratio of (x) the aggregate principal balance of all Advances related to Final Stage Solar Assets as of such date divided by (y) the Aggregate Outstanding Advances as of such date; provided, however, that solely for the purpose of determining the Final Stage Solar Asset Reserve Amount as of the Closing Date, the Final Stage Solar Asset Reserve Amount shall be an amount reasonably calculated by the Administrative Agent and provided to the Borrower prior to the Closing Date.
“Financial Covenants” shall have the meaning set forth in the Parent Guaranty.
“Financing Fund” shall mean, collectively, each entity set forth under the heading “Financing Funds” on Schedule VIII hereto.
“Financing Fund Contributions” shall mean any capital contributions from Parent or its Affiliates to Borrower or a Managing Member for contribution to a Financing Fund.
“Financing Fund LLCA” shall mean, collectively, each document set forth under the heading “Financing Fund LLCAs” on Schedule VIII hereto.
“First Payment Date Reserve Amount” shall mean, as of any date of determination, the product of (i) 1/3 times (ii) the sum of the Class A Interest Distribution Amount and the Class B Interest Distribution Amount due and payable on the immediately succeeding Payment Date times (iii) the ratio of (x) the aggregate principal balance of all Advances related to Solar Assets which have received Permission to Operate but have not yet made a payment under the related Solar Service Agreement as of such date divided by (y) the Aggregate Outstanding Advances as of such date.
“Funding Agent” shall mean, individually or collectively as the context may require, each Class A Funding Agent and each Class B Funding Agent, as applicable.
“Funding Date” shall mean any Business Day on which an Advance is made at the request of the Borrower in accordance with provisions of this Agreement.

A-21

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“GAAP” shall mean generally accepted accounting principles as are in effect from time to time and applied on a consistent basis (except for changes in application in which the Borrower’s independent certified public accountants and the Administrative Agent reasonably agree) both as to classification of items and amounts.
“Governmental Authority” shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Hedge Agreement” shall mean, collectively, (i) the ISDA Master Agreement, the related Schedule to the ISDA Master Agreement, and the related Confirmation or (ii) a long form confirmation, in each case in form and substance reasonably acceptable to the Administrative Agent.
“Hedge Counterparty” shall mean the initial counterparty under a Hedge Agreement, and any Qualifying Hedge Counterparty to such Hedge Agreement thereafter.
“Hedge Requirements” shall mean the requirements of the Borrower (i) within two (2) Business Days of the Closing Date and on each Funding Date to enter into forward-starting interest rate swap agreements with a forward start date no later than the Facility Maturity Date to an aggregate DV01 exposure of within +/- 5.0% of the then present value of such forward-starting interest rate swap agreement according to the aggregate Expected Amortization Profile of the Aggregate Outstanding Advances and, to the extent the expected notional balance of the Aggregate Outstanding Advances is equal to or greater than $5,000,000, with an amortizing notional balance schedule which, after giving effect to such interest rate swap agreement, will cause not greater than 125.0% and not less than 75.0% of the aggregate Expected Amortization Profile of the Aggregate Outstanding Advances to be subject to a fixed interest rate, with each such interest rate swap agreement being entered into at the market fixed versus LIBOR swap rate as at the date of the execution thereof and (ii) upon the election of the Borrower or no later than five (5) Business Days following the occurrence of a Hedge Trigger Event and each Funding Date thereafter enter into one or more interest rate swap or cap agreements with a Hedge Counterparty, under which the Borrower will expect to, at all times until the Facility Maturity Date, receive on or about each Payment Date, an amount required to maintain a fixed interest rate or interest rate protection at then current market interest rates on not greater than 110.0% and not less than 90.0% of the expected notional balance of the Aggregate Outstanding Advances through the Facility Maturity Date (determined after giving effect to Advances and payments made on the applicable Funding Date) (it being understood that an interest rate swap agreement entered into under clause (i) of this definition of “Hedge

A-22

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Requirements” (to the extent the effective date thereof is earlier than the Facility Maturity Date) may be taken into account in determining whether the Borrower satisfies the requirements of this clause (ii)).
“Hedge Trigger Event” shall mean the occurrence of either of the following (i) LIBOR for any Interest Accrual Period is greater than or equal to 2.75% or (ii) the end of the Availability Period.
“Hedged SREC” shall mean a solar renewable energy certificate representing any and all environmental credits, benefits, emissions reductions, offsets and allowances, howsoever entitled, that are created or otherwise arise from a PV System’s generation of electricity, including a solar renewable energy certificate issued to comply with a State’s renewable portfolio standard, which is subject to a Hedged SREC Agreement.
“Hedged SREC Agreement” shall mean, with respect to a PV System, the agreement evidencing all conditions to the payment of Hedged SREC Payments by the Eligible Hedged SREC Counterparty and the rate and timing of such Hedged SREC Payments.
“Hedged SREC Credit Support Obligations” shall mean that Indebtedness constituting credit support for Hedged SRECs in favor of Eligible Hedged SREC Counterparties in the form of guarantees, letters of credit and similar reimbursement and credit support obligations.
“Hedged SREC Payments” shall mean, with respect to a PV System and the related Hedged SREC Agreement, all payments due by the related Eligible Hedged SREC Counterparty under or in respect of such Hedged SREC Agreement.
“Hedged SREC Solar Asset” shall mean (i) a Hedged SREC Agreement and all rights and remedies of the Borrower thereunder, including all Hedged SREC Payments due on and after the related Cut-Off Date and any related security therefor, (ii) the related Hedged SRECs subject to such Hedged SREC Agreement, and (iii) all documentation in the Solar Asset File and other documents held by the Verification Agent related to such Hedged SREC Agreement and related Hedged SRECs.
“Host Customer” shall mean the customer under a Solar Service Agreement.
“Host Customer Payments” shall mean with respect to a PV System and a Solar Service Agreement, all payments due from the related Host Customer under or in respect of such Solar Service Agreement, including any amounts payable by such Host Customer that are attributable to sales, use or property taxes.

A-23

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Host Customer Security Deposit” shall mean any security deposit that a Host Customer must provide in accordance with such Host Customer’s Solar Service Agreement or the Facility Administrator’s credit and collections policy.
“Host Customer Solar Asset” shall mean (i) a PV System installed on a residential property, (ii) all related real property rights, Permits and Manufacturer Warranties (in each case, to the extent transferable), (iii) all rights and remedies of the lessor/seller under the related Solar Service Agreement, including all Host Customer Payments on and after the related Cut-Off Date and any related security therefor (other than Host Customer Security Deposits) and all Energy Storage System Incentives, (iv) all related PBI Solar Assets on and after the related Cut-Off Date, and (v) all documentation in the Solar Asset File and other documents held by the Verification Agent related to such PV System, the Solar Service Agreement and PBI Documents, if any.
“Indebtedness” shall mean as to any Person at any time, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (i) borrowed money; (ii) obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (iii) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility; (iv) reimbursement obligations under any letter of credit, currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device (other than in connection with this Agreement); (v) obligations of such Person to pay the deferred purchase price of property or services; (vi) obligations of such Person as lessee under leases which have been or should be in accordance with GAAP recorded as capital leases; (vii) any other transaction (including without limitation forward sale or purchase agreements, capitalized leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements, and whether structured as a borrowing, sale and leaseback or a sale of assets for accounting purposes; (viii) any guaranty or endorsement of, or responsibility for, any Indebtedness of the types described in this definition; (ix) liabilities secured by any Lien on property owned or acquired, whether or not such a liability shall have been assumed (other than any Permitted Liens or Permitted Equity Liens); or (x) unvested pension obligations.
“Indemnified Taxes” shall mean (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Transaction Document and (ii) to the extent not otherwise described in clause (i), Other Taxes.
“Indemnitees” shall have the meaning set forth in Section 10.5.
“Independent Accountant” shall have the meaning set forth in the Facility Administration Agreement.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Independent Director” shall have the meaning set forth in Section 5.1(M).
“Initial Solar Asset” shall mean each Solar Asset listed on the Schedule of Solar Assets as of the Closing Date.
“Insolvency Event” shall mean, with respect to any Person:
(i)    the commencement of: (a) a voluntary case by such Person under the Bankruptcy Code or (b) the seeking of relief by such Person under other debtor relief Laws in any jurisdiction outside of the United States;
(ii)    the commencement of an involuntary case against such Person under the Bankruptcy Code (or other debtor relief Laws) and the petition is not controverted or dismissed within sixty (60) days after commencement of the case;
(iii)    a custodian (as defined in the Bankruptcy Code) (or equal term under any other debtor relief Law) is appointed for, or takes charge of, all or substantially all of the property of such Person;
(iv)    such Person commences (including by way of applying for or consenting to the appointment of, or the taking of possession by, a rehabilitator, receiver, custodian, trustee, conservator or liquidator (or any equal term under any other debtor relief Laws) (collectively, a “conservator”) of such Person or all or any substantial portion of its property) any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency, liquidation, rehabilitation, conservatorship or similar law of any jurisdiction whether now or hereafter in effect relating to such Person;
(v)    such Person is adjudicated by a court of competent jurisdiction to be insolvent or bankrupt;
(vi)    any order of relief or other order approving any such case or proceeding referred to in clauses (i) or (ii) above is entered;
(vii)    such Person suffers any appointment of any conservator or the like for it or any substantial part of its property that continues undischarged or unstayed for a period of sixty (60) days; or
(viii)    such Person makes a compromise, arrangement or assignment for the benefit of creditors or generally does not pay its debts as such debts become due.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Interconnection Agreement” shall mean, with respect to a PV System, a contractual obligation between a utility and a Host Customer that allows the Host Customer to interconnect such PV System to the utility electrical grid.
“Interest Accrual Period” shall mean for each Payment Date, the period from and including the immediately preceding Payment Date to but excluding such Payment Date except that the Interest Accrual Period for the initial Payment Date shall be the actual number of days from and including the Closing Date to, but excluding, the initial Payment Date; provided, however, that with respect to any application of Distributable Collections pursuant to Section 2.7(C) on a Business Day other than a Payment Date, the “Interest Accrual Period” shall mean the period from and including the immediately preceding Payment Date to but excluding such Business Day.
“Interest Distribution Amount” shall mean, individually or collectively as the context may require, the Class A Interest Distribution Amount and the Class B Interest Distribution Amount. For the avoidance of doubt, the Interest Distribution Amount shall not constitute “Confidential Information.”
“Intermediate Holdco” shall mean Sunnova Intermediate Holdings, LLC, a Delaware limited liability company.
“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, or any successor statute, and the rules and regulations thereunder, as the same are from time to time in effect.
“Inverter” shall mean, with respect to a PV System, the necessary device required to convert the variable direct electrical current (DC) output from a Solar Photovoltaic Panel into a utility frequency alternating electrical current (AC) that can be used by a Host Customer’s home or property, or that can be fed back into a utility electrical grid pursuant to an Interconnection Agreement.
“Law” shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, guideline, judgment, injunction, writ, decree or award of any Governmental Authority.
“Lease Agreement” shall mean an agreement between the owner of the PV System and a Host Customer whereby the Host Customer leases a PV System from such owner for fixed or escalating monthly payments.
“Lender Group” shall mean, individually or collectively as the context may require, each Class A Lender Group and each Class B Lender Group, as applicable.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Lender Group Percentage” shall mean, individually or collectively as the context may require, each Class A Lender Group Percentage and each Class B Lender Group Percentage, as applicable.
“Lender Representative” shall have the meaning set forth in Section 10.16(B)(i).
“Lenders” shall have the meaning set forth in the introductory paragraph hereof.
“Letter of Credit” means any letter of credit issued by an Eligible Letter of Credit Bank and provided by the Borrower to the Administrative Agent in lieu of or in substitution for moneys otherwise required to be deposited in the Liquidity Reserve Account or the Supplemental Reserve Account, as applicable, which Letter of Credit is to be held as an asset of the Liquidity Reserve Account or the Supplemental Reserve Account, as applicable, and which satisfies each of the following criteria: (i) the related account party of which is not the Borrower, (ii) is issued for the benefit of the Paying Agent, (iii) has a stated expiration date of at least 180 days from the date of determination (taking into account any automatic renewal rights), (iv) is payable in Dollars in immediately available funds to the Paying Agent upon the delivery of a draw certificate duly executed by the Paying Agent stating that (A) such draw is required pursuant to Section 8.2(C) or (D), as applicable, or (B) the issuing bank ceased to be an Eligible Letter of Credit Bank and the Letter of Credit has not been extended or replaced with a Letter of Credit issued by an Eligible Letter of Credit Bank within ten (10) Business Days such issuing bank ceasing to be an Eligible Letter of Credit Bank, (v) the funds of any draw request submitted by the Paying Agent in accordance with Sections 8.2(C) and (D) will be made available in cash no later than two (2) Business Days after the Paying Agent submits the applicable drawing documents to the related Eligible Letter of Credit Bank, and (vi) that has been reviewed by the Administrative Agent and otherwise contains terms and conditions that are acceptable to the Administrative Agent. For purposes of determining the amount on deposit in the Liquidity Reserve Account or the Supplemental Reserve Account, as applicable, the Letter of Credit shall be valued at the amount as of any date then available to be drawn under such Letter of Credit.
“LIBOR” shall mean (a) an interest rate per annum equal to the rate appearing on the applicable Screen Rate; or (b) (if no Screen Rate is available for U.S. Dollars or the Interest Accrual Period or such Screen Rate ceases to be available), the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Administrative Agent at its request quoted by the Base Reference Banks, in each case at approximately 11:00 A.M., London time, two (2) Business Days prior to the commencement of such Interest Accrual Period for the offering of deposits in U.S. Dollars in the principal amount of the Advances and for a three (3) month period. Notwithstanding the foregoing, if LIBOR as determined herein would be less than zero (0.00), such rate shall be deemed to be zero percent (0.00%) for purposes of this Agreement. Notwithstanding the foregoing,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


if at any time while any Advances are outstanding, the applicable London interbank offered rate described in the definition of Screen Rate ceases to exist or be reported on the Screen Rate, the Administrative Agent may select (with notice to the Borrower and any other Lenders) an alternative rate, including any applicable spread adjustments thereto (the "Alternative Rate") that in its commercially reasonable judgment is consistent with the successor for the London interbank offered rate, including any applicable spread adjustments thereto, generally being used in the new issue collateralized loan obligation market and all references herein to "LIBOR" will mean such Alternative Rate selected by the Administrative Agent.
“Lien” shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing).
“Liquidated Damages Amount” shall have the meaning set forth in the Sale and Contribution Agreement.
“Liquidation Fee” shall mean for any Interest Accrual Period for which a reduction of the principal balance of the relevant Advance is made for any reason, on any day other than the last day of such Interest Accrual Period, the amount, if any, by which (A) the additional interest (calculated without taking into account any Liquidation Fee or any shortened duration of such Interest Accrual Period) which would have accrued during the portion of such Interest Accrual Period for which the cost of funding had been established prior to such reduction of the principal balance on the portion of the principal balance so reduced, exceeds (B) the income, if any, received by the Conduit Lender or the Non-Conduit Lender which holds such Advance from the investment of the proceeds of such reductions of principal balance for the portion of such Interest Accrual Period for which the cost of funding had been established prior to such reduction of the principal balance. A statement as to the amount of any Liquidation Fee (including the computation of such amount) shall be submitted by the affected Conduit Lender or the Non-Conduit Lender to the Borrower and shall be prima facie evidence of the matters to which it relates for the purpose of any litigation or arbitration proceedings, absent manifest error or fraud. Such statement shall be submitted five (5) Business Days prior to such amount being due.
“Liquidity Reserve Account” shall have the meaning set forth in Section 8.2(A)(iii).
“Liquidity Reserve Account Required Balance” shall mean on any date of determination, an amount equal to the sum of (i) the product of (a) six, (b) one-twelfth, (c) the Aggregate Outstanding

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Advances and (d) the weighted average effective per annum rate used to calculate the Class A Interest Distribution Amounts and the Class B Interest Distribution Amounts for the immediately preceding Payment Date or, with respect to the initial Payment Date hereunder, 5.58%, (ii) the Final Stage Solar Asset Reserve Amount, (iii) the East Region Substantial Stage Date Solar Asset Reserve Amount, (iv) the Non-East Region Substantial Stage Date Solar Asset Reserve Amount and (v) the First Payment Date Reserve Amount.
“Loan Note” shall mean, individually or collectively as the context may require, each Class A Loan Note and each Class B Loan Note, as applicable.
“Majority Class B Lenders” shall mean, as of any date of determination, Class B Lenders having Class B Advances exceeding fifty percent (50%) of all outstanding Class B Advances.
“Majority Lenders” shall mean, as of any date of determination, (i) unless and until all Obligations owing to any Class A Lender solely in its capacity as a Class A Lender have been reduced to zero, Class A Lenders having Class A Advances exceeding fifty percent (50%) of all outstanding Class A Advances, and (ii) at any time on and after all Obligations owing to each Class A Lender solely in its capacity as Class A Lender have been reduced to zero, Class B Lenders having Class B Advances exceeding fifty percent (50%) of all outstanding Class B Advances; provided, that (w) in the event that no Advances are outstanding as of such date, “Majority Lenders” shall mean Administrative Agent, (x) so long as CSNY, its Affiliates or any related Conduit Lender with respect to CSNY or its Affiliates (the foregoing collectively referred to herein as the “Credit Suisse Related Parties”) holds at least twenty-five percent (25%) of Class A Advances or, if no Obligations are owing to any Class A Lender, Class B Advances or, if no Obligations are owing to any Lender, “Majority Lenders” shall include such Credit Suisse Related Party holding such Advances hereunder and (y) at any time there are two or less Class A Lenders, the term “Majority Lenders” shall mean all Class A Lenders holding at least ten percent (10%) of Class A Advances. For the purposes of determining the number of Lenders in the foregoing proviso, Affiliates of a Lender shall constitute the same Lender.  
“Management Agreement” shall mean, collectively, each document set forth under the heading “Management Agreements” on Schedule VIII hereto.
“Manager” shall mean, collectively, each entity set forth under the heading “Managers” on Schedule VIII hereto.
“Manager Fee” shall mean the fees, expenses and other amounts owed to the Manager pursuant to the Management Agreements.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Managing Member” shall mean, collectively, each entity set forth under the heading “Managing Members” on Schedule VIII hereto.
“Managing Member Distributions” shall mean all distributions and payments in any form made, or due to be made, to the Managing Members or the Borrower in connection with its ownership interest in the Managing Member Interests, including Hedged SREC Payments.
“Managing Member Distributions Payment Level” shall mean, for any Collection Period, the quotient (expressed as a percentage) of (i) the sum of all Managing Member Distributions actually received in the Collection Account during such Collection Period, divided by (ii) the Scheduled Managing Member Distributions during such Collection Period.
“Managing Member Interests” shall mean, collectively, the Managing Members’ interest in 100% of the interests listed under the heading “Managing Member Interests” on Schedule VIII hereto.
“Manufacturer’s Warranty” shall mean any warranty given by a manufacturer of a PV System relating to such PV System or any part or component thereof.
“Margin Stock” shall have the meaning set forth in Regulation U.
“Marketable REC” shall mean a renewable energy certificate representing any and all environmental credits, benefits, emissions reductions, offsets and allowances, howsoever entitled, that are created or otherwise arise from a PV System’s generation of electricity, including a solar renewable energy certificate issued to comply with a State’s renewable portfolio standard and in each case resulting from the avoidance of the emission of any gas, chemical, or other substance attributable to the generation of solar energy by a PV System. For the avoidance of doubt, Marketable RECs do not include any renewable energy certificates that are the basis for PBI Payments or to which a PBI Obligor is given title to under a performance based incentive program or the basis for any Hedged SREC Payments.
“Master Purchase Agreement” shall mean, collectively, each document set forth under the heading “Master Purchase Agreements” on Schedule VIII hereto.
“Material Adverse Effect” shall mean, any event or circumstance having a material adverse effect on any of the following: (i) the business, property, operations or financial condition of the Borrower, the Facility Administrator, the Parent, a Financing Fund, a Managing Member or SAP, (ii) the ability of the Borrower or the Facility Administrator to perform its respective obligations under the Transaction Documents (including the obligation to pay interest that is due and payable), (iii) the validity or enforceability of, or the legal right to collect amounts due under or with respect

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


to, a material portion of the Eligible Solar Assets, or (iv) the priority or enforceability of any liens in favor of the Administrative Agent.
“Maturity Date” shall mean the earliest to occur of (i) the Facility Maturity Date, (ii) the occurrence of an Event of Default and declaration of all amounts due in accordance with Section 6.2(B) and (iii) the date of any voluntary termination of the Facility by the Borrower; provided that the Maturity Date may be extended in accordance with Section 2.16.
“Maximum Facility Amount” shall mean $150,000,000.
“Minimum Payoff Amount” shall mean, with respect to a Takeout Transaction, an amount of proceeds equal to the sum of (i) the product of the aggregate Discounted Solar Asset Balance or the Collateral subject to such Takeout Transaction times the Effective Advance Rate then in effect plus (ii) any accrued interest with respect to the amount of principal of Advances being prepaid in connection with such Takeout Transaction, plus (iii) any fees due and payable to any Lender or the Administrative Agent with respect to such Takeout Transaction; provided that if such Takeout Transaction is being undertaken to cure an Event of Default, then the Minimum Payoff Amount shall include such additional proceeds as are necessary to cure such Event of Default, if any.
“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor rating agency.
“Multi‑Employer Plan” shall mean a multi‑employer plan, as defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making or accruing an obligation to make contributions or has within any of the preceding five plan years made or accrued an obligation to make contributions or had liability with respect to.
“Multiple Employer Plan” shall mean a Single Employer Plan, to which the Borrower or any ERISA Affiliate, and one or more employers other than the Borrower or an ERISA Affiliate, is making or accruing an obligation to make contributions or, in the event that any such plan has been terminated, to which the Borrower or an ERISA Affiliate made or accrued an obligation to make contributions during any of the five plan years preceding the date of termination of such plan.
“Nationally Recognized Accounting Firm” shall mean (A) PricewaterhouseCoopers LLP, Ernst & Young LLP, KPMG LLC, Deloitte LLP and any successors to any such firm and (B) any other public accounting firm designated by the Parent and approved by the Administrative Agent, such approval not to be unreasonably withheld or delayed.
“Net Cash Flow” shall mean for any Collection Period (i) with respect to the Managing Member Interests (A) the Scheduled Managing Member Distributions minus (B) the sum of (x) the Tax Equity Investor Distribution Reduction Amount for such Collection period and (y) amounts

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


attributable to (1) Solar Assets that were Transferable Solar Assets as of the last day of such Collection Period, and (2) SRECs related to the Solar Assets that are not Hedged SRECs, and (ii) with respect to a SAP Solar Asset (other than a Substantial Stage Solar Asset), an amount equal to (A) the sum of (x) the Scheduled Host Customer Payment for such SAP Solar Asset during such Collection Period, plus (y) the Scheduled PBI Payments for such SAP Solar Asset during such Collection Period minus (B) the Operational Amounts for such Collection Period.
“Net Scheduled Payment” shall mean, with respect to a Host Customer Solar Asset and PBI Solar Asset and any Collection Period an amount equal to (i) the sum of (A) the Scheduled Host Customer Payment for such Host Customer Solar Asset during such Collection Period, plus (B) the Scheduled PBI Payments for such Host Customer Solar Asset during such Collection Period, minus (ii) the Manager Fee and the Servicing Fee allocated with respect to such Host Customer Solar Asset during such Collection Period.
“Non-Conduit Lender” shall mean each Lender that is not a Conduit Lender.
“Non-East Region” means any state or territory of the United States that is not an East Region state or territory.
“Non-East Region Substantial Stage Date Solar Asset Reserve Amount” shall mean, as of any date of determination, the product of (i) 8/3 times (ii) the sum of the Class A Interest Distribution Amount and the Class B Interest Distribution Amount due and payable on the immediately succeeding Payment Date times (iii) the ratio of (x) the aggregate principal balance of all Advances related to Substantial Stage Solar Assets the Obligor of which is located in a Non-East Region as of such date divided by (y) the Aggregate Outstanding Advances as of such date; provided, however, that solely for the purpose of determining the Non-East Region Substantial Stage Date Solar Asset Reserve Amount as of the Closing Date, the Non-East Region Substantial Stage Date Solar Asset Reserve Amount shall be an amount reasonably calculated by the Administrative Agent and provided to the Borrower prior to the Closing Date.
“Notice of Borrowing” shall have the meaning set forth in Section 2.4.
“Obligations” shall mean and include, with respect to each of the Borrower, SAP, the Managing Members or Parent, respectively, all loans, advances, debts, liabilities, obligations, covenants and duties owing by such Person to the Administrative Agent, the Paying Agent or any Lender of any kind or nature, present or future, arising under this Agreement, the Loan Notes, the Security Agreement, the Pledge Agreement, the Subsidiary Guaranty, any of the other Transaction Documents or any other instruments, documents or agreements executed and/or delivered in connection with any of the foregoing, but, in the case of Parent, solely to the extent Parent is a party

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


thereto, whether or not for the payment of money, whether arising by reason of an extension of credit, the issuance of a letter of credit, a loan, guaranty, indemnification or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising. The term includes the principal amount of all Advances, together with interest, charges, expenses, fees, attorneys’ and paralegals’ fees and expenses, any other sums chargeable to the Borrower or Parent, as the case may be, under this Agreement or any other Transaction Document pursuant to which it arose but, in the case of Parent, solely to the extent Parent is a party thereto.
“OFAC” shall have the meaning set forth in Section 4.1(S).
“Officer’s Certificate” shall mean a certificate signed by an authorized officer of an entity.
“Operational Amounts” shall mean amounts necessary for SAP to pay the Manager for O&M Services and Servicing Services related to Solar Assets owned by SAP.
“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Transaction Document, or sold or assigned an interest in any Solar Asset or Transaction Document).
“Other Taxes” shall mean 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 Transaction Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.
“O&M Services” shall mean the services required to be performance by the Manager pursuant to the terms of each Management Agreement, including all administrative, operations, maintenance, collection and other management services with respect to the related Solar Assets, maintaining required insurance and collecting sales and use taxes payable by Host Customers under their Solar Service Agreements.
“Parent” shall mean Sunnova Energy Corporation, a Delaware corporation.
“Parent Guaranty” shall mean the Limited Performance Guaranty, dated as of the Closing Date, by the Parent in favor of the Borrower and the Administrative Agent.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Participant” shall have the meaning set forth in Section 10.8.
“Participant Register” shall have the meaning set forth in Section 10.8.
“Parts” shall mean components of a PV System.
“Patriot Act” shall have the meaning set forth in Section 10.18.
“Paying Agent” shall have the meaning set forth in the introductory paragraph hereof.
“Paying Agent Account” shall have the meaning set forth in Section 8.2(A)(v).
“Paying Agent Fee” shall mean a fee payable by the Borrower to the Paying Agent as set forth in the Paying Agent Fee Letter.
“Paying Agent Fee Letter” shall mean that certain letter agreement, dated as of August 22, 2019, between the Borrower and the Paying Agent.
“Paying Agent Indemnified Parties” shall have the meaning set forth in Section 9.5.
“Payment Date” shall mean the 30th day of each October, January, April and July or, if such 30th day is not a Business Day, the next succeeding Business Day, commencing October 2019.
“Payment Facilitation Agreement” shall mean each modification, waiver or amendment agreement (including a replacement Solar Service Agreement) entered into by the Manager in accordance with a Servicing Agreement relating to a Solar Service Agreement.
“PBI Documents” shall mean, with respect to a PV System, (i) all applications, forms and other filings required to be submitted to a PBI Obligor in connection with the performance based incentive program maintained by such PBI Obligor and the procurement of PBI Payments, and (ii) all approvals, agreements and other writings evidencing (a) that all conditions to the payment of PBI Payments by the PBI Obligor have been met, (b) that the PBI Obligor is obligated to pay PBI Payments and (c) the rate and timing of such PBI Payments.
“PBI Liquidated Damages” shall mean any liquidated damages due and payable to a PBI Obligor in respect of a Solar Asset.
“PBI Obligor” shall mean a utility or Governmental Authority that maintains or administers a renewable energy program designed to incentivize the installation of PV Systems and use of solar generated electricity that has approved and is obligated to make PBI Payments to the owner of the related PV System.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“PBI Payments” shall mean, with respect to a PV System and the related PBI Documents, all payments due by the related PBI Obligor under or in respect of such PBI Documents; provided, that PBI Payments do not include Rebates or Hedged SRECs or amounts received, if any, in respect of Hedged SRECs.
“PBI Solar Assets” shall mean (i) all rights and remedies of the payee under any PBI Documents related to such PV System, including all PBI Payments on and after the related Transfer Date and (ii) all documentation in the Solar Asset File and other documents held by the Verification Agent related to such than PBI Documents.
“Performance Guaranty” shall mean, with respect to a PV System, an agreement in the form of a production warranty between the Host Customer and Parent (or in some cases, between the Host Customer and the owner of the Solar Asset), which the Facility Administrator has agreed to perform on behalf of the Borrower that specifies a minimum level of solar energy production, as measured in kWh, for a specified time period. Such guarantees stipulate the terms and conditions under which the Host Customer could be compensated if their PV System does not meet the electricity production guarantees.
“Permission to Operate” shall mean, with respect to any PV System, receipt of a letter or functional equivalent from the connecting utility authorizing such PV System to be operated.
“Permits” shall mean, with respect to any PV System, the applicable permits, franchises, leases, orders, licenses, notices, certifications, approvals, exemptions, qualifications, rights or authorizations from or registration, notice or filing with any Governmental Authority required to operate such PV System.
“Permitted Assignee” shall mean (a) a Lender or any of its Affiliates, (b) any Person managed by a Lender or any of its Affiliates, and (c) any Program Support Provider for any Conduit Lender, an Affiliate of any Program Support Provider, or any commercial paper conduit administered, sponsored or managed by a Lender or to which a Non-Conduit Lender provides liquidity support, an Affiliate of a Lender or an Affiliate of an entity that administers or manages a Lender or with respect to which the related Program Support Provider of such commercial paper conduit is a Lender.
“Permitted Equity Liens” shall mean the ownership interest of the related Tax Equity Investor in the related Tax Equity Facility and in each case arising under the related Financing Fund LLCA.
“Permitted Indebtedness” shall mean (i) Indebtedness under the Transaction Documents, and (ii) to the extent constituting Indebtedness, reimbursement obligations of the Borrower owed to the Borrower in connection with the payment of expenses incurred in the ordinary course of

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


business in connection with the financing, management, operation or maintenance of the Solar Assets or the Transaction Documents.
“Permitted Investments” shall mean any one or more of the following obligations or securities: (i) (a) direct interest bearing obligations of, and interest-bearing obligations guaranteed as to payment of principal and interest by, the United States or any agency or instrumentality of the United States the obligations of which are backed by the full faith and credit of the United States; (b) direct interest-bearing obligations of, and interest-bearing obligations guaranteed as to payment of principal and interest by, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, but only if, at the time of investment, such obligations are assigned the highest credit rating by S&P; and (c) evidence of ownership of a proportionate interest in specified obligations described in (a) and/or (b) above; (ii) demand, time deposits, money market deposit accounts, certificates of deposit of and federal funds sold by, depository institutions or trust companies incorporated under the laws of the United States of America or any state thereof (or domestic branches of foreign banks), subject to supervision and examination by federal or state banking or depository institution authorities, and having, at the time of a relevant Borrower’s investment or contractual commitment to invest therein, a short term unsecured debt rating of “A-1” by S&P; (iii) securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States of America or any state thereof which have a rating of no less than “A-1+” by S&P and a maturity of no more than 365 days; (iv) commercial paper (including both non-interest bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the closing date thereof) of any corporation (other than the Parent), incorporated under the laws of the United States of America or any state thereof, that, at the time of the investment or contractual commitment to invest therein, a rating of “A-1” by S&P; (v) money market mutual funds, or any other mutual funds registered under the 1940 Act which invest only in other Permitted Investments, having a rating, at the time of such investment, in the highest rating category by S&P; (vi) money market deposit accounts, demand deposits, time deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal or state banking or depository institution authorities; provided, however, that at the time of the investment or contractual commitment to invest therein, the commercial paper or other short-term unsecured debt obligations (other than such obligations the rating of which is based on the credit of a Person other than such depository institution or trust company) thereof will be rated “A-1+” by S&P, including proprietary money market funds offered or managed by the Paying Agent or an Affiliate thereof; (vii) repurchase agreements with respect to obligations of, or guaranteed as to principal and interest by, the United States of America or any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States of America; provided, however, that the unsecured obligations of the party agreeing to repurchase such obligations at the time have a credit rating of no less than the A-1 by S&P; and

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(viii) any investment agreement (including guaranteed investment certificates, forward delivery agreements, repurchase agreements or similar obligations) with an entity which on the date of acquisition has a credit rating of no less than the A-1 by S&P, in each case denominated in or redeemable in Dollars.
“Permitted Investor” shall mean collectively, Energy Capital Partners III, LP, Energy Capital Partners III-A, LP, Energy Capital Partners III-B, LP, Energy Capital Partners III-C, LP and Energy Capital Partners-D, LP, Quantum Strategic Partners, and each of their Permitted Transferees (as defined in the Investors Agreement, dated as of March 29, 2018, by and among the Parent and the other signatories thereto).
“Permitted Liens” shall mean (i) any lien for taxes, assessments and governmental charges or levies owed by the applicable asset owner and not yet due and payable or which are being contested in good faith, (ii) Liens in favor of the Administrative Agent (or in favor of the Borrower and created pursuant to the Transaction Documents), (iii) solely in the case of Substantial Stage Solar Assets and Final Stage Solar Assets, workmen’s, mechanic’s, or similar statutory Liens securing obligations owing to approved channel partners (or subcontractors of channel partners) which are not yet due or for which reserves in accordance with GAAP have been established; provided that any such Solar Asset shall be classified as a Defective Solar Asset if not resolved within sixty (60) days of such Solar Asset receiving Permission to Operate from the applicable Governmental Authority, (iv) Liens on cash collateral or other liquid assets in favor of Eligible Hedged SREC Counterparties securing Hedged SREC Credit Support Obligations that constitute Permitted Indebtedness, (v) to the extent a PV System constitutes a fixture, any conflicting interest of an encumbrancer or owner of the real property that has or would have priority over the applicable UCC fixture filing (or jurisdictional equivalent) so long as any such lien does not adversely affect the rights of the Borrower of the Administrative Agent and (vi) any rights of customers under Host Customers Agreements.
“Person” shall mean any individual, corporation (including a business trust), partnership, limited liability company, joint‑stock company, trust, unincorporated organization or association, joint venture, government or political subdivision or agency thereof, or any other entity.
“Plan” shall mean an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code as to which the Borrower or any Affiliate may have any liability.
“Pledge Agreement” shall mean the Pledge Agreement, dated as of the Closing Date, by TEP Resources, the Borrower and the Managing Members in favor of the Administrative Agent, as amended, restated, modified and/or supplemented from time to time in accordance with its terms.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Potential Amortization Event” shall mean any occurrence or event that, with notice, passage of time or both, would constitute an Amortization Event.
“Potential Default” shall mean any occurrence or event that, with notice, passage of time or both, would constitute an Event of Default.
“Power Purchase Agreement” shall mean an agreement between the owner of the PV System and a Host Customer whereby the Host Customer agrees to purchase electricity produced by such PV System for a fixed fee per kWh.
“Prepaid Solar Asset” shall mean a Solar Asset for which the related Host Customer has prepaid all amounts under the related Solar Service Agreement.
“Projected Purchase Option Price” shall mean, with respect to a Purchase Option, an amount estimated by the related Managing Member and agreed upon by the Administrative Agent on or before the Scheduled Commitment Termination Date. Should the Availability Period expire before the Scheduled Commitment Termination Date, the Administrative Agent may use its reasonable judgment to estimate the Projected Purchase Option Price.
“Program Support Provider” shall mean and include any Person now or hereafter extending liquidity or credit or having a commitment to extend liquidity or credit to or for the account of, or to make purchases from, a Conduit Lender (or any related commercial paper issuer that finances such Conduit Lender) in support of commercial paper issued, directly or indirectly, by such Conduit Lender in order to fund Advances made by such Conduit Lender hereunder.
“Projected SREC Hedge Ratio” shall mean, with respect to a state and SREC Year, the quotient (expressed as a percentage) of (i) the sum of all SRECs to be delivered for such SREC Year (or portion of an SREC Year remaining) under Hedged SREC Agreements for such state, divided by (ii) SRECs that are available for delivery in such SREC Year (or portion of an SREC Year remaining) in such state, as calculated by the Administrative Agent. For the avoidance of doubt, only PV Systems that have been certified for SREC production will be included in the calculation of SRECs available for delivery.
“Puerto Rico Solar Asset” shall mean a Host Customer Solar Asset for which the related PV System is installed on a residence in Puerto Rico.
“Purchase Option” shall mean, collectively, each purchase option set forth under the heading “Purchase Options” on Schedule VIII hereto.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Purchase Option Price” shall have the meaning set forth in the Tax Equity Financing Documents.
“Purchase Standard” shall mean (i) the terms of the related Financing Fund LLCA and the terms of the Transaction Documents to which the Borrower is a party, (ii) the availability of funds in the Supplemental Reserve Account to pay the Purchase Option Price as then projected by the Facility Administrator and (iii) the same degree of analysis that the Borrower and its Affiliates use in determining whether or not to exercise similar purchase options for comparable assets owned by the Borrower and its Affiliates, taking into consideration the best interests of all parties to the Transaction Documents.
“PV System” shall mean, with respect to a Solar Asset, a photovoltaic system, including Solar Photovoltaic Panels, Inverters, Racking Systems, any Energy Storage Systems installed in connection therewith, wiring and other electrical devices, as applicable, conduits, weatherproof housings, hardware, remote monitoring equipment, connectors, meters, disconnects and over current devices (including any replacement or additional parts included from time to time).
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

“QFC Credit Support” shall have the meaning set forth in Section 10.24 hereof.
“Qualified Service Provider” shall mean one or more Independent Accountants or, subject to the approval of Administrative Agent, other service providers.
“Qualifying Hedge Counterparty” shall mean (i) a counterparty which at all times satisfies all then applicable counterparty criteria of S&P or Moody’s for eligibility to serve as counterparty under a structured finance transaction rated “A+”, in the case of S&P or “A1”, in the case of Moody’s or (ii) an affiliate of any Funding Agent (in which case rating agency counterparty criteria shall not be applicable).
“Qualifying Hedge Counterparty Joinder” shall mean that certain Joinder Agreement executed by a Qualifying Hedge Counterparty and acknowledged by the Administrative Agent, a copy of which shall be provided to all Parties to this Agreement.
“Racking System” shall mean, with respect to a PV System, the hardware required to mount and securely fasten a Solar Photovoltaic Panel onto the Host Customer site where the PV System is located.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Rebate” shall mean any rebate by a PBI Obligor, electric distribution company, or state or local governmental authority or quasi‑governmental agency as an inducement to install or use a PV System, paid upon such PV System receiving Permission to Operate.
“Recipient” shall mean the Administrative Agent, the Lenders or any other recipient of any payment to be made by or on account of any obligation of the Borrower under this Agreement or any other Transaction Document.
“Register” shall have the meaning set forth in Section 10.8.
“Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Relevant Parties” shall mean the Borrower, the Managing Members and SAP.
“Reportable Event” shall mean a reportable event as defined in Section 4043 of ERISA and the regulations issued under such Section, with respect to a Plan, excluding, however, such events as to which the Pension Benefit Guaranty Corporation by regulation or by public notice waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event, provided, that a failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waivers in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Internal Revenue Code.
“Required Tax Loss Insurance Coverage Period” shall mean the period beginning on the date on which a Tax Loss Insurance Policy is issued to, if prior to the scheduled expiration of a Tax Loss Insurance Policy, the Internal Revenue Service commenced an investigation of a Financing Fund that could result in a Tax Loss Indemnity with respect to such Financing Fund, the date of either (a) the termination of such investigation without a determination by the Internal Revenue Service that results in a Tax Loss Indemnity or (b) a final determination with respect to such investigation and payment of any Tax Loss Indemnity resulting from such final determination.
“Responsible Officer” shall mean (x) with respect to the Paying Agent, any President, Vice President, Assistant Vice President, Assistant Secretary, Assistant Treasurer or Corporate Trust Officer, or any other officer in the Corporate Trust Office customarily performing functions similar to those performed by any of the above designated officers, in each case having direct responsibility for the administration of this Agreement or the Facility Administration Agreement, as applicable, and (y) with respect to any other party hereto, any corporation, limited liability company or partnership, the chairman of the board, the president, any vice president, the secretary, the treasurer, any assistant secretary, any assistant treasurer, managing member and each other officer of such

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


corporation or limited liability company or the general partner of such partnership specifically authorized in resolutions of the board of directors of such corporation or managing member of such limited liability company to sign agreements, instruments or other documents in connection with the Transaction Documents on behalf of such corporation, limited liability company or partnership, as the case may be, and who is authorized to act therefor.
“S&P” shall mean S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, or any successor rating agency.
“Sale and Contribution Agreement” shall mean that certain Sale and Contribution Agreement, dated as of the Closing Date, by and among the Seller, TEP Resources and the Borrower.
“SAP” shall mean Sunnova SAP IV, LLC, a Delaware limited liability company.
“SAP Contribution Agreement” shall mean that certain Contribution Agreement, dated as of the Closing Date, between the Borrower and SAP.
“SAP Distributions” shall mean all distributions and payments in any form made, or due to be made, to the Borrower in connection with its ownership interest in SAP.
“SAP Financing Documents” shall mean the documents listed on Schedule IX hereto
“SAP NTP Financing Documents” shall mean the documents listed on Schedule X hereto.
“SAP Revenue Account” shall have the meaning set forth in Section 8.2(A)(iv).
“SAP Solar Asset” shall mean a Solar Asset owned by SAP.
“SAP Transfer” shall mean a transfer of Solar Assets pursuant to the SAP NTP Financing Documents pursuant to which (i) the SAP Solar Assets subject to such transfer are contemporaneously transferred to a Financing Fund and (ii) after giving effect thereto, neither a Class A Borrowing Base Deficiency nor a Class B Borrowing Base Deficiency exists, as demonstrated in a Borrowing Base Certificate delivered by the Borrower to the Administrative Agent no later than two (2) Business Days prior to the SAP Transfer.
“Schedule of Solar Assets” shall mean, as the context may require, the Schedule of Solar Assets owned by the Financing Funds and SAP, as such schedule may be amended from time to time in connection with the delivery of a Notice of Borrowing.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Scheduled Commitment Termination Date” shall mean May 20, 2022, unless otherwise extended pursuant to and in accordance with Section 2.16.
“Scheduled Hedged SREC Payments” shall mean the payments scheduled to be paid by an Eligible Hedged SREC Counterparty during each Collection Period, if any, as set forth on Schedule IV hereto, as the same may be updated from time to time.
“Scheduled Host Customer Payments” shall mean for each Solar Asset, the payments scheduled to be paid by a Host Customer during each Collection Period in respect of the initial term of the related Solar Services Agreement, as set forth on Schedule V hereto, as the same may be updated from time to time and may be adjusted by the Facility Administrator to reflect that such Solar Asset has become a Defaulted Solar Asset, a Defective Solar Asset or if a Payment Facilitation Agreement has been executed in connection with such Solar Asset. The Scheduled Customer Payments exclude any amounts attributable to sales, use or property taxes to be collected from Host Customers.
“Scheduled Managing Member Distributions” shall mean forecasted Managing Member Distributions set as set forth on Schedule VII hereto.
“Scheduled PBI Payments” shall mean for each Solar Asset, the payments scheduled to be paid by a PBI Obligor during each Collection Period, if any, as set forth on Schedule VI hereto, as the same may be updated from time to time and may be adjusted by the Facility Administrator to reflect that such Solar Asset has become a Defaulted Solar Asset, a Defective Solar Asset or if a Payment Facilitation Agreement has been executed in connection with such Solar Asset.
“Screen Rate” shall mean the London interbank offer rate administered by ICE Benchmark Administration Limited for the relevant currency and period displayed on the appropriate page of the Thomson Reuters screen. If the agreed page is replaced or service ceases to be available, the Administrative Agent may specify another page or service displaying the same rate after consultation with the Borrower and the Majority Lenders.
“Secured Parties” shall mean the Administrative Agent, each Lender and each Qualifying Hedge Counterparty.
“Security Agreement” shall mean the Security Agreement, dated as of the Closing Date, executed and delivered by the Borrower, SAP and the Managing Members in favor of the Administrative Agent, for the benefit of the Secured Parties, as amended, restated, modified and/or supplemented from time to time in accordance with its terms.
“SEI” shall mean Sunnova Energy International Inc., a Delaware corporation.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Seller” shall mean TEP Developer.
“Servicing Agreement” shall mean, collectively, each document set forth under the heading “Servicing Agreements” on Schedule VIII hereto.
“Servicing Fee” shall mean the fees, expenses and other amounts owed to the Manager pursuant to the Servicing Agreements.
“Servicing Services” shall mean the services required to be performed by the Manager pursuant to the terms of each Servicing Agreement, including all billing and collection services with respect to the related Solar Assets.
“Single Employer Plan” shall mean any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multi‑Employer Plan, that is subject to Title IV of ERISA or Section 412 of the Internal Revenue Code and is sponsored or maintained by the Borrower or any ERISA Affiliate or for which the Borrower or any ERISA Affiliate may have liability by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.
“Solar Asset” shall mean a Host Customer Solar Asset, PBI Solar Asset or a Hedged SREC Solar Asset, in each case owned by a Financing Fund or SAP, as applicable.
“Solar Asset File” shall have the meaning set forth in the Verification Agent Agreement.
“Solar Asset Owner Member Interests” shall mean, collectively, the 100.00% equity interests in the Managing Members and SAP.
“Solar Asset Payment Level” shall mean, for any Collection Period, the quotient (expressed as a percentage) of (i) the sum of all Host Customer Payments, PBI Payments, Hedged SREC Payments actually received by the Financing Fund or SAP, as applicable, during such Collection Period, divided by (ii) the sum of all Scheduled Host Customer Payments, Scheduled PBI Payments and Scheduled Hedged SREC Payments during such Collection Period.
“Solar Photovoltaic Panel” shall mean, with respect to a PV System, the necessary hardware component that uses wafers made of silicon, cadmium telluride, or any other suitable material, to generate a direct electrical current (DC) output using energy from the sun’s light.
“Solar Service Agreement” shall mean in respect of a PV System, a Lease Agreement or a Power Purchase Agreement entered into with a Host Customer and all related Ancillary Solar Service Agreements, including any related Payment Facilitation Agreements, but excluding any Performance Guaranty or Customer Warranty Agreement.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Solvent” shall mean, with respect the Borrower, that as of the date of determination, both (a) (i) the sum of such entity’s debt (including contingent liabilities) does not exceed the present fair saleable value of such entity’s present assets; (ii) such entity’s capital is not unreasonably small in relation to its business as contemplated on the Closing Date; and (iii) such entity 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 (b) such entity is “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).
“SREC” shall mean a solar renewable energy certificate representing any and all environmental credits, benefits, emissions reductions, offsets and allowances, howsoever entitled, that are created or otherwise arise from a PV System’s generation of electricity, including, but not limited to, a solar renewable energy certificate issued to comply with a State’s renewable portfolio standard.
“SREC Year” shall mean (i) with respect to New Jersey, the twelve-month period beginning on June 1 and ending on May 31 and numbered in accordance with the calendar year in which such twelve-month period ends and (ii) with respect to Massachusetts, a calendar year.
“Subsidiary” shall mean, with respect to any Person at any time, (i) any corporation or trust of which 50% or more (by number of shares or number of votes) of the outstanding Capital Stock or shares of beneficial interest normally entitled to vote for the election of one or more directors, managers or trustees (regardless of any contingency which does or may suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person’s subsidiaries, or any partnership of which such Person or any of such Peron’s Subsidiaries is a general partner or of which 50% or more of the partnership interests is at the time directly or indirectly owned by such Person or one or more of such Person’s subsidiaries, and (ii) any corporation, trust, partnership or other entity which is controlled or capable of being controlled by such Person or one or more of such Person’s subsidiaries.
“Subsidiary Guaranty” shall mean the Guaranty, dated as of the Closing Date, by SAP, the Managing Members and each other party joined thereto as a guarantor in favor of the Administrative Agent.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Substantial Stage Solar Asset” shall mean a Solar Asset that has not yet been installed but for which the Parent or an Affiliate thereof has been issued a “notice to proceed” confirming that the Host Customer has signed a Solar Service Agreement, and a channel partner has submitted a final design proposal and such proposal has been approved by the Parent or an Affiliate thereof, as of a Funding Date.
“Successor Facility Administrator” shall mean a successor Facility Administrator appointed pursuant to the Facility Administration Agreement.
“Sunnova Credit Facility” shall mean any financing agreement providing extensions of credit to the Parent or its Subsidiaries in which the Administrative Agent or its affiliates is a lender, agent or noteholder thereunder.
“Sunnova Inventory Holdings” shall mean Sunnova Inventory Holdings, LLC, a Delaware limited liability company.
“Sunnova Inventory Pledgor” shall mean Sunnova Inventory Pledgor, LLC, a Delaware limited liability company.
“Sunnova Management” shall mean Sunnova TE Management, LLC, a Delaware limited liability company.
“Supplemental Reserve Account” shall have the meaning set forth in Section 8.2(A)(ii).
“Supplemental Reserve Account Deposit” shall mean, for any Payment Date after Availability Period, an amount equal to the sum of (i) any Supplemental Reserve Account Deposit amounts from Payment Dates not deposited into the Supplemental Reserve Account, and (ii) the lesser of (a) the product of (1) one-fourth of $[***] and (2) the aggregate DC nameplate capacity (measured in kW) of all PV Systems owned by the Financing Funds and SAP which are operational (excluding Transferable Solar Assets) and that have related Solar Service Agreements with remaining terms that exceed the remaining terms of the related manufacturer warranty for the Inverter associated with such PV System and (b) the Supplemental Reserve Account Required Balance as of the related Calculation Date minus the sum of (1) the amount on deposit in the Supplemental Reserve Account as of the related Calculation Date, and (2) the amount, if any, being deposited into the Supplemental Reserve Account on such Payment Date pursuant to clause (i). Notwithstanding the foregoing, the Supplemental Reserve Account Deposit shall be $0 for any Payment Date on which the sum of Distributable Collections is greater than or equal to the sum of (i) the payments and distributions required under clauses (i) through (iii) of Section 2.7(B) and (ii) the Aggregate Outstanding Advances as of such Payment Date prior to any distributions made on such Payment Date.

A-45

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Supplemental Reserve Account Required Balance” shall mean, as of any date of determination, (i) prior to the end of the Availability Period, $[***] or (ii) after the Availability Period, an amount equal to the sum of (a) for any Payment Date prior to the date on which a Managing Member has acquired the related Tax Equity Investor Interests in the related Financing Fund pursuant to the related Purchase Option, the sum of the Projected Purchase Option Prices under each Financing Fund, (b) for any Payment Date during a Required Tax Loss Insurance Coverage Period, the Tax Loss Insurance Deductibles and (c) the product of (1) $[***] and (2) the aggregate DC nameplate capacity (measured in kW) of all PV Systems owned by the Financing Funds and SAP which are operational (excluding Transferable Solar Assets) and that have related Solar Service Agreements with remaining terms that exceed the remaining terms of the related manufacturer warranty for the Inverter associated with such PV System.

“Supported QFC” shall have the meaning set forth in Section 10.24 hereof.
“Swap Rate” shall mean, as of any date of determination, the then current weighted average of (i) the fixed interest rates under the swap agreements entered into in accordance with clause (i) of the definition of Hedge Requirements and (ii) with respect to any Advance not yet hedged in accordance with such clause (i) the then current fixed versus LIBOR swap rate associated with the Expected Amortization Profile of such Advance, as determined by the Administrative Agent in consultation with the Borrower.
“Takeout Agreements” shall mean agreements, instruments, documents and other records entered into in connection with a Takeout Transaction.
“Takeout Transaction” shall mean (i) any sale, assignment or other transfer of the Solar Asset Owner Member Interests and related Collateral (either directly or through the sale, assignment or other transfer of all the Capital Stock of the Borrower) by the Borrower to any of its Affiliates (including a special purpose bankruptcy remote subsidiary of Parent) or to a third party, in each case, in an arms’ length transaction, which Collateral is used to secure or provide for the payment of amounts owing (or to be owing) or expected as a result of the issuance of equity or debt securities or other Indebtedness by a Person other than the Borrower that are backed by such Collateral (a “Financing Transaction”); provided, that there is no Borrowing Base Deficiency, then the Borrower may only enter into a Takeout Transaction if immediately after giving effect to such Financing Transaction, (w) no Event of Default exists (unless such Event of Default would be cured by application of the net proceeds of such Financing Transaction), (x) an amount equal to the greater of $[***] or the Minimum Payoff Amount for the Collateral removed from the Borrower in the Financing Transaction shall be deposited into the Takeout Transaction Account for distribution in accordance with Section 2.8(C), (y) there are no selection procedures utilized which are materially adverse to the Lenders with respect to those items of the Collateral assigned by the Borrower in the

A-46

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Financing Transaction and (z) such Financing Transaction is not guaranteed by and has no material recourse to the Borrower (except that such assets are being sold and assigned by it free and clear of all Liens), (ii) a financing arrangement, securitization, sale or other disposition of such Collateral (either directly or through the sale or other disposition of all the Capital Stock of the Borrower, a Managing Member, a Financing Fund or SAP) entered into by Borrower or any of its Affiliates other than under this Agreement so long as (1) all proceeds of such transaction shall have been deposited into the Takeout Transaction Account and (2) such proceeds are sufficient, together with any equity contributions of the Parent, to repay the Obligations prorated to the reduction in the Borrowing Base as a result of such transaction, or (iii) any other financing arrangement, securitization, sale or other disposition of items of Collateral (either directly or through the sale or other disposition of the Capital Stock of the Borrower, a Managing Member, a Financing Fund, or SAP) entered into by Borrower or any of its Affiliates other than under this Agreement that is not a Financing Transaction and that has been consented to in writing by the Administrative Agent and the Majority Lenders.
“Takeout Transaction Account” shall have the meaning set forth in Section 8.2(A)(v).
“Tax Credit” shall mean an investment tax credit under Section 48(a)(3)(A)(i) of the Code or any successor provision.
“Tax Equity Facility” shall mean each transaction contemplated by the Tax Equity Financing Documents.
“Tax Equity Financing Documents” shall mean, collectively, each document set forth under the heading “Tax Equity Financing Documents” on Schedule VIII hereto.
“Tax Equity Investor” shall mean, collectively, each entity set forth under the heading “Tax Equity Investors” on Schedule VIII hereto.
“Tax Equity Investor Consent” shall mean the consent of a Tax Equity Investor of the related Tax Equity Financing Documents, as applicable relating to the transactions contemplated by this Facility.
“Tax Equity Investor Distribution Reduction Amount” shall mean, for any Collection Period, amounts required to be paid by the Financing Funds to the Tax Equity Investors, in each case, which reduce Scheduled Managing Member Distributions for such Collection Period.
“Tax Equity Investor Interests” shall mean the Tax Equity Investors’ interest in 100% of the Class A Interest in the related Financing Fund.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Tax Equity Party” shall mean each of the Financing Funds, the Managing Members and SAP.
“Tax Loss” shall mean the amount a Tax Credit and other federal tax benefits assumed in the Base Case Model that the respective Financing Fund, the respective Managing Member or the respective Tax Equity Investor (or their respective affiliates) shall lose the benefit of, shall not have the right to claim, shall suffer the disallowance or reduction of, shall be required to recapture or shall not claim (as a result of a final determination in accordance with the terms of such Financing Fund LLCA.
“Tax Loss Claim” shall mean the assertion by the Internal Revenue Service of a position that would result in a Tax Loss Indemnity if not reversed through administrative action or litigation.
“Tax Loss Indemnity” shall mean a Managing Member’s obligation, pursuant to the terms of the related Financing Fund LLCA, to pay the related Tax Equity Investor the amount of any Tax Loss, reduced by any Tax Savings and grossed up for any U.S. federal interest, penalties, fines or additions to tax payable by a Managing Member or the related Tax Equity Investor (or their respective affiliates) as a result thereof and for the net amount of any additional U.S. federal income taxes payable by a Managing Member or the related Tax Equity Investor (or their respective affiliates) as a result of including any Tax Loss Indemnity payment in its income, in each case as a result of the breach or inaccuracy of certain representations, warranties and covenants of a Managing Member set forth in such Financing Fund LLCA or the failure by Managing Member to comply with applicable law in connection with its acts or omissions pursuant to, or the performance of any covenant or obligation under, such Financing Fund LLCA.
“Tax Loss Insurance Deductible” shall mean, with respect to a Tax Loss Insurance Policy, the deductible due under such Tax Loss Insurance Policy. Should the Availability Period expire before a Tax Loss Insurance Policy is entered into, the Administrative Agent may use reasonable judgment to estimate the Tax Loss Insurance Deductible.
“Tax Loss Insurance Policy” shall mean the policy of insurance issued by a Tax Loss Insurer with respect to a Financing Fund naming such Financing Fund and the related Managing Member as insureds and such Financing Fund as loss payee, in form and substance (including, but not limited to, amounts and coverage period) approved by the Administrative Agent in its sole discretion.
“Tax Loss Insurer” shall mean the insurance company party to any Tax Loss Insurance Policy.
“Tax Savings” shall mean, with respect to a Tax Loss, any federal income tax savings realized by a Managing Member or the related Tax Equity Investor (or their respective affiliates) as a result

A-48

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


of the Tax Loss, using an assumed tax rate equal to the maximum allowable U.S. federal corporate income tax rate applicable to corporations as of a given date of determination.
“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, and including any interest, additions to tax or penalties applicable thereto.
“TEP Collateral Account” shall have the meaning set forth in Section 5.1(W).
“TEP Developer” shall mean Sunnova TEP Developer, LLC, a Delaware limited liability company.
“TEP II Credit Agreement” shall mean that certain Amended and Restated Credit Agreement, dated as of March 29, 2019, by and among Sunnova TEP II Holdings, LLC, a Delaware limited liability company, as borrower, Sunnova TE Management II, LLC, a Delaware limited liability company, as facility administrator, the financial institutions from time to time parties thereto, as lenders, each funding agent representing a group of lenders thereunder, Credit Suisse AG, New York Branch, as administrative agent for the lenders thereunder, Wells Fargo Bank, National Association, not in its individual capacity, but solely as paying agent, and U.S. Bank National Association, as verification agent, as amended, restated, modified and/or supplemented.
“TEP II Transaction Documents” shall mean the “Transaction Documents” referred to in the TEP II Credit Agreement.
“TEP Inventory” shall mean Sunnova TEP Inventory, a Delaware limited liability company.
“TEP Resources” shall mean Sunnova TEP Resources, a Delaware limited liability company.
“Terminated Solar Asset” shall mean a Solar Asset for which the related PV System has experienced an Event of Loss and (i) is not repaired, restored, replaced or rebuilt to substantially the same condition as it existed immediately prior to the Event of Loss within 120 days of such Event of Loss or (ii) is deemed to be a “Cancelled Project” in accordance with the related Master Purchase Agreement.
“Transaction Documents” shall mean this Agreement, the Loan Notes, the Security Agreement, the Pledge Agreement each Fee Letter, the Paying Agent Fee Letter, the Verification Agent Fee Letter, the Facility Administration Agreement, the Verification Agent Agreement, the Contribution Agreements, the Sale and Contribution Agreement, the SAP Contribution Agreement, the Parent Guaranty, the Tax Equity Investor Consents, each Hedge Agreement, and any other agreements, instruments, certificates or documents delivered hereunder or thereunder or in

A-49

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


connection herewith or therewith, and “Transaction Document” shall mean any of the Transaction Documents.
“Transfer Date” shall mean (i) with respect to Initial Solar Assets, the Closing Date and (ii) (x) with respect to any Additional Solar Asset that is not a SAP Solar Asset, the date on which such Additional Solar Asset is included in the definition of Borrowing Base and the Lenders make an Advance against such Additional Solar Asset and (y) with respect to any Additional Solar Asset that is a SAP Solar Asset, the date set forth in the relevant Additional Solar Asset Supplement (as defined in the Sale and Contribution Agreement).
“Transferable Solar Asset” shall mean (i) any Solar Asset that constitutes a Defaulted Solar Asset, Defective Solar Asset, Delinquent Solar Asset, or Terminated Solar Asset and (ii) any other Solar Asset that is not an Eligible Solar Asset hereunder.
“UCC” shall mean the Uniform Commercial Code as from time to time in effect in any applicable jurisdiction.
“Underwriting and Reassignment Credit Policy” shall mean the internal underwriting and reassignment policy of TEP Developer attached as Exhibit J hereto.
“United States” shall mean the United States of America.
“Unused Line Fee” shall have the meaning set forth in Section 2.5(D).
“Unused Line Fee Percentage” shall have the meaning set forth in the Fee Letter referred to in clause (i) of the definition thereof.
“Unused Portion of the Commitments” shall mean, as of any date of determination, the sum of the Class A Unused Portion of the Commitments plus the Class B Unused Portion of the Commitments as of such date of determination.
“Usage Percentage” shall mean, as of such date of determination, a percentage equal to (i) the Aggregate Outstanding Advances divided by (ii) the Aggregate Commitment as of such date.
“U.S. Person” shall mean any Person who is a U.S. person within the meaning of Section 7701(a)(30) of the Internal Revenue Code.

“U.S. Special Resolution Regime” shall have the meaning set forth in Section 10.24 hereof.

A-50

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“U.S. Tax Compliance Certificate” shall have the meaning set forth in Section 2.17(G)(ii)(b)(3).
“Verification Agent” shall have the meaning set forth in the introductory paragraph hereof.
“Verification Agent Agreement” shall mean the Verification Agent Agreement dated as of or about the Closing Date, by and among the Verification Agent, the Borrower, the Facility Administrator and the Administrative Agent, as amended, restated, modified and/or supplemented from time to time in accordance with its terms.
“Verification Agent Fee” shall mean a fee payable by the Borrower to the Verification Agent as set forth in the Verification Agent Fee Letter.
“Verification Agent Fee Letter” shall mean the Verification Agent Fee Letter, dated as of the date hereof, among the Borrower and the Verification Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.


A-51

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT B‑1
FORM OF BORROWING BASE CERTIFICATE
BORROWING BASE CERTIFICATE
SUNNOVA TEP HOLDINGS, LLC
[DATE]
In connection with that certain Credit Agreement, dated as of September 6, 2019 (as may be amended from time to time, the “Credit Agreement”), by and among SUNNOVA TEP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA TE MANAGEMENT, LLC, a Delaware limited liability company, as Facility Administrator (in such capacity, the “Facility Administrator”), CREDIT SUISSE AG, NEW YORK BRANCH, as Administrative Agent for the financial institutions that may become parties thereto as Lenders, the Lenders, WELLS FARGO BANK, NATIONAL ASSOCIATION, as Paying Agent, and U.S. BANK NATIONAL ASSOCIATION, as Verification Agent, the Borrower hereby certifies that
1.    The attached Schedule I sets forth the borrowing base calculations with respect to Class A Advances on the proposed Funding Date (the “Class A Borrowing Base Calculation”) and provides all data used, in Excel format, to calculate the foregoing as of the date set forth above and the computations reflected in the Class A Borrowing Base Calculation are true, correct and complete.
2.    The attached Schedule II sets forth the borrowing base calculations with respect to Class B Advances on the proposed Funding Date (the “Class B Borrowing Base Calculation”) and provides all data used, in Excel format, to calculate the foregoing as of the date set forth above and the computations reflected in the Class B Borrowing Base Calculation are true, correct and complete.
3.    The attached Schedule III sets forth the Excess Concentration Amount calculations on the Funding Date (the “Excess Concentration Amount Calculation”) and provides all data used, in Excel format, to calculate the foregoing as of the date set forth above and the computations reflected in the Excess Concentration Amount Calculation are true, correct and complete.
4.    Each Solar Asset included in the Class A Borrowing Base Calculations and in the Class B Borrowing Base Calculations constitutes an Eligible Solar Asset as of the

B-1-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


date hereof and the Excess Concentration Amount Calculation has been computed based on the information known to the Borrower or Facility Administrator as of the date hereof.
Capitalized terms used but not defined herein shall have the meanings specified in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first written above.
SUNNOVA TEP HOLDINGS, LLC, as Borrower
By:
_________________________________
Name:
Title:


B-1-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE I

Class A Borrowing Base Calculation

1. Aggregate Discounted Solar Asset Balance
$_____________
2. Excess Concentration Amount (see Line 45 of Schedule III)
$_____________
3. Line 1 minus Line 2
$_____________
4. Solar Assets other than Puerto Rico Solar Assets or Substantial Stage Solar Assets included in Line 3 times 70.00%
$_____________
5. Puerto Rico Solar Assets other than Substantial Stage Solar Assets included in Line 3 times 63.00%
$_____________
6. Substantial Stage Solar Assets included in Line 3 times (x) during the Borrowing Base Step-up Period, 61.25% and (y) at all times after the Borrowing Base Step-up Period, 52.50%
$_____________
7. Line 4 plus Line 5 plus Line 6 (the “Class A Borrowing Base”)
$_____________
8. The Class A Aggregate Commitment
87,500,00
9. The lesser of Line 7 or Line 8
$_____________
                        



B-1-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE II
Class B Borrowing Base Calculation
1. Aggregate Discounted Solar Asset Balance
$_____________

2. Excess Concentration Amount (see Line 45 of Schedule III)
$_____________

3. Line 1 minus Line 2
$_____________

4. Solar Assets other than Puerto Rico Solar Assets or Substantial Stage Solar Assets included in Line 3 times 10.00%
$_____________

5. Puerto Rico Solar Assets other than Substantial Stage Solar Assets included in Line 3 times 9.00%
$_____________

6. Substantial Stage Solar Assets included in Line 3 times (x) during the Borrowing Base Step-up Period, 8.75% and (y) at all times after the Borrowing Base Step-up Period, 7.50%
$_____________

7. Line 4 plus Line 5 plus Line 6 (the “Class B Borrowing Base”)
$_____________

8. The Class B Aggregate Commitment

$12,500,000

9. The lesser of Line 7 or Line 8
$_____________



B-1-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



SCHEDULE III
Excess Concentration Amount Calculation
1.    Aggregate Discounted Solar Asset Balance
$_____________
2.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer had a FICO score of less than [***] at the time of origination
$_____________
3.    Line 1 times 35.0%
$_____________
4.    Line 2 minus 3 (enter $0 if less than $0)
$_____________
 
 
5.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer had a FICO score of less than [***] at the time of origination
$_____________
6.    Line 1 times 28.0%
$_____________
7.    Line 5 minus Line 6 (enter $0 if less than $0)
$_____________
 
 
8.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer reside in the state in the United States with the highest concentration of Host Customers measured by the aggregate Discounted Solar Asset Balance in each state and the Aggregate Discounted Solar Asset Balance
$_____________
9.    Line 1 times 50.0%
$_____________
10.    Line 8 minus Line 9 (enter $0 if less than $0)
$_____________
 
 
11.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer reside in any one of the two states in the United States with either the highest or the second highest concentrations of Host Customers measured by the aggregate Discounted Solar Asset Balance in each state and the Aggregate Discounted Solar Asset Balance
$_____________
12.    Line 1 times 75.0%
$_____________
13.    Line 11 minus Line 12 (enter $0 if less than $0)
$_____________
 
 
14.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer reside in any one of the three states in the United States with either the highest, second highest or third highest concentrations of Host Customers measured by the aggregate Discounted Solar Asset Balance in each state and the Aggregate Discounted Solar Asset Balance
$_____________
15.    Line 1 times 85.0%
$_____________
16.    Line 14 minus Line 15 (enter $0 if less than $0)
$_____________

B-1-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


17.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer was a resident of Puerto Rico, Guam or the Northern Mariana Islands at the time of origination
$_____________
18.    Line 1 times 20.0%
$_____________
19.    Line 17 minus Line 18 (enter $0 if less than $0)
$_____________
20.    [Reserved]
$_____________
21.    [Reserved]
$_____________
22.    [Reserved]
$_____________
23.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer was a resident of Guam at the time of origination
$_____________
24.    Line 1 times 7.5%
$_____________
25.    Line 23 minus Line 24 (enter $0 if less than $0)
$_____________
26.    The aggregate Discounted Solar Asset Balance for Eligible Solar Assets in which the related Host Customer was a resident of the Northern Mariana Islands at the time of origination
$_____________
27.    Line 1 times 1.5%
$_____________
28.    Line 26 minus Line 27 (enter $0 if less than $0)
$_____________
29.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets with Credit Card Receivables
$_____________
30.    Line 1 times 2.5%
$_____________
31.    Line 29 minus Line 30 (enter $0 if less than $0)
$_____________
32.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets that are Final Stage Solar Assets
$_____________
33.    Line 1 times 20.0%
$_____________
34.    Line 32 minus Line 33 (enter $0 if less than $0)
$_____________
35.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets that are Substantial Stage Solar Assets
$_____________
36.    Line 1 times 20.0%
$_____________
37.    Line 35 minus Line 36 (enter $0 if less than $0)
$_____________
38.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets that are Final Stage Solar Assets or Substantial Stage Solar Assets
$_____________
39.    Line 1 times 35.0%
$_____________
40.    Line 38 minus Line 39 (enter $0 if less than $0)
$_____________
41.    The aggregate portion of the Discounted Solar Asset Balance of all Eligible Solar Assets for which the related PV System includes an Energy Storage System
$_____________
42.    Line 1 times 50.0%
$_____________
43.    Line 41 minus Line 42 (enter $0 if less than $0)
$_____________

B-1-6

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


44.    The aggregate Discounted Solar Asset Balance of all Eligible Solar Assets relating to any one Host Customer which exceeds the lesser of (i) one percent (1.00%) the Maximum Facility Amount and (ii) the U.S. Dollar equivalent of 1.5 million Swiss Francs (calculated at the rate of exchange at which, in accordance with normal banking procedures, the Administrative Agent could purchase with U.S. Dollars, Swiss Francs in New York City, New York, at the close of business on the day prior to such date of determination)
$_____________
45.    The sum of Line 4 plus Line 7 plus Line 10 plus Line 13 plus Line 16 plus Line 19 plus Line 22 plus Line 25 plus Line 28 plus Line 31 [plus Line 34 plus Line 37] plus Line 40 plus Line 43 plus Line 44 (the “Excess Concentration Amount”)
$_____________







B-1-7

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT B‑2
FORM OF NOTICE OF BORROWING
__________ ___, 20__

To:    Credit Suisse AG, New York Branch, as Administrative Agent Class A Funding Agent and Class B Funding Agent
11 Madison Avenue, 3rd Floor
New York, NY 10010
Attention:    Patrick Duggan
    Patrick Hart
Wells Fargo Bank, National Association, as Paying Agent
600 S. 4th Street, MAC N9300-061
Minneapolis, MN 55479
Attention: Corporate Trust Services – Asset Backed Administration,
E-mail: ctsabsservicer@wellsfargo.com
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of September 6, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Sunnova TEP Holdings, LLC (the “Borrower”), Credit Suisse AG, New York Branch, as Administrative Agent for the financial institutions that may from time to time become parties thereto as Lenders (in such capacity, the “Administrative Agent”), the Lenders, Wells Fargo Bank, National Association, as Paying Agent and U.S. Bank National Association, as Verification Agent. Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.
A: In accordance with Section 2.4 of the Credit Agreement, the Borrower hereby requests that the Class A Lenders provide Class A Advances based on the following criteria:
1.    Aggregate principal amount of Class A Advances requested: $[____________]
2.    Allocated amount of such Class A Advances to be paid by the Class A Lenders in each Class A Lender Group:
CS Lender Group    $[________________]
[_____________]    $___________________

B-2-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


3.    $_______________ should be transferred to the Liquidity Reserve Account
4.    $_______________ should be transferred to the Supplemental Reserve Account
Account(s) to which Class A Funding Agents should wire the balance of the requested funds:
Bank Name: [_________________]
ABA No.: [_________________]
Account Name: [_________________]
Account No.: [_________________]
Reference: [_________________]
5.    Attached to this notice as Exhibit A is the Borrowing Base Certificate in connection with these Class A Advances and a related Schedule of Solar Assets.
B: In accordance with Section 2.4 of the Credit Agreement, the Borrower hereby requests that the Class B Lenders provide Class B Advances based on the following criteria:
1.    Aggregate principal amount of Class B Advances requested: $[____________]
2.    Allocated amount of such Class B Advances to be paid by the Class B Lenders in each Class B Lender Group:
CS Lender Group    $[________________]
[_____________]    $___________________
3.    $_______________ should be transferred to the Liquidity Reserve Account
4.    $_______________ should be transferred to the Supplemental Reserve Account
Account(s) to which Class B Funding Agents should wire the balance of the requested funds:
Bank Name: [_________________]
ABA No.: [_________________]
Account Name: [_________________]

B-2-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Account No.: [_________________]
Reference: [_________________]
5.    Attached to this notice as Exhibit B is the Borrowing Base Certificate in connection with these Class B Advances and a related Schedule of Solar Assets.
C: In accordance with Section 3.2 of the Credit Agreement, the Borrower hereby certifies that no Amortization Event, Event of Default, Potential Amortization Event or Potential Default has occurred and is continuing or would result from any borrowing of any Advance or from the application of the proceeds therefrom.
Very truly yours,
SUNNOVA TEP HOLDINGS, LLC, as Borrower
By:
_________________________________
Name:
Title:

B-2-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



EXHIBIT A
Borrowing Base Certificate
[see attached]

B-2-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



EXHIBIT B
Borrowing Base Certificate
[see attached]




B-2-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT C
[RESERVED]


C-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT D-1
FORM OF CLASS A LOAN NOTE
CLASS A LOAN NOTE
Up to $[***]    [●], 2019
New York, New York
Reference is made to that certain Credit Agreement, dated as of September 6, 2019 (as may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among SUNNOVA TEP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA TE MANAGEMENT, LLC, a Delaware limited liability company, as Facility Administrator, CREDIT SUISSE AG, NEW YORK BRANCH, as Administrative Agent for the Lenders (including any Conduit Lender) that may become parties thereto, the Lenders, Wells Fargo Bank, National Association, as Paying Agent, and U.S. Bank National Association, as Verification Agent. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.
FOR VALUE RECEIVED, the Borrower hereby promises to pay CREDIT SUISSE AG, NEW YORK BRANCH, as Class A Funding Agent, for the benefit of the Class A Lenders in its Class A Lender Group (the “Class A Loan Note Holder”) on the Maturity Date or such earlier date as provided in the Credit Agreement, in immediately available funds in lawful money of the United States the principal amount of up to [***] DOLLARS ($[***]) or, if less, the aggregate unpaid principal amount of all Class A Advances made by the Class A Lenders in the Class A Loan Note Holder’s Class A Lender Group to the Borrower pursuant to the Credit Agreement together with all accrued but unpaid interest thereon.
The Borrower also agrees to pay interest in like money to the Class A Loan Note Holder, for the benefit of the Class A Lenders in its Class A Lender Group, on the unpaid principal amount of each such Class A Advance from time to time from the date hereof until payment in full thereof at the rate or rates and on the dates set forth in the Credit Agreement.
This Class A Loan Note is one of the Loan Notes referred to in, and is entitled to the benefits of, the Credit Agreement, which, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein and is secured by the Collateral.

D-1-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


In the event of any inconsistency between the provisions of this Class A Loan Note and the provisions of the Credit Agreement, the Credit Agreement will prevail.
THIS CLASS A LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5‑1401 AND 5‑1402 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS CLASS A LOAN NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS CLASS A LOAN NOTE, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS CLASS A LOAN NOTE OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS CLASS A LOAN NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS CLASS A LOAN NOTE.
This Class A Loan Note may be transferred or assigned by the holder hereof at any time, subject to compliance with the Credit Agreement and any applicable law. This Class A Loan Note shall be binding upon the Borrower and shall inure to the benefit of the holder hereof and its successors and assigns. The obligations and liabilities of the Borrower hereunder may not be assigned to any Person without the prior written consent of the holder hereof. Any such assignment in violation of this paragraph shall be void and of no force or effect.

D-1-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Demand, presentment, protest and notice of nonpayment and protest are hereby waived by the Borrower.
[Signature page follows.]


D-1-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


IN WITNESS WHEREOF, this Class A Loan Note has been duly executed and delivered on behalf of the Borrower by its duly authorized officer on the date and year first written above.


SUNNOVA TEP HOLDINGS, LLC, as Borrower



By:    ____________________________________
Name:
Title:    



D-1-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT D-2
FORM OF CLASS B LOAN NOTE
CLASS B LOAN NOTE
Up to $[***]    [●], 2019
New York, New York
Reference is made to that certain Credit Agreement, dated as of September 6, 2019 (as may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among SUNNOVA TEP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), SUNNOVA TE MANAGEMENT, LLC, a Delaware limited liability company, as Facility Administrator, CREDIT SUISSE AG, NEW YORK BRANCH, as Administrative Agent for the Lenders (including any Conduit Lender) that may become parties thereto, the Lenders, Wells Fargo Bank, National Association, as Paying Agent, and U.S. Bank National Association, as Verification Agent. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.
FOR VALUE RECEIVED, the Borrower hereby promises to pay CREDIT SUISSE AG, NEW YORK BRANCH, as Class B Funding Agent, for the benefit of the Class B Lenders in its Class B Lender Group (the “Class B Loan Note Holder”) on the Maturity Date or such earlier date as provided in the Credit Agreement, in immediately available funds in lawful money of the United States the principal amount of up to [***] DOLLARS ($[***]) or, if less, the aggregate unpaid principal amount of all Class B Advances made by the Class B Lenders in the Class B Loan Note Holder’s Class B Lender Group to the Borrower pursuant to the Credit Agreement together with all accrued but unpaid interest thereon.
The Borrower also agrees to pay interest in like money to the Class B Loan Note Holder, for the benefit of the Class B Lenders in its Class B Lender Group, on the unpaid principal amount of each such Class B Advance from time to time from the date hereof until payment in full thereof at the rate or rates and on the dates set forth in the Credit Agreement.
This Class B Loan Note is one of the Loan Notes referred to in, and is entitled to the benefits of, the Credit Agreement, which, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein and is secured by the Collateral.

D-2-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


In the event of any inconsistency between the provisions of this Class B Loan Note and the provisions of the Credit Agreement, the Credit Agreement will prevail.
THIS CLASS B LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5‑1401 AND 5‑1402 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS CLASS B LOAN NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS CLASS B LOAN NOTE, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS CLASS B LOAN NOTE OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS CLASS B LOAN NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS CLASS B LOAN NOTE.
This Class B Loan Note may be transferred or assigned by the holder hereof at any time, subject to compliance with the Credit Agreement and any applicable law. This Class B Loan Note shall be binding upon the Borrower and shall inure to the benefit of the holder hereof and its successors and assigns. The obligations and liabilities of the Borrower hereunder may not be assigned to any Person without the prior written consent of the holder hereof. Any such assignment in violation of this paragraph shall be void and of no force or effect.

D-2-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Demand, presentment, protest and notice of nonpayment and protest are hereby waived by the Borrower.
[Signature page follows.]


D-2-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


IN WITNESS WHEREOF, this Class B Loan Note has been duly executed and delivered on behalf of the Borrower by its duly authorized officer on the date and year first written above.

SUNNOVA TEP HOLDINGS, LLC, as Borrower



By:    ____________________________________
Name:
Title:


D-2-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT E

COMMITMENTS
Class A Commitments:
 
 
The Class A Aggregate Commitment
Credit Suisse AG, Cayman Islands Branch
$[***]
Total:
$87,500,000
Class B Commitments:
 
 
The Class B Aggregate Commitment
Credit Suisse AG, Cayman Islands Branch
$[***]
Total:
$12,500,000



E-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT F
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (the “Assignment Agreement”) is dated as of the Effective Date set forth below and is entered into by and between the Assignor identified in item 1 below (the “Assignor”) and the Assignee identified in item 2 below (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit 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 Agreement as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a [Class A][Class B] Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor 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 [Class A][Class B] Lender) against any Person, whether known or unknown, arising under or in connection with the Credit 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 Assignor to the Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Each such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment Agreement, without representation or warranty by the Assignor.
1.    Assignor:    ________________________________
2.
Assignee:    ________________________________
3.
Administrative Agent:    Credit Suisse AG, New York Branch

F-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


4.
Credit Agreement:    Credit Agreement, dated as of September 6, 2019, by and among Sunnova TEP Holdings, LLC, a Delaware limited liability company, Sunnova TE Management, LLC, a Delaware limited liability company, Credit Suisse AG, New York Branch, as Administrative Agent for the Lenders (including any Conduit Lender) that may become parties thereto, the Lenders, Wells Fargo Bank, National Association, as Paying Agent, and U.S. Bank National Association, as Verification Agent
6.
Assigned Interest:
Assignor
Assignee
Type of Loans Assigned (Class A or Class B)
Aggregate Amount of Loans for all Lenders
Amount of Loans Assigned
Percentage Assigned of
Loans
 
 
 
$
$
%
[Signature pages follow]

F-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Effective Date: ____________________, 20__
The terms set forth in this Assignment Agreement are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By
    
Name    
Title    
ASSIGNOR
[NAME OF ASSIGNOR]
By
    
Name    
Title    
Accepted:
CREDIT SUISSE AG, New York Branch,
as Administrative Agent
By
    
Name    
Title    
By
    
Name    
Title    
Annex 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AGREEMENT
SECTION 1.
REPRESENTATIONS AND WARRANTIES.

F-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 1.1.    Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment Agreement and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Transaction Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Transaction Documents or any collateral thereunder, (iii) the financial condition of the Borrower or any other Person obligated in respect of any Transaction Document, or (iv) the performance or observance by the Borrower or any other Person of any of their respective obligations under any Transaction Document.
Section 1.2.    Assignee. The 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 Agreement and to consummate the transactions contemplated hereby and to become a [Class A][Class B]Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 10.8 of the Credit Agreement (subject to such consents, if any, as may be required under Section 10.8 of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a [Class A][Class B]Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a [Class A][Class B] Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to the Credit Agreement, 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 Agreement and to purchase the 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 Agreement and to purchase the Assigned Interest, and (vii) attached to the Assignment Agreement is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, 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 Transaction Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Transaction Documents are required to be performed by it as a Lender.
SECTION 2.
PAYMENTS.

F-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to, on or after the Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves. 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 Assignee.
SECTION 3.
GENERAL PROVISIONS.
This Assignment Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment Agreement 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 Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment Agreement. This Assignment Agreement shall be governed by, and construed in accordance with, the law of the State of New York.


F-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT G
FORM OF SOLAR SERVICE AGREEMENT
[SEE ATTACHED]

G-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



EXHIBIT H
FORM OF NOTICE OF DELAYED FUNDING

Sunnova TEP Holdings, LLC
20 Greenway Plaza, Suite 475
Houston, TX 77046
Re:    Notice of Potential For Delayed Funding
Reference is made to the Credit Agreement, dated as of September 6, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Sunnova TEP Holdings, LLC (the “Borrower”), Credit Suisse AG, New York Branch, as Administrative Agent for the financial institutions that may from time to time become parties thereto as Lenders (in such capacity, the “Administrative Agent”), the Lenders, Wells Fargo Bank, National Association, as Paying Agent and U.S. Bank National Association, as Verification Agent. Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.
Pursuant to Section 2.4(E) of the Credit Agreement, [ ], as a Non-Conduit Lender, hereby notifies the Borrower that it has incurred external costs, fees or expenses directly related to and as a result of the “liquidity coverage ratio” under Basel III in respect of its Commitments under the Credit Agreement and/or its interests in the Loan Notes.
Sincerely,
[____]
By:     
Name:
Title:


I-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



EXHIBIT I
DELAYED FUNDING NOTICE
Sunnova TEP Holdings, LLC
20 Greenway Plaza, Suite 475
Houston, TX 77046
Re:    Notice of Potential For Delayed Funding
Reference is made to the Credit Agreement, dated as of September 6, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Sunnova TEP Holdings, LLC (the “Borrower”), Credit Suisse AG, New York Branch, as Administrative Agent for the financial institutions that may from time to time become parties thereto as Lenders (in such capacity, the “Administrative Agent”), the Lenders, Wells Fargo Bank, National Association, as Paying Agent and U.S. Bank National Association, as Verification Agent. Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.
Pursuant to Section 2.4(E) of the Credit Agreement, [_____], as a Non-Conduit Lender, hereby notifies the Borrower of its intent to fund its amount of the Advance related to the Notice of Borrowing delivered by the Borrower on [_____], on a Business Day that is before [_____], rather than on the date specified in such Notice of Borrowing.
Sincerely,
[____]
By:     
Name:
Title:


I-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT J
UNDERWRITING AND REASSIGNMENT CREDIT POLICY
[SEE ATTACHED]


J-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE I
ELIGIBILITY CRITERIA -
REPRESENTATIONS AND WARRANTIES AS TO SOLAR ASSETS
1.
Accuracy of Schedule of Solar Assets. Each entry with respect to the Solar Asset set forth on the Schedule of Solar Assets is complete, accurate, true and correct in all material respects and does not omit any necessary information that makes such entry misleading, including, if such Solar Asset is a Substantial Stage Solar Asset, the amount disbursed to channel partners for services rendered in respect of Substantial Stage Solar Asset.
2.
Form of Solar Service Agreement. The related Solar Service Agreement is substantially in the form of one of the Parent’s standard forms of Solar Service Agreement attached as Exhibit G to this Agreement (as such Exhibit may be modified after the Closing Date in accordance with Section 5.1(X) of the Agreement). The related Solar Service Agreement provides that an Approved Installer has designed, procured and installed, or will design, procure and install, a PV System at the property specified in such Solar Service Agreement and the Host Customer agrees to purchase electric energy produced by such PV System or lease such PV System. At the time of installation, such Approved Installer was properly licensed and had the required expertise to design, procure and install the related PV System.
3.
Modifications to Solar Service Agreement. The terms of the related Solar Service Agreement have not been amended, waived, extended, or modified in any manner inconsistent with the Customer Collection Policy.
4.
Host Customer Payments in U.S. Dollars. The related Host Customer is obligated per the terms of the related Solar Service Agreement to make payments in U.S. dollars to the owner of the related Solar Service Agreement or its designee.
5.
Host Customer FICO Score. As of the date of the Solar Service Agreement, the related Host Customer has a FICO of at least [***].
6.
Weighted Average FICO Score. After giving effect to the Solar Asset’s inclusion in the Collateral, the weighted average FICO score (determined as of the dates of the related Solar Service Agreements) for Eligible Solar Assets will be at least [***].
7.
Absolute and Unconditional Obligation. The related Solar Service Agreement is by its terms an absolute and unconditional obligation of the Host Customer to pay for electricity generated and delivered or that will be generated and delivered by the related PV System to such Host Customer after the related PV System has received Permission to Operate, and the payment obligations under the related Solar Service Agreement do not provide for offset

Schedule I-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


for any reason, including without limitation non‑payment or non‑performance by the Parent or any assignee thereof under any Customer Warranty Agreement or Performance Guaranty.
8.
Non‑cancelable; Prepayable. The related Solar Service Agreement is non‑cancelable and prepayable by the Host Customer, if at all, only with a mandatory prepayment amount equal to or greater than an amount determined by the discounting of all remaining projected Host Customer Payments at a pre‑determined discount rate of not more than 6% per annum.
9
Freely Assignable. (a) Ownership of the related PV System is freely assignable to a Financing Fund or SAP, as applicable, and a security interest in such PV System may be granted by SAP, without the consent of any Person, except any such consent as has already been obtained.
(b) The related Solar Service Agreement and the rights with respect to the related Solar Assets (other than the PV System) are freely assignable to a Financing Fund or SAP, as applicable, and a security interest in such Solar Assets may be granted by SAP, without the consent of any Person, except any such consent as has already been obtained.
10.
Legal Compliance. The origination of the related Solar Service Agreement and related PV Systems, as installed, was in compliance (or in the case of a Substantial Stage Solar Asset, will be in compliance) in all material respects with respect to the applicable federal, state and local laws and regulations including those relating to usury, truth‑in‑lending, consumer credit protection and disclosure laws at the time such Solar Service Agreement was originated or such PV System was installed (or in the case of a Substantial Stage Solar Asset, will be installed), as applicable.
11.
Legal, Valid and Binding Agreement. The related Solar Service Agreement is the legal, valid and binding payment obligation of the related Host Customer, enforceable against such related Host Customer in accordance with its terms, except as such enforceability may be limited in the future by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally, and except as such enforceability may be limited in the future by general principles of equity (whether considered in a suit at law or in equity).
12.
No Delinquencies, Defaults or Terminations. The related Solar Service Agreement is not a Delinquent Solar Asset or a Defaulted Solar Asset and the related PV System is not a Terminated Solar Asset. Furthermore, the Host Customer associated with the related Solar Service Agreement is not a Host Customer for any other Solar Service Agreement that was

Schedule I-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


originated, acquired and/or serviced by the Parent or any Affiliate thereof that would meet the definition of either Delinquent Solar Asset or Defaulted Solar Asset.
13.
Minimum Payments Made. (i) Except in the case of a Substantial Stage Solar Asset or a Final Stage Solar Asset, either a minimum of one payment due under the related Solar Service Agreement has been made or the related Host Customer’s first payment under the related Solar Service Agreement has not been made because such payment is not yet due but such payment is due in the calendar month no later than the first full calendar month immediately following the later of (a) the related Transfer Date or (b) the date that such Solar Asset receives Permission to Operate and (ii) solely in the case of a Substantial Stage Solar Asset or a Final Stage Solar Asset, the related Host Customer’s first payment under the related Solar Service Agreement has not been made because such payment is not yet due but such payment is due in the calendar month that is no later than one hundred twenty (120) days after the Transfer Date with respect to such Substantial Stage Solar Asset or Final Stage Solar Asset or no later than thirty (30) days after such Transfer Date.
14.
PV System and Solar Service Agreement Status. The related PV System has not been turned off due to a Host Customer delinquency under the Solar Service Agreement.
15.
Affiliate Host Customers. Solar Service Agreements comprising no more than 0.25% of the Aggregate Discounted Solar Asset Balance as of the Closing Date (with respect to the Initial Solar Assets) and as of the most recent Transfer Date (as to all Eligible Solar Assets then owned by a Financing Fund or SAP) are related to Host Customers that are Persons who are employees of the Parent, the Borrower or any of their respective Affiliates.
16.
No Adverse Selection. No selection procedures reasonably believed by the Parent or Borrower to be adverse to the Lenders were utilized in selecting such Solar Asset and the related Solar Service Agreement from among the Eligible Solar Assets directly owned by the Parent or its Affiliates.
17.
Full Force and Effect. The related Solar Service Agreement is in full force and effect in accordance with its respective terms, except as may be limited in the future by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally, and except as such enforceability may be limited in the future by general principles of equity (whether considered in a suit at law or in equity).
18.
Ordinary Course of Business. The related Solar Service Agreement relates to the sale of power from or the leasing of a PV System, and such Solar Service Agreement was originated or acquired consistent with the ordinary course of business of the Parent.

Schedule I-3

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


19.
PV System. Except in the case of a Substantial Stage Solar Asset, the related PV System was properly delivered to and installed for the related Host Customer in good repair, without defects and in satisfactory order. Except in the case of a Substantial Stage Solar Asset, the related Host Customer has accepted the related PV System, and no related Host Customer has notified the Parent or any Affiliate thereof of any existing defects therein which is not in the process of being investigated, addressed or repaired by the Parent or any Affiliate thereof. Except in the case of a Substantial Stage Solar Asset, the Solar Photovoltaic Panels, Inverters and Energy Storage Systems with respect to the related PV System were manufactured by an Approved Vendor at the time of installation.
20.
No Defenses Asserted. The related Solar Service Agreement has not been satisfied, subordinated or rescinded and no lawsuit is pending with respect to such related Solar Service Agreement.
21.
Insurance. With respect to the related PV System (other than if such PV System is related to a Substantial Stage Solar Asset), the Parent has obtained and does maintain insurance in amounts and coverage consistent with the Parent’s policies. The Parent’s policies in respect of amounts, coverage and monitoring compliance thereof are consistent with insurance broker recommendations based on probable maximum loss projections and with the Parent’s historic loss experience, taking into account what is commercially reasonable and available in the market on commercially reasonable terms. All such required insurance is in full force and effect.
22.
Taxes and Governmental Charges. The transfer, assignment and the pledge of the Collateral by the Borrower and SAP pursuant to the Security Agreement and the Pledge Agreement is not subject to and will not result in any Tax payable by the Borrower to any federal, state or local government except as has been paid or provided for. No Tax is owed in connection with any period prior to the applicable Cut-Off Date or with respect to the sale, contribution or assignment of Conveyed Property by the applicable Assignor to the Seller, by the Seller to the Borrower or by the Borrower to SAP, except as has been paid or provided for.
23.
Governing Law of Solar Service Agreement. The related Solar Service Agreement is governed by the laws of a state or territory 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, pledge or assignment of the related Solar Service Agreement under any of the Transaction Documents, including any exchange for refund in accordance with the Transaction Documents.

Schedule I-4

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


24.
No Unpaid Fees. Except in the case of a Substantial Stage Solar Asset or a Final Stage Solar Asset, there are no unpaid fees owed to third parties relating to the origination of the related Solar Service Agreement and installation of the related PV System.
25.
Payment Terms of Solar Service Agreement. The related Solar Service 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 Solar Service Agreement.
26.
PBI Payments.
a.
All applications, forms and other filings required to be submitted in connection with the procurement of PBI Payments have been properly made in all material respects under applicable law, rules and regulations and the related PBI Obligor 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.
b.
All conditions to the payment of PBI Payments by the related PBI Obligor (including but not limited to the size of the PV Systems, final site visits, provision of data, installation of metering, proof of project completion, production data and execution and delivery of final forms and related agreements (including all applications, forms and other filings and any written reservation approvals, Interconnection Agreements and REC purchase agreements, if required, each, a “Performance Based Incentive Agreement”)) have been satisfied or approved, as applicable, and the PBI Obligor’s payment obligation is an absolute and unconditional obligation of the PBI Obligor that is not, by the terms of the related Performance Based Incentive Agreement, subject to offset for any reason.
c.
Copies of all PBI Documents and the Performance Based Incentive Agreement, if any, for PBI Payments have been delivered to the Verification Agent as of the Closing Date (as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset).
d.
To the extent the rights to receive PBI Payments and the related Performance Based Incentive Agreement, if any, are not freely assignable without the consent of the related PBI Obligor, or if consent or notice to any Person is required for the grant of a security interest, such consent will have been obtained or notice will have been given as of the Closing Date (as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset). The PBI Payments are not subject to any

Schedule I-5

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


law, rule or regulation which would make unlawful the sale, transfer, pledge or assignment of any rights to the PBI Payments within the regulations set forth with respect to such PBI Payments. Immediately prior to the transfer of the rights to the PBI Payments and the related Performance Based Incentive Agreement, if any, to a Financing Fund or the Borrower, TEP Developer or the Seller, as applicable, had full legal and equitable title to such rights, free and clear of all Liens except for Permitted Liens and a Financing Fund or SAP, as applicable, acquired full legal and equitable title to such PBI Payments and the related Performance Based Incentive Agreement, free and clear of all Liens, except for Permitted Liens or Permitted Equity Liens. To the extent that notice is required, upon completion of the assignment of a Performance Based Incentive Agreement to a Financing Fund or SAP, as applicable, the Parent or an affiliate thereof delivered notice to the PBI Obligor indicating that such Financing Fund or SAP, as applicable, is the owner of the related PV System and the payee of the PBI Payment.
e.
If a Performance Based Incentive Agreement is required by the laws, rules or regulations governing the obligations of the PBI Obligor to pay the PBI Payments, such Performance Based Incentive Agreement is, to the best of the knowledge of the Parent, 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).
f.
The transfer, assignment and pledge of the rights to the PBI Payments is not subject to and will not result in any tax, fee or governmental charge payable by the Borrower to any federal, state or local government, except as paid.
27.
Host Customer. The related Solar Services Agreement was either originated or acquired by the Parent in the ordinary course of business and in accordance with its Underwriting and Reassignment Credit Policy.
28.
Warranties. All Manufacturer Warranties relating to the related Solar Service Agreement and the related PV System are in full force and effect and can be enforced by a Financing Fund, SAP or the Manager (other than with respect to those Manufacturer Warranties that are no longer being honored by the relevant manufacturer with respect to all customers generally, and except as such enforceability may be limited in the future by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights

Schedule I-6

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


generally, and except as such enforceability may be limited in the future by general principles of equity (whether considered in a suit at law or in equity).
29.
True Lease. The related Solar Service Agreement in the form of a Lease Agreement is a “true” lease, as defined in Article 2‑A of the UCC.
30.
UCC. The related Solar Service Agreement and rights to PBI Payments constitute “general intangibles”, “accounts” or “chattel paper” within the meaning of the applicable UCC and no paper originals with respect to any “chattel paper” or single authoritative copy with respect to “electronic chattel paper” exists. The PV Systems constitute “Equipment” within the meaning of the applicable UCC. Upon the filing of all appropriate financing statements in the proper filing offices in the appropriate jurisdictions, the Administrative Agent will have a first priority perfected security interest in and to the Solar Service Agreements, the rights to PBI Payments and the PV Systems, subject to Permitted Liens and in each case related solely to the SAP Solar Assets.
31.
Fixture Filing. The terms of the related Solar Service Agreement provide that the parties thereto agree that the related PV System is not a fixture. The Parent or an Affiliate thereof has filed (or in the case of a Substantial Stage Solar Asset, will file) a protective UCC fixture filing or, with respect to Guam, its jurisdictional equivalent, in respect of the related PV System; provided, that (i) certain of such UCC fixture filings or such equivalent filings have been temporarily released in order to assist the applicable Host Customer in a pending refinancing of such Host Customer’s mortgage loan or sale of the related property and (ii) as a result, such UCC fixture filings or equivalent filings may not have been filed or maintained in a manner that would provide priority under the UCC over a conflicting interest of an encumbrancer or owner of the real property subject to such UCC fixture filing or equivalent filing.
32.
Host Customer Residency. The related Host Customer is a resident of one of the 50 states of the United States, the District of Columbia or an Approved U.S. Territory.
33.
PV System. The related PV System was installed (or in the case of a Substantial Stage Solar Asset, will be installed) on a single‑family residential property and one or more of the Host Customers (i) that is an individual that is not deceased and is not a governmental entity, a business, a corporation, institution or other legal entity (a "natural person"); provided, that 5.00% of the Aggregate Discounted Solar Asset Balance may relate to Host Customers that are a limited liability company, corporation, trust, partnership or other legal entity if (A) the Parent has determined that the controlling member of the limited liability company, controlling stockholder of the corporation, trustee of the trust, general partner of the

Schedule I-7

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


partnership or other equivalent controlling person the legal entity is a natural person and (B) the Parent has performed the same underwriting process in connection with such natural person as it applies to Host Customers that are natural persons; (ii) that voluntarily entered into such Solar Service Agreement and not as a result of fraud or identity theft, and (iii) who owns the real property on which the PV System is installed in one of the 50 states of the United States, the District of Columbia or an Approved U.S. Territory; provided that in the case where the Host Customer is a natural person, the residence may be owned by a limited liability company, corporation, trust, partnership or other legal entity for which the Parent has determined that the Host Customer is the controlling member, controlling stockholder, trustee, general partner or other equivalent controlling person). No related Host Customer has notified the Parent or any Affiliate thereof of any damage or other casualty affecting the PV system or home and neither the Parent nor any Affiliate thereof is aware of any other event that has occurred, in each case, that would affect the value or performance of the Solar Asset or the PV System. All parts and materials furnished in connection with the related PV System which are material to the solar energy production performance of such PV System, including but not limited to the Solar Photovoltaic Panels and Inverters, are (or in the case of a Substantial Stage Solar Asset, will be) newly manufactured with a manufacturer date no more than 12 months prior to the date the Solar Asset was originated.
34.
Hedged SRECs. With respect to all Solar Assets for which the related Host Customer is a resident of either New Jersey or Massachusetts, as of the date that is 120 days from the Closing Date, the Projected SREC Hedge Ratio determined for the SREC Years 2019, 2020, 2021 and 2022 does not exceed 85%.
35.
Maximum Solar Asset Tenor. The original term to maturity of the Solar Asset does not exceed 300 months.
36.
Host Customer Solvency: (i) The Host Customer is not a debtor in a bankruptcy case as of the Closing Date (in the case of the Initial Solar Assets) or the related Transfer Date (in the case of Additional Solar Assets), and (ii) the Host Customer has not commenced any litigation or asserted any claim in writing challenging the validity or enforceability of the related Solar Service Agreement.
37.
No Impairment. Neither the Parent nor any of its Affiliates has done anything to impair the rights of the Borrower, the Administrative Agent or the Lenders in the Collateral or payments with respect thereto.

Schedule I-8

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


38.
Ownership. A Financing Fund or SAP, as applicable, has full legal and equitable title to the related PV System and related Solar Service Agreement, in each case free and clear of all Liens except for Permitted Liens and Permitted Equity Liens.
39.
Final Stage Solar Asset. If such Solar Asset is a Final Stage Solar Asset, such Solar Asset will not be a Final Stage Solar Asset for more than 150 days since the date such Solar Asset first constituted a Final Stage Solar Asset.
40.
Substantial Stage Solar Asset. If such Solar Asset is a Substantial Stage Solar Asset, (i) such Solar Asset will not be a Substantial Stage Solar Asset for more than 90 days (or 120 days if the related Host Customer is located in the East Region) since the Parent or an Affiliate thereof has issued a “notice to proceed” confirming the related Host Customer signed the related Solar Service Agreement, a channel partner submitted a final design proposal and such proposal was approved by the Parent or an Affiliate thereof and (ii) the related Host Customer has not cancelled the installation of the Solar Asset notwithstanding receipt of the related “notice to proceed.”
41.
Puerto Rico Solar Asset. If such Solar Asset is a Puerto Rico Solar Asset, the related PV System relies on one or more Energy Storage Systems and does not rely on the operation of the utility grid in order to operate.
42.
Hedged SREC Payments.
a.
All applications, forms and other filings required to be submitted in connection with the procurement of Hedged SREC Payments have been properly made in all material respects under applicable law, rules and regulations and the related Eligible Hedged SREC Counterparty has provided a written reservation approval (which may be in the form of electronic mail from the related Eligible Hedged SREC Counterparty) for the payment of Hedged SREC Payments.
b.
All conditions to the payment of Hedged SREC Payments by the related Eligible Hedged SREC Counterparty have been satisfied or approved, as applicable, and the Eligible Hedged SREC Counterparty’s payment obligation is an absolute and unconditional obligation of the Eligible Hedged SREC Counterparty that is not, by the terms of the related Hedged SREC Agreement, subject to offset for any reason.
c.
Copies of all Hedged SREC Agreements with respect to Hedged SREC Payments have been delivered to the Verification Agent as of the Closing Date (as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset).

Schedule I-9

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


d.
To the extent that the rights to receive Hedged SREC Payments and the related Hedged SREC Agreement, if any, are not freely assignable without the consent of the Eligible Hedged SREC Counterparty, or if consent of or notice to any Person is required for the grant of a security interest, such consent will have been obtained or notice will have been given as of the Closing Date (as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset). The Hedged SREC Payments are not subject to any law, rule or regulation which would make unlawful the sale, transfer, pledge or assignment of any rights to the Hedged SREC Payments within the regulations set forth with respect to such Hedged SREC Payments. Immediately prior to the transfer of the rights to the Hedged SREC Payments and the related Hedged SREC Agreement to the Borrower, TEP Developer had full legal and equitable title to such rights, free and clear of all Liens except for Permitted Liens and the Borrower acquired full legal and equitable title to such Hedged SREC Payments and the related Hedged SREC Agreement, free and clear of all Liens, except for Permitted Liens, Permitted Equity Liens and security interest granted to the Administrative Agent. To the extent notice is required, upon completion of the assignment of a Hedged SREC Agreement to the Borrower, TEP Developer delivered notice to the Eligible Hedged SREC Counterparty indicating that the Borrower is the owner of the related PV System and the payee of the Hedged SREC Payment.
e.
If a Hedged SREC Agreement is required by the laws, rules or regulations governing the obligations of the Eligible Hedged SREC Counterparty to pay the Hedged SREC Payments, such Hedged SREC Agreement is, to the best of the knowledge of the Parent, the legal valid and binding payment obligation of the Eligible Hedged SREC Counterparty, enforceable against such Eligible Hedged SREC Counterparty 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).
f.
The transfer, assignment and pledge of the rights to the Hedged SREC Payments is not subject to and will not result in any tax, fee or governmental charge payable by the Borrower to any federal, state or local government, except as paid.
43.
Delivery of Solar Service Agreement. The related Solar Service Agreement and any amendments or modifications have been converted into an electronic (.pdf) form (an “Electronic Copy”) and delivered to the Verification Agent.  The related original (or “authoritative copy” for purposes of the UCC) of the Solar Service Agreement and any amendments or modifications have been destroyed on or before the Closing Date

Schedule I-10

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(as to the Initial Solar Assets) or the related Transfer Date (as to any Additional Solar Asset) in compliance with the Parent’s document storage policies or, if not destroyed, no other Person has or could obtain possession or control thereof in a manner that would enable such Person to claim priority over the lien of the Administrative Agent.
44.
Financing Funds/SAP.
p.
Each Tax Equity Facility Document to which any Tax Equity Party is a party is a legal, valid and binding obligation of such Tax Equity Party, enforceable against such Tax Equity Party in accordance with its terms, except as such enforceability may be limited in the future by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally, and except as such enforceability may be limited in the future by general principles of equity (whether considered in a suit at law or in equity). None of the Tax Equity Facility Documents to which a Tax Equity Party is a party has been amended or modified since the effective date of such Tax Equity Facility Documents other than as set forth on Schedule VIII. No Tax Equity Party is party to any material contract, agreement or other undertaking except the Tax Equity Facility Documents and any other contract, agreement or undertaking previously disclosed in writing to the Administrative Agent.
q.
All Tax Equity Facility Documents 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 PV Systems owned by a Financing Fund or the PV Systems owned by SAP or on the legality, validity or enforceability of the Tax Equity Facility Documents.
r.
None of the Managing Members, the Financing Funds or SAP has any indebtedness or other obligations or liabilities, direct or contingent other than as permitted under the Transaction Documents. The Managing Members have full legal and equitable title to the Managing Member Interests free and clear of all Liens.
s.
No loan to the Managing Members, the Financing Funds or SAP made or indebtedness incurred prior to the related Closing Date remains outstanding.
t.
Each of the Managing Members and SAP is a limited liability company that is disregarded for federal income tax purposes.

Schedule I-11

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


u.
None of the Managing Members, the Financing Funds or SAP is in breach or default under or with respect to any contractual obligation.
v.
None of the Managing Members, the Financing Funds or SAP has conducted any business other than the business contemplated by the Tax Equity Facility Documents.
w.
No event has occurred under the Tax Equity Facility Documents that would allow a Tax Equity Investor or another member to remove, or give notice of removal of, the related Managing Member, nor has a Managing Member given or received notice of an action, claim or threat of removal.
x.
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 of the Managing Member Distributions.
y.
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 a Financing Fund, SAP or a Managing Member, or against any of their 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 Solar Assets or on the legality, validity or enforceability of any of the Transaction Documents or any of the Tax Equity Facility Documents.
z.
No notice or action challenging the tax structure, tax basis validity, tax characterization or tax-related legal compliance of the Tax Equity Facility or the tax benefits associated with the Tax Equity Facility is ongoing or has been resolved in a manner adverse to the Tax Equity Facility or a Managing Member, in each case, that would reasonably be expected to have a material adverse effect on the Tax Equity Facility or a Managing Member.
aa.
The only holders of equity interests in the Financing Funds are the Managing Members and Tax Equity Investors and other than the Purchase Options there are no outstanding obligations of the Managing Members or a Tax Equity Investor to repurchase, redeem, or otherwise acquire any membership or other equity interests in the Managing Members and a Tax Equity Investor, as applicable, 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 Managing Members and a Tax Equity Investor, as applicable. The class or classes

Schedule I-12

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


of membership interests that a Financing Fund is authorized to issue and has issued are expressly set forth in its Financing Fund LLCA.
ab.
Each of the Financing Funds and SAP 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 each of the Financing Funds and SAP 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 Financing Funds and SAP, as applicable, are in good faith contesting the same, so long as such contest is pursued in accordance with the requirements of each applicable Tax Equity Facility Document. There is no action, suit, proceeding, investigation, audit or claim now pending by a taxing authority regarding any taxes relating to the Financing Funds or SAP that could, if made, individually or in the aggregate have a Material Adverse Effect.
ac.
The Borrower has delivered to the Administrative Agent the most recent financial statements (including the notes thereto) prepared in respect of the Financing Funds and SAP pursuant to the requirements of the Tax Equity Facility Documents, and such financial statements (if any) (a) fairly present in all material respects the financial condition of the Financing Funds and SAP, as applicable, as of the date thereof and (b) have been prepared in accordance with the requirements of Tax Equity Facility Documents. Such financial statements and notes thereto disclose all direct or contingent material liabilities of the Financing Funds and SAP as of the dates thereof, including liabilities for taxes, material commitments and debt.
ad.
The Financing Funds or SAP, as applicable, is party to each Solar Service Agreement in respect of each PV System owned by it.
45.
Savings Product. If such Solar Asset is a Host Customer Solar Asset, the related Solar Service Agreement is a "savings product" (as such term is defined in the Underwriting and Reassignment Credit Policy).



Schedule I-13

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE II
THE COLLECTION ACCOUNT, THE SUPPLEMENTAL RESERVE ACCOUNT, THE LIQUIDITY RESERVE ACCOUNT, THE SAP REVENUE ACCOUNT, THE TAKEOUT TRANSACTION ACCOUNT, AND THE BORROWER’S ACCOUNT AND THE TEP COLLATERAL ACCOUNT

Collection Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Account No.:    [***]
Account Name:    [***]
FFC:    [***]
Supplemental Reserve Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Account No.:    [***]
Account Name:    [***]
FFC:    [***]
Liquidity Reserve Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Acct:    [***]
Account Name:    [***]
FFC:    [***]
SAP Revenue Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Account No.:    [***]
Account Name:    [***]
FFC:    [***]
Takeout Transaction Account
Bank Name:    Wells Fargo Bank, N.A.
ABA No.:    [***]
Account No.:    [***]

Schedule II-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Account Name:    [***]
FFC:    [***]
Borrower’s Account
Bank Name:    Texas Capital Bank
ABA No.:    [***]
Account No.:    [***]
Account Name:    [***]
Reference:    [***]
TEP Collateral Account




Schedule II-2

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE III
[RESERVED]


Schedule III-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE IV
SCHEDULED HEDGED SREC PAYMENTS
[On file with the Administrative Agent]




Schedule IV-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE V
SCHEDULED HOST CUSTOMER PAYMENTS
[On file with the Administrative Agent]


Schedule V-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE VI

SCHEDULED PBI PAYMENTS
[On file with the Administrative Agent]

Schedule VI-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE VII
SCHEDULED MANAGING MEMBER DISTRIBUTIONS
[On file with the Administrative Agent]

Schedule VII-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



SCHEDULE VIII

TAX EQUITY DEFINITIONS
Financing Funds
3.
Sunnova TEP IV-A, LLC, a Delaware limited liability company (“TEP IV-A”)
4.
Sunnova TEP IV-B, LLC, a Delaware limited liability company (“TEP IV-B”)
Financing Fund LLCAs
3.
With respect to TEP IV-A, the Amended and Restated Limited Liability Company Agreement, dated as of August 16, 2019, entered into between the applicable Managing Member and the applicable Tax Equity Investor (the “TEP IV-A LLCA”)
4.
With respect to TEP IV-B, the Amended and Restated Limited Liability Company Agreement, dated as of December 31, 2019, entered into between the applicable Managing Member and the applicable Tax Equity Investor (the “TEP IV-B LLCA”)
Management Agreements
3.
Management Agreement, dated as of August 16, 2019, by and between the Manager and TEP IV-A (“TEP IV-A Management Agreement”)
4.
Management Agreement, dated as of December 31, 2019, by and between the Manager and TEP IV-B (“TEP IV-B Management Agreement”)
Managers
2.
Sunnova TE Management, LLC, a Delaware limited liability company
Managing Members
3.
Sunnova TEP IV-A Manager, LLC, a Delaware limited liability company
4.
Sunnova TEP IV-B Manager, LLC, a Delaware limited liability company
Managing Member Interests
5.
The Class B Interest in TEP IV-A
6.
To the extent the TEP IV-A Purchase Option is exercised, the Class A Interest in TEP IV-A
7.
The Class B Interest in TEP IV-B
8.
To the extent the TEP IV-B Purchase Option is exercised, the Class A Interest in TEP IV-B
Master Purchase Agreements
3.
Master Purchase Agreement, dated as of August 16, 2019, between Sunnova TEP Developer, LLC and TEP IV-A (“TEP IV-A MPA”)
4.
Development and Purchase Agreement, dated as of December 31, 2019, by and between Sunnova TEP Developer, LLC and TEP IV-B (“TEP IV-B DPA”)
Purchase Options
3.
“TEP IV-A Purchase Option” means the right of the applicable Managing Member or its designated Affiliate to purchase the related Tax Equity Investor’s interest in TEP IV-A
4.
“TEP IV-B Purchase Option” means the right of the applicable Managing Member to purchase the related Tax Equity Investor’s interest in TEP IV-B

Schedule VIII-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Servicing Agreements
3.
Servicing Agreement, dated as of August 16, 2019, by and among the Manager, TEP IV-A and GreatAmerica Portfolio Services Group LLC (“TEP IV-A Servicing Agreement”)
4.
Servicing Agreement, dated as of December 31, 2019, by and among the Manager, TEP IV-B and GreatAmerica Portfolio Services Group LLC (“TEP IV-B Servicing Agreement”)
Tax Equity Financing Documents
TEP IV-A
7.
Guaranty, dated as of August 16, 2019, by Parent for the benefit of the applicable Tax Equity Investor
8.
TEP IV-A Management Agreement
9.
TEP IV-A Servicing Agreement
10.
TEP IV-A MPA
11.
TEP IV-A LLCA
12.
Deposit Account Control Agreement, dated as of August 16, 2019, by and between TEP IV-A, the applicable Tax Equity Investor, and Texas Capital Bank, N.A., a national banking association
TEP IV-B
7.
Guaranty, dated as of December 31, 2019, by Parent for the benefit of the applicable Tax Equity Investor
8.
TEP IV-B Management Agreement
9.
TEP IV-B Servicing Agreement
10.
TEP IV-B DPA
11.
TEP IV-B LLCA
12.
Blocked Account Control Agreement, dated as of December 31, 2019, by and among TEP IV-B, the applicable Tax Equity Investor, and JPMorgan Chase Bank, N.A., a national banking association
Tax Equity Investors
3.
With respect to TEP IV-A, JPM Capital Corporation, a Delaware corporation
With respect to TEP IV-B, BAL Investment & Advisory, Inc., a Delaware corporation


Schedule VIII-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE IX
SAP FINANCING DOCUMENTS
2.
Management Agreement, dated as of September 6, 2019, by and between Manager and SAP.
Servicing Agreement, dated as of September 6, 2019, by and among GreatAmerica Portfolio Services Group LLC, Manager and SAP.

Schedule IX-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE X
SAP NTP FINANCING DOCUMENTS
2.
Master Distribution Agreement, dated as of December 31, 2019, by and among SAP, Borrower, TEP Resources and Seller.





Schedule VIII-1

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.
Exhibit 10.34

PURCHASE AGREEMENT
PURCHASE AGREEMENT (this “Agreement”), dated as of December 20, 2019, by and among Sunnova Energy International Inc., a Delaware corporation (the “Company”) and the entities listed on the signature pages hereto or who become parties to this Agreement via a Joinder in connection with any Transfers of Notes or Transfers by the Investors of the option to purchase Additional Notes set forth in Section 1.3 hereof (the “Investors” and, together with the Company, the “Parties”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in Annex A hereto and the rules of construction applicable to this Agreement are set forth in Annex B.
RECITALS
WHEREAS, the parties desire that, upon the terms and subject to the conditions and limitations set forth in this Agreement, the Company may issue and sell to the Investors, and the Investors shall thereupon purchase from the Company, certain of the Company’s 7.75% convertible senior unsecured notes due 2027 issuable in accordance with the Indenture (the “Notes”);
WHEREAS, on the Closing Date (as defined below), the Company is entering into that certain indenture (the “Indenture”), to be dated as of the Closing Date with Wilmington Trust, National Association, as trustee (the “Trustee”), in connection with the issuance of the Notes hereunder, which shall be substantially in the form attached hereto as Annex C;
WHEREAS, the Company intends to cause Sunnova TEP Inventory, LLC (“TEP Inventory”) to enter into that certain revolving credit facility (the “Equipment Facility”) with an initial borrowing capacity of $100,000,000;
WHEREAS, pursuant to and subject to the Indenture, the Notes shall be convertible on the terms and conditions set forth therein, into shares of the common stock of the Company, par value $0.0001 per share (the “Common Stock”); and
WHEREAS, on the Closing Date, the Company and Investors are entering into that certain registration rights agreement (the “Registration Rights Agreement”), to be dated as of the Closing Date, in connection with the Company’s obligation to file a shelf registration statement for the resale of the Common Stock to be received by the Investors upon the conversion of the Notes pursuant to the Indenture, which shall be substantially in the form attached hereto as Annex D.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
PURCHASE AND SALE
Section 1.1    Purchase and Sale of Notes. Upon the terms and subject to the conditions and limitations of this Agreement, on the Closing Date, the Company will issue and sell to each Investor, and each Investor will purchase, Notes (the “Initial Notes”) in the aggregate principal amount of the commitment set forth next to such Investor’s name on Exhibit A (with respect to each

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

Investor, its “Commitment”). The Company and the Investors agree that (a) the aggregate principal amount of the Initial Notes issued on the Closing Date is $55,000,000 and (b) the Notes shall be sold at a purchase price of 95% of the principal amount thereof. The obligations of each Investor hereunder shall be several and not joint.
Section 1.2    Closing Date. This Agreement shall become effective and binding on the date hereof upon the delivery of counterpart signature pages of this Agreement executed by each of the parties hereto. Subject to the terms and conditions of this Agreement, the closing of the purchase and sale of the Notes (the “Closing”) shall take place on December 23, 2019 or as soon as reasonably practicable thereafter following the execution and delivery of the Indenture, the execution and delivery of the Registration Rights Agreement, the payment by each Investor of its respective Commitment and all other documents, instruments and writings required to be delivered on the Closing Date to the offices of Kirkland & Ellis LLP, 609 Main Street, Houston, Texas 77002, at 11:00 a.m., Houston time, but in no event later than December 31, 2019, or as may extended upon the mutual agreement of the Parties (the “End Date”). In consideration of and in express reliance upon the representations, warranties and covenants, and otherwise upon the terms and subject to the conditions, of this Agreement at the Closing Date, the Company will issue and sell to each Investor, and each Investor agrees to purchase from the Company, the Initial Notes in respect of the Commitment in the amount next to such Investor’s name on Exhibit A hereto.
Section 1.3    Additional Notes. In addition, upon the terms and subject to the conditions and limitations of this Agreement, the Company hereby grants an option to each Investor (the “Option”), severally and not jointly, to purchase its pro rata portion of $20,000,000 in principal amount of Notes (the “Additional Notes”), as set forth in Exhibit A opposite the name of such Investor, for a purchase price equal to 95% of the principal amount of Additional Notes purchased by such Investor, plus any accrued but unpaid interest on such Additional Notes through, but excluding, the applicable Date of Delivery (as defined below). The Option hereby granted to each Investor will expire on March 31, 2020 and may be exercised by such Investor in whole or in part upon written notice to the Company setting forth the aggregate principal amount of Additional Notes as to which such Investor is then exercising the Option; provided that, in the event that any Investor has not exercised the full amount of its Option on or before March 31, 2020, any other Investor may elect to purchase all or any portion of the unpurchased Additional Notes remaining under such Option by delivering notice to the Company on or before April 1, 2020. Notwithstanding anything to the contrary herein, the exercise of the Option shall be subject to the Company’s consent, which may be granted or withheld in its sole discretion, at any time the Option is exercised pursuant to this Section 1.3. The Option may be transferred in whole or in part to (i) any other Original Investor or any of their respective Affiliates, subject to Section 7.7 hereof, by written notice to the Company or (ii) an investor who is reasonably acceptable to the Company and who executes a Joinder as of the effective date of such Transfer. Any such Joinder or written notice, as applicable, will set forth the aggregate principal amount of Additional Notes as to which such Original Investor is then transferring such Option. The time and date of delivery of any Notes for which any such Option has been exercised (a “Date of Delivery”) shall be determined by the Company, but shall not be later than the earlier of (i) three Business Days after the exercise of such Option and (ii) April 3, 2019.


[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

In the event that any or all of the Additional Notes are purchased by the Investors, payment of the purchase price (which shall include a payment of any accrued but unpaid interest on the Additional Notes through, but excluding, the applicable Date of Delivery) for, and delivery of, such Additional Notes shall be made at the above mentioned offices, or at such other place as shall be agreed upon by the Investors and the Company, on each Date of Delivery as specified in the notice from the applicable Investor to the Company.
Section 1.4    Closing Date Settlement. The payment for, against delivery of, Initial Notes in respect of the Commitment shall be settled on the Closing Date. The payment for, against delivery of, Additional Notes shall be settled on each applicable Date of Delivery. On the Closing Date and each Date of Delivery, each Investor shall provide payment for the applicable Initial Notes or Additional Notes, as applicable, to the Company’s account designated in writing by wire transfer of immediately available funds and, immediately upon receipt of such funds, the Company shall, or shall cause its transfer agent to deliver the Initial Notes or Additional Notes, as applicable, as provided in the Indenture.
ARTICLE II    
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor, severally and not jointly and with respect to itself only, hereby makes the following representations and warranties to the Company:
Section 2.1    Organization and Standing of the Investor. The Investor is duly organized, validly existing and in good standing under the laws of its jurisdiction of formation.
Section 2.2    Authorization and Power. The Investor has the requisite power and authority to enter into and perform its obligations under this Agreement and to purchase the Notes in accordance with the terms hereof. The execution, delivery and performance of this Agreement by the Investor and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action, and no further consent or authorization for the Investor is required. This Agreement has been duly executed and delivered by the Investor. This Agreement constitutes a valid and binding obligation of the Investor enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership, or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application or as rights to indemnification may be limited by public policy (the “Enforceability Exceptions”).
Section 2.3    No Conflicts. The execution, delivery and performance by the Investor of this Agreement and the consummation by the Investor of the transactions contemplated hereby and thereby do not and shall not (a) result in a violation of the Investor’s charter documents, bylaws or other applicable organizational documents, (b) conflict with, constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give rise to any rights of termination, amendment, acceleration or cancellation of, any Contract to which the Investor is a party or is bound, (c) create or impose any lien, charge or encumbrance on any property of the Investor under any agreement or any commitment to which the Investor is party or under which the

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

Investor is bound or under which any of its properties or assets are bound, or (d) result in a violation of any federal, state, local or foreign statute, rule, or regulation, or any order, judgment or decree of any court or governmental agency applicable to the Investor or by which any of its properties or assets are bound or affected, except, in the case of clauses (b), (c) and (d), for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, prohibit or otherwise interfere with the ability of the Investor to enter into and perform its obligations under this Agreement in any material respect. The Investor is not required under federal, state, local or foreign law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or to acquire the Notes in accordance with the terms of the Transaction Documents.
Section 2.4    Information. All materials relating to the business, financial condition, management and operations of the Company and materials relating to the offer and sale of the Notes which have been requested by the Investor have been furnished or otherwise made available to the Investor or its advisors. The Investor and its advisors have been afforded the opportunity to ask questions of representatives of the Company. The Investor has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Notes. The Investor understands that it (and not the Company) shall be responsible for its own tax liabilities that may arise as a result of this investment or the transactions contemplated by this Agreement. The Investor is aware of all of its obligations under U.S. federal and applicable state securities laws and all rules and regulations promulgated thereunder in connection with this Agreement and the transactions contemplated hereby and the purchase and sale of the Notes. The Investor has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its prospective investment in the Notes and has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment.
Section 2.5    Securities Act. The Investor is: (a) a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or (b) an “accredited investor” (as defined in Rule 501(a) of Regulation D under the Securities Act). The Investor has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the purchase of the Notes. The Investor understands and acknowledges that the Securities are being offered in transactions not involving any public offering within the meaning of the Securities Act, that the initial offering and issuance of the Securities has not been registered under the Securities Act or any other securities law, and (i) if, subject to the limitations herein or in the Indenture, as applicable, in the future it decides to resell, pledge or otherwise transfer any Securities that it purchases hereunder, those Securities, as applicable, absent an effective registration statement under the Securities Act, may be resold, pledged or transferred only pursuant to an applicable exemption from registration under the Securities Act in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and (ii) it will, and each subsequent holder of any of the Securities, as applicable, that it purchases in this offering is required to, notify any subsequent purchaser of such Securities, as applicable, from it or subsequent holders, as applicable, of the resale restrictions referred to in clause (i) of this sentence. The Investor is acquiring the Securities for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof in a manner that would violate the Securities Act and is aware that the sale of

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

the Securities to it is being made in reliance on a private placement exemption from registration under the Securities Act. The Investor understands that there is no public trading market for the Notes, that none is expected to develop and that the Notes must be held indefinitely unless and until the Notes are registered under the Securities Act or an exemption from registration is available. Such Investor has been advised of and is aware of the provisions of Rule 144 promulgated under the Securities Act. The Investor will cooperate reasonably with the Company to provide any information necessary for any applicable securities filings as required by the Transactions contemplated in this Agreement.
Each Investor acknowledges and understands that the Notes are being offered and sold in reliance on a transactional exemption from the registration requirements of federal and state securities laws and that the Company and its counsel will rely upon the truth and accuracy of the foregoing representations and acknowledgements.
ARTICLE III    
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As of the date hereof, the Company represents and warrants to the Investors as follows:
Section 3.1    Organization, Good Standing and Power. The Company and each Significant Subsidiary is duly organized and are validly existing and in good standing under the laws of their respective jurisdictions of organization, are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, have a Material Adverse Effect.
Section 3.2    Due Authorization. The Company has full corporate right, power and authority to issue, sell and deliver the Notes, in accordance with and upon the terms and conditions set forth in this Agreement. All corporate action required to be taken by the Company for the authorization, issuance, sale and delivery of the Notes, the execution and delivery of the Transaction Documents and the consummation of the transactions contemplated thereby has been validly taken. No approval from the holders of outstanding Common Stock is required under the provisions of the charter or by-laws or similar organizational documents of the Company or the rules and regulations of the NYSE in connection with the Company’s issuance and sale of the Notes and Common Stock to the Investors. Each of the Transaction Documents has been duly and validly authorized and has been or, with respect to the Transaction Documents to be delivered at the Closing, will be, validly executed and delivered by the Company, and constitutes, or will constitute, the legal, valid and binding obligations of the Company (assuming the due authorization, execution and delivery thereof by the Investors and the Trustee, as applicable), enforceable in accordance with its terms, except as may be limited by the Enforceability Exceptions.
Section 3.3    Capitalization and Valid Issuance of Notes.


[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

(a)    The authorized Equity Interests of the Company consist of 1,000,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock. At the close of business on December 18, 2019, there were 83,980,885 shares of Common Stock and no shares of Preferred Stock issued and outstanding. All outstanding equity securities of the Company are duly authorized, validly issued, fully paid and non-assessable.
(b)    The Notes being purchased by the Investors hereunder have been duly authorized by the Company and, when issued and delivered by the Company in accordance with this Agreement against payment of the consideration set forth herein, will be valid and enforceable obligations of the Company, subject to the Enforceability Exceptions.
(c)    There are no persons entitled to statutory, preemptive or other similar contractual rights to subscribe for the Notes; and, except (i) for the Notes to be issued pursuant to this Agreement, (ii) for awards issued pursuant to the Company’s long-term incentive plan (the “2019 Long-Term Incentive Plan”), or (iii) as disclosed in the Company SEC Documents, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, ownership interests in the Company are outstanding.
(d)    When the Notes are issued and sold pursuant to this Agreement and the Indenture, the maximum number of shares of Common Stock issuable in respect of the Notes will be duly authorized and reserved and, when the Common Stock is issued in accordance with the terms of the Indenture, it will be validly issued, fully paid and non-assessable and will be free and clear of any and all liens and restrictions on transfer, other than (i) restrictions on transfer under the Transaction Documents, under the Delaware General Corporation Law or under applicable state and federal securities laws, (ii) such liens as are created by the Investors, and (iii) restrictions on transfer of Common Stock under any Lock-Up Letter, to the extent any such Investor or its respective affiliates is a party to any such Lock-Up Letter.
Section 3.4    No Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company or any of its Subsidiaries is required for the execution, delivery and performance by the Company of each of the Transaction Documents, the issuance and sale of the Notes and the consummation of the transactions contemplated by the Transaction Documents, except (a) as required by the Commission in connection with the Company’s obligations under the Registration Rights Agreement, (b) as may be required under the state securities or “Blue Sky” Laws, (c) as may be required by the rules and regulations of the NYSE, (d) the filing of a Supplemental Listing Application with the NYSE or (e) where the failure to receive such authorization, consent, approval, waiver, license, qualification or written exemption or to make such filing, declaration, qualification or registration would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 3.5    No Conflicts. The execution, delivery and performance by the Company of each of the Transaction Documents, the issuance and sale of the Notes, the issuance of the Common Stock underlying the Notes and the consummation of the transactions contemplated by the Transaction Documents will not (i) conflict with or result in a breach or violation of any of the terms

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

or provisions of, or constitute a default under, result in the termination, modification or acceleration of, or result in the creation or imposition of any lien, charge or encumbrance upon any property, right or asset of the Company or any of its Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any property, right or asset of the Company or any of its Subsidiaries is subject, (ii) result in any violation of the provisions of the charter or bylaws or similar organizational documents of the Company or any of its Subsidiaries or (iii) result in the violation of any Law or statute applicable to the Company or any of its Subsidiaries or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company or any of its Subsidiaries, except, in the case of clauses (i) and (iii) above, and with respect to the Company’s Subsidiaries in the case of clause (ii) above, for any such conflict, breach, violation, default, lien, charge or encumbrance that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or materially impair or delay the ability of the Company to perform its obligations under this Agreement or the Transaction Documents or to consummate the transactions contemplated hereby and thereby.
Section 3.6    Title to Real and Personal Property. The Company and its Subsidiaries have good and marketable title (in fee simple, in the case of real property) to, or have valid rights to lease or otherwise use or access, all items of real and personal property that are necessary to the respective businesses of the Company and its Subsidiaries taken as a whole (other than with respect to Intellectual Property, title to which is addressed exclusively in Section 3.8 below), in each case subject to any site access rights (whether construed as leases, easements, licenses or rights of way) under the Company’s customer agreements and such other exceptions that do not materially affect the value of such property and buildings or materially interfere with the use made of such property and buildings by the Company and its Subsidiaries, free and clear of all liens, encumbrances, claims and defects and imperfections of title except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries or (ii) could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
Section 3.7    Litigation. Except as set forth in the Company SEC Documents, as of the date of this Agreement, there are no legal or governmental proceedings pending to which the Company or any of its Subsidiaries is a party or to which any property or asset of any such entity is subject, that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or which challenges the validity of any of the Transaction Documents or the right of the Company to enter into any of the Transaction Documents or to consummate the transactions contemplated hereby and thereby.
Section 3.8    Intellectual Property. (i) The Company and its Subsidiaries own or have the right to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, domain names and other source indicators, copyrights and copyrightable works, know-how, trade secrets, systems, procedures, proprietary or confidential information and all other worldwide intellectual property, industrial property and proprietary rights (collectively, “Intellectual Property”) used in the conduct of their respective businesses; (ii) to the Knowledge of the Company, the Company’s and its Subsidiaries’ conduct of their respective businesses does not infringe, misappropriate or otherwise violate any Intellectual Property of any

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

person; (iii) the Company and its Subsidiaries have not received any written notice of any claim relating to Intellectual Property; and (iv) to the Knowledge of the Company, the Intellectual Property of the Company and its Subsidiaries is not being infringed, misappropriated or otherwise violated by any person.
Section 3.9    Certain Environmental Matters. (i) The Company and its Subsidiaries (A) are in compliance with all, and have not violated any, applicable federal, state, local and foreign laws (including common law), rules, regulations, requirements, decisions, judgments, decrees, orders and other legally enforceable requirements relating to pollution or the protection of human health or safety, the environment, natural resources, hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (B) have received and are in compliance with all, and have not violated any, permits, licenses, certificates or other authorizations or approvals required of them under any Environmental Laws to conduct their respective businesses; and (C) have not received notice of any actual or potential liability or obligation under or relating to, or any actual or potential violation of, any Environmental Laws, including for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, and (ii) there are no costs or liabilities associated with Environmental Laws of or relating to the Company or its Subsidiaries, except in the case of each of (i) and (ii) above, for any such matter as would not, in the aggregate, reasonably be expected to have a Material Adverse Effect; and (iii) except as disclosed in the Company SEC Documents, (A) there is no proceeding that is pending, or that is known to be contemplated, against the Company or any of its Subsidiaries under any Environmental Laws in which a governmental entity is also a party, other than such proceeding regarding which it is reasonably believed no monetary sanctions of $100,000 or more will be imposed, (B) the Company and its Subsidiaries are not aware of any facts or issues regarding compliance with Environmental Laws, or liabilities or other obligations under Environmental Laws or concerning hazardous or toxic substances or wastes, pollutants or contaminants, that could reasonably be expected to have a material effect on the capital expenditures, earnings or competitive position of the Company and its Subsidiaries, and (C) none of the Company or its Subsidiaries anticipates material capital expenditures relating to any Environmental Laws.
Section 3.10    Investment Company Act. The Company is not and, immediately after giving effect to the offering and sale of the Notes and the application of the proceeds thereof, will not be required to register as an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder.
Section 3.11    Taxes. The Company and its Subsidiaries have paid all federal, state, local and foreign taxes and filed all Tax Returns required to be paid or filed through the date hereof, except in each case as would not, in the aggregate, reasonably be expected to have a Material Adverse Effect; and, except as otherwise disclosed in the Company SEC Documents, or as would not, in the aggregate, reasonably be expected to have a Material Adverse Effect, there is no tax deficiency that has been asserted against the Company or any of its Subsidiaries or any of their respective properties or assets.
Section 3.12    Insurance. The Company and its Subsidiaries have insurance covering their respective properties, operations, personnel and businesses, including business interruption

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

insurance, which insurance is in amounts and insures against such losses and risks as are, in the Company’s reasonable judgment, prudent and customary in the business in which the Company and its Subsidiaries are engaged; and neither the Company nor any of its Subsidiaries has (i) received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business.
Section 3.13    Compliance With Anti-Money Laundering Laws. The operations of the Company and its Subsidiaries are conducted in compliance with applicable financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of all jurisdictions where the Company or any of its Subsidiaries conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the Knowledge of the Company, threatened.
Section 3.14    Compliance with ERISA. Except, in each case, for any such matter as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect (i) each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for which the Company or any member of its “Controlled Group” (defined as any entity, whether or not incorporated, that is under common control with the Company within the meaning of Section 4001(a)(14) of ERISA or any entity that would be regarded as a single employer with the Company under Section 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended (the “Code”)) would have any liability (each, a “Plan”) has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan, excluding transactions effected pursuant to a statutory or administrative exemption; (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no Plan has failed (whether or not waived), or is reasonably expected to fail, to satisfy the minimum funding standards (within the meaning of Section 302 of ERISA or Section 412 of the Code) applicable to such Plan; (iv) no Plan is, or is reasonably expected to be, in “at risk status” (within the meaning of Section 303(i) of ERISA) and no Plan that is a “Multiemployer Plan” within the meaning of Section 4001(a)(3) of ERISA is in “endangered status” or “critical status” (within the meaning of Sections 304 and 305 of ERISA) (v) the fair market value of the assets of each Plan that is subject to Title IV of ERISA or Section 412 of the Code equals or exceeds the present value of all benefits accrued under such Plan (determined based on those assumptions used to fund such Plan); (vi) no “reportable event” (within the meaning of Section 4043(c) of ERISA and the regulations promulgated thereunder) has occurred or is reasonably expected to occur; (vii) each Plan that is intended to be qualified under Section 401(a) of the Code is so qualified, and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification; (viii) neither the Company nor any member of the Controlled Group

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the Pension Benefit Guarantee Corporation, in the ordinary course and without default) in respect of a Plan (including a “Multiemployer Plan” within the meaning of Section 4001(a)(3) of ERISA); and (ix) none of the following events has occurred or is reasonably likely to occur: (A) a material increase in the aggregate amount of contributions required to be made to all Plans by the Company or its Controlled Group affiliates in the current fiscal year of the Company and its Controlled Group affiliates compared to the amount of such contributions made in the Company’s and its Controlled Group affiliates’ most recently completed fiscal year; or (B) a material increase in the Company and its Subsidiaries’ “accumulated post-retirement benefit obligations” (within the meaning of Accounting Standards Codification Topic 715-60) compared to the amount of such obligations in the Company and its Subsidiaries’ most recently completed fiscal year, except, in each case, with respect to the events or conditions set forth in (i) through (ix) hereof, as would not, individually or in the aggregate, have a Material Adverse Effect.
Section 3.15    Certain Fees. No fees or commissions are or will be payable by the Company to brokers, finders or investment bankers with respect to the sale of any of the Notes or the consummation of the transaction contemplated by this Agreement or the other Transaction Documents.
Section 3.16    No Unlawful Payments.Neither the Company nor any of its Subsidiaries nor any director or officer of the Company or any of its Subsidiaries nor, to the Knowledge of the Company, any agent, employee, affiliate or other person associated with or acting on behalf of the Company or any of its Subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable Law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. The Company and its Subsidiaries have instituted, maintain and enforce, and will continue to maintain and enforce policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws.
Section 3.17    No Conflicts with Sanctions Laws. Neither the Company nor any of its Subsidiaries, directors or officers, nor, to the Knowledge of the Company, any agent, employee, affiliate or other person associated with or acting on behalf of the Company or any of its Subsidiaries is currently the subject or the target of any sanctions administered or enforced by the U.S. government, (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company or any of its Subsidiaries located, organized or resident in a country or territory that is itself the subject or target of Sanctions, including, without limitation, Crimea, Cuba, Iran, North Korea and Syria (each, a “Sanctioned Country”); and the Company will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as advisor, investor or otherwise) of Sanctions. For the past five years, the Company and its Subsidiaries have not knowingly engaged in and are not now knowingly engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned Country.
Section 3.18    Solvency.
(a)    On the Closing Date, immediately after giving effect to the Transactions, (i) the fair value of the assets of the Company and its Subsidiaries on a consolidated basis, at a fair valuation, will exceed the debts and liabilities, direct, subordinated, contingent or otherwise, of the Company and its Subsidiaries on a consolidated basis; (ii) the present fair saleable value of the property of the Company and its Subsidiaries on a consolidated basis will be greater than the amount that will be required to pay the probable liability of the Company and its Subsidiaries on a consolidated basis on their debts and other liabilities, direct, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Company and its Subsidiaries on a consolidated basis will be able to pay their debts and liabilities, direct, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Company and its Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in which they are engaged as such businesses are now conducted and are proposed to be conducted following the Closing Date.
(b)    There are no bankruptcy, insolvency, reorganization or receivership proceedings commenced and continuing or, to the Knowledge of the Company, being contemplated or threatened with respect to the Company or any Subsidiary.
Section 3.19    No Solicitation or Integration. (i) Neither the Company nor any other Person authorized by the Company to act on its behalf has engaged in a general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) of purchasers with respect to offers or sales of the Notes; and (ii) the Company has not, directly or indirectly, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) which, to its Knowledge, is or will be integrated with the Notes sold pursuant to this Agreement.  
Section 3.20    Periodic Reports. The Company has filed all reports, proxy statements, forms, and other documents required to be filed by the Company with the Commission pursuant to the Exchange Act in a timely manner and such reports, proxy statements, forms and other documents, including any audited or unaudited financial statements and any notes thereto or schedules included

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

therein, at the time filed (or in the case of registration statements, solely on the dates of effectiveness) (except to the extent corrected by a subsequent filing) (a) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, (b) complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be, and (c) complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto. The financial statements and other financial information of the Company included in the Company SEC Documents were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the Commission), and fairly present (subject in the case of unaudited statements to normal and recurring and year-end audit adjustments) in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of its operations and cash flows of the Company and its consolidated Subsidiaries for the periods then ended. The independent auditor of the Company as of the date of the most recent audited balance sheet of the Company is an independent registered public accounting firm with respect to the Company and has not resigned or been dismissed as independent registered public accountants of the Company as a result of or in connection with any disagreement with the Company on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures. Since the date of the most recent balance sheet of the Company audited by such auditor, (i) the interactive data in extensible Business Reporting Language included or incorporated by reference in the Company SEC Documents fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto and (ii) based on an annual evaluation of disclosure controls and procedures, except as set forth in the Company SEC Documents, the Company is not aware of (x) any significant deficiency or material weakness in the design or operation of internal controls over financial reporting that are likely to adversely affect its ability to record, process, summarize and report financial data or (y) any fraud, whether or not material, that involves management or other employees who have a significant role in the internal controls over financial reporting of the Company.
Section 3.21    No Material Adverse Change. Except as expressly set forth in or contemplated by the Company SEC Documents, since September 30, 2019 through the date hereof, no Material Adverse Effect has occurred.
Section 3.22    Registration. Assuming the accuracy of the representations and warranties of each Investor contained in Article II, the offer, sale and delivery of the Securities pursuant to this Agreement is exempt from registration requirements of the Securities Act, and neither the Company nor, to the Knowledge of the Company, any authorized representative acting on its behalf has taken or will take any action hereafter that would cause the loss of such exemption.
Section 3.23    Registration Rights Priority. Except for those rights contained in the Company’s Second Amended and Restated Registration Rights Agreement and the Company’s Amended and Restated Piggy-back Registration Rights Agreement, the Company has not granted registration rights that remain outstanding that (a) are equal or superior in priority to, or otherwise equal to or greater than, in any respect, those contained in the Registration Rights Agreement, (b)

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

reduce the aggregate amount of Common Stock that may be registered pursuant to the Registration Rights Agreement or (c) conflict in any material respect with the rights granted to the Investors pursuant to the Registration Rights Agreement.
Section 3.24    No Violation or Default. Neither the Company nor any of its Subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any property or asset of the Company or any of its Subsidiaries is subject; or (iii) in violation of any Law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company or any of its Subsidiaries, except, in the case of clauses (ii) and (iii) above, and with respect to the Company’s Subsidiaries in the case of clause (i) above, for any such default or violation that would not, in the aggregate, reasonably be expected to have a Material Adverse Effect or materially impair or delay the ability of the Company to perform its obligations under the Transaction Documents.
Section 3.25    No Labor Dispute. As of the date of this Agreement, no labor disturbance by or dispute, action, or similar proceeding with employees of the Company or any of its Subsidiaries exists or, to the Knowledge of the Company, is threatened, except, in each case, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 3.26    Accounting Controls. The Company and its Subsidiaries, taken as a whole, maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that have been designed to comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company and its Subsidiaries, taken as a whole, maintain internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. There are no material weaknesses in the Company’s internal controls over financial reporting (it being understood that the Company is not required to comply with Section 404 of the Sarbanes Oxley Act of 2002, as amended, and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), as of an earlier date than it would otherwise be required to so comply under applicable Law). To the extent known by the Company, the Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which have adversely affected or are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and (ii) any

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.
Section 3.27    Disclosure Controls. The Company and its Subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that complies with the requirements of the Exchange Act and that has been designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure.
Section 3.28    Listing and Maintenance Requirements. The Common Stock is listed on the NYSE, and the Company has not received any notice of delisting. The issuance and sale of the Notes does not contravene NYSE rules and regulations. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to the Knowledge of the Company is reasonably likely to, have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received as of the date of this Agreement any notification that the Commission is contemplating terminating such registration.
Section 3.29    Licenses and Permits. The Company and its Subsidiaries possess all licenses, sub-licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses, except where the failure to possess or make the same would not, in the aggregate, reasonably be expected to have a Material Adverse Effect; and, except as would not reasonably be expected to have a Material Adverse Effect, neither the Company nor any of its Subsidiaries has received notice of any revocation or modification of any such license, sub-license, certificate, permit or authorization or has any reason to believe that any such license, sub-license, certificate, permit or authorization will not be renewed in the ordinary course.
Section 3.30    Cybersecurity; Data Protection. The Company and its Subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform in all material respects as required in connection with the operation of the business of the Company and its Subsidiaries as currently conducted. To the knowledge of the Company, the IT Systems are free and clear of all Trojan horses, time bombs, malware and other corruptants designed to permit unauthorized access or activity. The Company and its Subsidiaries have implemented and maintained commercially reasonable controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data (including all personal, personally identifiable, sensitive, confidential or regulated data (“Personal Data”)) used in connection with their businesses, and, to the knowledge of the Company, there have been no breaches, violations, outages or unauthorized uses of or accesses to such IT Systems or Personal Data, except for those that have been remedied without material cost or liability or the duty to notify any other person, nor any incidents under

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

internal review or investigations relating to such IT Systems or Personal Data. The Company and its Subsidiaries are presently in material compliance with all laws or statutes applicable to the Company or its Subsidiaries and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company or its Subsidiaries, internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification.
Section 3.31    No Side Agreements. There are no agreements by, among or between the Company or any of its Subsidiaries, on the one hand, and any Investor or, to the Knowledge of the Company, any of their Affiliates, on the other hand, with respect to the transactions contemplated hereby other than this Agreement and the other Transaction Documents, nor promises or inducements for future transactions between or among any of such parties other than as set forth in the Transaction Documents.
ARTICLE IV    
TRANSFER RESTRICTIONS
Section 4.1    Lock-Up. During the Lock-Up Period, the Investors shall not, without the Company’s prior written consent, directly or indirectly, sell, offer, transfer, assign, mortgage, hypothecate, gift, pledge or dispose of, enter into or agree to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, pledge, mortgage, hypothecation, gift, assignment or similar disposition of (any of the foregoing, a “Transfer”), any of the Notes other than (i) any Transfer to an Investor’s Affiliate that executes and delivers to the Company a Joinder becoming an Investor party to this Agreement and a duly completed and executed IRS Form W-9, or appropriate Form W-8 or (ii) to the Company or any of its Subsidiaries. For the avoidance of doubt, after the conclusion of the Lock-Up Period, the Investors may Transfer, without the Company’s prior written consent, all or a portion of the Notes, subject to any limitations on Transfer contained in the Indenture and applicable securities laws.
ARTICLE V    
COVENANTS
The Company covenants with each Investor, and each Investor covenants with the Company, severally and not jointly, as follows:
Section 5.1    Future Ratings. If the Company obtains a rating or ratings from a “nationally recognized statistical rating organization” (as defined in Section 3(a)(62) of the Exchange Act) for any future indebtedness of the Company incurred after the Closing Date, the Company shall use commercially reasonable efforts to obtain a rating from a nationally recognized statistical rating organization for the Notes; provided, that the Company shall not be required to obtain a rating for the Notes in connection with the incurrence of any future indebtedness, the proceeds of which are used, in whole or in part, to redeem, retire, defease, discharge, or otherwise acquire the Notes.
Section 5.2    Equipment Facility Transaction. From the Closing Date until the date that the Company or its Affiliates shall have entered into the Equipment Facility, the Company will not,

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

and will not allow TEP Inventory, to make aggregate payments in respect of the acquisition of solar system equipment from third party sources, including inverters and related equipment, in excess of $10,000,000.
ARTICLE VI    
CONDITIONS TO THE SALE AND PURCHASE OF THE NOTES
Section 6.1    Conditions Precedent to the Obligation of an Investor to Purchase Notes. The obligation hereunder of the applicable Investor to acquire and pay for the Initial Notes on the Closing Date or the Additional Notes on any Date of Delivery is subject to the satisfaction or waiver at or before the Closing Date or the applicable Date of Delivery of each of the conditions set forth below. These conditions are for each Investor’s sole benefit and may be waived by any Investor, with respect to itself only, at any time in its sole discretion.
(i)    Accuracy of the Company’s Representations and Warranties. The representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects as of the Closing Date or Date of Delivery, as applicable (unless already qualified by materiality or in all material respects, in which case they shall be true and correct without further qualification).
(ii)    Solvency Certificate. The Company shall deliver to the applicable Investor a Solvency Certificate from the Company, dated as of the Closing Date or Date of Delivery, as applicable, in substantially the form of Exhibit B hereto.
(iii)    Secretary’s Certificate. A certificate of the Secretary or Assistant Secretary of the Company dated as of the Closing Date or Date of Delivery, as applicable, certifying as to and attaching: (A) a true, correct and complete and in full force and effect as of the Closing Date, copy of the Charter, (B) a true, correct and complete and in full force and effect as of the Closing Date, copy of the bylaws of the Company, (C) true, correct and complete, and in full force and effect as of the Closing Date, resolutions of the board of directors of the Company authorizing and approving the Transaction Documents, the Notes and the transactions contemplated thereby, including the issuance of the Notes to each Investor, and (D) the incumbency of the officers of the Company authorized to execute the Transaction Documents and the Notes.
(iv)    Officers’ Certificate. The Company shall deliver an Officers’ Certificate from the Company dated as of the Closing Date or Date of Delivery, as applicable, in substantially the form of Exhibit C hereto.
(v)    Opinion of Company Counsel. The Company shall deliver customary opinions addressed to the Investors from Baker Botts L.L.P., counsel to the Company, dated as of the Closing Date or Date of Delivery, as applicable.
(vi)    No Default or Event of Default. No Default or Event of Default (each as defined in the Indenture) shall have occurred and be continuing.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

(vii)    No Material Adverse Change. No change, event, occurrence, effect, fact, circumstance or condition that has had or would reasonably be likely to have a Material Adverse Effect shall have occurred since September 30, 2019.
(viii)    Definitive Documentation. As of the Closing Date or Date of Delivery, as applicable, the Investors shall be reasonably satisfied with the forms and substance of each of the Transaction Documents and shall have received duly executed copies of each Transaction Document, together with the exhibits and schedules thereto.
(ix)    Supplemental Listing. The Company shall have received official notice of the approval of the listing of additional shares of Common Stock equal to the maximum number of shares of Common Stock issuable in respect of the Initial Notes or Additional Notes, as applicable, on the NYSE, subject to official notice of issuance.
(x)    KYC. On or prior to the Closing Date or Date of Delivery, as applicable, the Company shall have provided to the Investors all information related to the Company (including names, addresses and tax identification numbers (if applicable)) reasonably requested in writing by the Investors at least five (5) Business Days prior to the Closing Date and mutually agreed to be required under “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, to be obtained by the Investors.
Section 6.2    Conditions Precedent to the Obligation of the Company to Issue Notes. The obligation of the Company to issue the Initial Notes on the Closing Date or to issue the Additional Notes on any Date of Delivery is subject to the fulfillment (or waiver in the Company’s sole discretion) on or before such date of each of the following conditions:
(i)    Payment. Each Investor shall have paid, as applicable, its Commitment on the Closing Date or the purchase price of its portion of Additional Notes on the Date of Delivery, as applicable, by wire transfer of immediately available funds to the account designated by the Company in writing.
(ii)    Supplemental Listing. The Company shall have received official notice of the approval of the listing of additional shares of Common Stock equal to the maximum number of shares of Common Stock issuable in respect of the Initial Notes or Additional Notes, as applicable, on the NYSE, subject to official notice of issuance.
(iii)    Representations and Warranties. The representations and warranties of the Investors contained in Article II shall be true and correct in all material respects (unless already qualified by materiality or in all material respects, in which case they shall be true and correct without further qualification).
(iv)    Transaction Documents. The parties to each Transaction Document (other than the Company) shall have duly executed each such Transaction Document and each such Transaction Document shall be in full force and effect.
ARTICLE VII    
MISCELLANEOUS

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

Section 7.1    Fees and Expenses. Each party shall bear its own fees and expenses related to the transactions contemplated by this Agreement; provided, however, that the Company shall pay by wire transfer of immediately available funds to an account designated by the Investors (i) the reasonable and documented out-of-pocket fees and expenses incurred by the Investors (including the reasonable and documented fees, expenses and disbursements of counsel to the Investors), which shall be as of the date hereof one or more attorneys at Kirkland & Ellis LLP in connection with (x) the preparation, negotiation, execution and delivery of this Agreement, the Indenture, the other Transaction Documents and due diligence of the Company, (y) the Investors’ purchase of the Notes and the initial filing of this Agreement and all related documents with the Securities Valuation Office of the National Association of Insurance Commissioners and (z) any and all amendments, consents, waivers or other documents or instruments relating thereto (whether or not such amendments, consents or waivers become effective); provided, further, that the Company shall not be required to reimburse the Investors’ expenses incurred in connection with the initial negotiation and execution of the Transaction Documents in excess of $500,000 in the aggregate and, in the event that the Closing does not occur, the Company’s obligations under this provision shall not exceed $250,000 in the aggregate, and (ii) all out-of-pocket expenses incurred by the Investors in connection with the enforcement or protection of its rights in connection with this Agreement and the other Transaction Documents, including its rights under this Section 7.1, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Notes.
Section 7.2    Consent to Jurisdiction, Waiver of Jury Trial.
(a)    Each of the Company and each Investor (a) hereby irrevocably submits to the jurisdiction of the U.S. District Court and other courts of the United States sitting in the City and State of New York, Borough of Manhattan, for the purposes of any suit, action or proceeding arising out of or relating to this Agreement, and (b) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Each of the Company and each Investor consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 7.2 shall affect or limit any right to serve process in any other manner permitted by Law.
(b)    EACH OF THE COMPANY AND EACH INVESTOR HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR DISPUTES RELATING HERETO. EACH OF THE COMPANY AND EACH INVESTOR (I) 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 (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.2.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

Section 7.3    Entire Agreement; Amendment. This Agreement, together with the annexes and exhibits referred to herein, and the Indenture represent the entire agreement of the parties with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by either party relative to subject matter hereof not expressly set forth herein. All exhibits to this Agreement are hereby incorporated by reference in, and made a part of, this Agreement as if set forth in full herein. Any term of this Agreement may be amended or waived only with the written consent of the Company and the Investors holding at least a majority of the aggregate principal amount of the outstanding Notes and Commitments at such time; provided, that, any waiver or amendment in respect of the amount of the Commitments shall require the consent of the affected Investors.
Section 7.4    Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery at the address or number designated below (if delivered on a Business Day during normal business hours where such notice is to be received), or the first Business Day following such delivery (if delivered other than on a Business Day during normal business hours where such notice is to be received) or (b) on the second Business Day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The address for such communications shall be:

If to the Company:

Sunnova Energy International Inc.
20 East Greenway Plaza, Suite 475
Houston, TX 77046
Telephone:    [***]
Attention:    Chief Financial Officer

With a copy (which shall not constitute notice) to:

Baker Botts L.L.P.
910 Louisiana Street, Suite 3200
Houston, TX 77002
Attention: Justin F. Hoffman

If to any Investor, at its address as it appears on the books and records of the Company.

With a copy (which shall not constitute notice) to:

Kirkland & Ellis LLP
609 Main Street
Houston, Texas 77002
Telephone:    [***]
Attention:    Matthew Pacey
Bryan Flannery

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Any party hereto may from time to time change its address for notices by giving at least ten (10) days’ advance written notice of such changed address to the other parties hereto.
Section 7.5    Waivers. No waiver by any party of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provisions, condition or requirement hereof nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.
Section 7.6    Headings; Construction. The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in which they are found. The parties agree that each of them and their respective counsel has reviewed and had an opportunity to revise this Agreement and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. Any reference in this Agreement to “Dollars” or “$” shall mean the lawful currency of the United States of America.
Section 7.7    Successors and Assigns. Subject to Article IV, (i) each Investor may assign its rights or obligations pursuant to this Agreement to any of its Affiliates and (ii) each Original Investor may assign its commitment to purchase Additional Notes under Section 1.3 to any of its Affiliates or to any other Original Investor or such Original Investor’s Affiliates, subject, in each case, to such assignee Affiliate making the representations and warranties set forth in Article II as of the date of such Transfer. Except as specifically permitted in the foregoing sentence, no Investor may assign its rights or obligations pursuant to this Agreement to any Person, without the prior written consent of the Company in its sole discretion. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. The assignment by a party to this Agreement of any rights hereunder shall not affect the obligations of such party under this Agreement.
Section 7.8    Governing Law. This Agreement shall be governed by and construed in accordance with the internal procedural and substantive laws of the State of New York, without giving effect to the choice of law provisions of such state that would cause the application of the laws of any other jurisdiction.
Section 7.9    Counterparts. This Agreement may be executed in counterparts, all of which taken together shall constitute one and the same original and binding instrument and shall become effective when all counterparts have been signed by each party and delivered to the other parties hereto, it being understood that all parties hereto need not sign the same counterpart. In the event any signature is delivered by digital or electronic transmission, such transmission shall constitute delivery of the manually executed original.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

Section 7.10    Severability. The provisions of this Agreement are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement, and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible.
Section 7.11    No Third Party Beneficiaries. This Agreement is intended only for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
Section 7.12    Further Assurances. From and after the date of this Agreement, upon the request of the Investors or the Company, each of the Company and the Investors shall execute and deliver such instrument, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement.
Section 7.13    Survival of Provisions. The covenants made in this Agreement shall survive the Closing Date and remain in full force and effect until payment in full in cash and discharge of all Notes then outstanding under the Indenture. The agreements and obligations of the Company set forth in Article VII shall remain operative and in full force and effect unless such obligations are expressly terminated in a writing by the parties, regardless of any purported general termination of this Agreement.
Section 7.14    Termination. This Agreement may be terminated at any time prior to the Closing: (a) by mutual written consent of the Company and the Investors representing a majority of the aggregate Commitment; (b) by written notice from either the Company or the Investors representing a majority of the Notes, if any Governmental Authority with lawful jurisdiction shall have issued a final order, decree or ruling or taken any other final action restraining, enjoining or otherwise prohibiting the transactions contemplated by the Transaction Documents and such order, decree, ruling or other action is or shall have become final and nonappealable; (c) by written notice from either the Company or the Investors representing a majority of the Notes, if the Closing does not occur by 11:59 p.m. New York City time on the End Date; provided, however, that the right to terminate this Agreement pursuant to this Section 7.14(c) shall not be available to any Party whose failure to fulfill any obligations under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date; (d) by notice given from the Company, if there have been one or more inaccuracies in or breaches of one or more representations, warranties, covenants or agreements made by the Investors in this Agreement such that the conditions in Section 6.2(iii) would not be satisfied and which have not been cured by the Investors five Business Days after receipt by the Investors of written notice from the Company requesting such inaccuracies or breaches to be cured; (e) by notice given by the Investors representing a majority of the aggregate Commitment, if there have been one or more inaccuracies in or breaches of one or more representations, warranties, covenants or agreements made by the Company in this Agreement such that the conditions in Section 6.1(i) would not be satisfied and which have not

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

been cured by the Company within five Business Days after receipt by the Company of written notice from the Investors requesting such inaccuracies or breaches to be cured.
Section 7.15    Certain Effects of Termination. In the event that this Agreement is terminated pursuant to this Section 7.15, (a) except as set forth in Section 7.15(b) and in Article IX, this Agreement shall become null and void and have no further force or effect, but the Parties shall not be released from any liability arising from or in connection with any breach hereof occurring prior to such termination; and (b) regardless of any purported termination of this Agreement, the provisions of Section 7.16 and Article VIII shall remain operative and in full force and effect as between the Company and the Investors, unless the Company and the Investors possessing the right to acquire not less than majority of the Notes execute a writing that expressly terminates such rights and obligations as between the Company and the Investors.
Section 7.16    Non-Disclosure.
(a)    Subject to Section 7.16(b), each Party agrees to use all non-public, confidential or proprietary information (financial and non­financial) disclosed to it by any other Party in connection with this Agreement or the Notes solely for the purposes of the transactions contemplated thereby and to treat all such information confidentially; provided, that nothing herein shall prevent the Investors from disclosing any such information (i) to purchasers or prospective purchasers of the Notes who agree in writing to be bound by the provisions of this Section 7.16, (ii) to investors or prospective investors in funds or accounts managed, advised or sub-advised by Affiliates of, or entities designated by, any of the Investors; provided that such Investor shall instruct such investors or prospective investors to comply with the provisions of this Section 7.16, (iii) pursuant to the order of any court or administrative agency, (iv) subject to the next sentence of this Section 7.16(a), upon the request or demand of any regulatory authority having jurisdiction over any Party or its Affiliates, (v) to the extent that such information was or becomes publicly available other than by reason of disclosure by the Parties in violation of this Agreement or was or becomes available to any Party or its Affiliates from a source which is not known by such Party to be subject to a confidentiality obligation to any other Party, (vi) to the extent such information was independently developed by any Party without reference to such non-public information, or (vii) to the Affiliates, employees, legal counsel, independent auditors and other experts or agents who need to know such information in connection with the sale of the Notes; provided that each Party shall use its commercially reasonable efforts to cause its Affiliates, employees, legal counsel, independent auditors and other experts or agents to comply with this Section 7.16(a) and shall be liable to any other affected Party under this Section 7.16(a) for any breach by its Affiliates or employees of the terms of this Section 7.16(a). In the event that any Party is requested or required pursuant to written or oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigation demand, or similar process to disclose any non-public information, it will notify such other affected Parties promptly of the request or requirement so that it may seek an appropriate protective order or waive compliance with the provisions of this Section 7.16(a); provided that, in the event that such affected Party is unable to obtain such a protective order, it shall use its commercially reasonable efforts to seek an order or other assurance that confidential treatment will be accorded to such portion of the nonpublic information required to be disclosed as the affected Party shall designate. Nothing in this paragraph shall limit the Company’s

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

right to file or disclose any information or documents relating to the transactions relating to the Notes it determines in good faith are required to be furnished or filed with the Commission.
(b)    Other than filings made by the Company with the Commission, the Company may disclose the identity of, or any other information concerning, the Investors or any of their respective Affiliates only after providing the Investors a reasonable opportunity to review and comment on such disclosure (with such comments being incorporated or reflected, to the extent reasonable, in any such disclosure); provided, however, that nothing in this Section 7.16 shall delay any required filing or other disclosure with the NYSE or any Governmental Authority or otherwise hinder the Company’s ability to timely comply with applicable Law or rules and regulations of the NYSE or other Governmental Authority.
(c)    Prior to making any public statements or issuing any press releases with respect to the transactions contemplated by the Transaction Documents, each Party will consult with the other Parties hereto and consider in good faith any comments provided by such other parties; provided that no Party will make any public statement or issue any press release that attributes comments to any other Party or that indicates the approval of any other Party of the contents of any such public statement or press release (or portion thereof) without the prior written approval of the other Parties hereto.
ARTICLE VIII    
INDEMNIFICATION
Section 8.1    Indemnification by the Company. The Company agrees to indemnify each Investor and the respective directors, officers, advisors, agents and employees of each such Investor (collectively, “Investor Related Parties”) from costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, or arising out of, a breach of a representation or warranty by the Company in this Agreement or a failure by the Company to comply with its covenants in this Agreement; provided that, (a) no Investor Related Party shall be entitled to recover special, consequential or punitive damages, except for any such special, consequential or punitive damages included in any third party claim in connection with which such Indemnified Party is entitled to indemnification and (b) no Investor Related Party shall be entitled to recover costs, losses, liabilities, damages, or expenses arising from the fraud, gross negligence or willful misconduct of an Investor Related Party or a dispute solely amongst Investor Related Parties to which the Company is not a party.
Section 8.2    Additional Limitations on Indemnification. The Company’s maximum aggregate liability under this Article VIII will be limited to the aggregate principal amount of the Notes outstanding on such date, but in no event greater than the Total Commitment. Notwithstanding anything to the contrary contained herein, any damages otherwise indemnifiable under this Article

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

VIII shall be reduced by the amount of insurance proceeds actually recovered by the Investor Related Parties in respect of such damages (net of costs of collection, deductibles and retro-premium adjustments). Damages shall be determined without duplication of recovery by reason of the state of facts giving rise to such damages constituting a breach of more than one representation or warranty. Any claim for indemnification relating to a breach of a representation and warranty must be made in writing no later than the earlier of (a) one (1) year after the payment in full in cash and discharge of all Notes then outstanding under the Indenture and (b) two (2) years after the Closing Date.
Section 8.3    Indemnification Procedure. Promptly after any Investor Related Party (hereinafter, the “Indemnified Party”) has received notice of any indemnifiable claim hereunder, or the commencement of any action, suit or proceeding by a third person, which the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement, the Indemnified Party shall give the indemnitor hereunder (the “Indemnifying Party”) written notice of such claim or the commencement of such action, suit or proceeding, but failure to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure. Such notice shall state the nature and the basis of such claim to the extent then known. The Indemnifying Party shall have the right to defend and settle, at its own expense and by its own counsel who shall be reasonably acceptable to the Indemnified Party, any such matter as long as the Indemnifying Party pursues the same diligently and in good faith. If the Indemnifying Party undertakes to defend or settle, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party shall cooperate with the Indemnifying Party and its counsel in all commercially reasonable respects in the defense thereof and the settlement thereof. Such cooperation shall include, but shall not be limited to, furnishing the Indemnifying Party with any books, records and other information reasonably requested by the Indemnifying Party and in the Indemnified Party’s possession or control. Such cooperation of the Indemnified Party shall be at the cost of the Indemnifying Party. After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such asserted liability; provided, however, that the Indemnified Party shall be entitled (a) at its expense, to participate in the defense of such asserted liability and the negotiations of the settlement thereof and (b) if (i) the Indemnifying Party has failed to assume the defense or employ counsel reasonably acceptable to the Indemnified Party or (ii) if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and counsel to the Indemnified Party (including in house counsel) shall have concluded that there may be reasonable defenses available to the Indemnified Party that are different from or in addition to those available to the Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to conflict with the interests of the Indemnifying Party, then the Indemnified Party shall have the right to select one firm of separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the Indemnifying Party as incurred. Notwithstanding any other provision of this Agreement, neither the Indemnifying Party nor the Indemnified Party shall settle any indemnified claim without the consent of the other (such consent not to be unreasonably withheld), unless the settlement thereof imposes no liability or obligation

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

on, and includes a complete release from liability of, and does not include any admission of wrongdoing or malfeasance by such other party. The remedies provided for in this Article VIII are cumulative and are not exclusive of any remedies that may be available to a party at law or in equity or otherwise.
ARTICLE IX    
MAJORITY HOLDER DESIGNEE
Section 9.1    Majority Holder Designee. Effective as of the issuance of the Initial Notes pursuant to the terms hereof, each of MTP Energy Management LLC and Tortoise Capital Advisors, LLC or their respective successors or assigns (collectively, the “Appointing Holders” and each an “Appointing Holder”) shall have the right, subject to Section 9.2, to act as or appoint a designee (the “Designees” and each a “Designee”) to act as a Majority Holder Designee in accordance with the terms of Sections 17.17 and 17.18 of the Indenture. Notwithstanding any other provisions of this Agreement, as long as any Notes remain outstanding, this Article IX shall survive any purported termination of this Agreement and may not be amended without the consent of each Appointing Holder that has the then-current right to appoint a designee under this Article IX.
Section 9.2    Removal; Replacement. The appointment of any such Designee shall continue to be effective unless and until (a) such Designee delivers a written notice of resignation to the Appointing Holder that appointed it, and to any other Designee, the Company and the Trustee (which resignation shall be effective immediately upon delivery thereof); provided that upon delivery of such notice a new Designee may be appointed pursuant to clause (b) of this Section 9.2; (b) the applicable Appointing Holder removes its Designee and/or appoints a new Designee, which appointment shall become effective immediately upon written notice from the applicable Appointing Holder to any other Designee, the Company and the Trustee; or (c) the Notes beneficially owned by the Appointing Holder that appointed such Designee and its respective affiliates (including funds, accounts or persons managed, advised, sub-advised by or affiliated with such Appointing Holder or its affiliates), successors and assigns (“Qualifying Notes”) cease to represent a majority of the principal amount of Initial Notes purchased by such Appointing Holder and its affiliates pursuant to this Agreement. In the event (i) any Designee resigns or is otherwise removed and the Appointing Holder that appointed it is not entitled (or elects not) to exercise the right to appoint a new Designee, and (ii) the Qualifying Notes beneficially owned by the other Appointing Holder represent a majority of the principal amount of Initial Notes purchased by such Appointing Holder and its affiliates pursuant to this Agreement, then the Designee appointed by the Appointing Holder referred to in clause (ii) may continue to act as the sole Majority Holder Designee until such time as the other Appointing Holder appoints a new Designee pursuant to the immediately preceding sentence. For the avoidance of doubt, no Appointing Holder shall be deemed to have forfeited such Appointing Holder’s right to appoint a Designee solely because such Appointing Holder has removed and/or failed to appoint a Designee pursuant to clause (b) above. The Appointing Holders shall notify the Trustee and the Company in writing of their then current holdings of Qualifying Notes in connection with any action taken by their respective Designees pursuant to the Indenture.
Section 9.3    Liability. Neither the Majority Holder Designee nor any of its officers, partners, directors, employees or agents shall be liable to the Holders or the Company for any action

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

taken or omitted by the Majority Holder Designee under or in connection with the Indenture and the Notes.
(Signature Page Follows)

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officer as of the date first above written.

COMPANY:
 
SUNNOVA ENERGY INTERNATIONAL INC.
 
 
 
 
By:
/s/ Walker A. Baker
Name:
Walter A. Baker
Title:
Executive Vice President, General Counsel and Secretary

 

[Signature page to Purchase Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.




INVESTORS:
 
MTP Energy Master Fund LLC
By MTP Energy Management LLC, its managing member
By Magnetar Financial LLC, its sole member
 
 
 
 
By:
/s/ Karl Wachter
Name:
Karl Wachter
Title:
General Counsel


[Signature page to Purchase Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.




TORTOISE ENERGY INFRASTRUCTURE CORP.
By Tortoise Capital Advisors, L.L.C. as Investment Adviser
 
 
 
 
By:
/s/ Stephen Pang
Name:
Stephen Pang
Title:
Managing Director
 

[Signature page to Purchase Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.




TORTOISE MIDSTREAM ENERGY FUND, INC.
By Tortoise Capital Advisors, L.L.C. as Investment Adviser
 
 
 
 
By:
/s/ Stephen Pang
Name:
Stephen Pang
Title:
Managing Director




[Signature page to Purchase Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.





TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC
By Tortoise Capital Advisors, L.L.C. as Investment Adviser
 
 
 
 
By:
/s/ Stephen Pang
Name:
Stephen Pang
Title:
Managing Director


[Signature page to Purchase Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



TORTOISE DIRECT OPPORTUNITIES FUND II, LP
By Tortoise Capital Advisors, L.L.C. as Investment Adviser
 
 
 
 
By:
/s/ Stephen Pang
Name:
Stephen Pang
Title:
Managing Director


[Signature page to Purchase Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.




TORTOISE ESSENTIAL ASSETS INCOME TERM FUND
By Tortoise Capital Advisors, L.L.C. as Investment Adviser
 
 
 
 
By:
/s/ Stephen Pang
Name:
Stephen Pang
Title:
Managing Director



[Signature page to Purchase Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



PRINCIPAL DIVERSIFIED SELECT REAL ASSET FUND
By Tortoise Capital Advisors, L.L.C. as Investment Adviser
 
 
 
 
 
 
By:
/s/ Stephen Pang
Name:
Stephen Pang
Title:
Managing Director





[Signature page to Purchase Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



ANNEX A TO THE
PURCHASE AGREEMENT

DEFINITIONS
“2019 Long-Term Incentive Plan” has the meaning assigned to such term in Section 3.3 hereof.
“Additional Notes” has the meaning assigned to such term in Section 1.3 hereof.
“Affiliate” shall have the meaning assigned to it in the Indenture.
“Amended and Restated Piggy-back Registration Rights Agreement” means that certain piggy-back registration rights agreement, made as of July 29, 2019, by and among Sunnova Energy International Inc. and certain stockholders party thereto.
“Anti-Money Laundering Laws” has the meaning assigned to such term in Section 3.13 hereof.
“Appointing Holder” has the meaning assigned to such term in Section 9.1 hereof.
“Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close.
“Charter” means the Second Amended and Restated Certificate of Incorporation of the Company, dated as of July 29, 2019.
“Closing” has the meaning assigned to such term in Section 1.2 hereof.
“Closing Date” shall mean the date on which Closing takes place, which shall occur on or prior to the End Date.
“Code” means the United States Internal Revenue Code of 1986, as amended.
“Commission” shall mean the Securities and Exchange Commission or any successor entity.
“Commitment” has the meaning assigned to such term in Section 1.1 hereof.
“Common Stock” shall mean the common stock, par value $0.0001 per share, of the Company.
“Commonly Controlled Entity” means any Person that, together with the Company or any of its Subsidiaries, is treated as a single employer under Section 414(b), (c) or (m) of the Code.
“Company SEC Documents” shall mean the Company’s forms, registration statements, reports, schedules and statements required to be filed by it under the Exchange Act or the Securities Act, collectively.
“Date of Delivery” has the meaning assigned to such term in Section 1.3 hereof.
“Designee” has the meaning assigned to such term in Section 9.1 hereof.
“End Date” has the meaning assigned to such term in Section 1.2 hereof.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

A-1


“Enforceability Exceptions” has the meaning assigned to such term in Section 2.2 hereof.
“Environmental Laws” has the meaning assigned to such term in Section 3.9 hereof.
“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such Equity Interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Equipment Facility” has the meaning assigned to such term in the Recitals hereof.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.
“GAAP” shall mean generally accepted accounting principles in the United States of America as applied by the Company.
“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Indebtedness” has the meaning assigned to such term in the Indenture.
“Indemnified Party” has the meaning assigned to such term in Section 8.3 hereof.
“Indemnifying Party” has the meaning assigned to such term in Section 8.3 hereof.
“Indenture” has the meaning assigned to such term in the Recitals hereof.
“Intellectual Property” has the meaning assigned to such term in Section 3.8 hereof.
“Investor Related Parties” has the meaning assigned to such term in Section 8.1 hereof.
“Investors” has the meaning assigned to such term in the Recitals hereof.
“IT Systems” has the meaning assigned to such term in Section 3.30 hereof.
“Joinder” shall mean, with respect to any person permitted to sign such document in accordance with the terms hereof, a joinder executed and delivered by such person, providing such person to have all the rights and obligations of an Investor under this Agreement, in such form as may be agreed to by the Company and such Investor.
“Knowledge” or any other similar knowledge qualification, means the actual knowledge of those persons listed on Schedule 1, in each case without any duty of investigation or inquiry.
“Law” means any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, order, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

A-2


“Lock-Up Period” shall mean the period commencing on the Closing Date and ending on the six-month anniversary of the Closing Date or, with respect to any Additional Notes, the six-month anniversary of any Date of Delivery.
“Lock-Up Letter” means any lock-up agreement executed in connection with that certain underwriting agreement, made as of July 24, 2019, by and among the Company and certain stockholders and their affiliates party thereto.
“Material Adverse Effect” means a material adverse change in, or material adverse effect on (a) the business, operations, Property or financial condition of the Company and its Subsidiaries, taken as a whole, excluding the effect of events, developments and circumstances affecting the electric utility industry generally or (b) the ability of the Company to perform any of its material obligations under the Transaction Documents.
“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Company or any Commonly Controlled Entity makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions or to which the Company or any Commonly Controlled Entity has any liability (including any contingent liability).
“Notes” has the meaning assigned to such term in the Recitals hereof.
“NYSE” shall mean the New York Stock Exchange.
“Option” has the meaning assigned to such term in Section 1.3 hereof
“Original Investor” shall mean the Investors party hereto on the Closing Date.
“Pension Plan” means any employee pension benefit plan (including a Multiemployer Plan) that is maintained or is contributed to by the Company or any Commonly Controlled Entity or to which the Company or any Commonly Controlled Entity has any liability and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.
“Person” means any person or entity, whether a natural person, trustee, corporation, partnership, limited partnership, limited liability company, trust, unincorporated organization, business association, firm, joint venture, governmental agency or authority.
“Personal Data” has the meaning assigned to such term in Section 3.30 hereof.
“Plan” means each employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of the Company or any Commonly Controlled Entity or any such Plan to which the Company or any Commonly Controlled Entity is required to contribute on behalf of any of its employees or to which the Company or any Commonly Controlled Entity has any liability.
“Qualifying Notes” has the meaning assigned to such term in Section 9.1 hereof.
“Registration Rights Agreement” has the meaning assigned to such term in the Recitals hereof.
“Sanctioned Country” has the meaning assigned to such term in Section 3.17 hereof.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

A-3


“Sanctions” has the meaning assigned to such term in Section 3.17 hereof.
“Sarbanes-Oxley Act” has the meaning assigned to such term in Section 3.26 hereof.
“Second Amended and Restated Registration Rights Agreement” means that certain registration rights agreement, made as of July 29, 2019, by and among Sunnova Energy International Inc. and certain stockholders party thereto.
“Securities” means the Notes and the shares of Common Stock issuable upon conversion of the Notes in accordance with the Indenture.
“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.
“Significant Subsidiary” has the meaning assigned to such term in the Indenture.
“Subsidiary” has the meaning assigned to such term in the Indenture.
“Supplemental Listing Application” shall mean the application of the Company to the NYSE for the listing of additional shares of the Company’s Common Stock on the NYSE.
“Tax” or “Taxes” means any and all federal, state, county, local, foreign and other present or future taxes (including income, profits, premium, disability, alternative minimum, stamp, value added, goods and services, estimated, excise, sales, use, occupancy, gross receipts, franchise, ad valorem, severance, capital levy, production, transfer, withholding, employment, unemployment compensation, payroll-related, and property taxes), levies, imposts, duties, deductions, and other similar governmental charges, assessments or withholdings imposed by any Governmental Authority whether or not measured in whole or in part by net income, and including deficiencies, interest, additions to tax or interest and penalties with respect thereto.
“Tax Return” means any federal, state, local, foreign and other applicable return, declaration, report, claim for refund, information return or statement or other document (including any related or supporting attachments, schedules, statements or information and any amendments thereof) filed or required to be filed with the U.S. Internal Revenue Service or any other Governmental Authority in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative requirements relating to any Tax.
“TEP Inventory” has the meaning assigned to such term in the Recitals hereof.
“Transaction Documents” means this Agreement (including any Joinder), the Indenture, the Registration Rights Agreement and the Notes.
“Transactions” means the transactions contemplated by this Agreement.
“Transfer” has the meaning assigned to such term in Section 4.1 hereof
“Trustee” has the meaning assigned to such term in the Recitals hereof.


[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

A-4


ANNEX B TO THE
PURCHASE AGREEMENT

RULES OF CONSTRUCTION

Unless the context otherwise requires:

1.
references herein to the “Company,” the “Investors” or the “Subsidiaries” shall include such Person’s respective successors and permitted assigns, in each case, in accordance with the terms and provisions of the Transaction Documents;

2.
an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

3.
“or” is not exclusive;

4.
words in the singular include the plural, and in the plural include the singular;

5.
the meanings of the words “will” and “shall” are the same when used to express an obligation;

6.
references to sections of or rules under the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the Commission from time to time;

7.
“herein,” “hereof” and other words of similar import refer to this Agreement as a whole (as amended or supplemented from time to time) and not to any particular Article, Section or other subdivision;

8.
“United States”, “U.S.” and “U.S.A.” means the “United States of America”;

9.
references to “including” shall be deemed to mean “including, but not limited to”; and

10.
references to agreements or documents shall be references to such agreements or documents as amended, supplemented, modified or replaced from time to time unless otherwise prohibited by this Agreement.



[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



ANNEX C TO THE
PURCHASE AGREEMENT

FORM OF INDENTURE

(See attached.)

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


ANNEX D TO THE
PURCHASE AGREEMENT

FORM OF REGISTRATION RIGHTS AGREEMENT

(See attached.)

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT A TO THE
PURCHASE AGREEMENT

The information in this exhibit has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.


[Exhibit A is maintained within the books and records of the Company]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT B TO THE
PURCHASE AGREEMENT

FORM OF SOLVENCY CERTIFICATE

SUNNOVA ENERGY INTERNATIONAL INC.
December __, 2019
This certificate (this “Solvency Certificate”) is delivered pursuant to Section [6.1(ii)] of the Purchase Agreement dated as of December __, 2019 (the “Purchase Agreement”), among Sunnova Energy International Inc., a Delaware corporation (the “Company”), and the Investors from time to time party thereto. Capitalized terms used and not otherwise defined herein shall have the meanings given such terms in the Purchase Agreement.
The undersigned hereby certifies, solely in his capacity as an officer of the Company and not in his individual capacity, as follows:
1.
I am the Chief Financial Officer of the Company. I am familiar with the Transactions, and have reviewed the Purchase Agreement and such documents and made such investigation as I have deemed relevant for the purposes of this Solvency Certificate.
2.
As of the date hereof, immediately after giving effect to the consummation of the Transactions, on and as of such date (i) the fair value of the assets of the Company and its Subsidiaries on a consolidated basis, at a fair valuation, will exceed the debts and liabilities, direct, subordinated, contingent or otherwise, of the Company and its Subsidiaries on a consolidated basis; (ii) the present fair saleable value of the property of the Company and its Subsidiaries on a consolidated basis will be greater than the amount that will be required to pay the probable liability of the Company and its Subsidiaries on a consolidated basis on their debts and other liabilities, direct, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Company and its Subsidiaries on a consolidated basis will be able to pay their debts and liabilities, direct, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Company and its Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in which they are engaged as such businesses are now conducted and are proposed to be conducted following the Closing Date.

This Solvency Certificate is being delivered by the undersigned officer only in his capacity as Chief Financial Officer of the Company and not individually and the undersigned shall have no personal liability to the Investors with respect thereto.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT C TO THE
PURCHASE AGREEMENT

FORM OF OFFICERS’ CERTIFICATE

SUNNOVA ENERGY INTERNATIONAL INC.

December __, 2019
This certificate (this “Officers’ Certificate”) is delivered pursuant to Section [6.1(iv)] of that certain Purchase Agreement dated as of December __, 2019 (the “Agreement”), by and among Sunnova Energy International Inc., a Delaware corporation (the “Company”), and the investors identified on the signature pages thereto (the “Investors”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement.
The undersigned, _____ and _____, hereby certify that they are the duly elected _____ and _____, respectively, of the Company, and that as such, they are authorized to execute this Officers’ Certificate, and they further certify to Investors in such capacity that:
1.    We have read the conditions precedent provided for in the Agreement with respect to the obligation of the Investors to purchase Notes on the Closing Date and the definitions relating thereto;
2.    We have examined such records of the Company and such agreements, certificates of public officials, certificates of officers or other representatives of the Company and others, and such other documents, certificates and corporate or other records as we have deemed necessary or appropriate as a basis for the opinion hereinafter expressed;
3.    We believe that the procedures described in the foregoing paragraphs 1 and 2 are sufficient to enable us to express an informed opinion as to whether the conditions precedent referred to above have been complied with; and
4.    Based upon such procedures, we are of the opinion that all conditions precedent provided for in the Agreement are satisfied, except with respect to any condition that will be satisfied concurrently with the Closing Date; provided, that, to the extent any such delivery or other condition requires satisfaction of any Investor or any other person other than the Company, the foregoing certification shall be to the Company’s Knowledge.
This Officers’ Certificate is being delivered by each undersigned officer only in his capacity as _____ and _____, respectively, of the Company and not individually and the undersigned shall have no personal liability to the Investors with respect thereto.


[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Schedule 1
Knowledge Persons
William J. Berger, Chief Executive Officer
Robert L. Lane, Executive Vice President and Chief Financial Officer
Walter A. Baker, Executive Vice President, General Counsel and Secretary


[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Exhibit 10.35


CREDIT AGREEMENT
dated as of December 30, 2019
among
SUNNOVA TEP INVENTORY, LLC,
as Borrower
CREDIT SUISSE AG, NEW YORK BRANCH,
as Administrative Agent for the financial institutions
that may from time to time become parties hereto as Lenders
LENDERS
from time to time party hereto
FUNDING AGENTS
from time to time party hereto
and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Paying Agent




[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


TABLE OF CONTENTS
Section
Heading
Page
ARTICLE I CERTAIN DEFINITIONS
1
Section 1.1.
Certain Definitions    1
Section 1.2.
Computation of Time Periods    1
Section 1.3.
Construction    1
Section 1.4.
Accounting Terms    2
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES
2
Section 2.1.
Establishment of the Credit Facility    2
Section 2.2.
The Advances    2
Section 2.3.
Use of Proceeds    3
Section 2.4.
Making the Advances    3
Section 2.5.
Fees    5
Section 2.6.
Reduction/Increase of the Commitments    6
Section 2.7.
Repayment of the Advances    7
Section 2.8.
Certain Prepayments    12
Section 2.9.
Mandatory Prepayments of Advances    12
Section 2.10.
[Reserved]    13
Section 2.11.
Interest    13
Section 2.12.
Breakage Costs; Liquidation Fees; Increased Costs; Capital Adequacy; Illegality; Additional Indemnifications    13

-i-

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 2.13.
Payments and Computations    15
Section 2.14.
Payment on Non-Business Days    15
Section 2.15.
[Reserved]    16
Section 2.16.
[Reserved]    16
Section 2.17.
Taxes    16
ARTICLE III CONDITIONS OF CLOSING AND LENDING
20
Section 3.1.
Conditions Precedent to Closing    20
Section 3.2.
Conditions Precedent to All Advances    23
Section 3.3.
No Approval of Work    26
ARTICLE IV REPRESENTATIONS AND WARRANTIES
26
Section 4.1.
Representations and Warranties of the Borrower    26
ARTICLE V COVENANTS
32
Section 5.1.
Affirmative Covenants    32
Section 5.2.
Negative Covenants    46
ARTICLE VI EVENTS OF DEFAULT
50
Section 6.1.
Events of Default    50
Section 6.2.
Remedies    52
Section 6.3.
Class B Lender Purchase Option    53
Section 6.4.
Sale of Collateral    55

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 6.5.
Certain Matters Related to Appraiser..    55
ARTICLE VII THE ADMINISTRATIVE AGENT AND FUNDING AGENTS
56
Section 7.1.
Appointment; Nature of Relationship    56
Section 7.2.
Powers    56
Section 7.3.
General Immunity    56
Section 7.4.
No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc.    57
Section 7.5.
Action on Instructions of Lenders    57
Section 7.6.
Employment of Administrative Agents and Counsel    57
Section 7.7.
Reliance on Documents; Counsel    57
Section 7.8.
The Administrative Agent’s Reimbursement and Indemnification    58
Section 7.9.
Rights as a Lender    58
Section 7.10.
Lender Credit Decision    58
Section 7.11.
Successor Administrative Agent    58
Section 7.12.
Loan Documents; Further Assurances    59
Section 7.13.
Collateral Review    59
Section 7.14.
Funding Agent Appointment; Nature of Relationship    60
Section 7.15.
Funding Agent Powers    60
Section 7.16.
Funding Agent General Immunity    60
Section 7.17.
Funding Agent Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc.    60
Section 7.18.
Funding Agent Action on Instructions of Lenders    61

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 7.19.
Funding Agent Employment of Agents and Counsel    61
Section 7.20.
Funding Agent Reliance on Documents; Counsel    61
Section 7.21.
Funding Agent’s Reimbursement and Indemnification    61
Section 7.22.
Funding Agent Rights as a Lender    62
Section 7.23.
Funding Agent Lender Credit Decision    62
Section 7.24.
Funding Agent Successor Funding Agent    62
Section 7.25.
Funding Agent Loan Documents; Further Assurances    62
ARTICLE VIII ADMINISTRATION AND SERVICING OF THE COLLATERAL
63
Section 8.1.
[Reserved].    63
Section 8.2.
Accounts    63
Section 8.3.
Adjustments    66
ARTICLE IX THE PAYING AGENT
66
Section 9.1.
Appointment    66
Section 9.2.
Representations and Warranties    67
Section 9.3.
Limitation of Liability of the Paying Agent    67
Section 9.4.
Certain Matters Affecting the Paying Agent    67
Section 9.5.
Indemnification    73
Section 9.6.
Successor Paying Agent    73
ARTICLE X MISCELLANEOUS
74
Section 10.1.
Survival    74

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 10.2.
Amendments, Etc.    74
Section 10.3.
Notices, Etc.    75
Section 10.4.
No Waiver; Remedies    76
Section 10.5.
Indemnification    76
Section 10.6.
Costs, Expenses and Taxes    77
Section 10.7.
Right of Set-off; Ratable Payments; Relations Among Lenders    77
Section 10.8.
Binding Effect; Assignment    78
SECTION 10.9.
GOVERNING LAW    81
Section 10.10.
Jurisdiction    81
Section 10.11.
Waiver of Jury Trial    81
Section 10.12.
Section Headings    81
Section 10.13.
Tax Characterization    81
Section 10.14.
Execution    81
Section 10.15.
Limitations on Liability    82
Section 10.16.
Confidentiality    82
Section 10.17.
Limited Recourse    83
Section 10.18.
Customer Identification - USA Patriot Act Notice    84
Section 10.19.
Paying Agent Compliance with Applicable Anti-Terrorism and Anti-Money Laundering Regulations    84
Section 10.20.
Non-Petition    84
Section 10.21.
No Recourse    84
Section 10.22.
[Reserved]    85
Section 10.23.
Additional Paying Agent Provisions    85

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 10.24.
Acknowledgement Regarding Any Supported QFCs    85


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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



SCHEDULE I
—    The Proceeds Account and the Debt Service Reserve Account
SCHEDULE II
—    Commitments

SCHEDULE 1.1(a)    Approved Type and Vendor List
SCHEDULE 1.1(b)     Approved Warehouses
SCHEDULE 1.1(c)    [Reserved]
SCHEDULE 1.1(d)    Eligible Equipment
SCHEDULE 1.1(e)    Eligible Equipment Supply Agreement
SCHEDULE 1.1(f)    Managing Members and Project Companies
SCHEDULE 4.1(P)    Capital Structure
SCHEDULE 4.1(W)    Burdensome Controls
SCHEDULE 5.1(L)    Insurance
SCHEDULE A    Disqualified Lenders



EXHIBIT A
—    Defined Terms
EXHIBIT B-1
—    Form of Borrowing Base Certificate
EXHIBIT B-2
—    Form of Notice of Borrowing
EXHIBIT C-1
—    Form of Class A Loan Note
EXHIBIT C-2
—    Form of Class B Loan Note
EXHIBIT D-1
—    Form of Notice of Delayed Funding
EXHIBIT D-2
—    Delayed Funding Notice
EXHIBIT E
—    Borrowing Base Report
EXHIBIT F
—    Form of Assignment Agreement
EXHIBIT G
—    Form of Collateral Access Agreement
EXHIBIT H
—    Form of Consent to Assignment
EXHIBIT I
—    Form of Step-in Rights Agreement
EXHIBIT J
—    Form of CPA Safe Harbor Amendment

 



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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this “Agreement”) is entered into as of December 30, 2019, by and among SUNNOVA TEP INVENTORY, LLC, a Delaware limited liability company (“Borrower”), the financial institutions from time to time parties hereto (each such financial institution (including any Conduit Lender), a “Lender” and collectively, the “Lenders”), each Funding Agent representing a group of Lenders, CREDIT SUISSE AG, NEW YORK BRANCH (“CSNY”), as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders, and WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Paying Agent (as defined below).
RECITALS
WHEREAS, the Borrower has requested that the Lenders provide a credit facility to the Borrower to finance the acquisition by the Borrower of Eligible Equipment (as defined below) for use in residential rooftop solar installations placed in service in subsequent years as having started construction for purpose of qualifying for Tax Credits (as defined below); and
WHEREAS, the Lenders are willing to provide the credit facility on the terms and conditions set forth in this Agreement and the other Loan Documents.
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows:
ARTICLE I

CERTAIN DEFINITIONS
Section 1.1.    Certain Definitions. Capitalized terms used but not otherwise defined herein have the meanings given to them in Exhibit A attached hereto.
Section 1.2.    Computation of Time Periods. In this Agreement, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each means “to but excluding” and the word “through” means “through and including.” Any references to completing an action on a non-Business Day (including any payments), shall be automatically extended to the next Business Day.
Section 1.3.    Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (A) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein), (B) any reference

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


herein to any Person shall be construed to include such Person’s successors and permitted assigns, (C) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (D) all references herein to Sections, Schedules and Exhibits shall be construed to refer to Sections of, and Schedules and Exhibits to, this Agreement, (E) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all real property, tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and interests in any of the foregoing, (F) any reference to a statute, rule or regulation is to that statute, rule or regulation as now enacted or as the same may from time to time be amended, re-enacted or expressly replaced and (G) “or” is not exclusive. References to “Project Company” or “Managing MemberCo” in this Agreement shall be deemed to include all entities comprising such defined term unless the context requires otherwise.
Section 1.4.    Accounting Terms. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited financial statements, except as otherwise specifically prescribed herein.
ARTICLE II    

AMOUNTS AND TERMS OF THE ADVANCES
Section 2.1.    Establishment of the Credit Facility. On the Closing Date, and subject to and upon the terms and conditions set forth in this Agreement and the other Loan Documents, the Administrative Agent and the Lenders agree to establish the credit facility set forth in this Agreement for the benefit of the Borrower.
Section 2.2.    The Advances. (A) Subject to the terms and conditions set forth herein, each Non-Conduit Lender in a Class A Lender Group agrees, severally and not jointly, to make one or more loans (each such loan, a “Class A Advance”) to the Borrower, from time to time during the Availability Period, in an amount, for each Class A Lender Group, equal to its Class A Lender Group Percentage of the aggregate Class A Advances requested by the Borrower pursuant to Section 2.4; provided that the Class A Advances made by any Class A Lender Group shall not exceed its Class A Lender Group Percentage of the lesser of (i) the Class A Aggregate Commitment effective at such time and (ii) the Class A Borrowing Base at such time; provided, further, that a Non-Conduit Lender in a Class A Lender Group shall be deemed to have satisfied its obligation to make a Class A Advance hereunder (solely with respect to such Class A Advance) to the extent any Conduit Lender in such Class A Lender Group funds such Class A Advance in place of such Non-Conduit Lender in accordance with this Agreement, it being understood that such Conduit Lender may fund a Class A Advance in its sole discretion.
(B)    Subject to the terms and conditions set forth herein, each Class B Lender agrees, severally and not jointly, to make one or more loans (each such loan, a “Class B Advance”) to the Borrower, from time to time during the Availability Period, in an amount equal to its Class B Lender

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Percentage of the aggregate Class B Advances requested by the Borrower pursuant to Section 2.4; provided that the Class B Advances made by any Class B Lender shall not exceed its Class B Lender Percentage of the lesser of (i) the Class B Aggregate Commitment effective at such time and (ii) the Class B Borrowing Base at such time.
Section 2.3.    Use of Proceeds. Proceeds of the Advances shall only be used by the Borrower to (a) pay the invoiced purchase price in respect of Eligible Equipment (either directly to an Approved Vendor pursuant to an Eligible Equipment Supply Agreement or to Sponsor or any of its Affiliates pursuant to the Contribution Agreement); (b) pay fees and transaction expenses associated with the closing of the Facility; and (c) fund the Debt Service Reserve Account up to the Debt Service Reserve Required Balance.
Section 2.4.    Making the Advances. (A) Except as otherwise provided herein, the Borrower may request that the Lenders make Advances to the Borrower no more than two (2) times during any calendar month by the delivery to the Administrative Agent, each Funding Agent, the Paying Agent and, so long as it remains a Lender hereunder, the CS Conduit Lender, not later than 1:00 P.M. (New York City time) two (2) Business Days prior to the proposed Funding Date (or, in the case of the initial Advances made on the Closing Date, such shorter period as may be acceptable to the Administrative Agent) of a written notice of such request substantially in the form of Exhibit B-2 attached hereto (each such notice, a “Notice of Borrowing”) together with a duly completed Borrowing Base Certificate signed by a Responsible Officer of the Borrower and the Sponsor; provided that the Borrower shall first have provided thirty (30) days prior written notice to the Administrative Agent (for informational purposes only) that it intends to submit such Notice of Borrowing. Any Notice of Borrowing or Borrowing Base Certificate received by the Administrative Agent, the Funding Agents and the Paying Agent after the time specified in the immediately preceding sentence shall be deemed to have been received by the Administrative Agent, the Funding Agents and the Paying Agent on the next Business Day, and to the extent that results in the proposed Funding Date being earlier than two (2) Business Days after the date of delivery of such Notice of Borrowing, then the date specified in such Notice of Borrowing as the proposed Funding Date of an Advance shall be deemed to be the Business Day immediately succeeding the proposed Funding Date of such Advance specified in such Notice of Borrowing. The proposed Funding Date specified in a Notice of Borrowing shall be no earlier than two (2) Business Days after the date of delivery of such Notice of Borrowing and may be up to a maximum of thirty (30) days after the date of delivery of such Notice of Borrowing. Unless otherwise provided herein, each Notice of Borrowing shall be irrevocable. The aggregate principal amount of the Class A Advance and Class B Advance requested by the Borrower for any Funding Date shall not be less than the lesser of (x) $1,000,000 and (y) the remaining amount necessary in order for the Borrower to fully utilize all available Commitments. If the Administrative Agent delivers a written notice (including by electronic mail) to the Borrower contesting the Borrower’s calculations or any statement within such Notice of Borrowing, it shall promptly inform the Borrower. The Borrower may then deliver an amended Notice of Borrowing to the Administrative Agent, the Funding Agents and the Paying Agent or, by written notice, rescind the Notice of Borrowing.
(B)    The Notice of Borrowing shall specify (i) the aggregate amount of Class A Advances requested together with the allocated amount of Class A Advances to be paid by each Class A Lender

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Group based on its respective Class A Lender Group Percentage, (ii) the aggregate amount of Class B Advances requested together with the allocated amount of Class B Advances to be paid by each Class B Lender based on its respective Class B Lender Percentage and (iii) the Funding Date; provided that the amount of Class A Advances and Class B Advances requested shall be pro rata between Class A Advances and Class B Advances, based on the Class A Aggregate Commitment and Class B Aggregate Commitment as of the proposed Funding Date.
(C)    [Reserved].
(D)    With respect to the Advances to be made on any Funding Date, upon a determination by the Administrative Agent that all conditions precedent to the Advances to be made on such Funding Date set forth in Article III have been satisfied or otherwise waived, each Lender shall fund the amount of its Advance by wire transfer of such funds in accordance with the applicable Funds Flow Memorandum initiated no later than 3:00 P.M. (New York City time) on such Funding Date.
(E)    Notwithstanding the foregoing, if any Non-Conduit Lender who shall have previously notified the Borrower in writing, in substantially the form of Exhibit D-1 hereto, that it has incurred any external cost, fee or expense directly related to and as a result of the “liquidity coverage ratio” under Basel III in respect of its Commitment hereunder or any liquidity agreement between such Non-Conduit Lender and the Conduit Lender, or its interest in the Advances, such Non-Conduit Lender may, upon receipt of a Notice of Borrowing pursuant to Section 2.4(A), notify the Borrower in writing by 5:00 P.M. (New York City time) two (2) Business Days prior to the Funding Date specified in such Notice of Borrowing, in substantially the form of Exhibit D-2 hereto (a “Delayed Funding Notice”), of its intent to fund (or, if applicable and if such Conduit Lender so agrees in its sole discretion, have its Conduit Lender, if applicable, fund all or part of) its allocated amount of the related Advance in an amount that would, if combined with all other requested Advances within the past thirty-five (35) days, exceed $20,000,000 (such amount, the “Delayed Amount”) on a Business Day that is on or before the thirty-fifth (35th) day following the date of delivery of such Non-Conduit Lender of such Delayed Funding Notice (the “Delayed Funding Date”) rather than on the date specified in such Notice of Borrowing. If any Non-Conduit Lender provides a Delayed Funding Notice to the Borrower following the delivery by the Borrower of a Notice of Borrowing, the Borrower may revoke such Notice of Borrowing by delivering written notice of the same to the Administrative Agent and the Funding Agents by 12:00 P.M. (New York city time) on the Business Day preceding the related Funding Date. No Non-Conduit Lender that has provided a Delayed Funding Notice in respect of an Advance (a “Delayed Funding Lender”) shall be considered to be in default of its obligation to fund its Delayed Amount pursuant to Section 2.4(D) hereunder unless and until it has failed to fund the Delayed Amount on or before the Delayed Funding Date. A Delayed Funding Lender is not obliged to fund until thirty-five (35) days have elapsed since the funding request. For the avoidance of doubt, a Delayed Funding Lender shall be required to fund its Delayed Amount regardless of the occurrence of a Potential Default which occurs during the period from and including the related Funding Date to and including the related Delayed Funding Date, unless such Potential Default relates to an Insolvency Event with respect to the Borrower.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(F)    If (i) one or more Delayed Funding Lenders provide a Delayed Funding Notice to the Borrower in respect of a Notice of Borrowing and (ii) the Borrower shall not have revoked the Notice of Borrowing prior to the Business Day preceding such Funding Date, the Administrative Agent shall, by no later than 12:00 P.M. (New York City time) on the Business Day preceding such Funding Date, direct each Class A Lender Group and each Non-Conduit Lender, as applicable, that is not a Delayed Funding Lender with respect to such Funding Date (each a “Non-Delayed Funding Lender”) to fund an additional portion of such Advance on such Funding Date equal to such Non-Delayed Funding Lender’s proportionate share (based upon such Non-Delayed Funding Lender’s Commitment relative to the sum of the Commitments of all Non-Delayed Funding Lenders) of the aggregate Delayed Amounts with respect to such Funding Date; provided, that in no event shall a Non-Delayed Funding Lender be required to fund any amounts in excess of its Commitment. Subject to Section 2.4(D), in the case of a Non-Delayed Funding Lender that is a Non-Conduit Lender, such Non-Conduit Lender hereby agrees, or, in the case of a Non-Delayed Funding Lender that is a Class A Lender Group, the Conduit Lender in such Class A Lender Group may agree, in its sole discretion, and the Non-Conduit Lenders in such Class A Lender Group hereby agree, to fund such portion of the Advance on such Funding Date.
(G)    After the Non-Delayed Funding Lenders fund a Delayed Amount on any Funding Date in accordance with Section 2.4(F), the Delayed Funding Lender in respect of such Delayed Amount will be obligated to fund an amount equal to the excess, if any, of (a) such Delayed Amount over (b) the amount, if any, by which the portion of any principal distribution amount paid to such Non-Delayed Funding Lenders pursuant to Section 2.7 or any decrease to the outstanding principal balance made in accordance with Section 2.8, on any date during the period from and including such Funding Date to but excluding the Delayed Funding Date for such Delayed Amount, was greater than what it would have been had such Delayed Amount been funded by such Delayed Funding Lender on such Funding Date (the “Delayed Funding Reimbursement Amount”) with respect to such Delayed Amount on or before its Delayed Funding Date, irrespective of whether the Borrower would be able to satisfy the conditions set forth in Section 3.2(A) to an Advance, in an amount equal to such Delayed Funding Reimbursement Amount on such Delayed Funding Date. Such Delayed Funding Lender shall fund such Delayed Funding Reimbursement Amount on such Delayed Funding Date by paying such amount to the Administrative Agent in immediately available funds, and the Administrative Agent shall distribute such funds to each such Non-Delayed Funding Lender, pro rata based on the relative amount of such Delayed Amount funded by such Non-Delayed Funding Lender on such Funding Date pursuant to Section 2.4(F).
Section 2.5.    Fees.
(A)    [Reserved].
(B)    [Reserved].
(C)    Paying Agent Fee. Subject to the terms and conditions of the Paying Agent Fee Letter, the Borrower shall pay to the Paying Agent the Paying Agent Fee.
(D)    Unused Line Fees. Solely during the Availability Period, the Borrower agrees to pay to each Funding Agent, for the benefit of the applicable Non-Conduit Lenders and as

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


consideration for the Commitment of such Non-Conduit Lender, unused line fees in Dollars (the “Unused Line Fee”) for the period from the Closing Date to the last day of the Availability Period, computed as (a) the Unused Line Fee Percentage multiplied by (b) the average Unused Portion of the Commitments with respect to such Non-Conduit Lenders during a calendar month. Accrued Unused Line Fees shall be due and payable in arrears on each Payment Date for the calendar month for which such fee was calculated and on the last day of the Availability Period.
(E)    Payment of Fees. The fees set forth in Section 2.5(C) and (D) shall be payable on each Payment Date by the Borrower as set forth in and in the order of priority established pursuant to Section 2.7(B). Notwithstanding anything to the contrary herein or in any Transaction Document, the fees referred to in this Section 2.5 shall not constitute “Confidential Information.”
(F)    Amendment Fee. The Borrower shall pay to the Administrative Agent a fee of $10,000 in connection with each amendment (or group of related amendments effective as of the same date) to the Loan Documents requested by it, which fee shall be in addition to the reimbursement of costs and expenses associated therewith that is provided for in Section 10.6 hereof.
Section 2.6.    Reduction/Increase of the Commitments.
(A)    The Borrower may, on any Business Day, upon written notice given to the Administrative Agent and each of the Funding Agents not later than ten (10) Business Days prior to the date of the proposed action (which notice may be conditioned upon any event), terminate in whole or reduce in part, on a pro rata basis based on its Class A Lender Group Percentage or Class B Percentage, as applicable, the Unused Portion of the Commitments with respect to the applicable Class A Lender Group (and on a pro rata basis with respect to each Non-Conduit Lender in such Class A Lender Group) and the Class B Lenders; provided, that (i) any partial reduction shall be in the amount of $1,000,000 (or, if less, the remaining amount of the Commitments) or an integral multiple thereof and (ii) any Unused Portion of the Commitments so reduced may not be increased.
(B)    The Borrower may, on any Business Day upon written notice given to the Administrative Agent and each of the Funding Agents, request an increase, on a pro rata basis based on its Class A Lender Group Percentage or Class B Percentage, as applicable, of the Commitments of the Non-Conduit Lenders; provided, that any increase shall be at least equal to $5,000,000 or an integral multiple thereof but shall in no event cause the Aggregate Commitment to exceed the Maximum Facility Amount, the Class A Aggregate Commitment to exceed the Class A Maximum Facility Amount or the Class B Aggregate Commitment to exceed the Class B Maximum Facility Amount. Each Non-Conduit Lender in a Class A Lender Group shall, within five (5) Business Days of receipt of such request, notify the Administrative Agent and the Administrative Agent shall in turn notify the Borrower in writing (with copies to the other members of the applicable Class A Lender Group) whether or not each such Non-Conduit Lender has, in its sole discretion, agreed to increase its Commitment. If a Non-Conduit Lender in a Class A Lender Group does not send any notification to the Administrative Agent within such five (5) Business Day period, such Non-Conduit Lender shall be deemed to have declined to increase its Commitment. In the event that one or more Non-Conduit Lender(s) in a Class A Lender Group agree to increase their Commitment, the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Commitment of each Class B Lender shall be automatically increased on a pro rata basis based on its Class B Percentage, but in no event shall the Aggregate Commitment exceed the Maximum Facility Amount or the Class B Aggregate Commitment exceed the Class B Maximum Facility Amount. Any increase in Commitments agreed to pursuant to this Section 2.6(B) may be reduced by a Non-Conduit Lender, at any time, upon five Business Days’ written notice to the Borrower from the Administrative Agent (with copies to the applicable Funding Agent and the Administrative Agent) setting forth the amount of such reduction; provided, however, that such Commitment may not be reduced to an amount less than such Non-Conduit Lender’s initial Commitment on the Closing Date or less than the then Aggregate Outstanding Advances.
Section 2.7.    Repayment of the Advances. (A) Notwithstanding any other provision to the contrary, the outstanding principal balance of the Advances and the other Obligations owing under this Agreement, together with all accrued but unpaid interest thereon, shall be due and payable in full, if not due and payable earlier, on the Maturity Date. For the avoidance of doubt, amounts borrowed and repaid hereunder may be reborrowed in accordance with the terms hereof.
(B)    On any Business Day other than while an Event of Default has occurred and is continuing, the Borrower may, and on each Payment Date the Borrower shall, direct (pursuant to instructions in a form reasonably acceptable to the Paying Agent) the Paying Agent to apply all amounts on deposit in the Proceeds Account to the Obligations in the following order of priority:
(i)    first (Paying Agent and Appraiser Fees), ratably, (a) to the Paying Agent (1) the Paying Agent Fee and (2)(x) any accrued and unpaid Paying Agent Fees with respect to prior Payment Dates plus (y) out-of-pocket expenses and indemnities of the Paying Agent incurred and not reimbursed in connection with its obligations and duties under this Agreement; provided that the aggregate payments to the Paying Agent reimbursement for clauses (2)(y) will be limited to $50,000 per calendar year so long as no Event of Default has occurred pursuant to this Agreement (unless otherwise approved by the Majority Lenders and, if such reimbursement amount is to be increased, the Majority Class B Lenders (the approval of the Majority Class B Lenders not to be unreasonably withheld, conditioned or delayed if otherwise approved by the Majority Lenders); provided that if the Majority Class B Lenders have not affirmatively disapproved such increase in writing within five (5) Business Days of receiving notice of such increase and the Majority Lenders have otherwise approved such increase, such increase shall be deemed approved) and (b) to the Appraiser, any amounts due and payable pursuant to the Appraiser Engagement Letter and not otherwise paid by Sponsor; provided that the aggregate payments to the Appraiser pursuant to this clause (b) will be limited to $250,000 per calendar year (unless otherwise approved by the Majority Lenders and, if such reimbursement amount is to be increased, the Majority Class B Lenders (the approval of the Majority Class B Lenders not to be unreasonably withheld, conditioned or delayed if otherwise approved by the Majority Lenders); provided that if the Majority Class B Lenders have not affirmatively disapproved such increase in writing within five (5) Business Days of receiving notice of such increase and the Majority Lenders have otherwise approved such increase, such increase shall be deemed approved);

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(ii)    second (Class A Interest Distribution Amount), to each Class A Funding Agent, for the benefit of and on behalf of the Class A Lenders in its Class A Lender Group, the Class A Interest Distribution Amount then due (allocated among the Class A Lender Groups based on their Class A Lender Group Percentages), other than any interest payable at the Default Rate, until paid in full;
(iii)    third (Class B Interest Distribution Amount), to the Class B Funding Agent, for the benefit of and on behalf of the Class B Lenders, the Class B Interest Distribution Amount then due (allocated among the Class B Lenders based on their Class B Lender Percentages), other than any interest payable at the Default Rate, until paid in full;
(iv)    fourth (Unused Line Fee), first, to each Class A Funding Agent, for the benefit of and on behalf of the related Non-Conduit Lender(s) in the applicable Class A Lender Group, the payment of the Unused Line Fee then due (allocated among the Class A Lender Groups based on their Class A Lender Group Percentages) until paid in full and second, to the Class B Funding Agent, for the benefit of and on behalf of the Class B Lenders, the payment of the Unused Line Fee then due (allocated among the Class B Lenders based on their Class B Lender Percentages) until paid in full;
(v)    fifth (Debt Service Reserve Account), unless an Event of Default has occurred and is continuing, if the amount on deposit in the Debt Service Reserve Account is less than the Debt Service Reserve Required Balance, to the Debt Service Reserve Account until the amount on deposit in the Debt Service Reserve Account shall equal the Debt Service Reserve Required Balance;
(vi)    sixth (Class A Borrowing Base Deficiency), to the extent required under Section 2.9(A) in connection with a Class A Borrowing Base Deficiency, to each Class A Funding Agent, on behalf of the Class A Lenders in its Class A Lender Group, for the prepayment and reduction of the outstanding principal amount of any Class A Advances, an amount equal to the amount necessary to cure such Class A Borrowing Base Deficiency (allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages) plus, to the extent not paid as provided above, accrued and unpaid interest on the Class A Advances prepaid, other than any interest payable at the Default Rate, in each case until paid in full;
(vii)    seventh (Class B Borrowing Base Deficiency), to the extent required under Section 2.9(A) in connection with a Class B Borrowing Base Deficiency, to the Class B Funding Agent, on behalf of the Class B Lenders in, for the prepayment and reduction of the outstanding principal amount of any Class B Advances, an amount equal to the amount necessary to cure such Class B Borrowing Base Deficiency (allocated ratably among the Class B Lender Groups based on their Class B Lender Percentages) plus, to the extent not paid as provided above, accrued and unpaid interest on the Class B Advances prepaid, other than any interest payable at the Default Rate, in each case until paid in full;
(viii)    eighth (Mandatory Prepayments), in accordance with the priorities set forth in Sections 2.9(B), 2.9(C) and 2.9(D), as applicable, (a) to each Class A Funding Agent on

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


behalf of its related Class A Lender Group, to the prepayment of Class A Advances in accordance with Sections 2.9(B), 2.9(C) and 2.9(D) (allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages) and (b) to the Class B Funding Agent, on behalf of the Class B Lenders, to the prepayment of Class B Advances in accordance with Sections 2.9(B), 2.9(C) and 2.9(D) (allocated ratably among the Class B Lenders based on their Class B Lender Percentages), in each case other than Liquidation Fees then due and payable;
(ix)    ninth (Hedge Counterparty Breakage), to the Administrative Agent for the account of the Hedge Counterparty under each Hedge Agreement, all payments which arose due to a default by the Borrower or due to any prepayments of amounts under such Hedge Agreement and all fees, expenses, indemnification payments, tax payments or other amounts (to the extent not previously paid hereunder) which are due and payable by the Borrower to such Hedge Counterparty on such date, pursuant to the terms of the applicable Hedge Agreement (net of all amounts which are due and payable by such Hedge Counterparty to the Borrower on such date pursuant to the terms of such Hedge Agreement);
(x)    tenth (Lender Fees and Expenses), first, to the Administrative Agent and each Class A Funding Agent on behalf of itself and the Class A Lenders in its related Class A Lender Group, the payment of all Breakage Costs, all Liquidation Fees and all other amounts (other than those already provided for above) due and payable by the Borrower to the Administrative Agent, such Class A Funding Agent and such Class A Lenders (solely in their capacity as a Class A Lender) hereunder or under any other Loan Document until paid in full and second, to the Class B Funding Agent on behalf of itself and the Class B Lenders, the payment of all Breakage Costs, all Liquidation Fees and all other amounts (other than those already provided for above) due and payable by the Borrower to the Class B Funding Agent and the Class B Lenders (solely in their capacity as a Class B Lender) hereunder or under any other Loan Document until paid in full;
(xi)    eleventh (All Other Obligations), to the Administrative Agent on behalf of any applicable party, the ratable payment of all other Obligations that are past due and/or payable on such date including all interest then payable at the Default Rate;
(xii)    twelfth (Agent Indemnities), ratably, to the Paying Agent and the Appraiser, any indemnification, expenses, fees or other obligations owed to such Person (including out-of-pocket expenses and indemnities of such Person not paid pursuant to clause (i) above and, with respect to the Paying Agent, any Paying Agent Fees not paid pursuant to clause (i) above), pursuant to the Loan Documents and, with respect to the Appraiser, the Appraiser Engagement Letter;
(xiii)    thirteenth (Class A Principal Prepayments; Class B Principal Prepayments), ratably, to each Class A Funding Agent on behalf of its related Class A Lender Group, to the prepayment of Class A Advances in accordance with Sections 2.8(A), 2.11, 2.12(A) and 2.13 (allocated ratably among the Class A Lender Groups based on their Class A Lender Group Percentages), and to the Class B Funding Agent on behalf of the Class B Lenders, to the prepayment of Class B Advances in accordance with Sections 2.8(A), 2.11,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


2.12(A) and 2.13 (allocated ratably among the Class B Lenders based on their Class B Lender Percentages); and
(xiv)    fourteenth (Remainder), on each Payment Date, all amounts remaining in the Proceeds Account after giving effect to the preceding distributions in this Section 2.7(B), so long as no Potential Default or Event of Default has occurred and is continuing, to any account or Person designated by the Borrower.
(C)    On each Payment Date during which an Event of Default has occurred and is continuing, the Borrower shall (and, if the Borrower fails to so direct the Paying Agent, the Administrative Agent shall) direct (pursuant to instructions in a form reasonably acceptable to the Paying Agent) the Paying Agent to apply all amounts on deposit in the Proceeds Account to the Obligations in the following order of priority:
(i)    first (Paying Agent Fees), ratably, (a) to the Paying Agent (1) the Paying Agent Fee and (2)(x) any accrued and unpaid Paying Agent Fees with respect to prior Payment Dates plus (y) out-of-pocket expenses and indemnities of the Paying Agent incurred and not reimbursed in connection with its obligations and duties under this Agreement and (b) to the Appraiser, any amounts due and payable pursuant to the Appraiser Engagement Letter and not otherwise paid by Sponsor;
(ii)    second (Class A Interest Distribution Amount), to each Class A Funding Agent, for the benefit of and on behalf of the Class A Lenders in its Class A Lender Group, the Class A Interest Distribution Amount then due (allocated among the Class A Lender Groups based on their Class A Lender Group Percentages), other than any interest payable at the Default Rate, until paid in full;
(iii)    third (Class A Principal), ratably, to each Class A Funding Agent on behalf of the Class A Lenders in its Class A Lender Group, for the repayment and reduction of the outstanding principal amount of any Class A Advances, in each case until paid in full;
(iv)    fourth (Class B Interest Distribution Amount), to the Class B Funding Agent, for the benefit of and on behalf of the Class B Lenders, the Class B Interest Distribution Amount then due (allocated among the Class B Lenders based on their Class B Lender Percentages), other than any interest payable at the Default Rate, until paid in full;
(v)    fifth (Class B Principal), to the Class B Funding Agent on behalf of the Class B Lenders, for the repayment and reduction of the outstanding principal amount of any Class B Advances, in each case until paid in full;
(vi)    sixth (Unused Line Fee), without limitation to Section 3.2(A)(vii), first, ratably, to each Class A Funding Agent, for the benefit of and on behalf of the related Non-Conduit Lender(s) in the applicable Class A Lender Group, the payment of the Unused Line Fee then due (allocated among the Class A Lender Groups based on their Class A Lender Group Percentages) until paid in full and second, to the Class B Funding Agent, for the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


benefit of and on behalf of the Class B Lenders, the payment of the Unused Line Fee then due (allocated among the Class B Lenders based on their Class B Lender Percentages) until paid in full;
(vii)    seventh (Hedge Counterparty Breakage), to the Administrative Agent for the account of the Hedge Counterparty under each Hedge Agreement, all payments which arose due to a default by the Borrower or due to any prepayments of amounts under such Hedge Agreement and all fees, expenses, indemnification payments, tax payments or other amounts (to the extent not previously paid hereunder) which are due and payable by the Borrower to such Hedge Counterparty on such date, pursuant to the terms of the applicable Hedge Agreement (net of all amounts which are due and payable by such Hedge Counterparty to the Borrower on such date pursuant to the terms of such Hedge Agreement);
(viii)    eighth (Lender Fees and Expenses), first, to the Administrative Agent and each Class A Funding Agent on behalf of itself and the Class A Lenders in its related Class A Lender Group, the payment of all Breakage Costs, all Liquidation Fees and all other amounts (other than those already provided for above) due and payable by the Borrower to the Administrative Agent, such Class A Funding Agent and such Class A Lenders (solely in their capacity as a Class A Lender) hereunder or under any other Loan Document until paid in full and second, to the Class B Funding Agent on behalf of itself and the Class B Lenders, the payment of all Breakage Costs, all Liquidation Fees and all other amounts (other than those already provided for above) due and payable by the Borrower to the Class B Funding Agent and the Class B Lenders (solely in their capacity as a Class B Lender) hereunder or under any other Loan Document until paid in full;
(ix)    ninth (All Other Obligations), to the Administrative Agent on behalf of any applicable party, the ratable payment of all other Obligations that are past due and/or payable on such date including all interest then payable at the Default Rate;
(x)    tenth (Agent Indemnities), ratably, to the Paying Agent, any indemnification, expenses, fees or other obligations owed to the Paying Agent (including out-of-pocket expenses and indemnities of the Paying Agent not paid pursuant to clause (i) above and any Paying Agent Fees not paid pursuant to clause (i) above), pursuant to the Loan Documents;
(xi)    eleventh (Remainder), all amounts thereafter shall remain on deposit in the Proceeds Account.
(D)    Notwithstanding anything to the contrary set forth in this Section 2.7 or Section 8.2, the Paying Agent shall not be obligated to make any determination or calculation with respect to the payments or allocations to be made pursuant to either of such Sections, and in making the payments and allocations required under such Sections, the Paying Agent shall be entitled to rely exclusively and conclusively upon the information in the latest direction received by the Paying Agent pursuant to either such Section prior to the applicable payment date. Any payment direction to be acted upon by the Paying Agent pursuant to either such Section on a payment date other than a Payment Date, and on a Payment Date, shall be delivered to the Paying Agent at least two (2) Business Days prior to the date on which any payment is to be made.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 2.8.    Certain Prepayments. (A) The Borrower (through the Paying Agent pursuant to Section 2.7(B) and as otherwise permitted in this Agreement) may at any time upon written notice to the Administrative Agent, the Funding Agents and the Paying Agent, and subject to the priority of payments set forth in Section 2.7(B), prepay all or any portion of the balance of the principal amount of the Class A Advances or the Class B Advances based on the outstanding principal amounts thereof, which notice shall be given at least three (3) Business Days prior to the proposed date of such prepayment. Each such prepayment (which need not be on a Payment Date) shall be accompanied by (a) the payment of all accrued but unpaid interest on the amounts to be so prepaid and (b) any Liquidation Fee in connection with such prepayment if such prepayment is not made on a Payment Date. Prepayments made in accordance with this Section shall be applied to the outstanding principal amount of Class A Advances and Class B Advances, ratably.
Section 2.9.    Mandatory Prepayments of Advances.
(A)    On any Funding Date or Payment Date on which either (i) the aggregate outstanding principal amount of all Class A Advances exceeds the lesser of (x) the amount of the Class A Aggregate Commitment in effect as of such date and (y) the Class A Borrowing Base (the occurrence of any such excess being referred to herein as a “Class A Borrowing Base Deficiency”), or (ii) the aggregate outstanding principal amount of all Class B Advances exceeds the lesser of (x) the amount of the Class B Aggregate Commitment in effect as of such date and (y) the Class B Borrowing Base (the occurrence of any such excess being referred to herein as a “Class B Borrowing Base Deficiency” and together with the Class A Borrowing Base Deficiency, a “Borrowing Base Deficiency”), the Borrower shall pay to the Class A Funding Agent and/or Class B Funding Agent, as applicable, for the account of the Class A Lender Group and/or the Class B Lenders, as applicable, the amount of any such excess (to be applied to the reduction of the applicable Advances ratably among all applicable Class A Lender Groups based on their Class A Lender Group Percentages and all Class B Lenders based on their Class B Lender Percentages to the extent necessary to cure such Borrowing Base Deficiency), together with accrued but unpaid interest on the amount required to be so prepaid to the date of such prepayment (other than any interest payable at the Default Rate) and any Liquidation Fee in connection with such prepayment if such prepayment is not made on a Payment Date.
(B)    Upon the receipt by Borrower or DeveloperCo of any Net Extraordinary Proceeds, the Borrower shall pay to the Class A Funding Agent and Class B Funding Agent, as applicable, for the account of each Class A Lender Group and the Class B Lenders, respectively (to be applied to the reduction of the applicable Advances ratably among all applicable Class A Lender Groups based on their Class A Lender Group Percentages and all Class B Lenders based on their Class B Lender Percentage), together with accrued but unpaid interest on the amount required to be so prepaid to the date of such prepayment (other than any interest payable at the Default Rate) and any Liquidation Fee in connection with such prepayment if such prepayment is not made on a Payment Date, an amount equal to the amount of such Net Extraordinary Proceeds.
(C)    On each immediately succeeding Payment Date following the receipt by Borrower or DeveloperCo of any Net Sale Proceeds (or a Pre-Sale Deposit of an amount equal to such Net Sale Proceeds in the Proceeds Account) at any time other than during a Cash Sweep Period, the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Borrower shall pay to the Class A Funding Agent and Class B Funding Agent, as applicable, for the account of each Class A Lender Group and the Class B Lenders, respectively (to be applied to the reduction of the applicable Advances ratably among all applicable Class A Lender Groups based on their Class A Lender Group Percentages and all Class B Lenders based on their Class B Lender Percentage), an amount equal to [***]% of the Net Sale Proceeds, together with accrued but unpaid interest on the amount required to be so prepaid to the date of such prepayment (other than any interest payable at the Default Rate) and any Liquidation Fee in connection with such prepayment if such prepayment is not made on a Payment Date (without double-counting any amounts required to be prepaid pursuant to Section 2.9(A)).
(D)    On each immediately succeeding Payment Date following the receipt by Borrower or DeveloperCo of any Net Sale Proceeds (or a Pre-Sale Deposit of an amount equal to such Net Sale Proceeds in the Proceeds Account) during a Cash Sweep Period, the Borrower shall pay an aggregate amount equal to the amount of such Net Sale Proceeds together with accrued but unpaid interest on the amount required to be so prepaid to the date of such prepayment (other than any interest then payable at the Default Rate) and any Liquidation Fee in connection with such prepayment if applicable, in the following order of priority: (i) first, to the Class A Funding Agent, for the account of each Class A Lender Group, (to be applied to the reduction of the applicable Advances ratably among all applicable Class A Lender Groups based on their Class A Lender Group Percentages), until the achievement of the Cash Sweep Class A Target Advance Rate and (ii) second, to the Class A Funding Agent and Class B Funding Agent, as applicable, for the account of each Class A Lender Group and the Class B Lenders, respectively (to be applied to the reduction of the applicable Advances ratably among all applicable Class A Lender Groups based on their Class A Lender Group Percentages and all Class B Lenders based on their Class B Lender Percentage) (without double-counting any amounts required to be prepaid pursuant to Section 2.9(A)).
Section 2.10.     [Reserved].
Section 2.11.    Interest. The makers of the Advances shall be entitled to the applicable Interest Distribution Amount payable on each Payment Date in accordance with Section 2.7(B) or (C), as applicable.
Section 2.12.    Breakage Costs; Liquidation Fees; Increased Costs; Capital Adequacy; Illegality; Additional Indemnifications.
(A)    Breakage Costs and Liquidation Fees. (i) If any Advance is not made on the date specified by the Borrower for any reason other than default by the Lenders, the Borrower hereby agrees to pay Breakage Costs, if any, and (ii) the Borrower agrees to pay all Liquidation Fees associated with a reduction of the principal balance of a Class A Advance or Class B Advance at any time. The Borrower shall not be responsible for any Liquidation Fees or any other loss, cost, or expenses arising at the time of, and arising solely as a result of, any assignment made pursuant to Section 10.8 and the reallocation of any portion of a Class A Advance or Class B Advance of the applicable Lender making such assignment unless, in each case, such assignment is requested by the Borrower.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(B)    Increased Costs. If any Change in Law (a) shall subject any Lender, the Administrative Agent or any Affiliate thereof (each of which, an “Affected Party”) to any Taxes (other than (x) Indemnified Taxes, (y) Taxes described in clauses (ii) through (iv) of the definition of Excluded Taxes and (z) Connection Income Taxes) on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, (b) shall impose, modify or deem applicable any reserve requirement (including any reserve requirement imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Affected Party, or (c) shall impose any other condition affecting the Collateral or the rights of any Lender and the Administrative Agent hereunder, the result of which is to increase the cost to any Affected Party under this Agreement or to reduce the amount of any sum received or receivable by an Affected Party under this Agreement, then on the next Payment Date after written demand by such Affected Party, such Affected Party shall receive such additional amount or amounts as will compensate such Affected Party for such additional or increased cost incurred or such reduction suffered to the extent such additional or increased costs or reduction are incurred or suffered in connection with the Collateral, any obligation to make Advances hereunder, any of the rights of such Lender or the Administrative Agent hereunder, or any payment made hereunder in accordance with Section 2.7(B); provided, that the Borrower shall not be required to compensate such Affected Party for any portion of such additional or increased cost or such reduction that is incurred more than one hundred eighty (180) days prior to any such demand (except that, if the event giving rise to such additional or increased cost or such reduction is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof).
(C)    Capital Adequacy. If any Change in Law has or would have the effect of reducing the rate of return on the capital of any Affected Party as a consequence of its obligations hereunder or arising in connection herewith to a level below that which any such Affected Party could have achieved but for such Change in Law (taking into consideration the policies of such Affected Party with respect to capital adequacy) by an amount deemed by such Affected Party to be material, then from time to time, then on the next Payment Date after written demand by such Affected Party (which demand shall be accompanied by a statement setting forth the basis for such demand), such Affected Party shall receive such additional amount or amounts as will compensate such Affected Party for such reduction in accordance with Section 2.7(B); provided, that the Borrower shall not be required to compensate such Affected Party for any portion of such additional amount or amounts that are incurred more than one hundred eighty (180) days prior to any such demand (except that, if the event giving rise to such additional amount or amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof).
(D)    Compensation. If as a result of any event or circumstance similar to those described in Section 2.12(A), 2.12(B), or 2.12(C), any Affected Party is required to compensate a bank or other financial institution providing liquidity support, credit enhancement or other similar support to such Affected Party in connection with this Agreement or the funding or maintenance of Advances hereunder, then on the next Payment Date after written demand by such Affected Party, such Affected Party shall receive such additional amount or amounts as may be necessary to reimburse such Affected Party for any amounts paid by it; provided, that the Borrower shall not be required to compensate such Affected Party for any portion of such additional amount or amounts that are

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


incurred more than one hundred eighty (180) days prior to any such demand (except that, if the event giving rise to such additional amount or amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof).
(E)    Calculation. In determining any amount provided for in this Section 2.12, the Affected Party may use any reasonable averaging and attribution methods. Any Affected Party making a claim under this Section 2.12 shall submit to the Borrower a certificate as to such additional or increased cost or reduction, which certificate shall be conclusive absent manifest error.
Section 2.13.    Payments and Computations. (A) The Borrower (through the Paying Agent pursuant to Section 2.7(B) or 2.7(C) and as otherwise permitted in this Agreement) shall make each payment and prepayment hereunder and under the Advances in respect of principal, interest, expenses, indemnities, fees or other Obligations due from the Borrower not later than 4:00 P.M. (New York City time) on the day when due in U.S. Dollars to the related Funding Agent at its address referred to in Section 10.3 or to such account provided by such Funding Agent in immediately available, same-day funds. Payments on Obligations may also be made by application of funds in the Proceeds Account as provided in Section 2.7(B) or 2.7(C). All computations of interest for Advances made under the Base Rate shall be made by the applicable Funding Agent on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed (including the first day but excluding the last day) occurring in the period for which such interest is payable. All other computations of fees and interest provided hereunder shall be made on the basis of a 360-day year and actual days elapsed (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by a Funding Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.
(B)    All payments to be made in respect of fees, if any, due to the Administrative Agent from the Borrower hereunder shall be made on the date when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without setoff, counterclaim or other deduction of any nature (other than with respect to Taxes pursuant to Section 2.17), and an action therefor shall immediately accrue. The Borrower agrees that, to the extent there are insufficient funds in the Proceeds Account, to make any payment under this clause (B) when due, the Borrower shall immediately pay to the Administrative Agent all amounts due that remain unpaid.
Section 2.14.    Payment on Non-Business Days. Whenever any payment hereunder or under the Advances shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest.
Section 2.15.    [Reserved].




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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 2.16.    [Reserved].
Section 2.17.    Taxes.
(A)    Defined Terms. For purposes of this Section 2.17 the term “applicable Law” includes FATCA.
(B)    Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(C)    Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of a Funding Agent timely reimburse it for the payment of, any Other Taxes.
(D)    Indemnification by the Borrower. The Borrower shall indemnify each Recipient, within ten days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified 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 the Borrower by a Recipient (with a copy to each Funding Agent), or by a Funding Agent on its own behalf or on behalf of a Recipient, shall be conclusive absent manifest error.
(E)    Indemnification by the Lenders. Each Non-Conduit Lender shall severally indemnify each Funding Agent, within ten days after demand therefor, for (i) any Indemnified Taxes attributable to such Non-Conduit Lender (but only to the extent that the Borrower has not already indemnified such Funding Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), and (ii) any Excluded Taxes attributable to such Non-Conduit Lender, in each case, that are payable or paid by a Funding Agent in connection with any Loan 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 Non-Conduit Lender by its Funding Agent shall be conclusive absent manifest error. Each Non-Conduit Lender hereby authorizes its Funding Agent to set off and apply any and all amounts at any time owing to such Non-Conduit Lender under any

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Loan Document or otherwise payable by such Funding Agent to the Non-Conduit Lender from any other source against any amount due to such Funding Agent under this paragraph (E).
(F)    Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section 2.17, the Borrower shall deliver to each Funding Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to such Funding Agent.
(G)    Status of Recipients. (i) Any Recipient that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower, the Paying Agent and the related Funding Agent, at the time or times reasonably requested by the Borrower, the Paying Agent or such Funding Agent, such properly completed and executed documentation reasonably requested by the Borrower, the Paying Agent or such Funding Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Recipient, if reasonably requested by the Borrower, the Paying Agent or the related Funding Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower, the Paying Agent or such Funding Agent as will enable the Borrower, the Paying Agent or such Funding Agent to determine whether or not such Recipient 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 clauses (ii)(a), (ii)(b) and (ii)(d) below) shall not be required if in the Recipient’s reasonable judgment such completion, execution or submission would subject such Recipient to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Recipient.
(ii)    Without limiting the generality of the foregoing,
(a)    any Recipient that is a U.S. Person shall deliver to the Borrower, the Paying Agent and the related Funding Agent on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower, the Paying Agent or such Funding Agent), copies of executed originals of Internal Revenue Service Form W-9 certifying that such Recipient is exempt from U.S. federal backup withholding tax;
(b)    any Recipient that is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Borrower, the Paying Agent and the related Funding Agent (in such number of copies as shall be requested by the Borrower, the Paying Agent or such Funding Agent) on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower, the Paying Agent or such Funding Agent), whichever of the following is applicable:
(1)    in the case of a Recipient 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 Loan Document, copies of executed originals of Internal

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Revenue Service Form W-8BEN or W-8BEN-E 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 Loan Document, Internal Revenue Service Form W-8BEN or W-8BEN-E 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;
(2)    copies of executed Internal Revenue Service Form W-8ECI;
(3)    in the case of a Recipient claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Internal Revenue Code, (x) a certificate to the effect that such Recipient is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of Internal Revenue Service Form W-8BEN or W-8BEN-E; or
(4)    to the extent a Recipient is not the beneficial owner, copies of executed originals of Internal Revenue Service Form W-8IMY, accompanied by Internal Revenue Service Form W-8ECI, Internal Revenue Service Form W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate, Internal Revenue Service Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Recipient is a partnership and one or more direct or indirect partners of such Recipient are claiming the portfolio interest exemption, such Recipient may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner;
(c)    any Recipient which is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Borrower, the Paying Agent and the related Funding Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower, the Paying Agent or such Funding Agent), copies of 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, the Paying Agent or such Funding Agent to determine the withholding or deduction required to be made; and
(d)    if a payment made to a Recipient under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Recipient were to fail to comply with the applicable reporting requirements of FATCA

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Recipient shall deliver to the Borrower, the Paying Agent and the related Funding Agent at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower, the Paying Agent or such Funding Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower, the Paying Agent or such Funding Agent as may be necessary for the Borrower, the Paying Agent and such Funding Agent to comply with their obligations under FATCA and to determine that such Recipient has complied with such Recipient’s obligations under FATCA or to determine the amount, if any, 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.
Each Recipient agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower, the Paying Agent and the related Funding Agent in writing of its legal inability to do so.
(H)    Forms for Paying Agent. The Administrative Agent and each Funding Agent shall deliver to the Paying Agent on or before the first Payment Date, copies of executed originals of Internal Revenue Service Form W-9 or W-8, as applicable, certifying that the Administrative Agent or such Funding Agent is exempt from U.S. federal backup withholding tax. The Administrative Agent and each Funding Agent agrees that if such Internal Revenue Service Form previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or promptly notify the Paying Agent and the Borrower in writing of its legal inability to do so.
(I)    Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.17 (including by the payment of additional amounts pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (I) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (I), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (I) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party 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 indemnified party

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(J)    Survival. Each party’s obligations under this Section 2.17 shall survive the resignation or replacement of a Funding Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.
ARTICLE III    

CONDITIONS OF CLOSING AND LENDING
Section 3.1.    Conditions Precedent to Closing. The following conditions shall be satisfied on or before the Closing Date:
(A)    Loan Documents. The Administrative Agent shall have received each of the following documents, in form and substance satisfactory to Administrative Agent, duly executed, and each such document shall be in full force and effect, and all consents, waivers and approvals necessary for the consummation of the transactions contemplated thereby shall have been obtained:
(i)    this Agreement;
(ii)    a Loan Note for each Class A Lender Group and each Class B Lender that has requested the same;
(iii)    the Security Agreement;
(iv)    the Pledge Agreement;
(v)    the DeveloperCo Security and Guaranty Agreement;
(vi)    the Sponsor Guaranty;
(vii)    a Consent to Assignment with respect to each Eligible Equipment Supply Agreement which has been executed and delivered as of the Closing Date;
(viii)    a Step-in Rights Agreement with respect to each Material Dealer Agreement which has been executed and delivered as of the Closing Date;
(ix)    each Fee Letter;
(x)    the Paying Agent Fee Letter;
(xi)    a Tax Equity Consent in relation to the Tax Equity Transaction Documents which have been executed and delivered on or prior to the Closing Date;
(xii)    the DeveloperCo Account Control Agreement; and

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(xiii)    each other Loan Document required to be executed and delivered on or prior to the Closing Date.
(B)    Material Contracts. The Administrative Agent shall have received duly executed copies of each Affiliate Transaction Document and each other Material Contract which has been executed and delivered as of the Closing Date, including a CPA Safe Harbor Amendment with respect to each Material Dealer Agreement.
(C)    Secretary’s Certificates. The Administrative Agent shall have received: (i) a certificate from the Assistant Secretary of the Paying Agent, (ii) a certificate from the Secretary of each of the Obligors and Sunnova Management (a) attesting to the resolutions of such Person’s members, managers or other governing body authorizing its execution, delivery, and performance of this Agreement and the other Loan Documents to which it is a party, (b) authorizing specific Responsible Officers for such Person to execute the same, and (c) attesting to the incumbency and signatures of such specific Responsible Officers; (iii) copies of governing documents, as amended, modified, or supplemented prior to the Closing Date of each of the Obligors and Sunnova Management, in each case certified by a Responsible Officer of such Person; and (iv) a certificate of status with respect to each of the Obligors and Sunnova Management dated within fifteen (15) days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such entity, which certificate shall indicate that such entity is in good standing in such jurisdiction.
(D)    Legal Opinions. The Administrative Agent shall have received customary opinions from (i) counsel (which may be in-house counsel) to Paying Agent addressing authorization and enforceability of the Loan Documents and other corporate matters and (ii) counsel to the Borrower, DeveloperCo, Pledgor and Sponsor and Sunnova Management in form and substance reasonably acceptable to the Administrative Agent addressing corporate, security interest and other matters.
(E)    Evidence of Insurance. The Administrative Agent shall have received certification evidencing coverage under the insurance policies referred to in Section 5.1(L).
(F)    Safe Harbor Opinion. The Administrative Agent shall have received a written legal opinion from Baker Botts L.L.P. in form and substance reasonably acceptable to the Administrative Agent.
(G)    Taxes. The Administrative Agent shall have received a certificate from the Borrower that all sales, use and property taxes, and any other taxes in connection with any period prior to the Closing Date, that are due and owing with respect to the Borrower or DeveloperCo have been paid or provided for by the Sponsor.
(H)    Representations and Warranties. All of the representations and warranties of the Borrower and each other Obligor set forth in the Transaction Documents shall be true and correct in all respects as of the Closing Date (or such earlier date or period specifically stated in such representation or warranty).

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(I)    No Default. No Potential Default or Event of Default shall have occurred and be continuing.
(J)    No Material Adverse Effect. Since December 31, 2018 there has been no Material Adverse Effect.
(K)    Closing Date Certificate of the Borrower. The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower (in his or her capacity as such) in form reasonably satisfactory to Administrative Agent certifying that (i) the representations and warranties of the Borrower and each other Obligor set forth in the Transaction Documents to which it is a party are true and correct as of the Closing Date (except to the extent such representations and warranties expressly relate to any earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date), (ii) no Potential Default or Event of Default has occurred and is continuing, (iii) since December 31, 2018 there has been no Material Adverse Effect and (iv) as to the matters set forth in Sections 3.1(G).
(L)    UCC Search Results. Administrative Agent shall have received the results of a recent search of all effective UCC financing statements (or equivalent filings) made with respect to the Obligors in all appropriate jurisdictions together with copies of all such filings disclosed by such search.
(M)    Perfection and Priority of Liens. The Borrower shall have duly filed proper financing statements (or the equivalent thereof in any applicable foreign jurisdiction, as applicable), on or before the Closing Date, under the UCC with the Delaware Secretary of State and any other applicable filing office in any applicable jurisdiction that the Administrative Agent deems necessary or desirable in order to perfect the Administrative Agent’s interests in the Collateral. The Borrower shall have filed proper financing statement terminations or amendments (or the equivalent thereof in any applicable foreign jurisdiction, as applicable), if any, necessary to release all security interests and other rights of any Person in the Collateral previously granted by the Borrower or any of its affiliates.
(N)    Accounts. The Administrative Agent shall have received evidence reasonably satisfactory to it that the Proceeds Account, the Debt Service Reserve Account and the DeveloperCo Account have been established.
(O)    Consultant Reports. The Administrative Agent shall have received a copy of each Consultant Report together with a customary reliance letter with respect to each such Consultant Report, in each case in form and substance reasonably satisfactory to the Administrative Agent and the Lenders, that shall entitle the Administrative Agent and the Lenders to rely upon such Consultant Report.
(P)    Know Your Customer Information. The Administrative Agent and the Paying Agent shall have received all documentation and other information required by regulatory authorities under applicable “Know Your Customer” and anti-money laundering rules and regulations, including the Patriot Act.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(Q)    Payment of Fees. The Borrower shall have paid all fees required to be paid on or prior to the Closing Date pursuant to the Loan Documents or otherwise previously agreed in writing to be paid on or prior to the Closing Date.
Section 3.2.    Conditions Precedent to All Advances. (A) Except as otherwise expressly provided below, the obligation of each Non-Conduit Lender to make or participate in each Advance (including the initial Advances made on the Closing Date) shall be subject, at the time thereof, to the satisfaction of the following conditions:
(i)    Funding Documents. The Administrative Agent shall have received, no later than two (2) Business Days prior to the Funding Date (or such shorter time period as the Administrative Agent may permit in its sole discretion), a completed Notice of Borrowing, a Borrowing Base Certificate and a Funds Flow Memorandum with respect to such Advance, each in form and substance reasonably satisfactory to the Administrative Agent.
(ii)    Material Contracts. The Administrative Agent shall have received
(a)    duly executed copies of each Eligible Equipment Supply Agreement and each Purchase Order;
(b)    duly executed copies of each other Material Contract which has been executed and delivered as of the applicable Funding Date;
(c)    (i) a Consent to Assignment with respect to each Eligible Equipment Supply Agreement and (ii) a Step-in Rights Agreement with respect to each Material Dealer Agreement in each case which has been executed and delivered as of the applicable Funding Date; and
(d)    a Tax Equity Consent in relation to the Tax Equity Transaction Documents which have been executed and delivered on or prior to the applicable Funding Date.
(iii)    Purchase Price. The Administrative Agent shall have received (i) copies of each invoice (or other evidence of the purchase price provided pursuant to the terms of the applicable Eligible Equipment Supply Agreement and reasonably satisfactory to the Administrative Agent) for all Eligible Equipment together with a receipt for payment or other evidence reasonably satisfactory to the Administrative Agent that the Borrower or the Sponsor has paid, or that the Borrower shall pay upon receipt of the applicable Advance, such purchase price in full and (ii) one or more letters of credit, in form and substance and in a stated amount (not to exceed the purchase price payable under the terms of the applicable Eligible Equipment Supply Agreement and Purchase Orders ) reasonably satisfactory to the Administrative Agent from an Eligible Letter of Credit Bank, with respect to the Eligible Equipment in respect of which the applicable Advance relates.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(iv)    Projected Deployment Schedule. The Administrative Agent shall have received the then-current Projected Deployment Schedule, in form and substance reasonably satisfactory to the Administrative Agent.
(v)    Undrawn Tax Equity Commitments. The Administrative Agent shall have received evidence (including copies of the Tax Equity Transaction Documents, each duly executed and delivered by the parties thereto) that the aggregate Undrawn Tax Equity Commitments as of the date of such Advance are at least equal to the amount necessary to fund the tax equity portion of the projected purchase price (in each case, as set forth in the applicable Tax Equity Transaction Documents) of Projects incorporating Eligible Equipment during the period of [***] after such date, as set forth in the Projected Deployment Schedule;
(vi)    Representations and Warranties. All of the representations and warranties of each Obligor shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality, Material Adverse Effect or Sponsor Material Adverse Effect, in which case such representations and warranties shall be true and correct in all respects) as of the Funding Date (or such earlier date or period specifically stated in such representation or warranty).
(vii)    No Default. No Potential Default or Event of Default shall have occurred and be continuing or would result from any borrowing of any Advance or from the application of the proceeds therefrom.
(viii)    Funding Date Certificate of the Borrower. The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower (in his or her capacity as such) dated as of the applicable Funding Date certifying that:
(a)    the representations and warranties of the Borrower and each other Obligor set forth in the Transaction Documents are true and correct in all material respects (except for those representations and warranties that are qualified by materiality, Material Adverse Effect or Sponsor Material Adverse Effect, in which case such representations and warranties are true and correct in all respects) as of the applicable Funding Date (except to the extent such representations and warranties expressly relate to any earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date);
(b)    no Potential Default or Event of Default has occurred and is continuing or would result from the applicable Advance on the Funding Date or from the application of the proceeds therefrom;
(c)    after giving effect to the applicable Advance on the Funding Date and the application of the proceeds therefrom, the Borrower will be Solvent;
(d)    all Equipment in respect of which the applicable Advance relates constitutes Eligible Equipment and the Eligible Equipment Supply Agreement

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


pursuant to which such Eligible Equipment was purchased constitutes an Eligible Equipment Supply Agreement;
(e)    to the best of Borrower’s knowledge, no material change to the market pricing of the Eligible Equipment in respect of which the applicable Advance relates is expected to occur in the three-month period following the applicable Funding Date; and
(f)    as to the matters set forth in Sections 3.2(A)(xi), (xii) and (xiii).
(ix)    [Intentionally Omitted]
(x)    Debt Service Reserve. The amount on deposit in the Debt Service Reserve Account shall not be less than the Debt Service Reserve Required Balance, taking into account the application of the proceeds of the Advances on the Funding Date.
(xi)    Aggregate Commitment/No Borrowing Base Deficiency. After giving effect to such Advance, the Aggregate Outstanding Advances shall not exceed the Aggregate Commitment in effect as of such Funding Date. After giving effect to such Advance, there should not exist a Class A Borrowing Base Deficiency or a Class B Borrowing Base Deficiency.
(xii)    No Material Tax Law Change or ITC Extension. No Material Tax Law Change or ITC Extension shall have occurred.
(xiii)    No Proposed Tax Law Change. No Proposed Tax Law Change shall have occurred.
(xiv)    Other Documents. The Borrower shall have provided the Administrative Agent with all documents reasonably requested by the Administrative Agent related to the Eligible Equipment being financed by the Borrower on such Funding Date.
(xv)    Payment of Fees. The Borrower shall have paid all fees required to be paid pursuant to the Loan Documents or otherwise previously agreed in writing to be paid on or prior to the applicable Funding Date.
(xvi)    Availability Period. The Commitment Termination Date shall not have occurred, nor shall it occur as a result of making such Advance, nor has the Availability Period ended.
(xvii)    Safe Harbor Opinion. With respect to any Funding Date on or after a date on which a payment is made for 2020 Safe-Harbor Equipment, the Administrative Agent shall have received a written legal opinion from Baker Botts L.L.P. in form and substance reasonably acceptable to the Administrative Agent.
(xviii)    DeveloperCo Account Balance. The amount on deposit in the DeveloperCo Account shall not be less than the DeveloperCo Account Required Balance.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(B)    Each Notice of Borrowing submitted by the Borrower after the Closing Date shall be deemed to be a representation and warranty that the conditions specified in this Section 3.2 have been satisfied on and as of the date of the applicable Notice of Borrowing and the applicable Funding Date.
Section 3.3.    No Approval of Work. The making of any Advance hereunder shall not be deemed an approval or acceptance by the Administrative Agent or the Lenders of any Eligible Equipment furnished or supplied under the Eligible Equipment Supply Agreements.
ARTICLE IV    

REPRESENTATIONS AND WARRANTIES
Section 4.1.    Representations and Warranties of the Borrower. The Borrower represents and warrants to the Administrative Agent and each Lender as of the Closing Date, as of each Funding Date, and with respect to clauses (A), (B), (F), (G), (I), (K), and (L) through (S) as of each Payment Date, as follows:
(A)    Organization; Corporate Powers. Each Obligor (i) is a duly organized and validly existing limited liability company, in good standing under the laws of the State of Delaware, (ii) has the limited liability company power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage, and (iii) is duly qualified and is authorized to do business in all jurisdictions where it is required to be so qualified or authorized.
(B)    Authority and Enforceability. Each Obligor has the limited liability company or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Transaction Documents to which it is party and has taken all necessary company or other organizational action to authorize the execution, delivery and performance of the Transaction Documents to which it is party. Each Obligor has duly executed and delivered each Transaction Document to which it is party and each Transaction Document to which it is party constitutes the legal, valid and binding agreement and obligation of the respective Obligor enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).
(C)    Government Approvals. No order, consent, authorization, approval, license, or validation of, or filing recording, registration with, or exemption by, any Governmental Authority is required to authorize or is required as a condition to: (i) the execution, delivery and performance by a Obligor of any Transaction Document to which it is a party or any of its obligations thereunder or (ii) the legality, validity, binding effect or enforceability of any Transaction Document to which such Obligor is a party.
(D)    Litigation. There are no material actions, suits or proceedings, pending or threatened in writing with respect to any Obligor.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(E)    Applicable Law, Contractual Obligations and Organizational Documents. Neither the execution, delivery and performance by any Obligor of the Transaction Documents to which it is party nor compliance with the terms and provisions thereof (i) will contravene any provision of any law, statute, rule, regulation, order, writ, injunction or decree of any Governmental Authority applicable to such Obligor or its properties and assets, (ii) will conflict with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under or result in the creation or imposition of (or the obligation to create or impose) any Lien (other than the Liens created pursuant to the Security Agreement, the Pledge Agreement or Permitted Liens) upon any of the property or assets of the Borrower pursuant to the terms of any contract, or (iii) will breach any provision of the certificate of formation or the operating agreement of such Obligor and will, for each of clause (i), (ii) and (iii), result in a Material Adverse Effect.
(F)    Use of Proceeds; Margin Stock. Proceeds of the Class A Advances and the Class B Advances have been used only as permitted under Section 2.3. No part of the proceeds of the Class A Advances or the Class B Advances will be used directly or indirectly to purchase or carry Margin Stock, or to extend credit to others for the purpose of purchasing or carrying any Margin Stock, in violation of any of the provisions of Regulations T, U or X of the Board of Governors of the Federal Reserve System. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. At no time would more than 25% of the value of the assets of the Borrower that are subject to any “arrangement” (as such term is used in Section 221.2(g) of such Regulation U) hereunder be represented by Margin Stock.
(G)    Accounts. The names and addresses of the Proceeds Account and the Debt Service Reserve Account are specified on Schedule I attached hereto. Other than accounts on Schedule I attached hereto, the Borrower does not have any other accounts. Other than the DeveloperCo Account and, as of the Closing Date only, the TCB Account, DeveloperCo does not have any other accounts. The Borrower has directed, or has caused to be directed, BL Borrower and BL HoldCo to make all payments in respect of BL Distributions to the DeveloperCo Account. The Borrower has directed, or has caused to be directed, all Project Companies to make all payments in respect of Project Sale Proceeds to the DeveloperCo Account.
(H)    ERISA. None of the assets of the Borrower are or, prior to the repayment of all Obligations, will be subject to Title I of ERISA, Section 4975 of the Internal Revenue Code, or, by reason of any investment in the Borrower by any governmental plan, as the case may be, any other federal, state, or local provision similar to Section 406 of ERISA or Section 4975 of the Internal Revenue Code. Neither the Borrower nor any of its ERISA Affiliates has maintained, participated or had any liability in respect to any Plan during the past six (6) years which could reasonably be expected to subject the Borrower or any of its ERISA Affiliates to any tax, penalty or other liabilities. No ERISA Event has occurred or is reasonably likely to occur. With respect to any Plan which is a Multi-Employer Plan, no such Multi-Employer Plan is, or to the knowledge of the Obligors reasonably likely to be, in reorganization or insolvent as defined in Title IV of ERISA.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(I)    Taxes.
(i)    Each Obligor has timely filed (or had filed on its behalf) all federal state, provincial, territorial, foreign and other Tax returns and reports required to be filed under applicable law, and has timely paid (or had paid on its behalf) all federal state, foreign and other Taxes levied or imposed upon it or its properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate actions diligently conducted and for which adequate reserves have been provided in accordance with GAAP. No Lien or similar adverse claim has been filed, and no claim is being asserted, with respect to any such Tax due from any Obligor or with respect to any Project or Eligible Equipment. Any Taxes due and payable by any Obligor or its predecessors in interest in connection with the execution and delivery of this Agreement and the other Transaction Documents and the transfers and transactions contemplated hereby or thereby have been paid or shall have been paid if and when due. Except to the extent provided herein, in the Back-Leverage Transaction Documents or in the Tax Equity Transaction Documents, no Obligor is liable for Taxes payable by any other Person.
(ii)    Each of Borrower, DeveloperCo, and BL HoldCo is and has at all times since its formation been disregarded as an entity separate from Pledgor for United States federal tax purposes, and no election has been filed with respect to such Person to cause such entity to be treated as an association taxable as a corporation for United States federal Tax purposes. Pledgor is a U.S. Person that is not a “tax-exempt entity” (within the meaning of Section 168(h)(2) of the Code). Sponsor is an association taxable as a corporation for Tax purposes.
(iii)    Pledgor is (i) an accrual method taxpayer, (ii) permitted to treat property as “provided” when the property is delivered to or accepted by Pledgor, and (iii) permitted by its method of accounting to use the so-called “3 ½ month rule” under Treasury Regulations Section 1.461-4(d)(6)(ii).
(iv)    Borrower reasonably expects that the applicable counterparty to each Eligible Equipment Supply Agreement will deliver Eligible Equipment under such Eligible Equipment Supply Agreement on or prior to the later of December 31 of the year in which payment for such item of Eligible Equipment is made in full or within 3.5 months after the date on which payment has been made in full (or, in each case, the date on which the first payment has been made, in the case of any payments made in installments) for such item of Eligible Equipment under and in accordance with such Eligible Equipment Supply Agreement.
(J)    Transaction Documents. No Obligor that is party to a Transaction Document nor Sunnova Management has defaulted under the Transaction Documents, and no Loan Party has defaulted, and no event or circumstance has occurred or exists that, with the passage of time or giving of notice of both, would constitute a default, under any other material agreement to which any Loan Party is a party and, to the Borrower’s knowledge, there is no breach or default, and no event or circumstance that has occurred or exists that with the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


passage of time or giving of notice of both, would constitute a breach or default, by a counterparty to any Transaction Documents or any other material agreement to which any Loan Party is a party.
(K)    Accuracy of Information. The written information (other than financial projections, forward looking statements, each Projected Deployment Schedule, and information of a general economic or industry specific nature) that has been made available to the Paying Agent, the Administrative Agent or any Lender by or on behalf of the Borrower or any Affiliate thereof in connection with the transactions hereunder including any written statement or certificate of factual information, when taken as a whole, does not, when furnished, 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 in the light of the circumstances under which such statements are made (giving effect to all supplements and updates thereto). Each Projected Deployment Schedule delivered to the Administrative Agent and the Lenders was based on good faith estimates and assumptions believed by the Borrower to be reasonable at the time made.
(L)    No Material Adverse Effect. Since the date of delivery of the latest audited financial statements for a fiscal year of SEI pursuant to Section 5.1(A)(i), there has been no Material Adverse Effect.
(M)    Investment Company Act. No Obligor is an “investment company” or an “affiliated person” of or “promoter” or “principal underwriter” for an “investment company” as such terms are defined in the 1940 Act, nor is any Obligor otherwise subject to regulation thereunder and no Obligor relies solely on the exemption from the definition of “investment company” in Section 3(c)(1) and/or 3(c)(7) of the 1940 Act (although such exemptions may be available).
(N)    Covered Fund. No Obligor is a “covered fund” under Section 13 of the Bank Holding Company Act of 1956, as amended
(O)    Properties; Security Interest. The Borrower has good title to all of its properties and assets necessary in the ordinary conduct of its business, free and clear of Liens other than Permitted Liens. Once executed and delivered, the Security Agreement and the Pledge Agreement create, as security for the Obligations, a valid and enforceable and (coupled with this Agreement and the taking of all actions required thereunder and under the Security Agreement and the Pledge Agreement for perfection) perfected security interest in and Lien on all of the Collateral, in favor of the Administrative Agent, for the benefit of the Secured Parties, superior to and prior to the rights of all third persons and subject to no other Liens, except for Permitted Liens. No Loan Party owns any real property.
(P)    Capital Structure. Schedule 4.1(P) shows, for each of SEI, Sponsor, Intermediate Holdco, Pledgor, Borrower, DeveloperCo, BL HoldCo, BL Borrower, each Managing MemberCo and each Project Company, its name, jurisdiction of organization, authorized and issued Equity Interests, holders of its Equity Interests (other than in the case of SEI), in each case, as of the Closing Date. Each such Person holding Equity Interests in

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


an Obligor has good title to such Equity Interests, and all such Equity Interests are duly issued, fully paid and non-assessable. The Equity Interests of Borrower, DeveloperCo and BL HoldCo are subject to no Liens other than Liens of the Administrative Agent and the Secured Parties, and there are no outstanding purchase options, warrants, subscription rights, agreements to issue or sell, convertible interests, phantom rights or powers of attorney relating to such Equity Interests.
(Q)    Account Payable. None of Borrower or DeveloperCo has made any material change in its historical accounts payable practices since the Closing Date.
(R)    [Reserved]
(S)    OFAC and Patriot Act. Neither any Obligor nor, to the knowledge of any Obligor, any of its officers, directors or employees appears on the Specially Designated Nationals and Blocked Persons List published by the Office of Foreign Assets Control (“OFAC”) or is otherwise a person with which any U.S. person is prohibited from dealing under the laws of the United States, unless authorized by OFAC. No Obligor conducts business or completes transactions with the governments of, or persons within, any country under economic sanctions administered and enforced by OFAC. No Obligor will directly or indirectly use the proceeds from this Agreement, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person to fund any activities of or business with any person that, at the time of such funding, is the subject of economic sanctions administered or enforced by OFAC, or is in any country or territory that, at the time of such funding or facilitation, is the subject of economic sanctions administered or enforced by OFAC. No Obligor is in violation of Executive Order No. 13224 or the Patriot Act.
(T)    Foreign Corrupt Practices Act. Neither the Obligors nor, to the knowledge of the Obligors, any of its directors, officers, agents or employees, has used any of the proceeds of any Advance (i) for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) to make any direct or indirect unlawful payment to any government official or employee from corporate funds, (iii) to violate any provision of the U.S. Foreign Corrupt Practices Act of 1977 or similar law of a jurisdiction in which a Obligor conducts its business and to which they are lawfully subject, or (iv) to make any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
(U)    Beneficial Ownership Certification. The information included in any Beneficial Ownership Certification delivered by Borrower is true and correct in all respects.
(V)    Financial Statements. The consolidated balance sheets, and related statements of income, cash flow and shareholders equity, of SEI that have been and are hereafter delivered to the Administrative Agent and Lenders, have been and will be prepared in accordance with GAAP, and fairly present in all material respects the financial positions and results of operations of SEI and its Subsidiaries at the dates and for the periods indicated

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


subject, in the case of unaudited financial statements, to the absence of footnotes and year-end adjustments.
(W)    Burdensome Contracts. No Obligor is party or subject to any Restrictive Agreement, except as shown on Schedule 4.1(W) (as such Schedule may be updated by Borrower from time to time). No such Restrictive Agreement prohibits the execution, delivery or performance of any Transaction Document by any Obligor or any of their Affiliates that is party to any Transaction Document.
(X)    Insurance. The Collateral and each of the Sunnova Parties is subject to insurance as required under Section 5.1(L) and as required pursuant to each applicable Material Contract, and all such insurance is in full force and effect.
(Y)    Eligible Equipment.
(i)    All equipment which is included in the Aggregate Borrowing Base in connection with any Advance constitutes Eligible Equipment and has been (or will be, concurrently with the making of such Advance) purchased pursuant to the applicable Eligible Equipment Supply Agreement, and such Eligible Equipment Supply Agreement continues to constitute an Eligible Equipment Supply Agreement.
(ii)    All Eligible Equipment is in good operating condition and repair, and all necessary replacements and repairs have been made so that the value and operating efficiency of the Eligible Equipment are preserved at all times.
(iii)    All Eligible Equipment is mechanically, electrically, and structurally sound.
(iv)    All Eligible Equipment is capable of performing the functions for which it was designed, in accordance with manufacturer specifications.
(v)    All manufacturer’s warranties with respect to all Eligible Equipment are in full force and effect and enforceable by the Borrower.
(vi)    All Eligible Equipment (other than Eligible In-Transit Equipment or Eligible Equipment that has not yet been delivered to Borrower or to the applicable Dealer for the benefit of the Borrower, in each case, in accordance with the terms of the applicable Supply Agreement and Purchase Order issued pursuant thereto) is stored in an Approved Warehouse.
(Z)    Material Contracts.
(i)    The services to be performed, the materials to be supplied and the property interests, if any, and other rights granted, in each case pursuant to the Material Contracts: (a) are sufficient to enable the Eligible Equipment (1) to be acquired, owned, stored and maintained by Borrower and DeveloperCo in accordance with Applicable Law and (2) to be ready to be transferred to a Project

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Company in connection with the purchase and sale of a Project under the terms of the Master Purchase Agreement in accordance with the Project Deployment Schedule (and in any event prior to the Maturity Date); and (b) provide adequate ingress and egress for any reasonable purpose in connection with the acquisition, ownership, storage or maintenance of the Eligible Equipment.
(ii)    All Material Contracts relating to the Eligible Equipment that are in effect are listed on Schedule 4.1(Z) (as such Schedule may be updated by the Borrower on each applicable Funding Date). Copies of all Material Contracts as currently in effect have been delivered to Administrative Agent by Borrower. Except as has been previously disclosed in writing to Administrative Agent, none of the Material Contracts has been amended, modified or terminated and each such Material Contract is in full force and effect.
ARTICLE V    

COVENANTS
Section 5.1.    Affirmative Covenants. The Borrower covenants and agrees that, until all Obligations (other than contingent obligations not then due) hereunder have been paid in full and the Commitments have been terminated:
(A)    Reporting and Notice Requirements. The Borrower will furnish to the Administrative Agent and each Lender:
(i)    within (a) the earlier of (x) one hundred eighty (180) days after the close of each fiscal year of SEI (beginning with the fiscal year ending December 31, 2019) and (y) such earlier period as required by Applicable Law, the unqualified (provided, however explanatory language added to the auditor’s standard report shall not constitute a qualification) audited financial statements for such fiscal year that include the consolidated balance sheet of SEI and its consolidated subsidiaries as of the end of such fiscal year, the related consolidated statements of income, of stockholders’ equity and of cash flows for such fiscal year, in each case, setting forth comparative figures for the preceding fiscal year (it being acknowledged that such requirement with respect to SEI may be satisfied by the filing of the appropriate report on Form 10-K with the Securities and Exchange Commission), and, beginning with the fiscal year ending December 31, 2019, the assets and liabilities of the Sponsor as of the end of such fiscal year presented in a note or schedule to such financial statements of SEI, and in each case prepared in accordance with GAAP, and audited by a Nationally Recognized Accounting Firm selected by SEI, (b) the earlier of (x) sixty (60) days after the end of each of the first three quarters of its fiscal year and (y) such earlier period as required by Applicable Law, the unaudited consolidated balance sheets and income statements for such fiscal quarter on a year-to-date basis for SEI and its consolidated subsidiaries (it being acknowledged that such requirement with respect to SEI may be satisfied by the filing of the appropriate report on Form 10-Q with the Securities and Exchange Commission) and (c) on the

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


date of each such delivery of financial statements pursuant to clause (a) or (b), a Compliance Certificate from a Responsible Officer of Borrower;
(ii)    within one hundred eighty (180) days after the close of each fiscal year of the Borrower (beginning with the fiscal year ending December 31, 2019), the unqualified (provided, however explanatory language added to the auditor’s standard report shall not constitute a qualification) audited financial statements for such fiscal year that include the consolidated balance sheet of the Borrower and its consolidated subsidiaries as of the end of such fiscal year, the related consolidated statements of income, of stockholders’ equity and of cash flows for such fiscal year, in each case, setting forth comparative figures for the preceding fiscal year, in each case prepared in accordance with GAAP, and audited by a Nationally Recognized Accounting Firm selected by the Borrower, and (b) sixty (60) days after the end of each of the first three quarters of its fiscal year, the unaudited consolidated balance sheets and income statements for such fiscal quarter on a year-to-date basis for the Borrower and its consolidated subsidiaries;
(iii)    within one hundred eighty (180) days after the end of each of its fiscal years (beginning with the fiscal year ending December 31, 2019), a report to the Administrative Agent prepared by a Qualified Service Provider containing such firm’s conclusions with respect to an examination of certain information relating to the Loan Parties’ compliance with their respective obligations under the Transaction Documents (including, without limitation, such firm’s conclusions with respect to an examination of the calculations of amounts set forth in the Borrowing Base Report delivered hereunder and the Borrower’s source records for such amounts), in form and substance satisfactory to the Administrative Agent;
(iv)    promptly, and in any event within five (5) Business Days, after the Borrower or any of their ERISA Affiliates knows or has reason to know that an ERISA Event has occurred, deliver to the Lenders a certificate of a responsible officer of the Borrower setting forth the details of such ERISA Event, the action that the Borrower or the ERISA Affiliate proposes to take with respect thereto, and, when known, any action taken or threatened by the Internal Revenue Service, Department of Labor or the Pension Benefit Guaranty Corporation;
(v)    promptly, and in any event within five (5) Business Days, after a Responsible Officer of any Obligor obtains knowledge thereof, notice of (a) the occurrence of any event that constitutes an Event of Default, a Potential Default or a Cash Sweep Event, which notice shall specify the nature thereof, the period of existence thereof and what action the Borrower proposes to take with respect thereto, (b) any other development concerning any litigation, governmental or regulatory proceeding (including environmental law) or labor matter (including ERISA Event) pending or threatened in writing against the (1) any Obligor, (2) SEI or any of its Affiliates or any Material Dealer or any other counterparty to any Material Contract that, in the case of this clause (2), individually or in the aggregate, if adversely

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


determined, would reasonably be likely to have a material adverse effect on (x) the ability of such Person or any of its Affiliates to perform their respective obligations under the Material Contracts, (y) the business, operations, financial condition, or assets of such Person or (z) any Eligible Equipment (except to the extent that the Borrower has made a mandatory prepayment of the Advances in connection with such Equipment) or the other Collateral, (c) any material disputes in respect of any Material Contract, (d) any breach or termination of a Material Contract, (e) any casualty, damage or loss, whether or not insured, through fire, theft, other hazard or casualty, or any act or omission of any Sunnova Party or Material Contract Counterparty, or of any other Person if such casualty, damage or loss affects Borrower, DeveloperCo or any Eligible Equipment, in excess of $100,000.00, (f) the initiation of any condemnation proceedings involving any Eligible Equipment, (g) any intentional withholding of compensation by an Obligor to any supplier under any Eligible Equipment Supply Agreements or the applicable counterparty under any Eligible Shipping Agreement or Storage Agreement, (h) any event of force majeure asserted in writing under any Material Contract and, to the extent reasonably requested by Administrative Agent and reasonably available to Borrower, copies of related invoices, statements, supporting documentation, schedules, data or affidavits delivered under the relevant Material Contract in connection with such event of force majeure;
(vi)    promptly, and in any event within five (5) Business Days (A) after receipt thereof by any Sunnova Party, copies of all material notices, requests, and other documents (excluding regular periodic reports) delivered or received by such Sunnova Party under or in connection with the Back-Leverage Transaction Documents or Tax Equity Transaction Documents; (B) after any Sunnova Party obtains knowledge thereof , notice of any breach, default, event of default or failure to satisfy any funding condition under any Back-Leverage Transaction Document or Tax Equity Transaction Document; and (C) after receipt thereof by any Obligor, copies of all material notices, documents and reports delivered or received under or in connection with any Material Dealer Agreement (including any CPA Safe Harbor Amendment), including, but not limited to, the Identifying Documents (as defined therein), inventory count report results, monthly reports identifying and documenting the segregation of Eligible Equipment in a Material Dealer’s possession and any transportation documentation in connection with any movement of Eligible Equipment;
(vii)    subject to any confidentiality requirements of the Securities and Exchange Commission, promptly after receipt thereof by SEI or any Subsidiary thereof, copies of each notice or other correspondence received from the Securities and Exchange Commission concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of SEI or any Subsidiary which could reasonably be expected to result in Material Adverse Effect;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(viii)    two (2) Business Days prior to each Funding Date and each Payment Date, a Borrowing Base Report as of such Funding Date or Payment Date;
(ix)    within 30 days after any request by the Administrative Agent an updated Consultant Report, or a supplement thereto, from the Technical Advisor, which update or supplement shall be limited in scope to the matters covered in the Consultant Report delivered by the Technical Advisor pursuant to Section 3.1(O) and shall otherwise be in form and substance reasonably acceptable to the Administrative Agent; provided that, unless an Event of Default has occurred and is continuing, (i) only two (2) such requests per calendar year shall be permitted and (ii) only one (1) such request per calendar quarter shall be permitted;
(x)    at least once per calendar month (commencing with January, 2020, for purposes of calculating the Aggregate Borrowing Base prior to the first Payment Date), an updated Eligible Equipment Appraisal relating to all Eligible Equipment;
(xi)    such other reports and information (financial or otherwise) as the Administrative Agent may reasonably request from time to time in connection with any Collateral.
(B)    Records and Storage of Eligible Equipment.
(i)    The Loan Parties shall keep accurate and complete records of Eligible Equipment, including kind, quality, quantity, cost, acquisitions and dispositions thereof, and shall submit to the Administrative Agent, on such periodic basis as the Administrative Agent may reasonably request (but in any event no more than once per month, unless an Event of Default has occurred and is continuing) a current schedule thereof. Promptly upon request, the Loan Parties shall deliver to the Administrative Agent evidence of their ownership or interests in any Eligible Equipment.
(ii)    The Loan Parties shall cause all Eligible Equipment, after physical delivery to the applicable Approved Warehouse pursuant to the terms of the applicable Supply Agreement and Purchase Order (and, if applicable, Eligible Shipping Agreement), until an Eligible Equipment Disposition is completed with respect to such Eligible Equipment, to be (a) held in an Approved Sunnova Warehouse or Approved Trinity Warehouse (other than in the case of Eligible Equipment that is Eligible In-Transit Equipment), with reasonable care and caution, in accordance with applicable standards of any insurance and in conformity with all Applicable Law, (b) segregated from any property owned by any other Person, (c) stored in all material respects in accordance with manufacturer guidelines, installation manuals, operating manuals and other such manufacturer requirements necessary to maintain any manufacturer’s warranty, and (d) identified by serial number as property purchased pursuant to the applicable Eligible Equipment Supply Agreement. Notwithstanding the foregoing, a Loan Party may temporarily move Eligible Equipment to any third-party storage facility upon the Loan Parties’

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


determination that there is a reasonably likelihood of imminent material loss, destruction or harm to such Eligible Equipment provided that (x) such Loan Party gives prompt written notice to the Administrative Agent, including the location of the temporary third-party storage facility and the Eligible Equipment (and applicable serial numbers) so removed, and (y) such Eligible Equipment is brought into compliance with subclauses (a) through (d) of this clause (ii) within 30 days of such temporary move (or such later date approved in writing by the Administrative Agent).
(iii)    The Loan Parties shall, to the extent of the Borrower’s and Sponsor’s contractual rights under the applicable Material Dealer Contracts, cause each applicable Material Dealer storing any Eligible Equipment to make current rent payments (within applicable periods provided for in the applicable lease agreement) on their rental obligations at all Approved Dealer Warehouse where any Collateral is located.
(iv)    The Loan Parties shall, to the extent of the Borrower’s and Sponsor’s contractual rights under the Material Dealer Contracts, cause all Material Dealers to store all Eligible Equipment in an Approved Dealer Warehouse (or, in the case of Trinity, in an Approved Trinity Warehouse).
(v)    (a) upon request by the Administrative Agent, the Borrower shall provide the Administrative Agent with copies of (x) all existing agreements and, promptly after execution thereof, all future agreements, between a Loan Party and any landlord, warehouseman, processor, shipper, bailee or other Person that owns any premises at which any Collateral may be kept or that otherwise may possess or handle any Collateral, including each Storage Agreement and (y) all other Material Contracts and (b) upon request by the Administrative Agent, the Borrower shall provide the Administrative Agent with a duly executed copy of a Consent to Assignment with the counterparty to any Eligible Equipment Supply Agreement or Affiliate Transaction Document or, with respect to any Material Dealer Contract, a Step-in Rights Agreement.
(C)    UCC Matters; Protection and Perfection of Security Interests. The Borrower shall notify the Administrative Agent in writing of any change (i) in its legal name, (ii) in its identity or type of organization or corporate structure, or (iii) in the jurisdiction of its organization, in each case, within ten (10) days of such change. The Borrower agrees that from time to time, at its sole cost and expense, it will promptly execute and deliver all further instruments and documents, and take all further action necessary or reasonably required by the Administrative Agent (a) to perfect, protect or more fully evidence the Administrative Agent’s security interest in the Collateral, or (b) to enable the Administrative Agent to exercise or enforce any of its rights hereunder, under the Security Agreement or under any other Loan Document. Without limiting the Borrower’s obligation to do so, the Borrower hereby irrevocably authorizes the filing of such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or reasonably required by the Administrative Agent. The Borrower hereby

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


authorizes the Administrative Agent to file one or more financing or continuation statements, and amendments thereto and assignments thereof, naming the Borrower as debtor, relative to all or any of the Collateral now existing or hereafter arising without the signature of the Borrower where permitted by law. A carbon, photographic or other reproduction of the Security Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement.
(D)    Access to Certain Documentation and Information Regarding the Eligible Equipment.
(i)    The Borrower shall, and shall cause each other Obligor and, to the extent of the contractual rights of the Borrower and the Sponsor under the applicable Material Dealer Contracts, each Material Dealer to, permit the Administrative Agent or its duly authorized representatives or independent contractors (including the Appraiser), upon reasonable advance notice to the Borrower, (i) access to documentation that any Obligor and Material Dealer may possess regarding the Collateral, (ii) to visit the Obligors and to discuss their respective affairs, finances and accounts (as they relate to their respective obligations under this Agreement and the other Transaction Documents) their respective officers, and independent accountants (subject to such accountants’ customary policies and procedures), and (iii) to examine the books of account and records of the Obligors and Material Dealers as they relate to the Collateral, to make copies thereof or extracts therefrom, in each case, at such reasonable times and during regular business hours of the applicable Obligor or Material Dealer; provided that, upon the existence of an Event of Default, the Class B Lenders shall have the same rights of access, inspection and examination as the Administrative Agent under this Section 5.1(D). The frequency of the granting of such access, such visits and such examinations, and the party to bear the expense thereof, shall be governed by the provisions of Section 7.13 with respect to the reviews of the Borrower’ business operations described in such Section 7.13. The Administrative Agent (and, as applicable, the Class B Lenders) shall and shall cause their representatives or independent contractors to use commercially reasonable efforts to avoid interruption of the normal business operations of the applicable Obligors and Material Dealers. Notwithstanding anything to the contrary in this Section 5.1(D), (i) none of the Obligors will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (x) constitutes non-financial trade secrets or non-financial proprietary information, (y) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by law or any binding confidentiality agreement, or (z) is subject to attorney-client or similar privilege or constitutes attorney work product and (ii) the Borrower shall have the opportunity to participate in any discussions with the Borrower’s independent accountants.
(ii)    The Borrower shall reimburse the Administrative Agent for all its reasonable and documented charges, costs and expenses in connection with (i)

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


examinations of the books and records of any Obligor pursuant to clause (i) or any other financial or Collateral matters as the Administrative Agent reasonably deems appropriate, (ii) appraisals of the Eligible Equipment, and (iii) field examinations, visits and inspections, in each case, other than upon the occurrence and during the continuation of an Event of Default, up to twice per calendar.
(E)    Existence and Rights; Compliance with Laws. The Borrower shall preserve and keep in full force and effect each of its Subsidiary’s limited liability company existence, and any material rights, permits, patents, franchises, licenses and qualifications, except in the case of any of its Subsidiaries (other than DeveloperCo) with the prior written consent of the Administrative Agent (not to be unreasonably withheld, conditioned or delayed). The Borrower shall comply, and cause each of its Subsidiaries to, comply with all applicable laws and maintain in place all permits, licenses, approvals and qualifications required for each of them to conduct its business activities to the extent that the lack of compliance thereof would result in a Material Adverse Effect.
(F)    Books and Records. The Borrower shall maintain, and cause DeveloperCo to maintain, proper and complete financial and accounting books and records. The Borrower shall maintain, and shall cause DeveloperCo to maintain, with respect to Eligible Equipment accounts and records as to each component of Eligible Equipment that are proper, complete, accurate and sufficiently detailed so as to permit (i) the reader thereof to know as of the most recently ended calendar month the status of all Eligible Equipment, and (ii) reconciliation of payments in respect of Projects incorporating Eligible Equipment and the amounts from time to time deposited in respect thereof in DeveloperCo Account and the Proceeds Account.
(G)    Taxes. The Borrower shall pay, or cause to be paid, when due all Taxes imposed upon any Loan Party or any of its properties or which they are required to withhold and pay over, and provide evidence of such payment to the Administrative Agent if requested; provided, that no Loan Party shall be required to pay any such Tax that is being contested in good faith by proper actions diligently conducted if (i) they have maintained adequate reserves with respect thereto in accordance with GAAP and (ii) in the case of a Tax that has or may become a Lien against any of the Collateral, such proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax.
(H)    Maintenance of Properties. The Borrower shall ensure that its and DeveloperCo’s material properties and equipment used or useful in each of their business in whomsoever’s possession they may be, are kept in reasonably good repair, working order and condition, normal wear and tear excepted, and that from time to time there are made in such properties and equipment all needful and proper repairs, renewals, replacements, extensions, additions, betterments and improvements thereto, in each case, to the extent and in the manner customary for companies in similar businesses.
(I)    ERISA. The Borrower shall deliver to the Administrative Agent such certifications or other evidence from time to time prior to the repayment of all Obligations and the termination of all Commitments, as requested by the Administrative Agent in its

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


sole discretion, that (i) no Obligor is an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA or a plan within the meaning of Section 4975 of the Internal Revenue Code, or a “governmental plan” within the meaning of Section 3(32) of ERISA, (ii) no Obligor is subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans, and (iii) assets of the Borrower do not constitute “plan assets” within the meaning of 29 C.F.R. Section 2510.3-101, as modified in application by Section 3(42) of ERISA of any “benefit plan investor” as defined in Section 3(42) of ERISA.
(J)    Use of Proceeds. The Borrower will only use the proceeds of the Class A Advances and the Class B Advances as permitted under Section 2.3.
(K)    Change of State of Organization; Proceeds; Names, Etc. (i) In respect of each Obligor, the Borrower shall notify the Administrative Agent and the Paying Agent in writing of any change (a) in such entity’s legal name, (b) in such entity’s identity or type of organization or corporate structure, or (c) in the jurisdiction of such entity’s organization, in each case, within ten (10) days of such change; and
(ii)    in the event that the Borrower or any Affiliated Entity thereof receives any Net Sale Proceeds or Net Extraordinary Proceeds directly, the Borrower shall hold, or cause such Affiliated Entity to hold, all such Net Sale Proceeds or Net Extraordinary Proceeds in trust for the benefit of the Secured Parties and deposit, or cause such Affiliated Entity to deposit, such amounts into the Proceeds Account, as soon as practicable, but in no event later than two (2) Business Days after its receipt thereof; provided that neither the Borrower nor any Affiliated Entity shall be required to deposit the applicable Net Sale Proceeds into the Proceeds Account in connection with the applicable Eligible Equipment Disposition if, prior to the receipt of such Net Sale Proceeds, the Borrower shall have made a Pre-Sale Deposit with respect to such Eligible Equipment Disposition of an amount equal to such New Sale Proceeds into the Proceeds Account.
(L)    Insurance.
(i)    Each Loan Party shall maintain or cause to be maintained insurance coverage by such insurers and in such forms and amounts and against such risks as set forth in Schedule 5.1(L). Upon the request of the Administrative Agent at any time subsequent to the Closing Date, the Loan Parties shall cause to be delivered to the Administrative Agent a certification evidencing Borrower’s and DeveloperCo’s coverage under any such policies. Unless the Administrative Agent shall agree otherwise, each policy shall include satisfactory endorsements showing the Administrative Agent (for the benefit of the Secured Parties) as sole loss payee and additional named insured.
(ii)    Without limiting the generality of the foregoing, no later than 5 days (or such shorter time period as the Administrative Agent may permit in its sole

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


discretion) prior to the date upon which any Loan Party reasonably expects the risk of loss with respect to any Eligible Equipment to be transferred to Borrower or DeveloperCo, as applicable, unless previously delivered to the Administrative Agent, Borrower shall deliver to the Administrative Agent evidence that insurance covering risks and in the amounts required under this Section 5.1(L) has been be procured with respect to such Eligible Equipment prior to such date.
(iii)    Subject to Section 5.1(L)(iv), any proceeds of insurance (other than workers’ compensation or D&O insurance) and any awards arising received by the Loan Parties from condemnation of Collateral shall be paid directly to the Administrative Agent for application in accordance with the terms of this Agreement.
(iv)    Subject in all cases to the Administrative Agent’s prior written approval, Borrower may request in writing, within 15 days after the Administrative Agent’s receipt of any insurance proceeds or condemnation awards relating to any loss or destruction of Eligible Equipment, to use such proceeds or awards to repair or replace such Eligible Equipment (and until so used, the proceeds shall be held by the Administrative Agent as Cash Collateral). Any such request must certify that: (i) no Default or Event of Default exists; (ii) such repair or replacement will be promptly undertaken and concluded, in accordance with plans reasonably satisfactory to the Administrative Agent; (iii) the repaired or replaced Eligible Equipment is free of Liens, other than Permitted Liens; (iv) Borrower complies with disbursement procedures for such repair or replacement as the Administrative Agent may reasonably require; (v) the aggregate amount of such proceeds or awards from any single casualty or condemnation does not exceed $1,000,000; and (vi) (x) if such lost or destroyed Eligible Equipment was 2019 Safe-Harbor Equipment, the applicable replacement Eligible Equipment is 2019 Safe-Harbor Equipment or (y) if such lost or destroyed Eligible Equipment was 2020 Safe-Harbor Equipment, the applicable replacement Eligible Equipment is 2020 Safe-Harbor Equipment.
(M)    Maintenance of Independent Director. The Borrower shall maintain at least one individual to serve as an independent director (an “Independent Director”) of the Borrower, (i) which is not, nor at any time during the past six (6) years has been, (a) a direct or indirect beneficial owner, a partner (whether direct, indirect or beneficial), customer or supplier of the Borrower or any of its Affiliates, (b) a manager, officer, employee, member, stockholder, director, creditor, Affiliate or associate of the Borrower or any of its Affiliates (other than as an independent officer, director, member or manager acting in a capacity similar to that set forth herein), (c) a person related to, or which is an Affiliate of, any person referred to in clauses (a) or (b), or (d) a trustee, conservator or receiver for any Affiliate of the Borrower or any of its Affiliates, (ii) which shall have had prior experience as an independent director for a corporation or limited liability company whose charter documents required the unanimous consent of all independent directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy, and (iii) which shall have at least three (3) years of

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


employment experience with one or more entities with a national reputation and presence that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities, and is currently employed by such an entity. Upon Borrower learning of the death or incapacity of an Independent Director, Borrower shall have 30 calendar days following such death or incapacity to appoint a replacement Independent Director. Any replacement of an Independent Director will be permitted only upon (i) 5 Business Days’ prior written notice to the Administrative Agent and the Lenders, and (ii) the certification of a Responsible Officer of the Borrower to the Administrative Agent and the Lenders that the applicable replacement Independent Director satisfies the criteria set forth in this Section 5.1(M). For the avoidance of doubt, other than in the event of the death or incapacity of an Independent Director, the Borrower shall at all times have an Independent Director and may not terminate any Independent Director without the prior written consent of the Administrative Agent.
(N)    Maintenance of Separate Existence. The Borrower shall, and shall cause DeveloperCo to, take all reasonable steps to continue its identity as a separate legal entity and to make it apparent to third Persons that it is an entity with assets and liabilities distinct from those of the Affiliated Entities or any other Person, and that it is not a division of any of the Affiliated Entities or any other Person. In that regard the Borrower shall, and shall cause DeveloperCo (and in the case of DeveloperCo, each subsequent reference in this Section 5.1(N) shall be deemed to be a reference to DeveloperCo) to:
(i)    maintain its limited liability company existence, make independent decisions with respect to its daily operations and business affairs, not amend, modify, terminate or fail to comply with the provisions of its organizational documents, not merge into or consolidate with any Person, or divide, enter into a plan of division, dissolve, terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure, and, other than pursuant to the terms of the limited liability company agreement of the Borrower, not be controlled in making such decisions by any other Affiliated Entity or any other Person;
(ii)    maintain its assets in a manner which facilitates their identification and segregation from those of any of the other Affiliated Entities;
(iii)    except as expressly otherwise permitted hereunder, conduct all intercompany transactions and conduct any other contract or agreement with the other Affiliated Entities upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s length basis with unaffiliated third parties;
(iv)    not assume or guarantee any obligation of any of the other Affiliated Entities, nor have any of its obligations assumed or guaranteed by any other Affiliated Entity, pledge its assets for the benefit of any other Affiliated Entity, or hold itself

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


out as responsible for the debts of any other Affiliated Entity or for the decisions or actions with respect to the business and affairs of any other Affiliated Entity;
(v)    except as expressly otherwise permitted hereunder or contemplated under any of the other Loan Documents, not permit the commingling or pooling of its funds or other assets with the assets of any other Affiliated Entity or make any loans or advances to any other Affiliated Entity;
(vi)    maintain separate deposit and other bank accounts to which no other Affiliated Entity has any access;
(vii)    compensate (either directly or through reimbursement of its allocable share of any shared expenses) all employees, consultants and agents, and Affiliated Entities, to the extent applicable, for services provided to the Borrower by such employees, consultants and agents or Affiliated Entities, in each case, either directly from the Borrower’s own funds or indirectly through documented capital contributions from Sponsor or any other direct or indirect parent of the Borrower;
(viii)    have agreed with each of the other relevant Affiliated Entities to allocate among themselves, through documented intercompany transactions, including documented capital contributions from Sponsor or any other direct or indirect parent of the Borrower, shared overhead and corporate operating services and expenses (including the services of shared employees, consultants and agents and reasonable legal and auditing expenses) on the basis of actual use or the value of services rendered, and otherwise on a basis reasonably related to actual use or the value of services rendered;
(ix)    pay for its own account, directly from the Borrower’s own funds or indirectly through documented capital contributions from Sponsor or any other direct or indirect parent of the Borrower, its own liabilities, including, without limitation, for accounting and payroll services, rent, lease and other expenses (or its allocable share of any such amounts provided by one or more other Affiliated Entity) and not have such liabilities or operating expenses (or the Borrower’s allocable share thereof) paid by any of the Affiliated Entities; provided, that Sponsor or another Affiliated Entity shall be permitted to pay the initial organizational expenses of the Borrower;
(x)    conduct its business (whether in writing or orally) solely in its own name through its duly authorized officers, employees and agents, hold itself out to the public as a legal entity separate and distinct from any other Affiliated Entity, and correct any known misunderstanding regarding its separate identity;
(xi)    maintain a sufficient number of employees in light of its contemplated business operations, and maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(xii)    maintain its books, records, resolutions and agreements as official records, and shall maintain all of its books, records, financial statements and bank accounts separate from those of any other Affiliated Entity, and shall not permit its assets to be listed on the financial statement of any other Affiliated Entity; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such affiliates and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such affiliates or any other Person and (ii) such assets shall be listed on the Borrower’s own separate balance sheet;
(xiii)    except as provided in the limited liability company agreement of the Borrower, not acquire obligations or securities of any other Affiliated Entities, or identify its members or the other Affiliated Entities, as applicable, as a division or part of it;
(xiv)    file its own tax returns unless prohibited by Applicable Law from doing so (except that the Borrower may file or may include its filing as part of a consolidated federal tax return, to the extent required and/or permitted by Applicable Law, provided that, there shall be an appropriate notation indicating the separate existence of the Borrower and its assets and liabilities; and
(xv)    otherwise practice and adhere to corporate formalities such as complying with its organizational documents and member resolutions, the holding of regularly scheduled meetings of members, use stationery, invoices and checks separate from those of any other Affiliated Entity, and maintaining complete and correct books and records and minutes of meetings and other proceedings of its members.
(O)    Deposits into the Accounts.
(i)    Net Extraordinary Proceeds. The Borrower shall direct, or cause to be directed, all Net Extraordinary Proceeds to be deposited directly to the Proceeds Account. Without limitation of the foregoing or Section 5.1(K)(ii), Borrower shall cause all Revised Purchase Price Amounts to be liquidated to cash.
(ii)    BL Distributions. The Borrower shall direct, or cause to be directed, all BL Distributions and Project Sale Proceeds to be deposited directly to the DeveloperCo Account.
(iii)    Project Sale Proceeds and Net Sale Proceeds.
(a)    The Borrower shall direct, or cause to be directed, all Net Sale Proceeds (other than Project Sale Proceeds constituting Net Sale Proceeds) to be deposited directly to the Proceeds Account. The Borrower shall direct, or cause to be directed, all Project Sale

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Proceeds constituting Net Sale Proceeds to be deposited into the Proceeds Account no later than one (1) Business Day following DeveloperCo’s receipt of such Project Sale Proceeds; provided that the Borrower shall not be required to direct, or cause to be directed, the applicable Net Sale Proceeds to be deposited into the Proceeds Account in connection with the applicable Eligible Equipment Disposition if, prior to the receipt of such Net Sale Proceeds, the Borrower shall have made a Pre-Sale Deposit with respect to such Eligible Equipment Disposition of an amount equal to such Net Sale Proceeds into the Proceeds Account.
(b)    Except during any Cash Sweep Period, no later than one (1) Business Day following any receipt of Net Sale Proceeds by Borrower, DeveloperCo or any Affiliated Entity, the Borrower will deposit (or cause to be deposited) directly into the Proceeds Account, an amount no less than [***]% of such Net Sale Proceeds, for further application in accordance with Sections 2.7 and Section 2.9(C); provided that the Borrower shall not be required to deposit, or cause to be deposited, the applicable Net Sale Proceeds into the Proceeds Account in connection with the applicable Eligible Equipment Disposition if, prior to the receipt of such Net Sale Proceeds, the Borrower shall have made a Pre-Sale Deposit with respect to such Eligible Equipment Disposition of an amount equal to such Net Sale Proceeds into the Proceeds Account.
(c)    During any Cash Sweep Period, no later than one (1) Business Day following any receipt of Net Sale Proceeds by Borrower, DeveloperCo or any Affiliated Entity, the Borrower will deposit (or cause to be deposited) directly into the Proceeds Account, an amount no less than [***]% of such Net Sale Proceeds, for further application in accordance with Sections 2.7 and Section 2.9(D); provided that the Borrower shall not be required to deposit, or cause to be deposited, the applicable Net Sale Proceeds into the Proceeds Account in connection with the applicable Eligible Equipment Disposition if, prior to the receipt of such Net Sale Proceeds, the Borrower shall have made a Pre-Sale Deposit with respect to such Eligible Equipment Disposition of an amount equal to [***]% of such Net Sale Proceeds into the Proceeds Account.
(P)    Hedging. The Borrower shall collectively at all times satisfy the Hedge Requirements.
(Q)    Government Approvals. The Borrower shall promptly obtain all orders, consents, authorizations, approvals, licenses and validations of, or file recordings, register with, or obtain exemption from, any Governmental Authority (including any such orders,

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


consents, authorizations, approvals, licenses or validations affecting any Collateral, including the manufacture, distribution or disposition of Eligible Equipment) required as a condition to the performance of its obligations under any Transaction Document.
(R)    Compliance with Contractual Obligations. The Borrower shall (a) comply with each Material Contract to which it is a party, (b) maintain in full force and effect each Material Contract to which it is a party and (c) take such action as may be necessary to enforce its material rights and obligations under each Material Contract to which it is a party and the material covenants thereof in accordance with the terms thereof.
(S)    Subsidiary Distributions. The Borrower shall (i) subject to clause (ii), cause each of its Subsidiaries to make and apply the maximum amount of cash distributions permitted pursuant to the Project Company Operating Agreements and the Back-Leverage Transaction Documents and (ii) make all Upstream Payments from BL HoldCo to Borrower.
(T)    Host Customer Pipeline. The Borrower shall maintain a list of Host Customer Agreements that have been executed by Sponsor or its Affiliates, or a Dealer for the benefit of Sponsor or its Affiliates and have not yet been conveyed to DeveloperCo and covering Projects with an aggregate installed capacity of no less than [***]MW DC during 2020, [***]MW DC during 2021 and [***]MW DC during 2022 and shall include such information in each Borrowing Base Report.
(U)    DeveloperCo Account.
(i)    The Borrower shall cause DeveloperCo to maintain a cash balance in the DeveloperCo Account of no less than $[***] as measured at 5:00 P.M. Houston, Texas time daily on each Business Day.
(ii)    The Borrower shall, and shall cause the Obligors, to use commercially reasonable efforts to make payments of obligations related to the Collateral (including rent obligations in accordance with the Storage Agreement to which Borrower is a party; payments under Eligible Shipping Agreements; and payments to Material Dealers employing Eligible Equipment) directly from the DeveloperCo Account.
(iii)    Within five (5) Business Days of the last day of each calendar month, the Borrower shall provide a report to the Administrative Agent reflecting the transfers from the DeveloperCo Account (including, in the case of distributions to Sponsor from the DeveloperCo Account permitted pursuant to Section 5.2(E), reasonable detail on the intended use of the applicable distributed amounts) during the period since the prior report delivered by Borrower pursuant to this Section 5.1(U)(iii), including without limitation, fees or other amounts paid to each Dealer, rent and other amounts paid to CED (or any other counterparty under a Storage Agreement), amounts paid under Eligible Shipping Agreements and, to the extent applicable, the next three (3) largest expenses.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(V)    Beneficial Ownership Certification. Promptly following any request therefor, the Borrower shall provide such information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” requirements under the Patriot Act, the Beneficial Ownership Regulation or other applicable anti-money laundering laws.
(W)    Post-Closing Covenants.
(i)    Hedge Requirements. No later than five (5) Business Days following the Closing Date, the Borrower shall be in compliance with all applicable Hedge Requirements and the Administrative Agent shall have received duly executed copies of each Hedge Agreement and, if applicable, a duly executed copy of each Secured Hedge Counterparty Joinder.
(ii)    BALIA Tax Equity Transaction. No later than ten (10) Business Days following the Closing Date, the Borrower shall have delivered to the Administrative Agent Tax Equity Transaction Documents and a Tax Equity Consent with BAL Investment and Advisory, Inc., in each case in form and substance satisfactory to the Administrative Agent.
(iii)    Trinity. No later than five (5) Business Days following the Closing Date, the Borrower shall have delivered to the Administrative Agent an agreement among Trinity, Borrower and Sponsor addressing the substance of the form of CPA Safe Harbor Amendment set forth in Exhibit J and the Trinity ROFR Letter, in each case in form and substance satisfactory to the Administrative Agent.
(iv)    JPM Acknoowledgment of Assignment of LC Proceeds. No later than ten (10) Business Days following the Closing Date, the Borrower shall have delivered to the Administrative Agent an acknowledgement of the Borrower’s assignment of each letter of credit delivered under the Supply Agreements, executed by the issuing bank, in form and substance satisfactory to the Administrative Agent.
(v)    Other Conditions Precedent. In the event that any of the conditions precedent set forth in Sections 3.1 or 3.2 are not satisfied on the date hereof with respect to the Closing Date or the first Funding Date, as reasonably determined by the Administrative Agent, the Borrower shall satisfy such conditions precedent no later than ten (10) Business Days following the Closing Date.
(vi)    TCB Account. The Borrower shall cause DeveloperCo (i) by no later than 5 Business Days following the Closing Date, to deliver an account control agreement, in form and substance satisfactory to the Administrative Agent, with respect to the TCB Account and (ii) by no later than 30 days following the Closing Date, to close the TCB Account and transfer all amounts then on deposit in the TCB Account into the DeveloperCo Account.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 5.2.    Negative Covenants. The Borrower covenants and agrees that, until all Obligations (other than contingent obligations not then due) hereunder have been paid in full, the Borrower will not:
(A)    Business Activities. Conduct any business other than:
(i)    the acquisition, transportation, storage and distribution of Equipment and the performance by the Borrower of all of its obligations under the Transaction Documents;
(ii)    the preparation, execution and delivery of any and all other documents and agreements as may be required in connection with the performance of the activities of the Borrower approved above; and
(iii)    to engage in any lawful act or activity and to exercise any powers permitted under the Delaware Limited Liability Company Act that are reasonably related, incidental, necessary, or advisable to accomplish the foregoing;
(B)    Sales, Liens, Etc.
(i)    Except as permitted hereunder (x) sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Lien upon or with respect to, the Collateral or any portion thereof, or upon or with respect to the Paying Agent Accounts or the DeveloperCo Account, or assign any right to receive income in respect thereof or (y) create or suffer to exist any Lien upon or with respect to any of its properties, whether now owned or hereafter acquired, or assign any right to receive income, to secure or provide for the payment of any Indebtedness of any Person or for any other reason; provided that notwithstanding anything to the contrary herein, this Section 5.2(B) shall not prohibit any Lien that constitutes a Permitted Lien.
(ii)    Make, or permit DeveloperCo to make, any Asset Disposition or otherwise sell, lease or otherwise dispose of any Eligible Equipment without the prior written consent of the Administrative Agent, other than (x) from Borrower to DeveloperCo, on a “first-in, first-out” basis, pursuant to the Equipment Sourcing Agreement or (y) by DeveloperCo pursuant to a Permitted Asset Disposition.
(iii)    No Loan Party shall return any Eligible Equipment to a supplier, vendor or other Person, whether for cash, credit or otherwise, without the prior written consent of the Administrative Agent.
(C)    Indebtedness. Incur or assume, or permit DeveloperCo to incur or assume, any Indebtedness, except Permitted Indebtedness.
(D)    Loans and Advances. Make, or permit DeveloperCo to make, any loans or advances to any Person.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(E)    Dividends, Etc. Except for Upstream Payments made by BL Borrower, BL HoldCo or DeveloperCo in accordance with this Agreement, declare or make, or permit DeveloperCo, BL Borrower or BL HoldCo to declare or make, any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any interest in Borrower, or purchase, redeem or otherwise acquire for value any interest in the Affiliated Entities or any rights or options to acquire any such interest to any Person that is not the Borrower, other than (1) distributions of cash by the Borrower in accordance with Section 2.7(B)(xiv), (2) a distribution by the Borrower on the Closing Date to reimburse the Sponsor for the payment of the invoiced purchase price in respect of Eligible Equipment and (3) so long as the DeveloperCo Distribution Conditions are satisfied, other distributions by DeveloperCo to Sponsor with available funds on deposit in the DeveloperCo Account that are not otherwise required to be deposited into the Proceeds Account.
(F)    Mergers, Etc. Merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) (except Permitted Asset Dispositions) to, or acquire all or substantially all of the assets of, any Person, or permit DeveloperCo to do any of the foregoing, except in connection with an acquisition or sale where all Obligations have been paid in full with all accrued but unpaid interest thereon and any related Liquidation Fees.
(G)    Investments. Make or permit DeveloperCo to make any Investment other than Permitted Investments; provided that in connection with and prior to the formation of any subsidiary following the Closing Date, the Borrower shall deliver to the Administrative Agent and the Lenders an updated Schedule 1.1(f) and, if applicable, a Tax Equity Consent.
(H)    Change in Organizational Documents. Amend, modify or otherwise change any of the terms or provisions in its organizational documents as in effect on the date hereof without the consent of the Administrative Agent, the Majority Lenders and, to the extent such amendment, modification or change could reasonably be expected to materially and adversely affect the Class B Lenders in a manner disproportionate to the Class A Lenders, the Majority Class B Lenders or permit DeveloperCo to do any of the foregoing.
(I)    Transactions with Affiliates. Enter into, or be a party to, any transaction with any of its Affiliates, except (i) the transactions contemplated by the Loan Documents, (ii) the Affiliate Transaction Documents, (iii) the other Transaction Documents as in effect on the Closing Date, (iv) any other transactions (including the lease of office space or computer equipment or software by the Borrower from an Affiliate and the sharing of employees and employee resources and benefits) (a) in the ordinary course of business or as otherwise permitted hereunder, (b) pursuant to the reasonable requirements and purposes of the Borrower’s business and (c) upon fair and reasonable terms (and, to the extent material, pursuant to written agreements) that are consistent with market terms for any such transaction, (v) employment and severance arrangements and health, disability and similar insurance or benefit plans between the Borrower and its directors, officers, employees in the ordinary course of business, and (v) the payment of customary fees and reasonable out

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


of pocket costs to, and indemnities provided on behalf of, directors, managers, consultants, officers and employees of any parent entity of the Borrower to the extent attributable to the ownership or operation of the Borrower or permit DeveloperCo to do any of the foregoing.
(J)    Addition, Termination or Substitution of Accounts. Add, terminate or substitute, or consent to the addition, termination or substitution of, the Proceeds Account, the Debt Service Reserve Account or the DeveloperCo Account unless the Administrative Agent, the Majority Lenders and the Majority Class B Lenders shall have consented thereto (consent by the Majority Class B Lenders to not be unreasonably withheld, conditioned or delayed if otherwise approved by the Administrative Agent; provided that if the Majority Class B Lenders have not affirmatively disapproved such addition, termination or substitution in writing within five (5) Business Days of receiving notice of such addition, termination or substitution and the Administrative Agent has otherwise approved such addition, termination or substitution, such addition, termination or substitution shall be deemed approved) after having received at least thirty (30) days’ prior written notice thereof. Notwithstanding the foregoing, the Borrower neither has nor shall have any control over the Paying Agent Accounts.
(K)    Cash Proceeds. (i) Deposit, or permit DeveloperCo, BL Borrower or BL HoldCo to deposit, at any time BL Distributions, Net Sale Proceeds or Net Extraordinary Proceeds into any bank account other than in accordance with Section 5.1(O), (ii) permit the assets of any Person (other than the Borrower) to be deposited into the Proceeds Account or the Debt Service Reserve Account or (iii) permit the assets of any Person (other than the DeveloperCo and, to the extent of Net Sale Proceeds, Borrower) to be deposited into the DeveloperCo Account.
(L)    Amendments to Material Contracts, Tax Equity Financing Documents and Backleverage Transaction Documents. Without the consent of the Administrative Agent, amend, modify or otherwise change any of the terms or provisions of any Material Contract, Tax Equity Transaction Document or Backleverage Transaction Document other than:
(i)    supplements identifying Eligible Equipment to be transferred pursuant to and in accordance with the Contribution Agreement, the Equipment Contract and Sourcing Agreement and the Master Purchase Agreements;
(ii)    amendments, supplements or other changes with respect to (1) any Tax Equity Financing Document, (2) any Back-Leverage Transaction Document, (3) any Eligible Shipping Agreement, (4) any Eligible Equipment Supply Agreement (excluding any Purchase Order and excluding the price or the timing for payment or delivery of any Eligible Equipment or any credit support obligations of any supplier), (5) any Storage Agreement (excluding the term of such Storage Agreement or the amount of rent payment obligations) or (6) any Material Dealer Agreement (excluding any amendment that would modify the terms of the CPA Safe Harbor Amendment), in the case of each of (1) through (6) that could not reasonably be expected to have a Material Adverse Effect or a material adverse effect on the value

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


of the Collateral or the amount of Net Sale Proceeds to be received in connection with any Eligible Equipment Disposition.
(M)    Bankruptcy of Tax Equity Parties. Without the consent of the Administrative Agent, the Borrower shall not, directly or indirectly, cause the institution of bankruptcy or insolvency proceedings against a Project Company.
(N)    Tax Status. Become, or permit DeveloperCo or BL HoldCo (nor any Subsidiary thereof) to become, other than an entity disregarded as separate from a U.S. Person that is not a tax-exempt entity (within the meaning of Section 168(h)(2) of the Code).
(O)    Restrictions on Upstream Payments. Create or suffer to exist any encumbrance or restriction on the ability of DeveloperCo to make an Upstream Payment, except for restrictions under the Loan Documents or under Applicable Law.
(P)    Restrictions on Payment of Certain Debt. Make, or permit DeveloperCo to make, any payments (whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with respect to any Indebtedness (other than the Obligations) prior to its due date under the agreements evidencing such Indebtedness as in effect on the Closing Date or the date such Indebtedness was entered into (or as amended or replaced thereafter with the prior written consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed)).
(Q)    Subsidiaries. Form or acquire any direct Subsidiary after the Closing Date or permit any existing direct Subsidiary to issue any additional Equity Interests, other than to the extent that the foregoing would constitute a Permitted Investment.
(R)    Restrictive Agreements. Become, or permit any Sunnova Party to become, a party to any Restrictive Agreement, except (a) in the case of BL HoldCo and BL Borrower, the Back-Leverage Transaction Documents, (b) in the case of a Managing MemberCo, Project Company or Developer, the applicable Tax Equity Transaction Documents, or (c) a Restrictive Agreement set forth in Schedule 4.1(W).
(S)    Swaps. Enter into, or permit DeveloperCo to enter into, any Swap, except pursuant to the Hedging Requirements.
(T)    New Material Contracts. (x) Enter into, or permit DeveloperCo or Sunnova Management to enter into, any new Material Contract (other than Eligible Shipping Agreements) after the Closing Date unless Borrower has delivered a Consent to Assignment from each counterparty under such Material Contract, (y) enter into, or permit its Subsidiaries to enter into, any new Limited Liability Company Agreement, Master Purchase Agreement or similar Tax Equity Financing Document unless Borrower has delivered a Tax Equity Consent from the applicable Tax Equity Investor in form and substance satisfactory to the Administrative Agent or (z) enter, or permit any Sunnova Entity to enter into, into any Material Dealer Contract after the Closing Date unless Borrower delivers a Step-in Rights

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Agreement from the applicable Material Dealer under such Material Dealer Contract within sixty (60) days of such Sunnova Entity’s entry into such Material Dealer Contract.
(U)    Accounts. Disburse funds from any Paying Agent Account or the DeveloperCo Account other than in accordance with this Agreement.
(V)    Real Estate. Own any real property or permit any Eligible Equipment to be treated as a fixture, or permit DeveloperCo to do any of the foregoing.
(W)    TCB Account. Borrower shall not, and shall not permit DeveloperCo to, make any distributions or other transfers from the TCB Account other than transfers in respect of payments due and owing to Dealers pursuant to the applicable Dealer Contracts.

ARTICLE VI    

EVENTS OF DEFAULT
Section 6.1.    Events of Default. The occurrence of any of the following specified events shall constitute an event of default under this Agreement (each, an “Event of Default”):
(A)    Non-Payment. (i) The Borrower shall fail to make any required payment of principal (including any payment required to be made to cure a Class A Borrowing Base Deficiency or a Class B Borrowing Base Deficiency) or interest when due hereunder and such failure shall continue unremedied for two (2) Business Days after the day such payment is due or (ii) the Borrower shall fail to pay the Aggregate Outstanding Advances by the Maturity Date, or (iii) the Borrower shall fail to make any required payment on any other Obligation when due hereunder or under any other Loan Document and such failure under this sub-clause (iii) shall continue unremedied for five (5) Business Days after the earlier of (a) written notice of such failure shall have been given to the Borrower by the Administrative Agent or any Lender or (b) the date upon which a Responsible Officer of the Borrower obtained knowledge of such failure.
(B)    Representations. Any representation or warranty made or deemed made by any Obligor herein or in any other Loan Document (after giving effect to any qualification as to materiality set forth therein, if any) (other than Section 4.1(L) as it relates to the Sponsor) shall prove to have been inaccurate in any material respect when made and such defect, to the extent it is capable of being cured, is not cured within thirty (30) days from the earlier of the date of receipt by the Borrower or such Obligor of written notice from the Administrative Agent of such failure by the applicable Obligor.
(C)    Covenants. Any Sunnova Party shall fail to perform or observe (i) any covenant contained in Sections 5.1(A)(iv)(a), 5.1(A)(vii), 5.1(B)(i), (ii) or (iii), 5.1(W) or 5.2 or the Sponsor shall fail to be in compliance with the Financial Covenants, (ii) any covenant contained in Section 5.1(U)(i) which, in the case of this clause (ii), has not been

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cured within fifteen (15) days from the earlier of the date of receipt by the Borrower or such Sunnova Party of written notice from the Administrative Agent or any Lender of such failure by the applicable Sunnova Party or the date upon which a Responsible Officer of the Borrower obtained knowledge of such failure or (iii) any other term, covenant or agreement contained in this Agreement or any other Loan Document or any other material term, covenant or agreement contained in any other Transaction Document which, in the case of this clause (iii), has not been cured within thirty (30) days from the earlier of the date of receipt by the Borrower or such Sunnova Party of written notice from the Administrative Agent of such failure by the applicable Sunnova Party.
(D)    Validity of Loan Documents. This Agreement, any other Loan Document or any Affiliate Transaction Document shall (except in accordance with its terms), in whole or in part, cease to be (i) in full force and effect and/or (ii) the legally valid, binding and enforceable obligation of any applicable Obligor.
(E)    Insolvency Event. An Insolvency Event shall have occurred with respect to any Obligor, Sunnova Management or any Tax Equity Investor.
(F)    Repudiation of Loan Documents. (i) Sponsor, Pledgor or any of their Affiliates party to an Affiliate Transaction Document repudiates, revokes or attempts to revoke the Sponsor Guaranty, Pledge Agreement or any other Affiliate Transaction Document; or (ii) an Obligor denies or contests the validity or enforceability of any Loan Documents or Affiliate Transaction Document, or the perfection or priority of any Lien granted to the Administrative Agent;
(G)    ERISA Event. Either (i) any ERISA Event shall have occurred or (ii) the assets of the Borrower become subject to Title I of ERISA, Section 4975 of the Internal Revenue Code, or, by reason of any investment in the Borrower by any governmental plan, as the case may be, any other federal, state, or local provision similar to Section 406 of ERISA or Section 4975 of the Internal Revenue Code.
(H)    Borrowing Base Deficiency. A Class A Borrowing Base Deficiency or a Class B Borrowing Base Deficiency continues for more than two (2) Business Days.
(I)    Security Interest. The Administrative Agent, for the benefit of the Lenders, ceases to have a first priority perfected security interest in Collateral having a value in excess of $250,000 and such failure shall continue unremedied for more than five (5) Business Days unless such Liens with a higher priority than the Administrative Agent’s Liens are Permitted Liens; provided that if such cessation in security interest is due to the Administrative Agent’s actions, then no Event of Default shall be deemed to occur under this Section 6.1(I).
(J)    Judgments. There shall remain in force, undischarged, unsatisfied, and unstayed for more than thirty (30) consecutive days, any final non-appealable judgment against any Loan Party or Pledgor in excess of $250,000 or the Sponsor in excess of

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$1,000,000, in each case over and above the amount of insurance coverage available from a financially sound insurer that has not denied coverage.
(K)    1940 Act. Any Obligor becomes, or becomes controlled by, an entity required to register as an “investment company” under the 1940 Act.
(L)    Hedging. Failure of the Borrower to maintain Hedge Agreements satisfying the Hedge Requirements and such failure continues for five (5) Business Days or any Hedge Counterparty ceases to be a Qualifying Hedge Counterparty and such Hedge Counterparty is not replaced with a Qualifying Hedge Counterparty within ten Business Days.
(M)    Change of Control. The occurrence of a Change of Control.
(N)    Sponsor Material Adverse Effect. A representation or warranty made or deemed made by the Borrower pursuant to Section 4.1(L) hereof regarding the Sponsor shall prove to have been inaccurate in any material respect when made and such defect, to the extent it is capable of being cured, is not cured within ninety (90) days from the earlier of the date of receipt by the Borrower of written notice from the Administrative Agent of such failure by the Borrower.
(O)    Cross Default. The occurrence of (i) an “Event of Default” under any Back-Leverage Transaction Document, (ii) any breach, default, event of default of any Sunnova Party or any failure by a Project Company to make a purchase price payment, in excess of $50,000, in each case in accordance with the terms of the applicable Tax Equity Transaction Documents and to the extent such failure shall continue unremedied for more than five (5) Business Days or (iii) any breach or default of an Obligor under any instrument or agreement to which it is a party or by which it or any of its properties is bound, relating to any Indebtedness (other than the Obligations), with respect to Sponsor, and with respect to any other Obligor, if, with respect to Sponsor, the maturity of or any payment with respect to such Indebtedness is actually accelerated or demanded due to such breach and, with respect to any other Obligor, the maturity of or any payment with respect to such Indebtedness may be accelerated or demanded due to such breach.
(P)    Eligible Equipment Dispositions. Borrower fails to repay in full in cash the Advances with respect to (i) [***]% of the total 2019 Safe-Harbor Equipment by July 31, 2020, (ii) [***]% of the total 2019 Safe-Harbor Equipment by December 31, 2020 or (iii) [***]% of the total 2019 Safe-Harbor Equipment by June 30, 2021, in each case paid in a proportion at least equal to [***]% of the required payment from Project Sale Proceeds.
(Q)    Impairment of Collateral. (i) A loss, theft, damage or destruction occurs with respect to any Collateral if the amount not covered by insurance exceeds $250,000; or (ii) any material portion of the Collateral is taken or impaired through condemnation;
(R)    Breach of Material Contract. Except to the extent permitted pursuant to the Loan Documents, (i) any Material Dealer Agreement, any Eligible Equipment Supply Agreement or any Storage Agreement shall at any time for any reason cease to be valid and

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binding or in full force and effect or shall be materially impaired (in each case, except at the end of its term in accordance with its terms and not related to any default thereunder) or (ii) any supplier under an Equipment Supply Agreement shall fail to deliver the applicable Equipment by the applicable Guaranteed Delivery Date (other than an immaterial portion thereof).
Section 6.2.    Remedies. If any Event of Default shall then be continuing, the Administrative Agent (i) may, in its discretion, or (ii) shall, upon the written request of the Majority Lenders, by written notice to the Borrower and the Lenders, take any or all of the following actions, without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against the Borrower in any manner permitted under applicable law:
(A)    declare the Commitments terminated, whereupon the Commitment of each Lender shall forthwith terminate immediately without any other notice of any kind;
(B)    declare the principal of and any accrued interest in respect of the Class A Advances, the Class B Advances and all other Obligations owing hereunder and thereunder to be, whereupon the same shall become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; provided, that, upon the occurrence of an Insolvency Event with respect to the Borrower, the principal of and any accrued interest in respect of the Advances and all other Obligations owing hereunder shall be immediately due and payable without any notice to the Borrower or Lenders;
(C)    foreclose on and liquidate the Collateral, and pursue all other remedies available under the Security Agreement, the Pledge Agreement, the Sponsor Guaranty and the other Loan Documents.
Section 6.3.    Class B Lender Purchase Option. (A) If an Event of Default other than an Event of Default described in Section 6.1(E) shall occur and be continuing and the Administrative Agent shall not have declared all Obligations under this Agreement or any of the other Loan Documents to be immediately due and payable, the Class B Lenders shall have the option at any time to purchase all (but not less than all) of the Class A Advances then outstanding and all related Obligations owing by the Borrower to the Class A Lenders (solely in such capacity) from the Class A Lenders (the “Class B Lender Purchase Option”) with the consent of all the Class A Lenders. At any time that the Class B Lender Purchase Option is available to the Class B Lenders, any Class B Lender may request that the Class A Lenders provide such Class B Lender with a statement setting forth the aggregate amount of all the Class A Advances then outstanding and all related Obligations owed by the Borrower to the Class A Lenders (solely in such capacity), separately itemizing the portion of such Obligations constituting interest payable at the Default Rate. Within ten (10) Business Days after the receipt of such statement, the requesting Class B Lender may provide irrevocable written notice to the Class A Lenders (which may be given to the Administrative Agent, and which the Administrative Agent shall forward forthwith to the Class A Lenders) specifying that such Class B Lender elects to exercise the Class B Lender Purchase Option (such irrevocable written notice, the “Election Notice”). Upon receipt of such Election Notice, the Class A Lenders shall promptly notify such Class B Lender whether the Class A Lenders will consent to a sale If any or

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all of the Class B Lenders shall have elected to exercise the Class B Lender Purchase Option and the Class A Lenders shall have consented to a sale , the Class A Lenders and applicable Class B Lenders shall, on a date that is reasonably convenient to the Class A Lender and the Class B Lenders within fifteen (15) Business Days after the delivery of the Election Notice, and make such purchase and sale in accordance with Section 6.3(C).
(B)    If (i) an Event of Default other than any Event of Default referred to in clause (ii) below shall occur and be continuing and the Majority Lenders shall have declared an Event of Default that has not been waived or (ii) an Event of Default under any of Sections 6.1(A), 6.1(E) or 6.1(O) (other than 6.1(O)(i) so long as (1) the applicable “Event of Default” under the Backleverage Transaction Documents is susceptible to cure and BL Borrower and the lenders under the Backleverage Transaction Documents are using reasonable efforts to cure or waive such “Event of Default” and (2) the applicable “Event of Default” under the Back-Leverage Transaction Documents is continuing for no longer than 30 days) shall occur and be continuing, the Class B Lenders shall have the right at any time to exercise the Class B Lender Purchase Option by requesting from the Class A Lenders a statement setting forth the aggregate amount of all the Class A Advances then outstanding and all related Obligations and delivery of an Election Notice within ten (10) Business Days after receipt of such statement, all as described in Section 6.3(A). If one or more Class B Lenders delivers an Election Notice, on the date specified by such Class B Lenders in such Election Notice (which shall not be more than fifteen (15) Business Days after the receipt by the Class A Lenders of the Election Notice), the Class A Lenders shall sell to the Class B Lenders, and the Class B Lenders shall purchase from the Class A Lenders, the Class A Advances then outstanding and all Obligations owed by the Borrower to the Class A Lenders (solely in such capacity) in accordance with Section 6.3(C).
(C)    Upon the date of a purchase and sale pursuant to this Section 6.3, the Class B Lenders that have elected the Class B Lender Purchase Option shall (i) pay to the Class A Lenders as the purchase price therefor the full amount of all the Class A Advances and all Obligations owed by the Borrower to the Class A Lenders (solely in such capacity) then outstanding and unpaid (other than any interest payable at the Default Rate) including principal, interest (other than any interest payable at the Default Rate), fees, any Liquidation Fee as in effect on the date thereof and any indemnification obligations and expenses, including attorneys’ fees and legal expenses, constituting Obligations. In addition, such Class B Lenders shall reimburse the Class A Lenders for any loss, cost, damage or expense (including attorneys’ fees and legal expenses) in connection with any commissions, fees, costs or expenses related to any checks or other payments provisionally credited to the Obligations owing to the Class A Lenders (solely in such capacity), and/or as to which the Class A Lenders have not yet received final payment (and, in each case, all of such payments shall be made without offset, deduction or defense), provided that to the extent that the Class A Lenders later receive such final payment, the Class A Lenders shall refund the amount of the same to the purchasing Class B Lender(s). The Class A Lenders shall retain all rights to be indemnified or held harmless by the Borrower in accordance with the terms of this Agreement with respect to any contingent claims for indemnification or cost reimbursement, provided, however, that such indemnification obligations to the selling Class A Lenders shall be subordinated to the prior payment in full in cash of all Obligations. The Class B Lenders shall remit the purchase price by wire transfer in federal funds to such bank account of the Class A Lenders as the Class A Lenders may designate

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in writing to the Class B Lenders for such purpose. Interest payable pursuant to the foregoing shall be calculated through the Business Day on which such purchase and sale shall occur if the amounts so paid by the Class B Lenders to the bank account designated by the Class A Lenders are received in such bank account prior to 1:00 p.m., New York time and interest shall be calculated to and include the next Business Day if the amounts so paid by the Class B Lenders to the bank account designated by the Class A Lenders are received in such bank account later than 1:00 p.m., New York time. Such purchase shall be expressly made without representation or warranty of any kind by the Class A Lenders as to the Obligations owing to the Class A Lenders (solely in such capacity) or otherwise and without recourse to the Class A Lenders, except that the Class A Lenders shall represent and warrant: (a) the amount of Obligations owing to the Class A Lenders (solely in such capacity) being purchased and that the purchase price and other sums payable by the Class B Lenders are true, correct and accurate amounts, (b) that the Class A Lenders shall convey the Obligations owing to the Class A Lenders (solely in such capacity) free and clear of any Liens or encumbrances of the Class A Lenders or created or suffered by the Class A Lenders, (c) as to all claims made or threatened in writing against the Class A Lenders related to the Obligations owing to the Class A Lenders (solely in such capacity), and (d) the Class A Lenders are duly authorized to assign the Obligations owing to the Class A Lenders (solely in such capacity). Upon payment in full of the Purchase Price the purchasing Class B Lender(s) shall acquire all of the interests of the Class A Lenders’ in respect of the Class A Advances and related Obligations and shall, as to such acquired interests, become Class A Lender(s) hereunder, without affecting any Class B Lenders’ interest in and to the Class B Advances or related Obligations.
Section 6.4.    Sale of Collateral. (A) The power to effect any sale of any portion of the Collateral upon the occurrence and during the continuance of an Event of Default pursuant to this Article VI and the Security Documents shall not be exhausted by any one or more sales as to any portion of the Collateral remaining unsold, but shall continue unimpaired until all Collateral shall have been sold or until all Obligations (other than contingent obligations not then due) hereunder have been paid in full. The Administrative Agent acting on its own or through an agent, may from time to time postpone any sale by public announcement made at the time and place of such sale.
(B)    Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent may, in its discretion, and shall, upon the written request of the Majority Lenders or otherwise as provided in Section 6.2, by written notice to the Borrower and the Lenders sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Administrative Agent’s offices or elsewhere, for cash, on credit (including pursuant to a “credit sale” to a Lender or an assignee thereof) or for future delivery, and upon such other terms as the Administrative Agent may require. Notwithstanding the foregoing, prior to the consummation of any sale of the Collateral pursuant to this Article VI and any other Loan Document (either private or public) other than pursuant to the Trinity ROFR Letter, the Administrative Agent shall first offer the Class B Lenders the opportunity to purchase the Collateral (subject to the Trinity ROFR Letter) for a purchase price equal to the greater of (x) the fair market value of the Collateral and (y) the aggregate outstanding principal balance of the Class A Advances, plus accrued interest thereon and fees owed thereto (such right, the “Right of First Refusal”). If the Class B Lenders do not exercise the Right of First Refusal within ten (10) Business Days of receipt thereof, then the Administrative Agent shall sell the Collateral as otherwise set forth in this Section 6.4 and pursuant to the other

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Loan Documents; provided, further, that if the Class B Lenders do not exercise the Right of First Refusal and the Administrative Agent elects to sell the Collateral in a private sale to a third party (other than pursuant to the Trinity ROFR Letter), then prior to the sale thereof, the Administrative Agent shall offer the Class B Lenders the opportunity to purchase the Collateral for the purchase price being offered by such third party, and the Class B Lenders shall have ten (10) Business Days to accept such offer. For clarity, it is understood and agreed that the Class B Lenders shall also have the right to bid for and purchase the Collateral offered for sale at a public auction and, upon compliance with the terms of sale, may hold, retain and dispose of such property without further accountability therefor. Any Class B Lender purchasing Collateral at such a sale may set off the purchase price of such property against amounts owing to it in payment of such purchase price up to the full amount owing to it. In connection with any sale or other disposition of Collateral at foreclosure or in lieu of foreclosure upon the exercise of remedies, the Administrative Agent shall make reasonable efforts to solicit multiple bids and shall accept the bona fide bid offering the highest price for the applicable Collateral (other than pursuant to the Trinity ROFR Letter).
Section 6.5.    Certain Matters Related to Appraiser. If a Default or an Event of Default has occurred and is continuing, the Majority Class B Lenders will be permitted to communicate directly with the Appraiser to explore disposition strategies for the Collateral, including requesting the Appraiser to provide valuations and quotations with respect to the Collateral; provided that the Class A Lenders and the Class B Lenders agree that, with respect to any sale, liquidation or other disposition of the Collateral, the Appraiser shall take instructions solely from the Administrative Agent at the direction of the Majority Lenders.












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ARTICLE VII    

THE ADMINISTRATIVE AGENT AND FUNDING AGENTS
Section 7.1.    Appointment; Nature of Relationship. The Administrative Agent is appointed by the Funding Agents and the Lenders (and by each Secured Hedge Counterparty by execution of a Secured Hedge Counterparty Joinder, if applicable) as the Administrative Agent hereunder and under each other Loan Document, and each of the Funding Agents and the Lenders and each Secured Hedge Counterparty irrevocably authorizes the Administrative Agent to act as the contractual representative of such Funding Agent and such Lender and such Secured Hedge Counterparty with the rights and duties expressly set forth herein and in the other Loan Documents. The Administrative Agent agrees to act as such contractual representative upon the express conditions contained in this Article VII. Notwithstanding the use of the defined term “Administrative Agent,” it is expressly understood and agreed that the Administrative Agent shall not have any fiduciary responsibilities to any Funding Agent or Lender or any Secured Hedge Counterparty by reason of this Agreement and that the Administrative Agent is merely acting as the representative of the Funding Agents, the Lenders and each Secured Hedge Counterparty with only those duties as are expressly set forth in this Agreement and the other Loan Documents. In its capacity as the Funding Agents’, the Lenders’ and each Secured Hedge Counterparty’s contractual representative, the Administrative Agent (A) does not assume any fiduciary duties to any of the Funding Agents, the Lenders or any Secured Hedge Counterparty, (B) is a “representative” of the Funding Agents, the Lenders and each Secured Hedge Counterparty within the meaning of Section 9-102 of the UCC as in effect in the State of New York, and (C) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Loan Documents. Each of the Funding Agents, the Lenders and each Secured Hedge Counterparty agree to assert no claim against the Administrative Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Funding Agent, each Lender and each Secured Hedge Counterparty waives.
Section 7.2.    Powers. The Administrative Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto. The Administrative Agent shall have no implied duties or fiduciary duties to the Funding Agents, the Lenders or to any Secured Hedge Counterparty, or any obligation to the Funding Agents, the Lenders or any Secured Hedge Counterparty to take any action hereunder or under any of the other Loan Documents except any action specifically provided by the Loan Documents required to be taken by the Administrative Agent.
Section 7.3.    General Immunity. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower, the Funding Agents, the Lenders, or any Secured Hedge Counterparty for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith except to the extent such action or inaction is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from (A) the gross negligence or willful misconduct of such Person or (B) breach of contract by such Person with respect to the Loan Documents.

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Section 7.4.    No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc.. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (A) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder, (B) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document, (C) the satisfaction of any condition specified in Article III, except receipt of items required to be delivered solely to the Administrative Agent, (D) the existence or possible existence of any Potential Default or Event of Default, or (E) the validity, effectiveness or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith. The Administrative Agent shall not be responsible to any Funding Agent, any Lender or any Secured Hedge Counterparty for any recitals, statements, representations or warranties herein or in any of the other Loan Documents, for the perfection or priority of any of the Liens on any of the Collateral, or for the execution, effectiveness, genuineness, validity, legality, enforceability, collectability, or sufficiency of this Agreement or any of the other Loan Documents or the transactions contemplated thereby, or for the financial condition of any guarantor of any or all of the Obligations, the Borrower or any of its respective Affiliates.
Section 7.5.    Action on Instructions of Lenders. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by the Majority Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders and on all holders of Loan Notes. The Administrative Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.
Section 7.6.    Employment of Administrative Agents and Counsel. The Administrative Agent may execute any of its duties as the Administrative Agent hereunder and under any other Loan Document by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Funding Agents, the Lenders or any Secured Hedge Counterparty, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Administrative Agent shall be entitled to advice of counsel concerning the contractual arrangement between the Administrative Agent and the Funding Agents, the Lenders or any Secured Hedge Counterparty and all matters pertaining to the Administrative Agent’s duties hereunder and under any other Loan Document.
Section 7.7.    Reliance on Documents; Counsel. The Administrative Agent shall be entitled to rely upon any Class A Loan Note, Class B Loan Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and, in respect to legal matters, upon the opinion of counsel selected by the Administrative Agent, which counsel may be employees of the Administrative Agent.
Section 7.8.    The Administrative Agent’s Reimbursement and Indemnification. The Non‑Conduit Lenders agree to reimburse and indemnify (on a pro rata basis based on the Class A

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Lender Group Percentages and the Class B Lender Percentages, as applicable) the Administrative Agent (A) for any amounts not reimbursed by the Borrower for which the Administrative Agent is entitled to reimbursement by the Borrower under the Loan Documents, (B) for any other reasonable and documented expenses incurred by the Administrative Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents, and (C) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents, provided, that no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from the gross negligence or willful misconduct of the Administrative Agent.
Section 7.9.    Rights as a Lender. With respect to its Commitment and Advances made by it and the Loan Notes (if any) issued to it, in its capacity as a Lender, the Administrative Agent shall have the same rights and powers hereunder and under any other Loan Document as any Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders,” as applicable, shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity. The Administrative Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Affiliates in which such Person is not prohibited hereby from engaging with any other Person.
Section 7.10.    Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender 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 and the other Loan Documents.
Section 7.11.    Successor Administrative Agent. The Administrative Agent may resign at any time by giving written notice thereof to the Lenders, the Funding Agents, each Secured Hedge Counterparty, the Paying Agent and the Borrower and the Administrative Agent may be removed at any time for cause by written notice received by the Administrative Agent from the Majority Lenders. Upon any such resignation or removal, the Lenders shall have the right to appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Lenders and shall have accepted such appointment within thirty (30) days after the exiting Administrative Agent’s giving notice of resignation or receipt of notice of removal, then the exiting Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent (but only if such successor is reasonably acceptable to each Lender) or petition a court of competent jurisdiction to appoint a successor Administrative Agent. Upon the acceptance of any appointment as the Administrative

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Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the exiting Administrative Agent, and the exiting Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents. After any exiting Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Article VII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent hereunder and under the other Loan Documents.
Section 7.12.    Loan Documents; Further Assurances. (A) Each Non-Conduit Lender, each Funding Agent and each Secured Hedge Counterparty authorizes the Administrative Agent to enter into each of the Loan Documents to which it is a party and each Lender, each Funding Agent and each Secured Hedge Counterparty authorizes the Administrative Agent to take all action contemplated by such documents in its capacity as Administrative Agent. Each Lender, each Funding Agent and each Secured Hedge Counterparty agrees that no Lender, no Funding Agent and no Secured Hedge Counterparty, respectively, shall have the right individually to seek to realize upon the security granted by any Loan Document, it being understood and agreed that such rights and remedies may be exercised solely by the Administrative Agent for the benefit of the Lenders, the Funding Agents and each Secured Hedge Counterparty upon the terms of the Loan Documents.
(B)    Any Funding Agent may (in their sole discretion and expense), at any time, have their Advances rated by Moody’s, S&P, DBRS, Inc., A.M. Best or Kroll Bond Rating Agency, Inc. Any such rating shall not be a condition precedent to closing the credit facility or the making of the Advances as set forth in this Agreement. The Borrower, Sunnova Management, and the Sponsor shall provide reasonable assistance to obtain such rating. For the avoidance of doubt, any such rating shall not be a condition precedent to the exercise of any rights of the Borrower or Sunnova Management under this Agreement. Any costs or fees associated with the rating of the Advances shall be borne by the Funding Agent and the Lenders.
Section 7.13.    Collateral Review. (A) Prior to the occurrence of an Event of Default, the Administrative Agent and/or its designated agent (including the Appraiser) may not more than one (1) time during any given calendar quarter (at the expense of the Borrower), upon reasonable notice, perform (i) reviews of the Obligors’ business operations and (ii) audits of the Collateral, in all cases, the scope of which shall be determined by the Administrative Agent.
(B)    After the occurrence of and during the continuance of an Event of Default, the Administrative Agent or its designated agent may, in its sole discretion regarding frequency (at the expense of the Borrower), upon reasonable notice, perform (i) reviews of the Obligors’ business operations and (ii) audits or any other review of the Collateral, in all cases, the scope of which shall be determined by the Administrative Agent.
Section 7.14.    Funding Agent Appointment; Nature of Relationship. The Class A Funding Agent is appointed by the Lenders in its Class A Lender Group and the Class B Funding Agent is appointed by the Class B Lenders, in each case as their agent hereunder, and such Lenders irrevocably authorize such Funding Agent to act as the contractual representative of such Lenders with the rights and duties expressly set forth herein and in the other Loan Documents. Each Funding Agent agrees

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to act as such contractual representative upon the express conditions contained in this Article VII. Notwithstanding the use of the defined term “Funding Agent,” it is expressly understood and agreed that no Funding Agent shall have any fiduciary responsibilities to any Lender by reason of this Agreement and that each Funding Agent is merely acting as the representative of the applicable Lenders with only those duties as are expressly set forth in this Agreement and the other Loan Documents. In its capacity as the related Lenders’ contractual representative, each Funding Agent (A) does not assume any fiduciary duties to any of the Lenders, (B) is a “representative” of such Lenders within the meaning of Section 9-102 of the UCC as in effect in the State of New York and (C) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Loan Documents. Each of the Lenders agrees to assert no claim against their Funding Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender waives.
Section 7.15.    Funding Agent Powers. Each Funding Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to such Funding Agent by the terms thereof, together with such powers as are reasonably incidental thereto. No Funding Agent shall have any implied duties or fiduciary duties to the applicable Lenders, or any obligation to such Lenders to take any action hereunder or under any of the other Loan Documents except any action specifically provided by the Loan Documents required to be taken by such Funding Agent.
Section 7.16.    Funding Agent General Immunity. Neither any Funding Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower, the Lenders or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith except to the extent such action or inaction is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from (A) the gross negligence or willful misconduct of such Person or (B) breach of contract by such Person with respect to the Loan Documents.
Section 7.17.    Funding Agent Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc. Neither any Funding Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (A) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder, (B) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document, (C) the satisfaction of any condition specified in Article III, except receipt of items required to be delivered solely to the Administrative Agent, (D) the existence or possible existence of any Potential Default, Event of Default or Cash Sweep Event, or (E) the validity, effectiveness or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith. No Funding Agent shall be responsible to any Lender for any recitals, statements, representations or warranties herein or in any of the other Loan Documents, for the perfection or priority of any of the Liens on any of the Collateral, or for the execution, effectiveness, genuineness, validity, legality, enforceability, collectability, or sufficiency of this Agreement or any of the other Loan Documents or the transactions contemplated thereby, or for the financial condition of any guarantor of any or all of the Obligations, the Borrower or any of their respective Affiliates.

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Section 7.18.    Funding Agent Action on Instructions of Lenders. Each Funding Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by each of the Lenders in its Class A Lender Group or each of the Class B Lenders, as applicable, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of such Lenders. Each Funding Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be indemnified to its satisfaction by the Lenders in its Class A Lender Group or the Class B Lenders, as applicable, pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.
Section 7.19.    Funding Agent Employment of Agents and Counsel. Each Funding Agent may execute any of its duties as a Funding Agent hereunder by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Lenders in its Class A Lender Group or the Class B Lenders, as applicable, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. Each Funding Agent, at the expense of the Non-Conduit Lenders, shall be entitled to advice of counsel concerning the contractual arrangement between such Funding Agent and the Lenders in its Class A Lender Group or the Class B Lenders, as applicable, and all matters pertaining to such Funding Agent’s duties hereunder and under any other Loan Document.
Section 7.20.    Funding Agent Reliance on Documents; Counsel. Each Funding Agent shall be entitled to rely upon any Loan Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and, in respect to legal matters, upon the opinion of counsel selected by such Funding Agent, which counsel may be employees of such Funding Agent.
Section 7.21.    Funding Agent’s Reimbursement and Indemnification. The Non‑Conduit Lenders agree to reimburse and indemnify (on a pro rata basis based upon the applicable Class A Lender Group Percentages or Class B Lender Percentages) the applicable Funding Agent (A) for any amounts not reimbursed by the Borrower for which such Funding Agent is entitled to reimbursement by the Borrower under the Loan Documents, (B) for any other reasonable and documented expenses incurred by such Funding Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents, and (C) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against such Funding Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents, provided, that no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from the gross negligence or willful misconduct of such Funding Agent.
Section 7.22.    Funding Agent Rights as a Lender. With respect to its Commitment and Advances made by it and the Loan Notes (if any) issued to it, in its capacity as a Lender, each Funding Agent shall have the same rights and powers hereunder and under any other Loan Document

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as any Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders,” as applicable, shall, unless the context otherwise indicates, include such Funding Agent in its individual capacity. Each Funding Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of their Affiliates in which such Person is not prohibited hereby from engaging with any other Person.
Section 7.23.    Funding Agent Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon its Funding Agent or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon its Funding Agent or any other Lender 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 and the other Loan Documents.
Section 7.24.    Funding Agent Successor Funding Agent. Any Funding Agent may resign at any time by giving written notice thereof to the Lenders in its Class A Lender Group or the Class B Lenders, as applicable, the Administrative Agent and the Borrower, and such Funding Agent may be removed at any time for cause by written notice received by the Lenders in its Class A Lender Group or by the Class B Lenders, as applicable. Upon any such resignation or removal, the Lenders in a Class A Lender Group or the Class B Lenders, as applicable, shall have the right to appoint a successor Funding Agent. If no successor Funding Agent shall have been so appointed by such Lenders and shall have accepted such appointment within thirty 30 days after the exiting Funding Agent’s giving notice of resignation or receipt of notice of removal, then the exiting Funding Agent may appoint, on behalf of the applicable Lenders, a successor Funding Agent (but only if such successor is reasonably acceptable to each such Lender) or petition a court of competent jurisdiction to appoint a successor Funding Agent. Upon the acceptance of any appointment as a Funding Agent hereunder by a successor Funding Agent, such successor Funding Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the exiting Funding Agent, and the exiting Funding Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents. After any exiting Funding Agent’s resignation hereunder as Funding Agent, the provisions of this Article VII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Funding Agent hereunder and under the other Loan Documents. Notwithstanding any provision in this Section 7.24 to the contrary, any Funding Agent that has provided notice of its resignation or has been provided notice of its removal shall be required to serve as Funding Agent until its successor has assumed such role.
Section 7.25.    Funding Agent Loan Documents; Further Assurances. Each Lender authorizes the applicable Funding Agent to enter into each of the Loan Documents to which it is a party and each Lender authorizes the applicable Funding Agent to take all action contemplated by such documents in its capacity as Funding Agent.

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ARTICLE VIII    

ADMINISTRATION AND SERVICING OF THE COLLATERAL
Section 8.1.    [Reserved].
Section 8.2.    Accounts.
(A)    Establishment. The Borrower has established and shall maintain or cause to be maintained:
(i)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule I attached hereto, the “Proceeds Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Borrower and the Secured Parties; and
(ii)    for the benefit of the Secured Parties, in the name of the Borrower, at the Paying Agent, a segregated non-interest bearing trust account (such account, as more fully described on Schedule I attached hereto, being the “Debt Service Reserve Account” and together with the Proceeds Account, each a “Paying Agent Account” and collectively the “Paying Agent Accounts”), bearing a designation clearly indicating that the funds deposited therein as described below are held for the benefit of the Borrower and the Secured Parties;
(B)     [Reserved].
(C)    Deposits and Withdrawals from the Debt Service Reserve Account. Deposits into, and withdrawals from, the Debt Service Reserve Account shall, subject to Section 2.7(D), be made in the following manner:
(i)    On the Closing Date, the Borrower shall deliver to the Paying Agent for deposit into the Debt Service Reserve Account, an amount equal to the Debt Service Reserve Required Balance as of such date;
(ii)    From the proceeds of Advances hereunder, the Borrower shall deliver to the Paying Agent for deposit into the Debt Service Reserve Account amounts necessary to maintain on deposit therein an amount equal to or in excess of the Debt Service Reserve Required Balance as of the date of each such Advance, and on each Payment Date, the Borrower shall direct (pursuant to instructions in a form reasonably acceptable to the Paying Agent) the Paying Agent to deposit into the Debt Service Reserve Account (as set forth and in the order of priority established pursuant to Section 2.7(B)), funds in the amount required under Section 2.7(B), and the Borrower may, at its option, deposit additional funds into the Debt Service Reserve Account;
(iii)    If on any Payment Date (without giving effect to any withdrawal from the Debt Service Reserve Account) available funds on deposit in the Proceeds Account would be insufficient to make the payments due and payable on such Payment Date pursuant to

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Sections 2.7(B)(ii) and (iii), the Borrower shall direct (pursuant to instructions in a form reasonably acceptable to the Paying Agent) the Paying Agent to withdraw from the Debt Service Reserve Account an amount equal to the lesser of such insufficiency and the amount on deposit in the Debt Service Reserve Account and deposit such amount into the Proceeds Account and apply such amount to payments set forth in Sections 2.7(B)(ii) and (iii); and
(iv)    [Reserved]
(v)    [Reserved]
(vi)    Unless an Event of Default has occurred and is continuing and except during any Cash Sweep Period, on any Payment Date, if amounts on deposit in the Debt Service Reserve Account are greater than the Debt Service Reserve Required Balance (after giving effect to all other distributions and disbursements on such Payment Date), the Borrower may direct (pursuant to instructions in a form reasonably acceptable to the Paying Agent) the Paying Agent to withdraw funds in excess of the Debt Service Reserve Required Balance from the Debt Service Reserve Account and deposit such amounts in the Proceeds Account;
(D)    Paying Agent Account Control. (i) Each Paying Agent Account shall be established and at all times maintained with the Paying Agent which shall act as a “securities intermediary” (as defined in Section 8-102 of the UCC) and a “bank” (as defined in Section 9-102 of the UCC) hereunder (in such capacities, the “Securities Intermediary”) with respect to each Paying Agent Account. The Paying Agent hereby confirms that, as of the Closing Date, the account numbers of each of the Paying Agent Accounts are as described on Schedule I attached hereto.
(ii)    Each Paying Agent Account shall be a “securities account” as defined in Section 8-501 of the UCC and shall be maintained by the Paying Agent as a securities intermediary for and in the name of the Borrower, subject to the lien of the Administrative Agent, for the benefit of the Secured Parties. The Paying Agent shall treat the Administrative Agent as the “entitlement holder” (within the meaning of Section 8‑102(a)(7) of the UCC) in respect of all “financial assets” (within the meaning of Section 8–102(a)(9) of the UCC) credited to the Paying Agent Accounts.
(iii)    The Paying Agent hereby confirms and agrees that:
(a)    the Paying Agent shall not change the name or account number of any Paying Agent Account without the prior written consent of the Administrative Agent and the Borrower;
(b)    all securities or other property underlying any financial assets (as hereinafter defined) credited to a Paying Agent Account shall be registered in the name of the Paying Agent, indorsed to the Paying Agent or indorsed in blank or credited to another securities account maintained in the name of the Paying Agent, and in no case will any financial asset credited to a Paying Agent Account be registered in the name of the Borrower or any other Person, payable to the Borrower or specially indorsed to the Borrower or any other Person, except to the extent the

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foregoing have been specially indorsed to the Administrative Agent, for the benefit of the Secured Parties, or in blank;
(c)    all property transferred or delivered to the Paying Agent pursuant to this Agreement will be credited to the appropriate Paying Agent Account in accordance with the terms of this Agreement;
(d)    each Paying Agent Account is an account to which financial assets are or may be credited, and the Paying Agent shall, subject to the terms of this Agreement, treat the Borrower as entitled to exercise the rights that comprise any financial asset credited to each such Paying Agent Account; and
(e)    notwithstanding the intent of the parties hereto, to the extent that any Paying Agent Account shall be determined to constitute a “deposit account” within the meaning of Section 9-102(a)(29) of the UCC, such Paying Agent Account shall be subject to the exclusive control of the Administrative Agent, for the benefit of the Secured Parties, and the Paying Agent will comply with instructions originated by the Administrative Agent directing disposition of the funds in such Paying Agent Account, without further consent by the Borrower; provided that, notwithstanding the foregoing, the Administrative Agent hereby authorizes the Paying Agent to honor withdrawal, payment, transfer or other instructions directing disposition of the funds in the Proceeds Account received from the Borrower, on its behalf, pursuant to Section 2.7 or this Section 8.2.
(iv)    The Paying Agent hereby agrees that each item of property (including, without limitation, any investment property, financial asset, security, instrument or cash) credited to any Paying Agent Account shall be treated as a “financial asset” within the meaning of Section 8-102(a)(9) of the UCC.
(v)    If at any time the Paying Agent shall receive an “entitlement order” (as defined in Section 8-102(a)(8) of the UCC) (an “Entitlement Order”) from the Administrative Agent (i.e., an order directing a transfer or redemption of any financial asset in any Paying Agent Account), or any “instruction” (within the meaning of Section 9-104 of the UCC), originated by the Administrative Agent, the Paying Agent shall comply with such Entitlement Order or instruction without further consent by the Borrower or any other Person. The Borrower shall not make any withdrawals from any Paying Agent Account, except pursuant to Section 2.7 or this Section 8.2.
(vi)    In the event that the Paying Agent has or subsequently obtains by agreement, by operation of law or otherwise a security interest in any Paying Agent Account or any financial assets, funds, cash or other property credited thereto or any security entitlement with respect thereto, the Paying Agent hereby agrees that such security interest shall be subordinate to the security interest of the Administrative Agent, for the benefit of the Secured Parties. Notwithstanding the preceding sentence, the financial assets, funds, cash or other property credited to any Paying Agent Account will not be subject to deduction, set-off, banker’s lien, or any other right in favor of any Person other than the Administrative Agent,

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for the benefit of the Secured Parties (except that the Paying Agent may set-off (i) all amounts due to the Paying Agent in its capacity as securities intermediary in respect of customary fees and expenses for the routine maintenance and operation of the Paying Agent Accounts, and (ii) the face amount of any checks that have been credited to the Paying Agent Accounts but are subsequently returned unpaid because of uncollected or insufficient funds).
(vii)    Regardless of any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the “bank’s jurisdiction” (within the meaning of Section 9-304 of the UCC) and the “security intermediary’s jurisdiction” (within the meaning of Section 8-110 of the UCC).
(viii)    If, at any time, the Paying Agent resigns, is removed hereunder or ceases to meet the eligibility requirements of an Eligible Institution, the Borrower, for the benefit of the Administrative Agent and the Lenders, shall within thirty (30) days establish a new Proceeds Account and Debt Service Reserve Account meeting the conditions specified above with an Eligible Institution reasonably acceptable to the Administrative Agent and transfer any cash and/or any investments held therein or with respect thereto to such new Proceeds Account and Debt Service Reserve Account, as applicable. From the date such new Proceeds Account or Debt Service Reserve Account, as applicable, is established, it shall be the “Proceeds Account” or “Debt Service Reserve Account,” hereunder, as applicable.
(E)    Permitted Investments. Prior to an Event of Default, the Borrower (and after an Event of Default, the Administrative Agent) may direct each banking institution at which the Proceeds Account or Debt Service Reserve Account shall be established, in writing, to invest the funds held in such accounts in one or more Cash Equivalents. Absent such written direction, such funds shall remain uninvested. All investments of funds on deposit in the Proceeds Account or Debt Service Reserve Account shall be uninvested so that such funds will be available on the Business Day immediately preceding the date on which the funds are to be disbursed from such account, unless otherwise expressly set forth herein. All interest derived from such Permitted Investments shall be deemed to be “investment proceeds” and shall be deposited into such account to be distributed in accordance with the requirements hereof. The taxpayer identification number associated with the Proceeds Account and Debt Service Reserve Account shall be that of the Borrower, and the Borrower shall report for federal, state and local income tax purposes the income, if any, earned on funds in such accounts.
Section 8.3.    Adjustments. If the Borrower makes a mistake with respect to the amount of any proceeds or payment and deposits, pays or causes to be deposited or paid, an amount that is less than or more than the actual amount thereof, the Borrower shall appropriately adjust the amounts subsequently deposited into the applicable account or paid out to reflect such mistake for the date of such adjustment.



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ARTICLE IX    

THE PAYING AGENT
Section 9.1.    Appointment. The appointment of Wells Fargo Bank, National Association is hereby confirmed by the other parties hereto as Paying Agent, and accepts such appointment subject to the terms of this Agreement.
Section 9.2.    Representations and Warranties. The Paying Agent represents to the other parties hereto as follows:
(A)    Organization; Corporate Powers. The Paying Agent is duly incorporated and validly existing under the laws of the jurisdiction of its incorporation and has all requisite power and authority to conduct its business, to own its property and to execute, deliver and perform all of its obligations under this Agreement, and no license, permit, consent or approval, is required to be obtained, effective or given by the Paying Agent to enable it to perform its obligations hereunder.
(B)    Authority. The execution, delivery and performance by the Paying Agent of this Agreement have been duly authorized by all necessary action on the part of the Paying Agent.
(C)    Enforcement. This Agreement constitutes the legal, valid and binding obligation of the Paying Agent, enforceable against the Paying Agent in accordance with its terms except as such enforcement may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and general principles of equity, regardless of whether such enforcement is sought at equity or at law.
(D)    No Conflict. The Paying Agent is not in violation of any law, rule, or regulation governing the banking or trust powers of the Paying Agent applicable to it or any indenture, lease, loan or other agreement to which the Paying Agent is a party or by which it or its assets may be bound or affected, except for such laws, rules or regulations or indentures, leases, loans or other agreements the violation of which would not have a material adverse effect on the Paying Agent’s abilities to perform its obligations in accordance with the terms of this Agreement.
Section 9.3.    Limitation of Liability of the Paying Agent. Notwithstanding anything contained herein to the contrary, this Agreement has been executed by Wells Fargo Bank, National Association, not in its individual capacity, but solely as the Paying Agent, and in no event shall Wells Fargo Bank, National Association have any liability for the representations, warranties, covenants, agreements or other obligations of the other parties hereto or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the party responsible therefor.
Section 9.4.    Certain Matters Affecting the Paying Agent. Notwithstanding anything herein to the contrary:

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(A)    The Paying Agent undertakes to perform such duties and only such duties as are specifically set forth in this Agreement. The Paying Agent shall not have any duties or responsibilities except those expressly set forth in this Agreement.
(B)    The Paying Agent shall not be subject to any fiduciary or other implied duties, obligations or covenants regardless of whether an Event of Default has occurred and is continuing.
(C)    The Paying Agent shall not be liable for any action taken or any error of judgment made in good faith by an officer or officers of the Paying Agent, unless it shall be conclusively determined by the final judgment of a court of competent jurisdiction not subject to appeal or review that the Paying Agent was grossly negligent or acted with willful misconduct in ascertaining the pertinent facts.
(D)    The Paying Agent shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with any direction given or certificate or other document delivered to the Paying Agent under this Agreement or any other Loan Document.
(E)    None of the provisions of this Agreement or any other Loan Document shall require the Paying Agent to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.
(F)    The Paying Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties, and shall be under no obligation to inquire as to the adequacy, content, accuracy or sufficiency of any such information or be under any obligation to make any calculation (or re-calculation), certification, or verification in respect of any such information and shall not be liable for any loss that may be occasioned thereby. The Paying Agent may also, but shall not be required to, 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.
(G)    Whenever in the administration of the provisions of this Agreement or any other Loan Document the Paying Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action to be taken hereunder, such matter may, in the absence of gross negligence, willful misconduct or bad faith on the part of the Paying Agent, be deemed to be conclusively proved and established by a certificate delivered to the Paying Agent hereunder, and such certificate, in the absence of gross negligence, willful misconduct or bad faith on the part of the Paying Agent, shall be full warrant to the Paying Agent for any action taken, suffered or omitted by it under the provisions of this Agreement or any other Loan Document.

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(H)    The Paying Agent, at the expense of the Borrower, may consult with counsel, and the advice or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or opinion of counsel; provided however that such costs of counsel are reasonable and documented. Before the Paying Agent acts or refrains from acting hereunder, it may require and shall be entitled to receive an Officer’s Certificate and/or an opinion of counsel, the costs of which (including the Paying Agent’s reasonable and documented attorney’s fees and expenses) shall be paid by the party requesting that the Paying Agent act or refrain from acting. The Paying Agent shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or opinion of counsel.
(I)    The Paying Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, entitlement order, approval or other paper or document.
(J)    Except as provided expressly in Section 8.2(E) hereof, the Paying Agent shall have no obligation to invest and reinvest any cash held in any of the accounts hereunder in the absence of a timely and specific written investment direction pursuant to the terms of this Agreement. In no event shall the Paying Agent be liable for the selection of investments or for investment losses incurred thereon. The Paying Agent shall have no liability in respect of losses incurred as a result of the liquidation of any investment prior to its stated maturity or the failure of another party to timely provide a written investment direction pursuant to the terms of this Agreement. Investments in any Permitted Investments are not obligations or recommendations of, or endorsed or guaranteed by, the Paying Agent or its Affiliates. The Paying Agent and its Affiliates may provide various services for Permitted Investments and may be paid fees for such services. Each party hereto understands and agrees that proceeds of the sale of investments of the funds in any account maintained with the Paying Agent will be deposited by the Paying Agent into the applicable accounts on the Business Day on which the Paying Agent receives appropriate instructions hereunder, if such instructions received by the Paying Agent prior to the deadline for same day sale of such investments. If the Paying Agent receives such instructions after the applicable deadline for the sale of such investments, such proceeds will be deposited by the Paying Agent into the applicable account on the next succeeding Business Day. The parties hereto agree that notifications after the completion of purchases and sales of investments shall not be provided by the Paying Agent hereunder, and the Paying Agent shall make available, upon request and in lieu of notifications, periodic account statements that reflect such investment activity. No statement shall be made available if no investment activity has occurred during such period.
(K)    The Paying Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any action or omission on the part of any agent, attorney, custodian or nominee so appointed.

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(L)    Any corporation or entity into which the Paying Agent may be merged or converted or with which it may be consolidated, or any corporation or entity resulting from any merger, conversion or consolidation to which the Paying Agent shall be a party, or any corporation or entity succeeding to the business of the Paying Agent shall be the successor of the Paying Agent hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.
(M)    In no event shall the Paying Agent be liable for punitive, special, indirect or consequential loss or damage of any kind whatsoever (including lost profits), even if the Paying Agent has been advised of such loss or damage and regardless of the form of action.
(N)    In no event shall the Paying Agent be liable for any failure or delay in the performance of its obligations under this Agreement or any related documents because of circumstances beyond the Paying Agent’s control, including a failure, termination, or suspension of a clearing house, securities depositary, settlement system or central payment system in any applicable part of the world or acts of God, flood, war (whether declared or undeclared), civil or military disturbances or hostilities, nuclear or natural catastrophes, political unrest, explosion, severe weather or accident, earthquake, terrorism, fire, riot, labor disturbances, strikes or work stoppages for any reason, embargo, government action, including any laws, ordinances, regulations or the like (whether domestic, federal, state, county or municipal or foreign) which delay, restrict or prohibit the providing of the services contemplated by this Agreement or any other Loan Document or any related documents, or the unavailability of communications or computer facilities, the failure of equipment or interruption of communications or computer facilities, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility, or any other causes beyond the Paying Agent’s control whether or not of the same class or kind as specified above.
(O)    Knowledge of the Paying Agent shall not be attributed or imputed to any affiliate, line of business, or other division of Wells Fargo Bank, National Association (and vice versa).
(P)    The right of the Paying Agent to perform any permissive or discretionary act enumerated in this Agreement or any other Loan Document shall not be construed as a duty.
(Q)    Absent gross negligence, bad faith or willful misconduct (in each case as conclusively determined by a court of competent jurisdiction pursuant to a final order or verdict not subject to appeal) on the part of, Wells Fargo Bank, National Association in acting in each of its capacities under this Agreement and the related Loan Documents shall not constitute impermissible self-dealing or a conflict of interest, and the parties hereto hereby waive any conflict of interest presented by such service. Wells Fargo Bank, National Association may act as agent for, provide banking, custodial, collateral agency, verification and other services to, and generally engage in any kind of business, with others to the same extent as if Wells Fargo Bank, National Association, were not a party hereto. Nothing in

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this Agreement or any other Loan Document shall in any way be deemed to restrict the right of Wells Fargo Bank, National Association to perform such services for any other person or entity, and the performance of such services for others will not, in and of itself, be deemed to violate or give rise to any duty or obligation to any party hereto not specifically undertaken by Wells Fargo Bank, National Association hereunder or under any other Loan Document.
(R)    The Paying Agent shall not be responsible for preparing or filing any reports or returns relating to federal, state or local income taxes with respect to this Agreement or any other Loan Document other than for the Paying Agent’s compensation.
(S)    The Paying Agent shall not be deemed to have notice or knowledge of, or be required to act based on, any event or information (including any Event of Default, Cash Sweep Event or any other default and including the sending of any notice) unless a Responsible Officer of the Paying Agent has actual knowledge or shall have received written notice thereof. In the absence of such actual knowledge or receipt of such notice, the Paying Agent may conclusively assume that none of such events have occurred and the Paying Agent shall not have any obligation or duty to determine whether any Event of Default, Cash Sweep Event or any other default has occurred. The delivery or availability of reports or other documents to the Paying Agent (including publicly available reports or documents) shall not constitute actual or constructive knowledge or notice of information contained in or determinable from those reports or documents, except for such information provided to be delivered under this Agreement to the Paying Agent; and knowledge or information acquired by any Responsible Officer of the Paying Agent in any of its respective capacities hereunder or under any other document related to this transaction, provided that the foregoing shall not relieve the Person acting as Paying Agent, as applicable, from its obligations to perform or responsibility for the manner of performance of its duties in a separate capacity under the Loan Documents.
(T)    Except as otherwise provided in this Article IX:
(i)    except as expressly required pursuant to the terms of this Agreement, the Paying Agent shall not be required to make any initial or periodic examination of any documents or records for the purpose of establishing the presence or absence of defects, the compliance by the Borrower or any other Person with its representations and warranties or for any other purpose except as expressly required pursuant to the terms of this Agreement;
(ii)    whether or not therein expressly so provided, every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Paying Agent shall be subject to the provisions of this Article IX;
(iii)    the Paying Agent shall not have any liability with respect to the acts or omissions of any other Person, and may assume compliance by each of the other parties to the Loan Documents with their obligations thereunder unless a Responsible Officer of the Paying Agent is notified of any such noncompliance in writing;

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(iv)    under no circumstances shall the Paying Agent be personally liable for any representation, warranty, covenant, obligation or indebtedness of any other party to the Loan Documents (other than Wells Fargo Bank, National Association in any of its capacities under the Loan Documents);
(v)    the Paying Agent shall not be held responsible or liable for or in respect of, and makes no representation or warranty with respect to (A) any recording, filing or depositing of this Agreement or any agreement referred to herein or any financing statement, continuation statement or amendments to a financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any re-recording, refiling or redepositing of any thereof, or (B) the existence, genuineness, value or protection of any collateral, for the legality, enforceability, effectiveness or sufficiency of the Transaction Documents or for the monitoring, creation, maintenance, enforceability, existence, status, validity, priority or perfection of any security interest, lien or collateral or the performance of any collateral; and
(vi)    the Paying Agent shall not be required to take any action hereunder if it shall have reasonably determined, or shall have been advised by its counsel, that such action is likely to result in liability on the part of the Paying Agent or is contrary to the terms hereof or any other Loan Document to which it is a party or is not in accordance with applicable laws.
(U)    It is expressly understood and agreed by the parties hereto that the Paying Agent (i) has not provided nor will it provide in the future, any advice, counsel or opinion regarding the tax, financial, investment, securities law or insurance implications and consequences of the consummation, funding and ongoing administration of this Agreement and the matters contemplated herein, including, but not limited to, income, gift and estate tax issues, and the initial and ongoing selection and monitoring of financing arrangements, (ii) has not made any investigation as to the accuracy of any representations, warranties or other obligations of any other party to this Agreement or the other Loan Documents or any other document or instrument and shall not have any liability in connection therewith and (iii) has not prepared or verified, or shall be responsible or liable for, any information, disclosure or other statement in any disclosure or offering document delivered in connection with this Agreement or the other Loan Documents.
(V)    The recitals contained herein shall not be taken as the statements of the Paying Agent, and the Paying Agent does not assume any responsibility for their correctness. The Paying Agent does not make any representation regarding the validity, sufficiency or enforceability of this Agreement or the other Loan Documents or as to the perfection or priority of any security interest therein, except as expressly set forth in Section 9.2(C).
(W)    In the event that (i) the Paying Agent is unsure as to the application or interpretation of any provision of this Agreement or any other Loan Document, (ii) this Agreement is silent or is incomplete as to the course of action that the Paying Agent is required or permitted to take with respect to a particular set of facts, or (iii) more than one

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methodology can be used to make any determination or calculation to be performed by the Paying Agent hereunder, then the Paying Agent may give written notice to the Administrative Agent requesting written instruction and, to the extent that the Paying Agent acts or refrains from acting in good faith in accordance with any such written instruction, the Paying Agent shall not be personally liable to any Person. If the Paying Agent shall not have received such written instruction within ten (10) calendar days of delivery of notice to the Administrative Agent (or within such shorter period of time as may reasonably be specified in such notice or as may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking any action, and shall have no liability to any Person for such action or inaction.
(X)    The Paying Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement or any other Loan Document or to institute, conduct or defend any litigation hereunder or thereunder or in relation hereto or thereto at the request, order or direction of any of any Person, unless such Person with the requisite authority shall have offered to the Paying Agent security or indemnity satisfactory to the Paying Agent against the costs, expenses and liabilities (including the reasonable and documented fees and expenses of the Paying Agent’s counsel and agents) which may be incurred therein or thereby.
(Y)    The Paying Agent shall have no duty (i) to maintain or monitor any insurance or (ii) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Collateral.
(Z)    Notwithstanding anything to the contrary in this Agreement, the Paying Agent shall not be required to take any action that is not in accordance with applicable law.
Section 9.5.    Indemnification. The Borrower agrees to reimburse and indemnify, defend and hold harmless the Paying Agent, in its individual and representative capacities, and its officers, directors, agents and employees (collectively, the “Paying Agent Indemnified Parties”) against any and all fees, costs, damages, losses, suits, claims, judgments, liabilities, obligations, penalties, actions, expenses (including the reasonable and documented fees and expenses of counsel and court costs) or disbursements of any kind and nature whatsoever, regardless of the merit, which may be imposed on, incurred by or demanded, claimed or asserted against any of them in any way directly or indirectly relating to or arising out of or in connection with this Agreement or any other Loan Document or any other document delivered in connection herewith or therewith or the transactions contemplated hereby or thereby, or the enforcement of any of the terms hereof or thereof or of any such other documents, including in connection with any enforcement (including any action, claim or suit brought) by any Paying Agent Indemnified Party of its rights hereunder or thereunder (including rights to indemnification), provided, that the Borrower shall not be liable for any of the foregoing to the extent arising from the gross negligence, willful misconduct or bad faith of the Paying Agent, as determined by the final judgment of a court of competent jurisdiction, no longer subject to appeal or review. The provisions of this Section 9.5 shall survive the discharge, termination or assignment of this Agreement or any related agreement or the earlier of the resignation or removal

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of the Paying Agent. This Section 9.5 shall not apply with respect to Taxes other than any Taxes that represent losses, liabilities, claims and damages arising from any non-Tax proceeding. The Paying Agent Indemnified Parties’ reasonable and documented expenses are intended as expenses of administration.
Section 9.6.    Successor Paying Agent. The Paying Agent may resign at any time by giving at least thirty (30) days’ prior written notice thereof to the other parties hereto; provided, that no such resignation shall become effective until a successor Paying Agent that is satisfactory to the Administrative Agent and, to the extent no Event of Default has occurred and is continuing, the Borrower, has been appointed hereunder. The Paying Agent may be removed at any time for cause by at least thirty (30) days’ prior written notice received by the Paying Agent from the Administrative Agent. Upon any such resignation or removal, the Administrative Agent shall have the right to appoint a successor Paying Agent that is satisfactory to the Borrower (unless an Event of Default has occurred and is continuing). If no successor Paying Agent shall have been so appointed and shall have accepted such appointment within thirty (30) days after the exiting Paying Agent’s giving notice of resignation or receipt of notice of removal, then the exiting Paying Agent may, at the sole expense (including all fees, costs and expenses (including attorneys’ reasonable and documented fees and expenses) incurred in connection with such petition) of the Borrower, petition a court of competent jurisdiction to appoint a successor Paying Agent. Upon the acceptance of any appointment as the Paying Agent hereunder by a successor Paying Agent, such successor Paying Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the exiting Paying Agent, and the exiting Paying Agent shall be discharged from its duties and obligations hereunder. After any exiting Paying Agent’s resignation hereunder, the provisions of this Article IX shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Paying Agent hereunder. If the Paying Agent consolidates with, merges or converts into, or transfers or sells all or substantially all its corporate trust business or assets to, another Person, the resulting, surviving or transferee Person without any further act shall be the successor Paying Agent.
ARTICLE X    

MISCELLANEOUS
Section 10.1.    Survival. All representations and warranties made by the Borrower herein and all indemnification obligations of the Borrower hereunder shall survive, and shall continue in full force and effect, after the making and the repayment of the Advances hereunder and the termination of this Agreement.
Section 10.2.    Amendments, Etc. (A) No amendment to or waiver of any provision of this Agreement, nor consent to any departure therefrom by the parties hereto, shall in any event be effective unless the same shall be in writing and signed by the Administrative Agent, on behalf of the Lenders and each Funding Agent, and the Borrower; provided that no such amendment or waiver shall (i) reduce the amount of or extend the maturity of any Advance or reduce the rate or extend the time of payment of interest thereon, or reduce or alter the timing of any other amount payable to any Lender hereunder, including amending or modifying any of the definitions related to such terms, in each case without the consent of the Lenders affected thereby, (ii) reduce the percentage

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specified in the definition of the Majority Class B Lenders without the written consent of all Class B Lenders, (iii) reduce the percentage specified in the definition of the Majority Lenders without the written consent of all Lenders, (iv) amend, modify or waive any provision of Sections 7.14 through 7.25 hereof without the written consent of all Funding Agents, (v) [intentionally omitted], (vi) affect the rights or duties of the Paying Agent under this Agreement without the written consent of the Paying Agent, (vii) (A) amend or modify any provision of any of Sections 2.7, 2.8, 2.9, 5.1(A), 5.1(L)(iv), 5.2(A), 5.2(B), 5.2(N), and 6.1 through 6.4, or any or of the definitions of the defined terms “Appraiser,” “Aggregate Borrowing Base”, “Borrowing Base”, “Cash Sweep Event”, “Cash Sweep Period”, “Cash Sweep Class A Target Advance Rate” (or amend or modify any defined terms used in any of the foregoing sections or definitions, the amendment or modification of which would result in a substantive amendment or modification of such sections or definitions), or (B) waive, limit, reduce or impair any condition precedent required to be satisfied for the making of an Advance, without, in each case, the consent of all Lenders, or (viii) amend or modify any provision of Section 2.6 or otherwise increase the Class A Aggregate Commitment above the Class A Maximum Facility Amount or increase the Class B Aggregate Commitment above the Class B Maximum Facility Amount without the consent of all Lenders. The Borrower agrees to provide notice to each party hereto of any amendments to or waivers of any provision of this Agreement; provided that the Borrower shall provide the Lenders with prompt written notice of any amendment to any provision of this Agreement, prior to such amendment becoming effective.
(B)    Notwithstanding the foregoing or any other provision of this Agreement or any other Loan Document to the contrary, the Administrative Agent, on behalf of the Lenders and each Funding Agent, and the Borrower may enter into an amendment hereto for the purpose of subdividing the Advances into separate tranches or reallocating the outstanding principal balance of the Advances among the Class A Advances and the Class B Advances; provided, no such amendment may be executed without the consent of all Lenders affected thereby; provided further, that such amendment shall be at the expense of the Lender or Lenders requesting such amendment and that none of the Borrower, Paying Agent or the Administrative Agent need enter into such amendment and no Lender need consent to such amendment if it would have a Material Adverse Effect on the payments, economics or obligations of any such party. Subject to the preceding sentence, the Borrower agrees to cooperate in effecting any amendment pursuant to this Section 10.2(B).
(C)    Notwithstanding anything to the contrary set forth in this Section 10.2, the consent of the Administrative Agent shall not be required for any amendment made in accordance with Sections 5.1(A)(ix) and (x).
Section 10.3.    Notices, Etc. All notices and other communications provided for hereunder shall be in writing and mailed or delivered by courier or facsimile:
(A) if to the Borrower, to the Borrower, at its address at 20 Greenway Plaza, Suite 475, Houston, TX 77046. Attention: Chief Financial Officer and Treasurer, Facsimile: (281) 985-9907, email address: treasury@sunnova.com; notices@sunnova.com;
(B) if to the Administrative Agent, the CS Funding Agent, the CS Non‑Conduit Lender, or the CS Conduit Lender at its address at Credit Suisse AG, New York Branch, 11 Madison Avenue,

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4th Floor, New York, NY 10010; Conduit and Warehouse Financing (212) 538-2007; email address: list.afconduitreports@creditsuisse.com; abcp.monitoring@creditsuisse.com;
(C) if to the Class B Funding Agent or Class B Non-Conduit Lender, at its address at LibreMax Master Fund, Ltd., c/o LibreMax Capital, LLC, 600 Lexington Avenue, 7th Floor, New York, NY 10022, Attention: Frank Bruttomesso, Email: fbruttomesso@libremax.com, Telephone: 212-612-1565;
(D) if to the Paying Agent, at its address at 600 S. 4th Street, MAC N9300-061, Minneapolis, MN 55479, Attention: Corporate Trust Services – Asset-Backed Administration, Email: ctsabsservicer@wellsfargo.com; and
(E) in the case of any party, at such address or other address as shall be designated by such party in a written notice to each of the other parties hereto. Notwithstanding the foregoing, each Borrowing Base Report may be delivered by electronic mail; provided, that such electronic mail is sent by a Responsible Officer and each such Borrowing Base Report is accompanied by an electronic reproduction of the signature of a Responsible Officer of the Borrower and the Sponsor. All such notices and communications shall be effective, upon receipt, provided, that notice by facsimile or email shall be effective upon electronic or telephonic confirmation of receipt from the recipient.
Section 10.4.    No Waiver; Remedies. No failure on the part of the Administrative Agent or any Lender to exercise, and no delay in exercising, any right hereunder or under the Loan Notes shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
Section 10.5.    Indemnification. The Borrower agrees to indemnify the Administrative Agent, the Paying Agent, each Lender, and their respective Related Parties (collectively, the “Indemnitees”) from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses (including court costs and fees and expenses of counsel and of enforcing the Borrower’s indemnification obligations hereunder) to which such Indemnitee may become subject arising out of, resulting from or in connection with any claim, litigation, investigation or proceeding (each, a “Proceeding” (including any Proceedings under environmental laws)) relating to the Loan Documents or any other agreement, document, instrument or transaction related thereto, the use of proceeds thereof and the transactions contemplated hereby, regardless of whether any Indemnitee is a party thereto and whether or not such Proceedings are brought by the Borrower, its equity holders, affiliates, creditors or any other third party, and to reimburse each Indemnitee upon written demand therefor (together with reasonable back-up documentation supporting such reimbursement request) for any reasonable and documented legal or other out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing of one law firm to all such Indemnitees, taken as a whole, and, in the case of a conflict of interest, of one additional counsel to the affected Indemnitee taken as a whole (and, if reasonably necessary, of one local counsel and/or one regulatory counsel in any material relevant jurisdiction); provided, that the foregoing indemnity and reimbursement obligation will not, as to any Indemnitee, apply to (A) losses, claims, damages, liabilities or related expenses (i) to the extent they are found in a final non-appealable judgment of a court of competent jurisdiction to arise from the willful misconduct, bad faith or

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


gross negligence of, or with respect to Indemnitees other than the Paying Agent, material breach of the Loan Documents by, such Indemnitee or any of its affiliates or controlling persons or any of the officers, directors, employees, advisors or agents of any of the foregoing or (ii) arising out of any claim, litigation, investigation or proceeding that does not involve an act or omission of the Borrower or any of their Affiliates and that is brought by such Indemnitee against another Indemnitee (other than an Indemnitee acting in its capacity as Paying Agent, agent, arranger or any other similar role in connection with the Loan Documents) or (B) any settlement entered into by such Indemnitee without the Borrower’s written consent (such consent not to be unreasonably withheld or delayed). This Section 10.5 shall not apply with respect to Taxes other than any Taxes that represent losses, liabilities, claims and damages arising from any non-Tax Proceeding. The provisions of this Section 10.5 shall survive the discharge, termination or assignment of this Agreement or any related agreement or the earlier of the resignation or removal of the Paying Agent. Notwithstanding anything to the contrary in this Section 10.5, the provisions of this Section shall be applied without prejudice to, and the provisions shall not have the effect of diminishing, the rights of the Paying Agent and any Paying Agent Indemnified Parties under Section 9.5 of this Agreement or any other provision of any Loan Document providing for the indemnification of any such Persons.
Section 10.6.    Costs, Expenses and Taxes. The Borrower agrees to pay all reasonable and documented costs and expenses in connection with the preparation, execution, delivery, filing, recording, administration, modification, amendment or waiver of this Agreement, the Loan Notes and the other documents to be delivered hereunder, including the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent and the Paying Agent with respect thereto and with respect to advising the Administrative Agent and the Paying Agent as to their respective rights and responsibilities under this Agreement and the other Loan Documents. The Borrower further agrees to pay on demand all costs and expenses, if any (including reasonable and documented counsel fees and expenses) (A) in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Loan Notes and the other documents to be delivered hereunder and (B) incurred by the Administrative Agent or the Paying Agent in connection with the transactions described herein and in the other Loan Documents including in any case reasonable and documented counsel fees and expenses in connection with the enforcement of rights under this Section 10.6. Without limiting the foregoing, the Borrower acknowledges and agrees that the Administrative Agent or its counsel may at any time after an Event of Default shall have occurred and be continuing, engage professional consultants selected by the Administrative Agent to conduct additional due diligence with respect to the transactions contemplated hereby, including (A) review and independently assess the existing methodology employed by the Borrower and DeveloperCo in allocating purchase price payments with respect to Projects incorporating any Collateral and make any recommendations to amend the methodology, if appropriate, (B) review the financial forecasts submitted by the Borrower to the Administrative Agent and assess the reasonableness and feasibility of those forecasts and make any recommendations based on that review, if appropriate, and (C) verify the asset base of the Borrower and the Borrower’s valuation of their assets, as well as certain matters related thereto. The reasonable and documented fees and expenses of such professional consultants, in accordance with the provisions of this Section 10.6, shall be at the sole cost and expense of the Borrower. In addition, the Borrower shall pay any and all Other Taxes and agrees to save the Administrative Agent, the Paying Agent and each Lender harmless from and against any and all liabilities with respect to or resulting from any delay in paying

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or omission to pay such Other Taxes. In addition, the Borrower agrees to pay on demand all fees pursuant to the Appraiser Engagement Letter and otherwise reasonable and documented costs and expenses, if any (including reasonable and documented counsel fees and expenses), incurred by the Appraiser in connection with the Appraiser’s responsibilities in connection with this Agreement and the Loan Documents.
Section 10.7.    Right of Set-off; Ratable Payments; Relations Among Lenders. (A) Upon the occurrence and during the continuance of any Event of Default, and subject to the prior payment of Obligations owed to the Paying Agent, each of the Administrative Agent and the Lenders are hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by and other indebtedness incurred pursuant to this Agreement at any time owing to the Administrative Agent or such Lender to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and the Loan Notes, whether or not the Administrative Agent or such Lenders shall have made any demand under this Agreement or the Loan Notes and although such obligations may be unmatured. The Administrative Agent and each Lender agrees promptly to notify the Borrower after any such set-off and application; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Administrative Agent and the Lenders under this Section 10.7(A) are in addition to other rights and remedies (including other rights of set-off) which the Administrative Agent and the Lenders may have.
(B)    If any Lender, whether by setoff or otherwise, has payment made to it upon its Advances in a greater proportion than that received by any other Lender, such other Lender agrees, promptly upon demand, to purchase a portion of the Advances held by the Lenders so that after such purchase each Lender will hold its ratable share of Advances. If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon written demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in proportion to the obligations owing to them. In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made.
(C)    Except with respect to the exercise of set-off rights of any Lender in accordance with Section 10.7(A), the proceeds of which are applied in accordance with this Agreement, each Lender agrees that it will not take any action, nor institute any actions or proceedings, against the Borrower or any other obligor hereunder or with respect to any Collateral or Loan Document, without the prior written consent of the other Lenders or, as may be provided in this Agreement or the other Loan Documents, at the direction of the Administrative Agent.
(D)    The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender.


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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Section 10.8.    Binding Effect; Assignment. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the Paying Agent and the Administrative Agent and each Lender, and their respective successors and assigns, except that the Borrower shall not have the right assign to their rights hereunder or any interest herein without the prior written consent of the Administrative Agent and the Lenders, and any assignment by Borrower in violation of this Section 10.8 shall be null and void. Any Lender may at any time, without the consent of the Borrower or the Administrative Agent, assign all or any portion of its rights and obligations under this Agreement and any Loan Note to a Federal Reserve Bank and each Conduit Lender may assign its rights and obligations under this Agreement to a Program Support Provider; provided, that no such assignment or pledge shall release the transferor Lender from its obligations hereunder. Each Lender may assign to one or more banks or other entities all or any part or portion of, or may grant participations to one or more banks or other entities in all or any part or portion of its rights and obligations hereunder (including, without limitation, its Commitment, its Loan Notes or its Advances); provided that during the Availability Period, no Lender may transfer or assign any portion of its rights and obligations under this Agreement or any Loan Note to a Disqualified Lender; provided further that each such assignment (A) shall be substantially in the form of Exhibit F hereto or any other form reasonably acceptable to the Administrative Agent and (B) shall either be made (i) to a Permitted Assignee or (ii) to a Person that is acceptable to the Administrative Agent in its reasonable discretion (such consent not to be unreasonably withheld or delayed) unless an Event of Default shall have occurred and be continuing.
(b)    If any assignment or participation is made to a Disqualified Lender in violation of this Section 10.8, the Borrower may upon notice to the applicable Disqualified Lender and the Administrative Agent, (A) purchase or prepay the Advances held by such Disqualified Lender by paying the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Lender paid to acquire such Advances, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder and/or (B) require such Disqualified Lender to assign, without recourse (in accordance with and subject to the restrictions contained in this Section 10.8), all of its interest, rights and obligations under this Agreement to one or more banks or other entities at the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Lender paid to acquire such interests, rights and obligations, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder.
Disqualified Lenders (A) will not, absent an Event of Default or consent from the Borrower (x) have the right to receive financial reports that are not publicly available or other reports or confidential information provided to Lenders by the Borrower or the Administrative Agent (other than Tax reporting information with respect to the Advances), (y) attend or participate in meetings with the Borrower attended by the Lenders and the Administrative Agent, or (z) access any electronic site maintained by the Borrower or Administrative Agent to provide Lenders with confidential information or confidential communications from counsel to or financial advisors of the Administrative Agent and (B) (x) for purposes of any consent to any amendment, waiver or modification of, or any action under, and for the purpose of any direction to the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) under this Agreement or any other Loan Document, each Disqualified Lender will be deemed to have consented in the same proportion as the Lenders that are not Disqualified Lenders consented to such matter, and (y)

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for purposes of voting on any plan of reorganization or plan of liquidation, each Disqualified Lender party hereto hereby agrees (1) not to vote on such plan, (2) if such Disqualified Lender does vote on such plan notwithstanding the restriction in the foregoing clause (1), such vote will be deemed not to be in good faith and shall be “designated” pursuant to Section 1126(e) of the Bankruptcy Code (or any similar provision in any other debtor relief laws), and such vote shall not be counted in determining whether the applicable class has accepted or rejected such plan in accordance with Section 1126(c) of the Bankruptcy Code (or any similar provision in any other debtor relief laws) and (3) not to contest any request by any party for a determination by the a bankruptcy court (or other applicable court of competent jurisdiction) effectuating the foregoing clause (2).
(c)    Upon, and to the extent of, any assignment (unless otherwise stated therein) made by any Lender hereunder, the assignee or purchaser of such assignment shall be a Lender hereunder for all purposes of this Agreement and shall have all the rights, benefits and obligations (including the obligation to provide documentation pursuant to Section 2.17(G)) of a Lender hereunder. Each Funding Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices a register (the “Register”) for the recordation of the names and addresses of the applicable Lenders, the outstanding principal amounts (and accrued interest) of the Advances owing to each applicable Lender pursuant to the terms hereof from time to time and any assignment of such outstanding Advances. The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall 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. The Register shall be available for inspection by the Borrower, the Paying Agent and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(d)    Any Lender may, without the consent of the Borrower, sell participation interests in its Advances and obligations hereunder (each such recipient of a participation a “Participant”); provided that after giving effect to the sale of such participation, such Lender’s obligations hereunder and rights to consent to any waiver hereunder or amendment hereof shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, all amounts payable to such Lender hereunder and all rights to consent to any waiver hereunder or amendment hereof shall be determined as if such Lender had not sold such participation interest, and the Borrower and the Administrative Agent and the other parties hereto shall continue to deal solely and directly with such Lender and not be obligated to deal with such participant. The Participant shall have no right to affect such Lender’s vote or action with respect to any matter requiring such Lender’s vote or action under this Agreement. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the outstanding principal amounts (and accrued interest) of each Participant’s interest in the Advances or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of 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 Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations or Section 1.163-5 of the Proposed United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest

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error, and such Lender shall treat each Person whose name is recorded in the Participant 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 shall have no responsibility for maintaining a Participant Register. Each recipient of a participation shall, to the fullest extent permitted by law, have the same rights, benefits and obligations (including the obligation to provide documentation pursuant to Section 2.17(G)), hereunder with respect to the rights and benefits so participated as it would have if it were a Lender hereunder, except that no Participant shall be entitled to receive any greater payment under Sections 2.11 or 2.17 than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.
(e)    Notwithstanding any other provision of this Agreement to the contrary, (i) a Lender may pledge as collateral, or grant a security interest in, all or any portion of its rights in, to and under this Agreement to a security trustee in connection with the funding by such Lender of Advances without the consent of the Borrower; provided that no such pledge or grant shall release such Lender from its obligations under this Agreement and (ii) a Conduit Lender may at any time, without any requirement to obtain the consent of the Administrative Agent or the Borrower, pledge or grant a security interest in all or any portion of its rights (including, without limitation, rights to payment of capital and yield) under this Agreement to a collateral agent or trustee for its commercial paper program.
Section 10.9.    GOVERNING LAW. THIS AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
Section 10.10.    Jurisdiction. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK (NEW YORK COUNTY) OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.

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Section 10.11.    Waiver of Jury Trial. ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS AGREEMENT.

Section 10.12.    Section Headings. All section headings are inserted for convenience of reference only and shall not affect any construction or interpretation of this Agreement.

Section 10.13.    Tax Characterization. The parties hereto intend for the transactions effected hereunder to constitute a loan for U.S. federal income tax purposes.

Section 10.14.    Execution. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed 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 a signature page to this Agreement by facsimile or by e-mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Agreement.

Section 10.15.    Limitations on Liability. None of the members, managers, general or limited partners, officers, employees, agents, shareholders, directors, Affiliates or holders of limited liability company interests of or in the Borrower shall be under any liability to the Administrative Agent or the Lenders, respectively, any of their successors or assigns, or any other Person for any action taken or for refraining from the taking of any action in such capacities or otherwise pursuant to this Agreement or for any obligation or covenant under this Agreement, it being understood that this Agreement and the obligations created hereunder shall be, to the fullest extent permitted under applicable law, with respect to the Borrower, solely the limited liability company obligations of the Borrower. The Borrower and any member, manager, partner, officer, employee, agent, shareholder, director, Affiliate or holder of a limited liability company interest of or in the Borrower may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person (other than the Borrower) respecting any matters arising hereunder.

Section 10.16.    Confidentiality. (A) Except as otherwise provided herein, the Fee Letters (including such information set forth in any engagement letter, term sheet or proposal prior to the Closing Date that contains fees similar in nature to those in the Fee Letters) (collectively, “Confidential Information”) are confidential. Each of the Borrower and the Paying Agent agrees:

(i)    to keep all Confidential Information confidential and to disclose Confidential Information only to those Affiliates, officers, employees, agents, accountants, equity holders, legal counsel and other representatives of the Borrower or its Affiliates (collectively,

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“Representatives”) who have a need to know such Confidential Information for the purpose of assisting in the negotiation, completion and administration of this Facility;
(ii)    to use the Confidential Information only in connection with the Facility and not for any other purpose; and
(iii)    to maintain and keep in force procedures reasonably designed to cause its Representatives to comply with these provisions and to be responsible for any failure of any Representative to follow those procedures. The provisions of this Section 10.16(A) shall not apply to Confidential Information that (a) has been approved for release by written authorization of the appropriate party, or (b) is or hereafter becomes (through a source other than the Borrower, the Paying Agent or their respective Affiliates or Representatives) generally available to the public and shall not prohibit the disclosure of Confidential Information to the extent required by applicable Law or by any Governmental Authority or to the extent necessary in connection with the enforcement of any Loan Document.

The Borrower agrees not to provide copies of the Loan Documents to any prospective investor in, or prospective lender to, the Borrower without the prior written consent of the Administrative Agent, which shall not be unreasonably withheld, delayed or conditioned. For the avoidance of doubt, Borrower or any affiliate of Sponsor may provide copies of the Loan Documents to any potential investor or equity holder in Sponsor or its affiliates, provided that each such Person shall have been instructed to keep the same confidential in accordance with this Section 10.16.

(B)    Each Lender, each Funding Agent, and the Administrative Agent agrees to maintain the confidentiality of all nonpublic information with respect to the Sunnova Parties furnished or delivered to it pursuant to or in connection with this Agreement or any other Loan Document; provided, that such information may be disclosed (i) to such party’s Affiliates or such party’s or its Affiliates’ officers, directors, employees, agents, accountants, legal counsel and other representatives (collectively “Lender Representatives”), in each case, who have a need to know such information for the purpose of assisting in the negotiation, completion and administration of the Facility and on a confidential basis, (ii) to any permitted assignee of or participant in, or any prospective assignee of or participant in, the Facility or any of its rights or obligations under this Agreement, in each case on a confidential basis, (iii) to any financing source, dealer, hedge counterparty or other similar party in connection with financing or risk management activities related to the Facility, (iv) to any Commercial Paper rating agency (including by means of a password protected internet website maintained in connection with Rule 17g-5), (v) to the extent required by applicable Law or by any Governmental Authority, and (vi) to the extent necessary in connection with the enforcement of any Loan Document, and (vii) solely in the case of the Class B Lenders, to direct and indirect investors and potential investors in the Class B Lenders information related to the material terms and conditions of this Agreement and the Loan Document (including any material economic terms and the identity of the parties to the Loan Document), investment performance, general portfolio composition data and statistics regarding the Borrower’s assets pursuant to marketing, monitoring and reporting activities in connection with the Borrower's and its respective Affiliates’ businesses.
The provisions of this Section 10.16(B) shall not apply to information that (i) is or hereafter becomes (through a source other than the applicable Lender, Funding Agent or the Administrative

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[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Agent or any Lender Representative associated with such party) generally available to the public, (ii) was rightfully known to the applicable Lender, applicable Funding Agent or the Administrative Agent or any Lender Representative or was rightfully in their possession prior to the date of its disclosure pursuant to this Agreement, (iii) becomes available to the applicable Lender, applicable Funding Agent or the Administrative Agent or any Lender Representative from a third party unless to their knowledge such third party disclosed such information in breach of an obligation of confidentiality to the applicable Lender, applicable Funding Agent or the Administrative Agent or any Lender Representative, (iv) has been approved for release by written authorization of the parties whose information is proposed to be disclosed, or (v) has been independently developed or acquired by any Lender, any Funding Agent or the Administrative Agent or any Lender Representative without violating this Agreement. The provisions of this Section 10.16 shall not prohibit any Lender, any Funding Agent or the Administrative Agent from filing with or making available to any judicial, governmental or regulatory agency or providing to any Person with standing any information or other documents with respect to the Facility as may be required by applicable Law or requested by such judicial, governmental or regulatory agency.

Section 10.17.    Limited Recourse. All amounts payable by the Borrower on or in respect of the Obligations shall constitute limited recourse obligations of the Borrower secured by, and payable solely from and to the extent of, the Collateral; provided that (A) the foregoing shall not limit in any manner the ability of the Administrative Agent or any other Lender to seek specific performance of any Obligation (other than the payment of a monetary obligation in excess of the amount payable solely from the Collateral), (B) the provisions of this Section 10.17 shall not limit the right of any Person to name the Borrower as party defendant in any action, suit or in the exercise of any other remedy under this Agreement or the other Loan Documents and (C) when any portion of the Collateral is transferred in a transfer permitted under and in accordance with this Agreement, the security interest in and Lien on such Collateral shall automatically be released (including, without limitation, automatically and immediately following deposit of the applicable amount into the Proceeds Account in accordance with Section 5.1(O)(iii) for the applicable Eligible Equipment pursuant to an Eligible Equipment Disposition), and the Lenders under this Agreement will no longer have any security interest in, lien on, or claim against such Collateral. No recourse shall be sought or had for the obligations of the Borrower against any Affiliate, director, officer, shareholder, manager or agent of the Borrower other than as specified in the Loan Documents.

Section 10.18.    Customer Identification - USA Patriot Act Notice. The Administrative Agent and each Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “Patriot Act”), and the Administrative Agent’s and each Lender’s policies and practices, the Administrative Agent and the Lenders are required to obtain, verify and record certain information and documentation that identifies the Borrower, which information includes the name and address of the Borrower and such other information that will allow the Administrative Agent or such Lender to identify the Borrower in accordance with the Patriot Act.

Section 10.19.    Paying Agent Compliance with Applicable Anti-Terrorism and Anti-Money Laundering Regulations. In order to comply with laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including, but not limited to those relating

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to funding of terrorist activities and money laundering, the Paying Agent is required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Paying Agent. Accordingly, each of the parties agrees to provide to the Paying Agent upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Paying Agent to comply with such laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including, but not limited to those relating to funding of terrorist activities and money laundering.
Section 10.20.    Non-Petition. 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 of any state of the United States or of any other jurisdiction 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 Section 10.20 and the parties’ respective obligations under this Section 10.20 shall survive the termination of this Agreement.
Section 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 a Conduit Lender hereunder shall be without recourse of any kind to such Conduit Lender. A Conduit Lender shall have no liability or obligation hereunder unless and until such Conduit Lender has received such amounts pursuant to this Agreement. In addition, the parties hereto hereby agree that (i) a Conduit Lender shall have no obligation to pay the parties hereto any amounts constituting fees, reimbursement for expenses or indemnities (collectively, “Expense Claims”) and such Expense Claims shall not constitute a claim (as defined in Section 101 of Title 11 of the Bankruptcy Code or similar laws of another jurisdiction) against such Conduit Lender, unless or until such Conduit Lender has received amounts sufficient to pay such Expense Claims pursuant to this Agreement and such amounts are not required to pay the outstanding indebtedness of such Conduit Lender and (ii) no recourse shall be sought or had for the obligations of a Conduit Lender hereunder against any Affiliate, director, officer, shareholders, manager or agent of such Conduit Lender.
(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.
Section 10.22.    [Reserved].
Section 10.23.    Additional Paying Agent Provisions. The parties hereto acknowledge that the Paying Agent shall not be required to act as a “commodity pool operator” as defined in the Commodity Exchange Act, as amended, or be required to undertake regulatory filings related to this Agreement in connection therewith.
Section 10.24.    Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Hedge Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance

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Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact by stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States.

[Signature Pages Follow]



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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
SUNNOVA TEP INVENTORY, LLC, as Borrower
By:     /s/ Robert Lane
Name: Robert Lane
Title: Executive Vice President, Chief Financial
Officer

[Signature Page to Sunnova Safe Harbor Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



CREDIT SUISSE AG, New York Branch,
as Administrative Agent and as Class A Funding Agent
By: /s/ Patrick J. Hart
Name: Patrick J. Hart
Title: Director
By: /s/ Jason Ruchelsman
Name: Jason Ruchelsman
Title: Director
LIBREMAX MASTER FUND, LTD,
as Class B Funding Agent
By: /s/ Frank Bruttomesso
Name: Frank Bruttomesso
Title: COO/GC of LibreMax Capital, LLC, its
Investment Manager



CREDIT SUISSE AG, Cayman Islands Branch,
as a Class A Non-Conduit Lender
By: /s/ Patrick J. Hart
Name: Patrick J. Hart
Title: Authorized Signatory
By: /s/ Jason Ruchelsman
Name: Jason Ruchelsman
Title: Authorized Signatory

[Signature Page to Sunnova Safe Harbor Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


LIBREMAX MASTER FUND, LTD,
as a Class B Non-Conduit Lender
By: /s/ Frank Bruttomesso
Name: Frank Bruttomesso
Title: COO/GC of LibreMax Capital, LLC, its
Investment Manager


[Signature Page to Sunnova Safe Harbor Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



ALPINE SECURITIZATION LTD,
as a Class A Conduit Lender
By: /s/ Patrick J. Hart
Name: Patrick J. Hart
Title: Director
By: /s/ Steven Schlussler
Name: Steven Schlussler
Title: Director


[Signature Page to Sunnova Safe Harbor Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity but solely as Paying Agent
By: /s/ Jeanine C. Casey
Name: Jeanine C. Casey
Title: Vice President

[Signature Page to Sunnova Safe Harbor Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.





[Signature Page to Sunnova Safe Harbor Credit Agreement]

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


EXHIBIT A

DEFINED TERMS
“1940 Act” shall mean the Investment Company Act of 1940, as amended.
“2019 Safe-Harbor Equipment” means Eligible Equipment that is delivered in 2019 or that is paid for during 2019 and provided to Borrower within 3.5 months after payment.
“2020 Safe-Harbor Equipment” means Eligible Equipment that (a) is not 2019 Safe-Harbor Equipment and (b) is delivered in 2020 or that is paid for during 2020 and provided to Borrower within 3.5 months after payment.
“Adjusted LIBOR Rate” shall mean the greater of (a) a rate per annum equal to the rate (rounded upwards, if necessary, to the next higher 1/100 of 1%) obtained by dividing (i) LIBOR by (ii) a percentage equal to 100% minus the reserve percentage (rounded upward to the next 1/100th of 1%) in effect on such day and applicable to the Non-Conduit Lender for which this rate is calculated under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “eurocurrency liabilities”) and (b) zero. The Adjusted LIBOR Rate shall be adjusted automatically as of the effective date of any change in such reserve percentage.
“Administrative Agent” shall have the meaning set forth in the introductory paragraph hereof.
“Advance” shall mean, individually or collectively, as the context may require, a Class A Advance and/or a Class B Advance.
“Affected Party” shall have the meaning set forth in Section 2.12(B).
“Affiliate” shall mean, with respect to any Person, any other Person that (i) directly or indirectly Controls, is Controlled by, or is under direct or indirect common Control with such Person, or, (ii) is an officer or director of such Person, and in the case of any Lender that is an investment fund, the investment advisor thereof and any investment fund having the same investment advisor.
“Affiliate Transaction Document” shall mean (a) the Pipeline Exclusivity Agreement, (b) each Master Purchase Agreement, (c) the Equipment Sourcing Agreement, (d) the Management Services Agreement, and (e) the Contribution Agreement.
“Affiliated Entity” shall mean any of the Obligors and any of their respective direct or indirect Subsidiaries and/or Affiliates, whether now existing or hereafter created, organized or acquired.
“Aggregate Borrowing Base” shall mean, on any date of determination and through the next date of determination, (i) the product of (a) 85% and (b) the Market Value of all Eligible Equipment as of such date of determination, (ii) plus the Debt Service Reserve Borrowing Base Amount.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Aggregate Commitment” shall mean, on any date of determination, the sum of the Commitments then in effect. The Aggregate Commitment as of the Closing Date shall be equal to $95,206,150.96.
“Aggregate Outstanding Advances” shall mean, as of any date of determination, the sum of (i) the aggregate principal balance of all Class A Advances outstanding plus (ii) the aggregate principal balance of all Class B Advances outstanding.
“Agreement” shall have the meaning set forth in the introductory paragraph hereof.
“A.M. Best” shall mean A.M. Best Company, Inc. and any successor rating agency.
“Applicable Law” shall mean all applicable laws of any Governmental Authority, including, without limitation, laws relating to consumer leasing and protection and any ordinances, judgments, decrees, injunctions, writs and orders or like actions of any Governmental Authority and rules and regulations of any federal, regional, state, county, municipal or other Governmental Authority.
“Appraisal Price” shall mean, with respect to any Eligible Equipment and as of any date of determination, the product of (i) the quotient of (a) the Appraisal Value of such Eligible Equipment as of such date of determination divided by (b) the Appraisal Value of such Eligible Equipment as of the purchase date of such Eligible Equipment, multiplied by (ii) the invoiced purchase price of such Eligible Equipment.
“Appraisal Value” shall mean, as of any date of determination, the fair market value (or, at all times that an Event of Default has occurred and is continuing and during any Cash Sweep Period resulting from a Cash Sweep Event in clause (ii) in the definition thereof, orderly liquidation value) set forth in the most recent Eligible Equipment Appraisal.
“Appraiser” shall mean Gordon Brothers Asset Advisors LLC, or any other appraisal firm reasonably acceptable to the Administrative Agent and the Majority Class A Lenders and Majority Class B Lenders.
“Appraiser Engagement Letter” shall mean that certain letter agreement, dated as of December 30, 2019, by and between Sponsor and Gordon Brothers Asset Advisors LLC.
“Approved Dealer Warehouse” shall mean (a) the warehouses set forth in Part 1 Schedule 1.1(b) on the Closing Date and (b) any additional warehouse which is: (i) owned by a Material Dealer or leased by a Material Dealer (in each case, other than Trinity) from a third party warehouseman pursuant to a Storage Agreement reasonably acceptable to the Administrative Agent, (ii) included in a supplement to Part 1 of Schedule 1.1(b) delivered by the Borrower to the Lenders and the Administrative Agent following the Closing Date, (iii) located in the United States (including Approved U.S. Territories) (iv) reasonably acceptable to the Administrative Agent.
“Approved Trinity Warehouse” shall mean (a) the warehouses set forth in Part 3 of Schedule 1.1(b) on the Closing Date and (b) any additional warehouse which is: (i) owned by Trinity or leased by Trinity from a third party warehouseman pursuant to a Storage Agreement reasonably acceptable

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


to the Administrative Agent, (ii) included in a supplement to Part 3 of Schedule 1.1(b) delivered by the Borrower to the Lenders and the Administrative Agent following the Closing Date, (iii) located in the United States (including Approved U.S. Territories), (iv) the subject of a Collateral Access Agreement and (v) reasonably acceptable to the Administrative Agent.
“Approved Sunnova Warehouse” shall mean (a) the warehouses set forth in Part 2 of Schedule 1.1(b) on the Closing Date and (b) any additional warehouse which is: (i) leased by the Borrower or DeveloperCo from a third party warehouseman pursuant to a Storage Agreement reasonably acceptable to the Administrative Agent, (ii) included in a supplement to Part 2 of Schedule 1.1(b) delivered by the Borrower to the Lenders and the Administrative Agent following the Closing Date, (iii) located in the United States (including Approved U.S. Territories), (iv) the subject of a Collateral Access Agreement and (v) reasonably acceptable to the Administrative Agent.
“Approved Type and Vendor List” shall mean the list of approved vendors, equipment types and models set forth in Schedule 1.1(a), which list shall be updated after the Closing Date (a) automatically, without further action by any Person, upon the occurrence thereof, to remove any vendor set forth therein (i) in respect of which any Insolvency Event or other event described in Section 6.1(E) has occurred (unless, in the case of any such Insolvency Proceeding under the Bankruptcy Code, the relevant supply agreement has been assumed and the Administrative Agent has determined that performance thereunder will not be impaired), (ii) that has publicly communicated that it has stopped honoring, or will be unable to honor, its warranty obligations to customers generally or any vendor that is subject to an adjudication of any action, suit or proceeding determining any failure by such vendor to honor warranty obligations to customers or (iii) that has materially breached any of its obligations to Borrower or Sponsor under any supply agreement in respect of equipment, (b) to remove any vendor, equipment type or model (or country or origin for any of the foregoing) if, in the Administrative Agent’s discretion (in consultation with the Technical Advisor), the facts and circumstances since the Closing Date have changed such that the applicable vendor, equipment type, model or country of origin is no longer suitable to serve as Collateral based on then-current customary lending practices in the Sunnova Parties’ industry in financing vehicles similar to the Borrower (with any such update under this clause (b) to become effective 10 days after notice thereof is delivered to Borrower and to apply solely to Purchase Orders delivered on or after such date of effectiveness), and (c) upon the request of Borrower and subject to the prior written approval of the Administrative Agent (in consultation with the Technical Advisor), to add new vendors and new models from vendors listed therein (with any such update under this clause (c) to become effective 10 days following the date upon which the Administrative Agent posts such update to all Lenders unless, prior to such time, the Majority Lenders notify the Administrative Agent that they not accept the update).

“Approved U.S. Territory” shall initially mean Puerto Rico, Guam and the Northern Mariana Islands and shall mean any other territory of the United States which the Administrative Agent has, in its sole discretion and in consultation with counsel regarding equivalent ability to perfect and exercise remedies in respect of its security interest, approved as an Approved U.S. Territory, by providing a written notice to the Borrower regarding the same.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Approved Vendor” shall mean any vendor set forth on the Approved Type and Vendor List, as such Approved Type and Vendor List may be updated from time to time in accordance with the definition thereof.

“Approved Warehouse” shall mean any Approved Sunnova Warehouse, Approved Trinity Warehouse or Approved Dealer Warehouse.
“Asset Disposition” means a sale, lease, license, consignment, transfer, issuance or other disposition of property or other assets of a Loan Party to any other Person, including any disposition in connection with a sale-leaseback transaction, synthetic lease or statutory division of a limited liability company.
“Availability Period” shall mean the period from the Closing Date until the Commitment Termination Date.
“Back-Leverage Debt” shall mean Borrowed Money of BL Borrower incurred pursuant to the Back-Leverage Transaction Documents that does not prevent the creation, priority, perfection or enforcement of the Liens of the Administrative Agent and the Secured Parties on any of the Collateral.
“Back-Leverage Transaction Documents” shall mean that certain Credit Agreement, dated as of September 6, 2019, by and among BL Borrower, Credit Suisse AG, New York Branch, as administrative agent for the financial institutions that may from time to time become parties thereto as lenders, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as paying agent and U.S. Bank National Association, as verification agent and each “Transaction Document” as defined therein, as may be amended, restated, amended and restated, supplemented, modified or replaced from time to time in accordance with the terms hereof.
“Bankruptcy Code” shall mean the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., as amended.
“Base Rate” shall mean, with respect to any Lender for any day, a rate per annum equal to the greatest of (i) with respect to each Class A Lender, the prime rate of interest announced publicly by the Class A Funding Agent with respect to its Class A Lender Group (or the Affiliate of such Lender or Funding Agent, as applicable, that announces such rate) as in effect at its principal office from time to time, changing when and as said prime rate changes (such rate not necessarily being the lowest or best rate charged by such Person) or, if such Lender, Funding Agent or Affiliate thereof does not publicly announce the prime rate of interest, and with respect to each Class B Lender, as quoted in The Wall Street Journal on such day, (ii) the sum of (a) 0.50% and (b) the rate 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, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by the applicable Funding Agent from three Federal funds brokers of recognized standing selected by it and (iii) zero.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Base Reference Banks” shall mean the principal London offices of Standard Chartered Bank, Lloyds TSB Bank, Royal Bank of Scotland, Deutsche Bank and the investment banking division of Barclays Bank PLC or such other banks as may be appointed by the Administrative Agent with the approval of the Borrower.
“Basel III” shall mean Basel III: A global regulatory framework for more resilient banks and banking systems prepared by the Basel Committee on Banking Supervision, and all national implementations thereof.
“Beneficial Ownership Certification” shall mean a certification regarding beneficial ownership required by the Beneficial Ownership Regulation, which certification shall be substantially similar in form and substance to the form of Certification Regarding Beneficial Owners of Legal Entity Customers published jointly, in May 2018, by the Loan Syndications and Trading Association and Securities Industry and Financial Markets Association.
“Beneficial Ownership Regulation” shall mean 31 C.F.R. § 1010.230.
“BHC Act Affiliate” shall have the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“BL Borrower” shall mean Sunnova TEP Holdings LLC, a Delaware limited liability company.
“BL Distributions” shall mean any dividend or other distribution or payment on Equity Interests of BL Borrower or BL Holdco.
“BL HoldCo” shall mean Sunnova TEP Resources, LLC, a Delaware limited liability company.

“Borrower” shall have the meaning set forth in the introductory paragraph hereof.
“Borrowing Base” shall mean the Class A Borrowing Base and/or the Class B Borrowing Base, as applicable.
“Borrowing Base Certificate” shall mean the certificate in the form of Exhibit B-1 attached hereto.
“Borrowing Base Deficiency” shall have the meaning set forth in Section 2.9.
“Borrowing Base Report” shall mean a report, substantially in the form of Exhibit E or otherwise in form and substance reasonably satisfactory to the Administrative Agent, which shall include a certification from a Responsible Officer of the Borrower confirming: (a) the Aggregate Borrowing Base, together with reasonably detailed calculations thereof, including each component of such calculation (including the then-applicable Market Value of all Eligible Equipment included in the Aggregate Borrowing Base), (b) the Eligible Equipment included in the Aggregate Borrowing Base as shown by (i) vendor, (ii) equipment type and (iii) serial number, (c) the current location of all Eligible Equipment included in the Aggregate Borrowing Base calculation, and (d) a list of Host

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Customer Agreements that (i) have been executed by Sponsor or its Affiliates, or a Dealer for the benefit of Sponsor or its Affiliates, but have not reached substantial completion as defined in the Dealer agreements on or prior to the date of such report, (ii) have not yet been conveyed to DeveloperCo, (iii) contemplate a date of installation scheduled for more than seven days after the date of such report and (iv) cover Equipment sufficient to complete Projects with an aggregate installed capacity of no less than [***]MW DC during 2020, [***]MW DC during 2021 and [***]MW DC during 2022.
“Breakage Costs” shall mean, with respect to a failure by the Borrower, for any reason resulting from Borrower’s failure (but excluding any failures to borrow resulting from a Lender default under this Agreement), to borrow any proposed Advance on the date specified in the applicable Notice of Borrowing (including without limitation, as a result of the Borrower’s failure to satisfy any conditions precedent to such borrowing) after providing such Notice of Borrowing, the resulting loss, cost, expense or liability incurred by reason of the liquidation or reemployment of deposits, actually sustained by the Administrative Agent, any Lender or any Funding Agent; provided, however, that the Administrative Agent, such Lender or such Funding Agent shall use commercially reasonable efforts to minimize such loss or expense and shall have delivered to the Borrower a certificate as to the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error. For the avoidance of doubt, if a Lender does not make an advance and the Borrower has met all conditions precedent required under Article III or Lender has breached this Agreement, then any Breakage Costs shall be borne by Lender.
“Business Day” shall mean any day other than Saturday, Sunday and any other day on which commercial banks in New York, New York or Minnesota are authorized or required by law to close.
“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Secured Parties, cash or deposit account balances, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent. “Cash Collateral” has a correlative meaning.
“Cash Equivalents” shall mean (a) (i) direct interest bearing obligations of, and interest-bearing obligations guaranteed as to payment of principal and interest by, the United States or any agency or instrumentality of the United States the obligations of which are backed by the full faith and credit of the United States; (ii) direct interest-bearing obligations of, and interest-bearing obligations guaranteed as to payment of principal and interest by, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, but only if, at the time of investment, such obligations are assigned the highest credit rating by S&P; and (iii) evidence of ownership of a proportionate interest in specified obligations described in (i) and/or (ii) above; (b) demand, time deposits, money market deposit accounts, certificates of deposit of and federal funds sold by, depository institutions or trust companies incorporated under the laws of the United States or any state thereof (or domestic branches of foreign banks), subject to supervision and examination by federal or state banking or depository institution authorities, and having, at the time of a relevant Borrower’s investment or contractual commitment to invest therein, a short term unsecured debt rating of “A-1” by S&P; (c) securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States or any state thereof which have a rating of no less

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


than “A-1+” by S&P and a maturity of no more than 365 days; (d) commercial paper (including both non-interest bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the closing date thereof) of any corporation (other than the Sponsor), incorporated under the laws of the United States or any state thereof, that, at the time of the investment or contractual commitment to invest therein, a rating of “A-1” by S&P; (e) money market mutual funds, or any other mutual funds registered under the 1940 Act which invest only in other Cash Equivalents, having a rating, at the time of such investment, in the highest rating category by S&P; (f) money market deposit accounts, demand deposits, time deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States or any state thereof and subject to supervision and examination by federal or state banking or depository institution authorities; provided, however, that at the time of the investment or contractual commitment to invest therein, the commercial paper or other short-term unsecured debt obligations (other than such obligations the rating of which is based on the credit of a Person other than such depository institution or trust company) thereof will be rated “A-1+” by S&P, including proprietary money market funds offered or managed by the Paying Agent or an Affiliate thereof; (g) repurchase agreements with respect to obligations of, or guaranteed as to principal and interest by, the United States or any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States; provided, however, that the unsecured obligations of the party agreeing to repurchase such obligations at the time have a credit rating of no less than the A-1 by S&P; and (h) any investment agreement (including guaranteed investment certificates, forward delivery agreements, repurchase agreements or similar obligations) with an entity which on the date of acquisition has a credit rating of no less than the A-1 by S&P, in each case denominated in or redeemable in Dollars.
“Cash Sweep Class A Target Advance Rate” shall mean, as of the applicable date of determination, the point at which the aggregate principal balance of all Class A Advances is no greater than the product of (a) a fraction, the numerator of which is [***]%, and the denominator of which is [***]% and (b) the Aggregate Borrowing Base as of such date.
“Cash Sweep Event” shall mean the occurrence of (i) a Material Tax Law Change or (ii) an event or circumstance that has resulted, or could reasonably be expected to result, in a Sponsor Material Adverse Effect.
“Cash Sweep Period” shall mean any period after the occurrence of a Cash Sweep Event; provided that a Cash Sweep Period resulting from a Cash Sweep Event of the type described in clause (ii) in the definition thereof shall terminate if the event or circumstance that caused such Cash Sweep Event has been cured or remedied, as determined by the Administrative Agent.
“CED” shall mean CED Greentech, a division of Consolidated Electrical Distributions, Inc.
“Change in Law” shall mean (i) the adoption or taking effect of any Law after the date of this Agreement, (ii) any change in Law or in the administration, interpretation, application or implementation thereof by any Governmental Authority after the date of this Agreement, (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority after the date of this Agreement or (iv) compliance by any Affected Party, by any lending office of such Affected Party or by such Affected Party’s holding

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


company, if any, with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided, that notwithstanding anything herein to the contrary, (a) the Dodd-Frank Act, (b) Basel III and (c) all requests, rules, guidelines and directives under either of the Dodd-Frank Act or Basel III or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date implemented, enacted, adopted or issued.
“Change of Control” shall mean, the occurrence of one or more of the following events:
(a) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of SEI to any Person or group of related Persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (a “Group”), other than, in each case, any such sale, lease, exchange or transfer to a Person or Group that is, prior to such, lease, exchange or transfer, an Affiliate of SEI and is Controlled by SEI;
(b) any Person or Group shall become the owner, directly or indirectly, beneficially or of record, of shares representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of SEI, other than any Person that is a Permitted Investor or Group that is controlled by a Permitted Investor; provided that any transfers or issuances of equity of SEI on or after the Closing Date to, among or between a Permitted Investor or any Affiliate thereof, shall not constitute a “Change of Control” for purposes of this clause (b);
(c) SEI ceases to own or Control, beneficially or of record, directly or indirectly, all of the Equity Interests in Sponsor;
(d) Sponsor ceases to own or Control, beneficially or of record, directly or indirectly, all Equity Interests in Pledgor;
(e) Pledgor ceases to own or Control, beneficially or of record, directly, all Equity Interests in Borrower;
(f) Borrower ceases to own or Control, beneficially or of record, directly, all Equity Interests in DeveloperCo;
(g) DeveloperCo ceases to own or Control, beneficially or of record, directly, all Equity Interests in BL HoldCo;
(h) BL HoldCo ceases to own or Control, beneficially or of record, directly or indirectly, all Equity Interests in BL Borrower;
(i) BL Borrower ceases to own or Control, beneficially or of record, directly or indirectly, all Equity Interests in each Managing MemberCo; or
(j) any Managing MemberCo ceases to own or Control, beneficially or of record, directly or indirectly, all the Equity Interests of the managing member of the applicable Project Company or otherwise ceases to be the managing member thereof.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Class A Advance” shall have the meaning set forth in Section 2.2(A).
“Class A Aggregate Commitment” shall mean, on any date of determination, the sum of the Class A Commitments then in effect. The Class A Aggregate Commitment as of the Closing Date shall be equal to $[***].
“Class A Borrowing Base” shall mean, as of any date of determination, the product of (a) the Class A Commitment Percentage multiplied by (b) the Aggregate Borrowing Base; provided that in no event shall the Class A Borrowing Base be greater than the Class A Aggregate Commitment.
“Class A Borrowing Base Deficiency” shall have the meaning set forth in Section 2.9.
“Class A Commitment” shall mean the obligation of a Non-Conduit Lender to fund a Class A Advance on the Closing Date, as set forth on Schedule II attached hereto.
“Class A Commitment Percentage” shall mean an amount equal to the quotient of the Class A Aggregate Commitment divided by (b) the Aggregate Commitment.
“Class A Funding Agent” shall mean a Person appointed as a Class A Funding Agent for a Class A Lender Group pursuant to Section 7.14.
“Class A Interest Distribution Amount” shall mean, with respect to the Class A Advances on any date of determination, an amount equal to the sum of (i) the product of (a) the daily average outstanding principal balance of all Class A Advances during the related period (including any related Interest Accrual Period), (b) the actual number of days in such period (including any related Interest Accrual Period), divided by 360, 365 or 366, as applicable, and (c) the Class A Usage Fee Rate and (ii) any unpaid Class A Interest Distribution Amounts from prior Payment Dates plus, to the extent permitted by law, interest thereon at the Class A Usage Fee Rate for the related Interest Accrual Period.
“Class A Lender” shall mean a Lender that has funded a Class A Advance.
“Class A Lender Group” shall mean with respect to any Class A Advances, any group consisting of related Conduit Lenders, Non-Conduit Lenders and Funding Agents.
“Class A Lender Group Percentage” shall mean, for any Class A Lender Group, the percentage equivalent of a fraction (expressed out to five decimal places), the numerator of which is, with respect to each Class A Lender Group, the Class A Commitment of all Non-Conduit Lenders in such Class A Lender Group, and the denominator of which is the Class A Aggregate Commitment.
“Class A Loan Note” shall mean each Class A Loan Note of the Borrower in the form of Exhibit C-1 attached hereto, payable to a Class A Funding Agent for the benefit of the Class A Lenders in such Class A Funding Agent’s Class A Lender Group, in the aggregate face amount of up to such Class A Lender Group’s portion of the Class A Maximum Facility Amount, evidencing the aggregate indebtedness of the Borrower to the Class A Lenders in such Class A Funding Agent’s Class A Lender Group, as the same be amended, restated, supplemented or otherwise modified from time to time.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Class A Maximum Facility Amount” shall mean $[***].
“Class A Unused Portion of the Commitments” shall mean, with respect to the Class A Lenders on any day, the excess of (x) the Class A Aggregate Commitment as of such day as of 5:00 P.M. (New York City time) on such day, over (y) the sum of the aggregate outstanding principal balance of the Class A Advances as of 5:00 P.M. (New York City time) on such day.
“Class A Usage Fee Margin” shall have the meaning set forth in the Fee Letter referred to in clause (i) of the definition thereof.
“Class A Usage Fee Rate” shall mean the sum of (i) the Cost of Funds and (ii) the Class A Usage Fee Margin.
“Class B Advance” shall have the meaning set forth in Section 2.2(B).
“Class B Aggregate Commitment” shall mean, on any date of determination, the sum of the Class B Commitments then in effect. The Class B Aggregate Commitment as of the Closing Date shall be equal to $[***].
“Class B Borrowing Base” shall mean, as of any date of determination, the product of (a) the Class B Commitment Percentage multiplied by (b) the Aggregate Borrowing Base; provided that in no event shall the Class B Borrowing Base be greater than the Class B Aggregate Commitment.
“Class B Borrowing Base Deficiency” shall have the meaning set forth in Section 2.9.
“Class B Commitment” shall mean the obligation of a Non-Conduit Lender to fund a Class B Advance on the Closing Date, as set forth on Schedule II attached hereto.
“Class B Commitment Percentage” shall mean an amount equal to the quotient of the Class B Aggregate Commitment divided by (b) the Aggregate Commitment.
“Class B Funding Agent” shall mean a Person appointed as a Class B Funding Agent for the Class B Lenders pursuant to Section 7.14. The initial Class B Funding Agent shall be LibreMax Master Fund, Ltd.
“Class B Interest Distribution Amount” shall mean, with respect to the Class B Advances on any date of determination, an amount equal to the sum of (i) the product of (a) the daily average outstanding principal balance of all Class B Advances during the related period (including any related Interest Accrual Period), (b) the actual number of days in such period (including any related Interest Accrual Period), divided by 360, 365 or 366, as applicable, and (c) the Class B Usage Fee Rate and (ii) any unpaid Class B Interest Distribution Amounts from prior Payment Dates plus, to the extent permitted by law, interest thereon at the Class B Usage Fee Rate for the related Interest Accrual Period.
“Class B Lender” shall mean a Lender that has funded a Class B Advance.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Class B Lender Percentage” shall mean the percentage equivalent of a fraction (expressed out to five decimal places), the numerator of which is the Class B Commitment of all Class B Lenders, and the denominator of which is the Class B Aggregate Commitment.
“Class B Lender Purchase Option” shall have the meaning set forth in Section 6.3.
“Class B Loan Note” shall mean each Class B Loan Note of the Borrower in the form of Exhibit C-2 attached hereto, payable to the Class B Funding Agent for the benefit of the Class B Lenders, in the aggregate face amount of up to the Class B Maximum Facility Amount, evidencing the aggregate indebtedness of the Borrower to the Class B Lenders, as the same be amended, restated, supplemented or otherwise modified from time to time.
“Class B Maximum Facility Amount” shall mean $[***].
“Class B Unused Portion of the Commitments” shall mean, with respect to the Class B Lenders on any day, the excess of (x) the Class B Aggregate Commitment as of such day as of 5:00 P.M. (New York City time) on such day, over (y) the sum of the aggregate outstanding principal balance of the Class B Advances as of 5:00 P.M. (New York City time) on such day.
“Class B Usage Fee Margin” shall have the meaning set forth in the Fee Letter referred to in clause (i) of the definition thereof.
“Class B Usage Fee Rate” shall mean the sum of (i) the Cost of Funds and (ii) the Class B Usage Fee Margin.
“Closing Date” shall mean December 30, 2019.
“Collateral” shall mean (a) the Pledged Collateral (as defined in the Pledge Agreement), (b) the Collateral (as defined in each of the Security Agreement and DeveloperCo Guaranty and Security Agreement) and (c) all Property described in any Security Documents as security for any Obligations and all other Property that now or hereafter secures (or is intended to secure) any Obligations.
“Collateral Access Agreement” shall mean each bailee letter, substantially in the form of Exhibit G or otherwise in form and substance reasonably satisfactory to the Administrative Agent, among the Administrative Agent, Borrower and a third-party warehouseman of an Approved Warehouse where any Collateral is stored or otherwise located.
“Commercial Paper” shall mean commercial paper, money market notes and other promissory notes and senior indebtedness issued by or on behalf of a Conduit Lender.
“Commitment” shall mean, individually or collectively, as the context may require, the Class A Commitments and the Class B Commitments, as applicable.
“Commitment Termination Date” shall mean the earlier of (a) December 31, 2020, (b) the occurrence of an ITC Extension, or (c) such earlier date on which the Commitments terminate hereunder.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Compliance Certificate” shall mean a certificate, in form and substance reasonably satisfactory to the Administrative Agent, by which Borrower and Sponsor each certifies Sponsor’s compliance with Section 5(r) of the Sponsor Guaranty, together with detailed calculations thereof, including each component thereof.

“Conduit Lender” shall mean the CS Conduit Lender and each financial institution identified as such that may become a party hereto.
“Confidential Information” shall have the meaning set forth in Section 10.16(A).
“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consent to Assignment” shall mean a consent to assignment, substantially in the form of Exhibit H or otherwise in form and substance reasonably satisfactory to the Administrative Agent, among the Administrative Agent, an Obligor and the counterparty to a Material Contract.
“Consultant Reports” shall mean, collectively, (a) Document No. 10156172-OAL-R-01, Sunnova TEP IV Due Diligence, Issue F, dated as of October 10, 2019, and Document No. 10156172-OAL-M-01, Sunnova CS Safe Harbor – Inverter Procurement Review, Issue B, dated as of December 27, 2019, each from the Technical Advisor, and (b) the insurance report, dated as of December 30, 2019, from the Insurance Advisor.
“Contribution Agreement” shall mean the Contribution Agreement, dated as of the date hereof, among Sponsor, Borrower and DeveloperCo.
“Control” shall mean possession, directly or indirectly, of power to (a) vote 50% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managing partners of such other Person, or (b) direct or cause the direction of the management and policies of such other Person whether by contract or otherwise.
    “Corporate Trust Office” shall mean, with respect to the Paying Agent, the corporate trust office thereof at which at any particular time its corporate trust business with respect to the Loan Documents is conducted, which office at the date of the execution of this instrument is located at 600 S. 4th Street, MAC 9300-061, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services – Asset-Backed Administration or at such other address as such party may designate from time to time by notice to the other parties to this Agreement.
“Cost of Funds” shall mean, (i) with respect to the Class A Advances for any Interest Accrual Period, interest accrued on such Class A Advances during such Interest Accrual Period at the Adjusted LIBOR Rate for such Interest Accrual Period or, if the Adjusted LIBOR Rate is not available, the Base Rate and (ii) with respect to the Class B Advances for any Interest Accrual Period, interest accrued on such Class B Advances during such Interest Accrual Period at the Adjusted LIBOR Rate for such Interest Accrual Period or, if the Adjusted LIBOR Rate is not available, the Base Rate.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Covered Entity” shall mean any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Covered Party” shall have the meaning set forth in Section 10.24 hereof.
“CPA Safe Harbor Amendment” shall mean an amendment to a Dealer Agreement in the form attached hereto as Exhibit J.
“CS Conduit Lender” shall mean Alpine Securitization Ltd.
“CS Non-Conduit Lender” shall mean Credit Suisse AG, Cayman Islands Branch.
“CSNY” shall have the meaning set forth in the introductory paragraph hereof.
“Dealer” shall mean a third party with whom the Sponsor or any of its Affiliates contracts to source potential Host Customers and to design, install or service PV Systems.
“Dealer Agreement” shall mean an agreement between the Sponsor or any of its Affiliates, on the one hand, and a Dealer, on the other hand, for the purpose of sourcing potential Host Customers and/or designing, installing or servicing PV Systems.
“Dealer Payments” shall mean, on any date of determination with respect to any Project, the amounts then due and payable to all Dealers in respect of such Project.
“Debt Service Reserve Account” shall have the meaning set forth in Section 8.2(A)(ii).
“Debt Service Reserve Borrowing Base Amount” shall mean (a) at any applicable time of determination prior to the [***] Payment Date following the Closing Date, an amount equal to the lesser of (i) the amount of cash then on deposit in the Debt Service Reserve Account or (ii) the product of (1) the amount of cash then on deposit in the Debt Service Reserve Account at such time multiplied by (2) the quotient of (x) [***] minus the total number of days that have elapsed since the Closing Date (or, if less, [***]) divided by (y) [***]; or (b) as of the [***] Payment Date and at all times thereafter, $0.
“Debt Service Reserve Required Balance” shall mean, as of the date of any determination, an amount equal to the sum of (a) the product of the Class A Usage Fee Rate multiplied by the sum of the Class A Advances then outstanding, (b) the product of the Class B Usage Fee Rate multiplied by the sum of the Class B Advances then outstanding, and (c) any Paying Agent Fee expected to come due in the succeeding [***] months.
“Default Rate” shall mean the Class A Usage Fee Rate or Class B Usage Fee Rate, as applicable, plus two percent (2.00%) per annum.
“Default Right” shall have the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Delayed Amount” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Date” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Lender” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Notice” shall have the meaning set forth in Section 2.4(E).
“Delayed Funding Reimbursement Amount” shall have the meaning set forth in Section 2.4(G).
“DeveloperCo” shall mean Sunnova TEP Developer, LLC, a Delaware limited liability company.
“DeveloperCo Account” shall mean that certain deposit account maintained with JPMorgan Chase Bank, N.A. with account number 539659216 and subject to the DeveloperCo Account Control Agreement.
“DeveloperCo Account Control Agreement” shall mean that certain Blocked Account Control Agreement, dated as of December 30, 2019, by and among DeveloperCo, the Administrative Agent and JPMorgan Chase Bank, N.A.
“DeveloperCo Account Required Balance” shall mean $[***].
“DeveloperCo Distribution Conditions” shall mean the satisfaction of each of the following:
(i)    no Potential Default or Event of Default has occurred and is continuing;
(ii)    immediately following the applicable distribution, an amount at least equal to the DeveloperCo Account Required Balance shall remain available on deposit in the DeveloperCo Account.
“DeveloperCo Security and Guaranty Agreement” shall mean that certain Guaranty and Security Agreement, dated as of the Closing Date, by DeveloperCo in favor of the Administrative Agent.
“Disqualified Lender” shall mean any financial institution or other Persons identified in Schedule A prior to the Closing Date, and any known Affiliate thereof clearly identifiable on the basis of its name (in each case, other than any Affiliate that is primarily engaged in, or that advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course and with respect to which such financial institution or other Person does not, directly or indirectly, possess the power to direct or cause the direction of the investment policies of such entity); provided that in no event shall a Lender designated under this Agreement as of the Closing Date be designated as a Disqualified Lender. The Borrower may from time to time, with the prior written consent of the Administrative Agent, update the list of Disqualified Lenders in Schedule A to (x) include identified Affiliates of financial institutions or other Persons identified pursuant to

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


the preceding sentence; provided that such updates shall not apply retroactively to disqualify parties that have previously acquired an assignment or participation interest in the Commitment or (y) remove one or more Persons as Disqualified Lenders (in which case such removed Person or Persons shall no longer constitute Disqualified Lenders).
“Dodd-Frank Act” shall mean the Dodd-Frank Wall Street Reform and Consumer Protection Act.
“Dollars,” “U.S. Dollars” and the symbol “$” shall mean the lawful currency of the United States.
“Eligible Equipment” shall mean Equipment that, as of the applicable date of determination, satisfies all of the requirements specified on Schedule 1.1(D).
“Eligible Equipment Appraisal” shall mean a written appraisal, in form reasonably satisfactory to the Administrative Agent, of the fair market value (or, at all times that an Event of Default has occurred and is continuing and during any Cash Sweep Period resulting from a Cash Sweep Event in clause (ii) in the definition thereof, orderly liquidation value) of all Eligible Equipment, from the Appraiser.
“Eligible Equipment Disposition” shall mean (a) the sale of a Project that incorporates Eligible Equipment to Sponsor, a Project Company (including pursuant to a Master Purchase Agreement), any other Affiliate or any third-party and (b) any sale or contribution by DeveloperCo to BL HoldCo of any Project that is not eligible for sale to a Project Company pursuant to a Master Purchase Agreement; provided that, in the case of each of clause (a) or (b) above, the Purchase Conditions have been satisfied.
“Eligible Equipment Supply Agreement” shall mean any agreement with an Approved Vendor relating to the purchase of Equipment, in which the Administrative Agent (on behalf of the Secured Parties) has a perfected, first priority security interest free and clear of all Liens (other than Permitted Liens) that satisfies all of the requirements specified on Schedule 1.1(e); provided that any agreement shall immediately cease to be an Eligible Equipment Supply Agreement upon (a) the expiration thereof in accordance with its terms, (b) the occurrence of any default by Borrower, or any other event, in each case, the effect of which is to permit the applicable Approved Vendor not to make any material payment or perform any material obligation thereunder, (c) such contract being repudiated by the applicable Approved Vendor, being terminated or becoming invalid, illegal or unenforceable or otherwise ceasing to be in full force and effect, (d) the suspension in performance by the applicable Approved Vendor thereto of its material obligations thereunder for a period of more than 15 consecutive days, (e) the counterparty thereto no longer being an Approved Vendor or (f) any material covenant, representation or warranty contained in the Loan Documents in respect of such agreement being been breached or not being true when made in any material respect; provided further that, an agreement that ceased to be an Eligible Equipment Supply Agreement pursuant to the foregoing clauses (b), (d), (e) or (f) may thereafter be reinstated as an Eligible Equipment Supply Agreement upon the demonstration, to the reasonable satisfaction of the Administrative Agent that the circumstances that caused such loss of eligibility have been cured within 60 days after the occurrence thereof.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Eligible In-Transit Equipment” shall have the meaning set forth defined in Schedule 1.1(D).
“Eligible Institution” shall mean a commercial bank or trust company having capital and surplus of not less than $[***] in the case of U.S. banks and $[***] (or the U.S. dollar equivalent as of the date of determination) in the case of foreign banks; provided that a commercial bank which does not satisfy the requirements set forth above shall nonetheless be deemed to be an Eligible Institution for purposes of holding any deposit account or any other account so long as such commercial bank is a federally or state chartered depository institution subject to regulations regarding fiduciary funds on deposit substantially similar to 12 C.F.R. § 9.10(b) and such account is maintained as a segregated trust account with the corporate trust department of such bank.
“Eligible Letter of Credit Bank” means a financial institution (a) organized in the United States, and (b) having total assets in excess of $[***] and with a long term rating of at least “A“ by S&P or “A3” by Moody’s and a short term rating of at least “A-1” by S&P or “P-1” by Moody’s.
“Eligible Shipping Agreement” shall mean any agreement providing for the shipment of Eligible Equipment directly to or from an Approved Warehouse, in which the Administrative Agent has a perfected, first priority security interest free and clear of all Liens (other than Permitted Liens); provided that any agreement shall immediately cease to be an Eligible Shipping Agreement upon (a) the expiration thereof in accordance with its terms, (b) the occurrence of any default by Borrower or DeveloperCo, or any other event, in each case the effect of which is to permit the counterparty thereto not to make any material payment or perform any material obligation thereunder, (c) such contract being repudiated by the counterparty thereto, being terminated or becoming invalid, illegal or unenforceable or otherwise ceasing to be in full force and effect, (d) the suspension of performance by the counterparty thereto of its material obligations thereunder, (e) the occurrence of any Insolvency Proceeding or other event described in Section 6.1(E) in respect of the counterparty thereto (unless, in the case of any such Insolvency Proceeding under the Bankruptcy Code, the relevant agreement has been assumed and the Administrative Agent has determined that performance thereunder will not be impaired) or (f) any material covenant, representation or warranty contained in the Loan Documents in respect of such agreement having been breached or not being true when made in any material respect; provided further that an agreement that ceased to be an Eligible Shipping Agreement pursuant to the foregoing clauses (b), (d), (e) or (f) may thereafter be reinstated as an Eligible Shipping Agreement upon the demonstration, to the reasonable satisfaction of the Administrative Agent, that the circumstances that caused such loss of eligibility have been cured within 60 days after the occurrence thereof.
“Entitlement Order” shall have the meaning set forth in Section 8.2(D)(v).
“Equipment” shall mean inverters and related equipment that is of a model and type set forth on the Approved Type and Vendor List.
“Equipment Sourcing Agreement” shall mean the Equipment Sourcing Agreement, dated as of the date hereof, between Borrower and DeveloperCo.
“Equity Interests” shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


in a Person (other than a corporation), including partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA, as in effect at the Closing Date and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.
“ERISA Affiliate” shall mean each Person (as defined in Section 3(9) of ERISA), which together with the Borrower, would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Internal Revenue Code or Section 4001(a)(14) or 4001(b)(1) of ERISA.
“ERISA Event” shall mean (i) that a Reportable Event has occurred with respect to any Single Employer Plan; (ii) the institution of any steps by the Borrower or any ERISA Affiliate, the Pension Benefit Guaranty Corporation or any other Person to terminate any Single Employer Plan or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, a Single Employer Plan; (iii) the institution of any steps by the Borrower or any ERISA Affiliate to withdraw from any Multi-Employer Plan or Multiple Employer Plan or written notification of the Borrower or any ERISA Affiliate concerning the imposition of withdrawal liability; (iv) a non-exempt “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code in connection with any Plan; (v) the cessation of operations at a facility of the Borrower or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (vi) with respect to a Single Employer Plan, a failure to satisfy the minimum funding standard under Section 412 of the Internal Revenue Code or Section 302 of ERISA, whether or not waived; (vii) the conditions for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to a Single Employer Plan; (viii) a determination that a Single Employer Plan is or is expected to be in “at-risk” status (within the meaning of Section 430(i)(4) of the Internal Revenue Code or Section 303(i)(4) of ERISA); (ix) the insolvency of or commencement of reorganization proceeding with respect to a Multi-Employer Plan or written notification that a Multi-Employer Plan is in “endangered” or “critical” status (within the meaning of Section 432 of the Internal Revenue Code or Section 305 of ERISA); or (x) the taking of any action by, or the threatening of the taking of any action by, the Internal Revenue Service, the Department of Labor or the Pension Benefit Guaranty Corporation with respect to any of the foregoing.
“Event of Default” shall mean any of the Events of Default described in Section 6.1.
“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (a) 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 applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) that are Other Connection Taxes, (ii) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


or for the account of such Lender with respect to an applicable interest in a Loan pursuant to a Law in effect on the date on which (a) such Lender acquires such interest in the Loan or (b) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, 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, (iii) Taxes attributable to such Recipient’s failure to comply with Section 2.17(G) and (iv) any U.S. federal withholding Taxes imposed under FATCA.
“Expense Claims” shall have the meaning set forth in Section 10.21.
“Facility” shall mean this Agreement together with all other Loan Documents.
“FATCA” shall mean Sections 1471 through 1474 of the Internal Revenue 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 interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code, and any intergovernmental agreements between the United States and another country which modify the provisions of the foregoing.
“Fee Letters” shall mean (i) that certain fee letter agreement, dated as of the Closing Date, entered into by and among the Administrative Agent and the Borrower, as the same be amended, restated, supplemented or otherwise modified from time to time, and (ii) any other fee letter between the Borrower and any Lender, as the same be amended, restated, supplemented or otherwise modified from time to time.
“Financial Covenants” shall mean the covenants set forth in Section 5(r) of the Sponsor Guaranty.
“Funding Agent” shall mean, individually or collectively as the context may require, each Class A Funding Agent and each Class B Funding Agent, as applicable.
“Funding Date” shall mean any Business Day on which an Advance is made at the request of the Borrower in accordance with provisions of this Agreement.
“Funds Flow Memorandum” shall mean, in connection with any Advance, a written memorandum delivered by the Borrower directing the application of the proceeds of the such Advance.
“GAAP” shall mean generally accepted accounting principles as are in effect from time to time and applied on a consistent basis (except for changes in application in which the Borrower’s independent certified public accountants and the Administrative Agent reasonably agree) both as to classification of items and amounts.
“Governmental Authority” shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive,

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Guaranteed Delivery Date” shall have the meaning set forth in Schedule 1.1(E).
“Hedge Agreement” shall mean, collectively, (i) the ISDA Master Agreement, the related Schedule to the ISDA Master Agreement, and the related Confirmation or (ii) a long form confirmation, in each case executed by the Borrower in accordance with the Hedge Requirements and in form and substance reasonably acceptable to the Administrative Agent.
“Hedge Counterparty” shall mean a Secured Hedge Counterparty or Qualifying Hedge Counterparty party to a Hedge Agreement.
“Hedge Requirements” shall mean the requirements of the Borrower on each Funding Date (or, in connection with the first Funding Date, pursuant to Section 5.1(W)(i)) to enter into and maintain one or more interest rate cap agreements with a Qualifying Hedge Counterparty, under which (a) the Borrower shall, until the Commitment Termination Date, receive on a monthly basis, on or about each Payment Date, an amount equal to the excess, if any, of LIBOR over the strike rate in exchange for the payment by the Borrower of a premium payable at the time such interest rate cap agreement is entered into, (b) the strike rate is not more than 2.50%, and (c) the notional balance shall not exceed 110.0% but shall not be less than 90.0% of the aggregate outstanding principal balance of the Loans after giving effect to payments made on the applicable Funding Date.
“Host Customer” shall mean the customer under Host Customer Agreement.
“Host Customer Agreement” shall mean a power purchase agreement or lease agreement relating to any PV System, including amendments, supplements and other modifications thereto. For the avoidance of doubt, Solar Loan Contracts do not constitute “Host Customer Agreements” for purposes of this Agreement and the other Loan Documents.
“Indebtedness” shall mean as to any Person at any time, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (i) borrowed money; (ii) obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (iii) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility; (iv) reimbursement obligations under any letter of credit, currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device (other than in connection with this Agreement); (v) obligations of such Person to pay the deferred purchase price of property or services; (vi) obligations of such Person as lessee under leases which have been or should be in accordance with GAAP recorded as capital leases; (vii) any other transaction (including without limitation forward sale or purchase agreements, capitalized leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements, and whether structured as a borrowing, sale and leaseback or a sale of assets for accounting purposes; (viii) any guaranty or endorsement of, or responsibility for, any Indebtedness of the types described in this definition; (ix) liabilities secured by any Lien on

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


property owned or acquired, whether or not such a liability shall have been assumed (other than any Permitted Liens or Permitted Equity Liens); or (x) unvested pension obligations.
“Indemnified Taxes” shall mean (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (ii) to the extent not otherwise described in clause (i), Other Taxes.
“Indemnitees” shall have the meaning set forth in Section 10.5.
“Independent Director” shall have the meaning set forth in Section 5.1(M).
“Insolvency Event” shall mean, with respect to any Person:
(i)    the commencement of: (a) a voluntary case by such Person under the Bankruptcy Code or (b) the seeking of relief by such Person under other debtor relief Laws in any jurisdiction outside of the United States;
(ii)    the commencement of an involuntary case against such Person under the Bankruptcy Code (or other debtor relief Laws) and the petition is not controverted or dismissed within sixty (60) days after commencement of the case;
(iii)    a custodian (as defined in the Bankruptcy Code) (or equal term under any other debtor relief Law) is appointed for, or takes charge of, all or substantially all of the property of such Person;
(iv)    such Person commences (including by way of applying for or consenting to the appointment of, or the taking of possession by, a rehabilitator, receiver, custodian, trustee, conservator or liquidator (or any equal term under any other debtor relief Laws) (collectively, a “conservator”) of such Person or all or any substantial portion of its property) any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency, liquidation, rehabilitation, conservatorship or similar law of any jurisdiction whether now or hereafter in effect relating to such Person;
(v)    such Person is adjudicated by a court of competent jurisdiction to be insolvent or bankrupt;
(vi)    any order of relief or other order approving any such case or proceeding referred to in clauses (i) or (ii) above is entered;
(vii)    such Person suffers any appointment of any conservator or the like for it or any substantial part of its property that continues undischarged or unstayed for a period of sixty (60) days; or
(viii)    such Person makes a compromise, arrangement or assignment for the benefit of creditors or generally does not pay its debts as such debts become due.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Insurance Advisor” shall mean Moore-McNeil, LLC or such other independent insurance advisor reasonably acceptable to the Administrative Agent.
“Interest Accrual Period” shall mean for each Payment Date, the period from and including the immediately preceding Payment Date to but excluding such Payment Date except that the Interest Accrual Period for the initial Payment Date shall be the actual number of days from and including the Closing Date to, but excluding, the initial Payment Date.
“Interest Distribution Amount” shall mean, individually or collectively as the context may require, the Class A Interest Distribution Amount and the Class B Interest Distribution Amount. For the avoidance of doubt, the amount of the Interest Distribution Amount shall not constitute “Confidential Information.”
“Intermediate Holdco” shall mean Sunnova Intermediate Holdings, LLC, a Delaware limited liability company.
“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, or any successor statute, and the rules and regulations thereunder, as the same are from time to time in effect.
“Investment” means any investment of capital in any Person either by purchase of stock or securities, contributions to capital, property transfer or otherwise.
“ITC Extension” shall mean the enactment of any federal legislation after the Closing Date that results in (a) (i) “energy property” (described in Section 48(a)(3)(A)(i) of the Code) on which construction began after December 31, 2019, being eligible for Tax Credits with respect to which the “energy percentage” (within the meaning of Section 48(a)(2) of the Code) is 30% or greater or (ii) “energy property” (described in Section 48(a)(3)(A)(i) of the Code) on which construction began after December 31, 2020, being eligible for a Tax Credit with respect to which the “energy percentage” (within the meaning of Section 48(a)(2) of the Code) is 26% or greater or (b) a benefit with an equivalent or greater value to Tax Credits at the rates described above, including a cash grant, a refundable credit or a production tax credit.
“Law” shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, guideline, judgment, injunction, writ, decree or award of any Governmental Authority.
“Lender” and “Lenders” shall have the meanings set forth in the introductory paragraph hereof.
“Lender Representatives” shall have the meaning set forth in Section 10.16(B)(i).
“LIBOR” shall mean (a) an interest rate per annum equal to the rate appearing on the applicable Screen Rate; or (b) (if no Screen Rate is available for U.S. Dollars or the Interest Accrual Period or such Screen Rate ceases to be available), the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Administrative Agent at its request quoted by the Base

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


Reference Banks, in each case at approximately 11:00 A.M., London time, two (2) Business Days prior to the commencement of such Interest Accrual Period for the offering of deposits in U.S. Dollars in the principal amount of the Advances and for a three (3) month period. Notwithstanding the foregoing, if LIBOR as determined herein would be less than zero (0.00), such rate shall be deemed to be zero percent (0.00%) for purposes of this Agreement. Notwithstanding the foregoing, if at any time while any Advances are outstanding, the applicable London interbank offered rate described in the definition of Screen Rate ceases to exist or be reported on the Screen Rate, the Administrative Agent may select (with notice to the Borrower and any other Lenders) an alternative rate, including any applicable spread adjustments thereto (the “Alternative Rate”) that in its commercially reasonable judgment is consistent with the successor for the London interbank offered rate, including any applicable spread adjustments thereto, generally being used in the new issue collateralized loan obligation market and all references herein to “LIBOR” will mean such Alternative Rate selected by the Administrative Agent.
“Lien” shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing).
“Liquidation Fee” shall mean for any Interest Accrual Period for which a reduction of the principal balance of the relevant Advance is made for any reason, on any day other than the last day of such Interest Accrual Period, the amount, if any, by which (A) the additional interest (calculated without taking into account any Liquidation Fee or any shortened duration of such Interest Accrual Period) which would have accrued during the portion of such Interest Accrual Period for which the cost of funding had been established prior to such reduction of the principal balance on the portion of the principal balance so reduced, exceeds (B) the income, if any, received by the Conduit Lender or the Non-Conduit Lender which holds such Advance from the investment of the proceeds of such reductions of principal balance for the portion of such Interest Accrual Period for which the cost of funding had been established prior to such reduction of the principal balance. A statement as to the amount of any Liquidation Fee (including the computation of such amount) shall be submitted by the affected Conduit Lender or the Non-Conduit Lender to the Borrower and shall be prima facie evidence of the matters to which it relates for the purpose of any litigation or arbitration proceedings, absent manifest error or fraud. Such statement shall be submitted five (5) Business Days prior to such amount being due.
“Loan Documents” shall mean this Agreement, the Loan Notes, the Security Documents, each Fee Letter, the Paying Agent Fee Letter, the Sponsor Guaranty, each Hedge Agreement and any other agreements, instruments, certificates or documents delivered hereunder or thereunder or in connection herewith or therewith, and “Loan Document” shall mean any of the Loan Documents
“Loan Note” shall mean, individually or collectively as the context may require, each Class A Loan Note and each Class B Loan Note, as applicable.
“Loan Party” shall mean Borrower and DeveloperCo.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Majority Class B Lenders” shall mean, as of any date of determination, Class B Lenders having Class B Advances exceeding fifty percent (50%) of all outstanding Class B Advances.
“Majority Lenders” shall mean, as of any date of determination, (i) unless and until all Obligations owing to any Class A Lender solely in its capacity as a Class A Lender have been reduced to zero, Class A Lenders having Class A Advances exceeding fifty percent (50%) of all outstanding Class A Advances, and (ii) at any time on and after all Obligations owing to each Class A Lender solely in its capacity as Class A Lender have been reduced to zero, Class B Lenders having Class B Advances exceeding fifty percent (50%) of all outstanding Class B Advances; provided, that (w) in the event that no Advances are outstanding as of such date, “Majority Lenders” shall mean Administrative Agent, (x) so long as CSNY, its Affiliates or any related Conduit Lender with respect to CSNY or its Affiliates (the foregoing collectively referred to herein as the “Credit Suisse Related Parties”) holds at least twenty-five percent (25%) of Class A Advances or, if no Obligations are owing to any Class A Lender, Class B Advances or, if no Obligations are owing to any Lender, “Majority Lenders” shall include such Credit Suisse Related Party holding such Advances hereunder and (y) at any time there are two or less Class A Lenders, the term “Majority Lenders” shall mean all Class A Lenders holding at least ten percent (10%) of Class A Advances. For the purposes of determining the number of Lenders in the foregoing proviso, Affiliates of a Lender shall constitute the same Lender.
“Management Services Agreement” shall mean the Management Services Agreement, dated as of the date hereof, among Borrower, DeveloperCo, Sunnova Management and the Administrative Agent.
“Managing MemberCo” shall mean each direct subsidiary of BL Borrower that owns membership interests in any Project Company, as set forth on Schedule 1.1(f), as such schedule shall be updated by the Borrower in accordance with Section 5.2(G).
“Margin Stock” shall have the meaning set forth in Regulation U.
“Market Value” shall mean (a) for purposes of any Advance the proceeds of which will be used to pay the purchase price of any Eligible Equipment (or to reimburse the Sponsor or any of its Affiliates for the purchase price of Eligible Equipment pursuant to the Contribution Agreement), the invoiced purchase price thereof and (b) as of any date of determination thereafter in respect of any Eligible Equipment, the lesser of (i) the invoiced purchase price thereof, (ii) the most recent Appraisal Price pursuant to the most recent monthly Eligible Equipment Appraisal and (iii) with respect to any Eligible Equipment, commencing on the date that is 24 months after the first date on which it was included in any Aggregate Borrowing Base calculation, 60% of the Market Value that would apply but for this clause (iii).
“Master Purchase Agreement” shall mean the applicable purchase agreement pursuant to which a Project Company has agreed to purchase from DeveloperCo Projects incorporating Eligible Equipment for an amount payable to DeveloperCo at least equal to the sum of (i) the invoiced purchase price of such Eligible Equipment pursuant to the applicable Eligible Equipment Supply Agreement plus (ii) all Dealer Payments in respect of such Project.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Material Adverse Effect” shall mean, any event or circumstance, taken alone or in conjunction with other events or circumstances, having a material adverse effect on any of the following: (i) the business, property, operations or financial condition of any Obligor, (ii) the ability of any Obligor to perform its respective obligations under the Transaction Documents (including the obligation of the Loan Parties to pay interest that is due and payable or repayment of any other Obligations), (iii) the enforceability of any Transaction Document or (iv) the validity, priority or enforceability of any Liens in favor of the Administrative Agent.
“Material Contract” shall mean (a) each Material Dealer Agreement (including each CPA Safe Harbor Amendment with respect to each Material Dealer Agreement); (b) each Eligible Equipment Supply Agreement; (c) each Affiliate Transaction Document; (d) each Storage Agreement; (e) each Eligible Shipping Agreement; and (f) any other agreement or arrangement to which Borrower or DeveloperCo is party (other than the Loan Documents and the Affiliate Transaction Documents) (i) that is deemed to be a material contract under any securities law applicable to such Person, including the Securities Act of 1933 or (ii) for which breach, termination, nonperformance or failure to renew could reasonably be expected to result in a Material Adverse Effect.
“Material Dealer” shall mean each of Trinity, Suntuity Solar LLC, Infinity Energy, Inc., Windmar PV Energy, Inc. and any other Dealer which, as of any time of determination, accounts for [***]% or more of the Sunnova Parties’ concentration or installed volume of PV Systems (in terms of total MW) over the prior [***] month period (or such shorter period since the execution of the Dealer Agreement with such Dealer).
“Material Dealer Agreement” shall mean each of (a) that certain Channel Partner Agreement between Sponsor and Trinity, dated as of June 6, 2017, (b) that certain Channel Partner Agreement between Sponsor and Suntuity Solar LLC, a New Jersey limited liability company, dated as of June 21, 2017, (c) that certain Channel Partner Agreement between Sponsor and Infinity Energy, Inc., a California corporation, dated as of March 7, 2017, (d) that certain Channel Partner Agreement between Sponsor and Windmar PV Energy, Inc., a Puerto Rico corporation, dated as of March 8, 2017 and (e) each other Dealer Agreement with a Material Dealer, in each case as amended, supplemented or otherwise modified from time to time in accordance with this Agreement.
“Material Tax Law Change” shall mean (a) any federal income tax legislation enacted on or after the Closing Date, (b) any issuance, promulgation and/or change in, or of, temporary or final Treasury Regulations on or after the Closing Date, (c) any applicable ruling, procedure, notice or announcement published in written form by the United States Department of Treasury or Internal Revenue Service on or after the Closing Date or (d) any change in the interpretation of the Code or United States Treasury Regulations attributable to a decision by the United States Tax Court, a United States District Court, United States Court of Appeals or the United States Supreme Court that is issued on or after the Closing Date, in each case (i) that would reasonably be expected to result in any Project incorporating 2019 Safe-Harbor Equipment or 2020 Safe-Harbor Equipment not qualifying for Tax Credits in the full amount as contemplated by Applicable Law as in effect on the Closing Date and (ii) with respect to which the Administrative Agent has delivered a written

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


notice to Borrower confirming that the Majority Lenders have determined that such event constitutes a Material Tax Law Change hereunder.
“Maturity Date” shall mean the earliest to occur of (a) twenty-seven (27) months after the initial purchase date from an Approved Vendor of Eligible Equipment included as Collateral hereunder, (b) December 31, 2022, (c) the date on which there is no Equipment included as Collateral hereunder and (d) the date on which all monetary Obligations shall become due and payable in full under this Agreement and the other Loan Documents, upon acceleration after an Event of Default or otherwise.
“Maximum Facility Amount” shall mean $137,609,341.71.
“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor rating agency.
“Multi-Employer Plan” shall mean a multi-employer plan, as defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making or accruing an obligation to make contributions or has within any of the preceding five plan years made or accrued an obligation to make contributions or had liability with respect to.
“Multiple Employer Plan” shall mean a Single Employer Plan, to which the Borrower or any ERISA Affiliate, and one or more employers other than the Borrower or an ERISA Affiliate, is making or accruing an obligation to make contributions or, in the event that any such plan has been terminated, to which the Borrower or an ERISA Affiliate made or accrued an obligation to make contributions during any of the five plan years preceding the date of termination of such plan.
“Nationally Recognized Accounting Firm” shall mean (A) PricewaterhouseCoopers LLP, Ernst & Young LLP, KPMG LLC, Deloitte LLP and any successors to any such firm and (B) any other public accounting firm designated by the Sponsor and approved by the Administrative Agent, such approval not to be unreasonably withheld or delayed.
“Net Extraordinary Proceeds” shall mean proceeds (including, when received, any deferred or escrowed payments to the extent permitted under this Agreement and the Transaction Document) received by Borrower or DeveloperCo (or any other Affiliated Entity and transferred to Borrower in accordance with Section 5.1(K)(ii)) in cash from (a) any insurance or indemnity payment from time to time with respect with any damage to or destruction in whole or in part of, any Collateral, unless such payment shall be used to replace, reinstate, restore or repair such Collateral in accordance with Section 5.1(L); (b) any refunded deposits or termination or other refunds or damage payments, including delay liquidated damages, received by Borrower, DeveloperCo or any Affiliated Entity under any Eligible Equipment Supply Agreement, Eligible Shipping Agreement or, to the extent relating to any Collateral, Material Dealer Agreement; (c) the incurrence of any Indebtedness by the Borrower pursuant to Section 5.2(C); or (d) Revised Purchase Price Amounts, in the case of each of clauses (a), (b) and (c), net of reasonable and documented third-party costs and expenses actually incurred in connection therewith, including legal fees and Taxes paid or payable in connection therewith.


[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Net Sale Proceeds” shall mean proceeds (including, when received, any deferred or escrowed payments, to the extent permitted under this Agreement and the Transaction Document) received by Borrower or DeveloperCo in cash from any Eligible Equipment Disposition in an amount equal to 100% of the Market Value (determined pursuant to clause (a) of the definition of “Market Value”) of the Equipment transferred pursuant to such Eligible Equipment Disposition.
“Non-Conduit Lender” shall mean each Lender that is not a Conduit Lender. For clarity, Class B Lenders are Non-Conduit Lenders.
“Non-Delayed Funding Lender” shall have the meaning set forth in Section 2.4(F).
“Notice of Borrowing” shall have the meaning set forth in Section 2.4.
“Obligations” shall mean and include, with respect to each of the Obligors, all loans, advances, debts, liabilities, obligations, covenants and duties owing by such Person to the Administrative Agent, the Paying Agent, any Secured Hedge Counterparty or any Lender of any kind or nature, present or future, arising under this Agreement, the Loan Notes, the Fee Letters, the Security Agreement, the Pledge Agreement, the DeveloperCo Guaranty and Security Agreement, any of the other Loan Documents or any other instruments, documents or agreements executed and/or delivered in connection with any of the foregoing, whether or not for the payment of money, whether arising by reason of an extension of credit, the issuance of a loan, indemnification or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising. The term includes the principal amount of all Advances, together with interest, charges, expenses, fees, attorneys’ and paralegals’ fees and expenses, any other sums chargeable to any Obligor, as the case may be, under this Agreement or any other Loan Document pursuant to which it arose but, in the case of Sponsor, solely to the extent Sponsor is a party thereto.
“Obligor” shall mean the Sponsor, the Pledgor and each Loan Party.
“OFAC” shall have the meaning set forth in Section 4.1(S).
“Officer’s Certificate” shall mean a certificate signed by an authorized officer of an entity.
“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Eligible Equipment or Transaction Document).
“Other Taxes” shall mean 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 Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Participant” shall have the meaning set forth in Section 10.8(d).
“Participant Register” shall have the meaning set forth in Section 10.8(d).
“Patriot Act” shall have the meaning set forth in Section 10.18.
“Paying Agent” shall have the meaning set forth in the introductory paragraph hereof.
“Paying Agent Account” and “Paying Agent Accounts” shall have the meanings set forth in Section 8.2(A)(ii).
“Paying Agent Fee” shall mean a fee payable by the Borrower to the Paying Agent as set forth in the Paying Agent Fee Letter.
“Paying Agent Fee Letter” shall mean that certain letter agreement, dated as of December 10, 2019, between the Borrower and the Paying Agent.
“Paying Agent Indemnified Parties” shall have the meaning set forth in Section 9.5.
“Payment Date” shall mean the last Business Day of each calendar month, starting on January 31, 2020.
“Permission to Operate” shall mean, with respect to any PV System, receipt of a letter or functional equivalent from the connecting utility authorizing such PV System to be operated.
“Permits” shall mean, with respect to any PV System, the applicable permits, franchises, leases, orders, licenses, notices, certifications, approvals, exemptions, qualifications, rights or authorizations from or registration, notice or filing with any Governmental Authority required to operate such PV System.
“Permitted Asset Disposition” shall mean (a) any Eligible Equipment Disposition; (b) the sale of Inventory (other than Eligible Equipment) in the ordinary course of business; (c) termination of a lease of real or personal Property not necessary for the ordinary course of business, which could not reasonably be expected to have a Material Adverse Effect and does not result from an Obligor’s default; (d) an Asset Disposition of any operating Project that is distributed to DeveloperCo by BL HoldCo or BL Borrower and is no longer eligible for financing pursuant to the terms of the Back-Leverage Transaction Documents; or (e) any other Asset Disposition approved in writing by the Administrative Agent.
“Permitted Assignee” shall mean (a) a Lender or any of its Affiliates, (b) any Person managed by a Lender or any of its Affiliates, and (c) any Program Support Provider for any Conduit Lender, an Affiliate of any Program Support Provider, or any commercial paper conduit administered, sponsored or managed by a Lender or to which a Non-Conduit Lender provides liquidity support, an Affiliate of a Lender or an Affiliate of an entity that administers or manages a Lender or with respect to which the related Program Support Provider of such commercial paper conduit is a Lender.
“Permitted Indebtedness” shall mean:

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(i)    the Obligations;
(ii)    solely with respect to BL HoldCo and BL Borrower, any Back-Leverage Debt; and
(iii)    to the extent constituting Indebtedness, reimbursement obligations of such Person owed in connection with the payment of expenses incurred in the ordinary course of business in connection with the financing, management, operation or maintenance of its property or agreements.
“Permitted Investment” shall mean (a) Investments in Subsidiaries to the extent existing on the Closing Date; (b) Investments in any Managing MemberCo or Project Company formed as subsidiaries of BL Borrower after the Closing Date or in any other Subsidiary and required to be made in connection with a tax equity transaction pursuant to Tax Equity Transaction Documents or otherwise made in the ordinary course of business to fund customary operating expenses and other reasonable working capital needs (and excluding, for the avoidance of doubt, any indirect distribution to the Sponsor); (c) Cash Equivalents held in the Paying Agent Accounts that are subject to the Administrative Agent’s Lien and control, pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent; and (d) contributions or other transfers of Eligible Equipment by Borrower to DeveloperCo pursuant to the Equipment Sourcing Agreement.
“Permitted Investor” shall mean collectively, Energy Capital Partners III, LP, Energy Capital Partners III-A, LP, Energy Capital Partners III-B, LP, Energy Capital Partners III-C, LP and Energy Capital Partners-D, LP, Quantum Strategic Partners, and each of their Permitted Transferees (as defined in the Investors Agreement, dated as of March 29, 2018, by and among the Sponsor and the other signatories thereto).
“Permitted Liens” shall mean:
(i)    Liens in favor of the Administrative Agent;
(ii)    Liens for Taxes not yet due or being Properly Contested;
(iii)    statutory Liens (other than Liens for Taxes) arising in the ordinary course of business, but only if (i) payment of the obligations secured thereby is not yet due or is being Properly Contested, and (ii) such Liens do not materially impair the value or use of the property or materially impair operation of the business of Borrower, DeveloperCo, BL HoldCo or BL Borrower;
(iv)    Liens arising by virtue of a judgment or judicial order against Borrower, DeveloperCo, BL HoldCo or BL Borrower, or any property of Borrower, DeveloperCo, BL HoldCo or BL Borrower, as long as the related judgment or judicial order does not give rise to an Event of Default;
(v)    solely with respect to BL HoldCo and BL Borrower, other Liens under the Back-Leverage Transaction Documents;

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


(vi)    deposits made in the ordinary course of business to secure the performance of leases and Storage Agreements;
(vii)    carriers’, repairmens’, mechanics’, workers’, materialmen’s or other like Liens arising in the ordinary course of business with respect to obligations which are not due or which are being Properly Contested; and
(viii)    banker’s Liens, rights of setoff and other similar Liens existing pursuant to the terms of the DeveloperCo Account Control Agreement solely with respect to assets the DeveloperCo Account.
“Person” shall mean any individual, corporation (including a business trust), partnership, limited liability company, joint-stock company, trust, unincorporated organization or association, joint venture, government or political subdivision or agency thereof, or any other entity.
“Pipeline Exclusivity Agreement” shall mean the Pipeline Exclusivity Agreement, dated as of the date hereof, among the Sponsor, the Borrower, DeveloperCo and the Administrative Agent.
“Plan” shall mean an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code as to which the Borrower or any Affiliate may have any liability.
“Pledge Agreement” shall mean the Pledge Agreement, dated as of the Closing Date, by Pledgor and Borrower in favor of the Administrative Agent, as amended, restated, modified and/or supplemented from time to time in accordance with its terms.
“Pledgor” shall mean Sunnova Inventory Pledgor LLC, a Delaware limited liability company.
“Potential Default” shall mean any occurrence or event that, with notice, passage of time or both, would constitute an Event of Default.
“Pre-Sale Deposit” shall mean, in connection with a particular Eligible Equipment Disposition to a Project Company pursuant to Tax Equity Transaction Documents which require DeveloperCo to transfer title to the relevant Eligible Equipment prior to receipt of final payment therefor, a deposit of cash to the Proceeds Account (from general working capital available in the DeveloperCo Account) in an amount equal to the amount that would otherwise be required to be deposited into the Proceeds Account pursuant to this Agreement at the time of such Eligible Equipment Disposition.
“Proceeding” shall have the meaning set forth in Section 10.5.
“Proceeds Account” shall have the meaning set forth in Section 8.2(A)(i).
“Program Support Provider” shall mean and include any Person now or hereafter extending liquidity or credit or having a commitment to extend liquidity or credit to or for the account of, or to make purchases from, a Conduit Lender (or any related commercial paper issuer that finances

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


such Conduit Lender) in support of commercial paper issued, directly or indirectly, by such Conduit Lender in order to fund Advances made by such Conduit Lender hereunder.
“Project” shall mean a PV System, the related Host Customer Agreement and any rights incidental thereto.
“Project Company” shall mean each tax equity investment vehicle set forth on Schedule 1.1(f), as such schedule shall be updated by the Borrower in accordance with Section 5.2(G).
“Project Company Operating Agreement” shall mean, with respect to each Project Company, the limited liability company agreement or operating agreement of such Project Company by and between the applicable Managing MemberCo and the applicable Tax Equity Investor.
“Project Sale Proceeds” shall mean proceeds (including, when received, any deferred or escrowed payments, to the extent permitted under this Agreement and the Transaction Document) received by DeveloperCo in cash from any disposition of a Project incorporating Eligible Equipment, net of reasonable and documented third-party costs and expenses actually incurred in connection therewith, including legal fees and Taxes paid or payable in connection therewith
“Projected Deployment Schedule” shall mean as of any date of determination, those projections prepared by Borrower for the period commencing on such date of determination and ending 12 months thereafter showing Borrower’s reasonable good faith estimates as of such date of the projected deployment of Eligible Equipment by Borrower and DeveloperCo during such period and any other projected acquisition and disposition of Eligible Equipment by Borrower and DeveloperCo during such period.
“Properly Contested” shall mean with respect to any obligation of an Obligor, (a) the obligation is subject to a bona fide dispute regarding amount or the Obligor’s liability to pay; (b) the obligation is being properly contested in good faith by appropriate proceedings promptly instituted and diligently pursued; and (c) appropriate reserves have been established in accordance with GAAP.
“Proposed Tax Law Change” means (a) any proposed change in or amendment to the Internal Revenue Code or any other applicable federal income Tax statute that has been passed by either house of Congress or is reported by either the United States House Committee on Ways and Means or the United States Senate Committee on Finance and that, in each case, is reasonably likely to be enacted into law (provided, that this determination shall take into account all relevant facts), (b) any proposed Treasury Regulation that applies a new or different interpretation or analysis of any provision of the Internal Revenue Code, any other applicable federal Tax statute, or any temporary or final Treasury Regulations promulgated thereunder, in the case of each of clauses (a) and (b), which would reasonably be expected to materially adversely affect the tax treatment of or tax consequences to the Borrower or the tax treatment of or tax consequences relating to the Eligible Equipment or owners thereof.
“Purchase Conditions” shall mean, with respect to any Eligible Equipment Disposition (including any disposition of a Project incorporating Eligible Equipment), (i) Project Sale Proceeds are at least equal to the Market Value of the applicable equipment, (ii) the amount to be deposited

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


in the Proceeds Account in connection with such Eligible Equipment Disposition (either from such Project Sale Proceeds or, at the election of DeveloperCo, from funds available in the DeveloperCo Account) is at least equal to (x) during a Cash Sweep Period, [***]% and (y) [***]%, in each case of the applicable Net Sale Proceeds plus, in connection with any Eligible Equipment Disposition consummated on or prior to June 30, 2020, an amount equal to [***] times the applicable amount of the reduction in the Debt Service Reserve Borrowing Base Amount since the time of the most recent Eligible Equipment Disposition, (iii) such amounts shall be applied to the prepayment of the Advances in accordance with Section 2.7(C) or (D), as applicable, (iv) after giving effect to such sale or contribution and associated mandatory prepayments, the total Class A Advances outstanding shall not exceed the Class A Borrowing Base, the total Class B Advances outstanding shall not exceed the Class B Borrowing Base and the Debt Service Reserve Account shall be funded in an amount no less than the Debt Service Reserve Required Balance and (v) no Event of Default shall have occurred and be continuing prior to or immediately after giving effect to such sale or contribution.
“Purchase Order” means each purchase order issued under a Supply Agreement by Borrower or Sponsor relating to any Eligible Equipment.
“PV System” shall mean a photovoltaic system, including solar photovoltaic panels, one or more inverters, racking, any energy storage systems installed in connection therewith, wiring and other electrical devices, as applicable, conduits, weatherproof housings, hardware, remote monitoring equipment, communication equipment, connectors, meters, disconnects and over current devices (including any replacement or additional parts included from time to time), in each case, intended for use in a residential rooftop solar installation.
“QFC” shall have the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
“QFC Credit Support” shall have the meaning set forth in Section 10.24 hereof.
“Qualified Service Provider” shall mean Protiviti Inc. or, subject to the approval of the Administrative Agent, other service providers.
“Qualifying Hedge Counterparty” shall mean a counterparty to a Hedge Agreement which at all times satisfies all then applicable counterparty criteria of S&P or Moody’s for eligibility to serve as counterparty under a structured finance transaction rated “A+”, in the case of S&P or “A1”, in the case of Moody’s.
“Recipient” shall mean the Administrative Agent, the Lenders or any other recipient of any payment to be made by or on account of any obligation of the Loan Parties under this Agreement or any other Loan Document.
“Register” shall have the meaning set forth in Section 10.8(c).
“Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Reportable Event” shall mean a reportable event as defined in Section 4043 of ERISA and the regulations issued under such Section, with respect to a Plan, excluding, however, such events as to which the Pension Benefit Guaranty Corporation by regulation or by public notice waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event, provided, that a failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waivers in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Internal Revenue Code.
“Representatives” shall have the meaning set forth in Section 10.16(A)(i).
“Responsible Officer” shall mean (x) with respect to the Paying Agent, any President, Vice President, Assistant Vice President, Assistant Secretary, Assistant Treasurer or Corporate Trust Officer, or any other officer in the Corporate Trust Office customarily performing functions similar to those performed by any of the above designated officers, in each case having direct responsibility for the administration of this Agreement, and (y) with respect to any other party hereto, any corporation, limited liability company or partnership, the chairman of the board, the president, any vice president, the secretary, the treasurer, any assistant secretary, any assistant treasurer, managing member and each other officer of such corporation or limited liability company or the general partner of such partnership specifically authorized in resolutions of the board of directors of such corporation or managing member of such limited liability company to sign agreements, instruments or other documents in connection with the Loan Documents on behalf of such corporation, limited liability company or partnership, as the case may be, and who is authorized to act therefor.
“Restrictive Agreement” shall mean with respect to any Person, an agreement (other than a Loan Document) that conditions or restricts the right of such Person to incur or repay Indebtedness, to grant Liens on any assets, to declare or make cash distributions, to modify, extend or renew any agreement evidencing Indebtedness, or to repay any intercompany Indebtedness.
“Revised Purchase Price Amount” shall mean any value (in cash, credit or otherwise), other than delivery of the relevant Equipment, provided by any supplier to Borrower or Sponsor in connection with any Purchase Order following the payment of the purchase price by Borrower or Sponsor in connection with such Purchase Order.
“S&P” shall mean S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, or any successor rating agency.
“Screen Rate” shall mean the London interbank offer rate administered by ICE Benchmark Administration Limited for the relevant currency and period displayed on the appropriate page of the Thomson Reuters screen. If the agreed page is replaced or service ceases to be available, the Administrative Agent may specify another page or service displaying the same rate after consultation with the Borrower and the Majority Lenders.
“Secured Hedge Counterparty” shall mean an affiliate of any Funding Agent that is party to any Hedge Agreement.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Secured Hedge Counterparty Joinder” shall mean that certain Joinder Agreement executed by a Secured Hedge Counterparty and acknowledged by the Administrative Agent, a copy of which shall be provided to all Parties to this Agreement.
“Secured Parties” shall mean the Administrative Agent, each Lender and each Secured Hedge Counterparty.
“Securities Intermediary” shall have the meaning set forth in Section 8.2(D)(i).
“Security Agreement” shall mean the Security Agreement, dated as of the Closing Date, executed and delivered by the Borrower in favor of the Administrative Agent, for the benefit of the Secured Parties, as amended, restated, modified and/or supplemented from time to time in accordance with its terms.
“Security Documents” shall mean the Sponsor Guaranty, the Pledge Agreement, the Security Agreement, the DeveloperCo Security and Guaranty Agreement, the DeveloperCo Account Control Agreement, the Collateral Access Agreements, the Consents to Assignment, each Step-in Rights Agreement, each Tax Equity Consent and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any Obligations.
“SEI” shall mean Sunnova Energy International Inc., a Delaware corporation.
“Single Employer Plan” shall mean any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multi-Employer Plan, that is subject to Title IV of ERISA or Section 412 of the Internal Revenue Code and is sponsored or maintained by the Borrower or any ERISA Affiliate or for which the Borrower or any ERISA Affiliate may have liability by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.
“Solar Loan Contract” shall mean a loan and security agreement or retail installment and security agreement entered into with a customer and evidencing a loan to finance the purchase of a PV System by the customer.
“Solvent” shall mean, with respect any to Obligor, that as of the date of determination, both (a) (i) the sum of such entity’s debt (including contingent liabilities) does not exceed the present fair saleable value of such entity’s present assets; (ii) such entity’s capital is not unreasonably small in relation to its business as contemplated on the Closing Date; and (iii) such entity 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 (b) such entity is “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).
“Sponsor” shall mean Sunnova Energy Corporation, a Delaware corporation.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Sponsor Guaranty” shall mean that certain Limited Guaranty, dated as of the Closing Date, by the Sponsor in favor of the Borrower and the Administrative Agent.
“Sponsor Material Adverse Effect” shall mean the effect of any event or circumstance that, taken alone or in conjunction with other events or circumstances, has a material adverse effect on any of the following: (a) the business, operations, properties or financial condition of Sponsor and its Subsidiaries, taken as a whole, (b) the ability of Sponsor to perform its obligations under the Sponsor Guaranty or (c) the enforceability of the Sponsor Guaranty or any Transaction Document to which the Sponsor is a party.
“Step-in Rights Agreement” shall mean, with respect to a Material Dealer Agreement, a step-in rights agreement, substantially in the form of Exhibit I or otherwise in form and substance satisfactory to the Administrative Agent, among the Administrative Agent, an Obligor and the applicable Material Dealer.
“Storage Agreement” shall mean, in the case of each Approved Warehouse other than an Approved Trinity Warehouse owned by Trinity or Approved Dealer Warehouse owned by the applicable Material Dealer, a written agreement, in form and substance reasonably satisfactory to the Administrative Agent, between or among (i) Borrower, Trinity or such Material Dealer, on the one hand, and (ii) a third-party warehouseman, on the other hand.
“Subsidiary” shall mean, with respect to any Person at any time, (i) any corporation or trust of which 50% or more (by number of shares or number of votes) of the outstanding Equity Interests or shares of beneficial interest normally entitled to vote for the election of one or more directors, managers or trustees (regardless of any contingency which does or may suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person’s subsidiaries, or any partnership of which such Person or any of such Person’s Subsidiaries is a general partner or of which 50% or more of the partnership interests is at the time directly or indirectly owned by such Person or one or more of such Person’s subsidiaries, and (ii) any corporation, trust, partnership or other entity which is controlled or capable of being controlled by such Person or one or more of such Person’s subsidiaries.
“Sunnova Management” shall mean Sunnova Inventory Management, LLC, a Delaware limited liability company.
“Sunnova Parties” shall mean the Loan Parties, BL HoldCo, BL Borrower, each Managing MemberCo, each Project Company and each of their respective Affiliates that is party to any Transaction Document, Back-Leverage Transaction Document or Tax Equity Transaction Document.
“Supported QFC” shall have the meaning set forth in Section 10.24 hereof.
“Swap” shall have the meaning set forth in Section 1a(47) of the Commodity Exchange Act.
“Tax Credit” means the energy credit under Section 48 of the Code and allowed as an investment tax credit under Section 46 of the Code.

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


“Tax Equity Consent” shall mean, with respect to each Project Company Operating Agreement, Master Purchase Agreement and any other Tax Equity Transaction Document which includes restrictions that could reasonably be expected to prevent or otherwise interfere with the Administrative Agent’s foreclosure or transfer of the Collateral, a consent to collateral assignment from the applicable Tax Equity Investor in form and substance satisfactory to the Administrative Agent.
“Tax Equity Investor” shall mean, with respect to any Project Company, a third party investor in such Project Company to whom the tax benefits associated with the ownership of PV Systems are transferred or disproportionately allocated.  
“Tax Equity Transaction Documents” shall mean the material documents (including, in each case, all material amendments, modifications, supplements, waivers and consents with respect thereto) entered into in connection with any transaction entered into by the Managing MemberCo, the applicable Tax Equity Investor and/or DeveloperCo, including the applicable Master Purchase Agreement, Project Company Operating Agreement, maintenance services agreement, administrative services agreement, capital contribution agreement or guarantee from Sponsor or any other Sunnova Party of the obligations of such Managing MemberCo in connection with such transaction.
“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, and including any interest, additions to tax or penalties applicable thereto.
“TCB Account” means the account in the name of DeveloperCo disclosed to the Administrative Agent and established at Texas Capital Bank.
“Technical Advisor” shall mean Black & Veatch, DNV GL or such other independent technical advisor reasonably acceptable to the Administrative Agent.
“Transaction Documents” shall mean the Loan Documents, each Material Contract and any other agreements, instruments, certificates or documents delivered hereunder or thereunder or in connection herewith or therewith, and “Transaction Document” shall mean any of the Transaction Documents.
“Trinity” shall mean Trinity Heating & Air, Inc., d/b/a Trinity Solar.
“Trinity ROFR Letter” means a letter agreement delivered pursuant to Section 5.1(W)(iii), by and among the Administrative Agent, Borrower and Trinity, setting forth a right of first refusal in favor of Trinity, with respect to the purchase of certain Eligible Equipment.
“UCC” shall mean the Uniform Commercial Code as from time to time in effect in any applicable jurisdiction.
“Undrawn Tax Equity Commitment” shall mean, as of any date of determination, the portion of the outstanding commitments of all Tax Equity Investors (i) that Borrower has demonstrated, to

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


the reasonable satisfaction of the Administrative Agent (including delivery of the applicable Tax Equity Transaction Documents or such other documentation reasonably acceptable to the Administrative Agent), are required to be contributed by such Tax Equity Investors to the related Project Company to pay a portion of the purchase price payable to DeveloperCo pursuant to a Master Purchase Agreement for Projects in which Eligible Equipment is expected to be incorporated and (ii) which are eligible to be drawn with respect to Projects in which Eligible Equipment is expected to be incorporated by no later than the date on which such Eligible Equipment is scheduled to be purchased from Borrower pursuant to the Equipment Sourcing Agreement.
“United States” shall mean the United States of America.
“Unused Line Fee” shall have the meaning set forth in Section 2.5(D).
“Unused Line Fee Percentage” shall have the meaning set forth in the Fee Letter referred to in clause (i) of the definition thereof.
“Unused Portion of the Commitments” shall mean, as of any date of determination, the sum of the Class A Unused Portion of the Commitments plus the Class B Unused Portion of the Commitments as of such date of determination.
“Upstream Payment” shall mean a distribution of cash by (a) BL HoldCo to the DeveloperCo Account or the Proceeds Account or (b) the DeveloperCo Account to the Proceeds Account.
“U.S. Person” shall mean any Person who is a U.S. person within the meaning of Section 7701(a)(30) of the Internal Revenue Code.
“U.S. Special Resolution Regime” shall have the meaning set forth in Section 10.24 hereof.
“U.S. Tax Compliance Certificate” shall have the meaning set forth in Section 2.17(G)(ii)(b)(3).


[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


SCHEDULE 1.1(D)
to
Credit Agreement
ELIGIBLE EQUIPMENT
“Eligible Equipment” means Equipment that meets each of the following criteria as of any date of determination:

a.
That (a) has not been physically delivered to, or for the benefit of, Borrower at an Approved Warehouse but with respect to which the Administrative Agent has received one or more letters of credit, in form and substance and in a stated amount (not to exceed the purchase price payable under the terms of the applicable Eligible Equipment Supply Agreement) reasonably satisfactory to the Administrative Agent from an Eligible Letter of Credit Bank, (b) is stored in an Approved Sunnova Warehouse (other than as provided in Section 5.1(B)(ii)), (c) is stored in an Approved Trinity Warehouse (other than as provided in Section 5.1(B)(ii)) or is in transit within the United States (including Approved U.S. Territories) from an Approved Sunnova Warehouse to an Approved Trinity Warehouse pursuant to an Eligible Shipping Agreement, (d) is stored in an Approved Dealer Warehouse (other than as provided in Section 5.1(B)(ii)), (e) is in transit within the United States (including Approved U.S. Territories) from an Approved Sunnova Warehouse or Approved Trinity Warehouse to an Approved Dealer Warehouse pursuant to an Eligible Shipping Agreement, or from an Approved Trinity Warehouse or Approved Dealer Warehouse to a Host Customer’s residence or otherwise under the control of a Dealer prior to final installation on the Host Customer’s residence or (f) has been installed at the applicable Host Customer’s residence but with respect to which Borrower and DeveloperCo have not received the total amount of Net Sale Proceeds therefor and applied such amount in accordance with Section 2.9(C); provided, that (1) the aggregate Market Value of Equipment that can be considered Eligible Equipment pursuant to subclause (d), (e) or (f) of this clause (i) (such Eligible Equipment, “Eligible In-Transit Equipment”) may not exceed an amount equal to [***]% of the aggregate Commitments and (2) the aggregate Market Value of Equipment that can be considered Eligible Equipment pursuant to subclause (c) of this clause (i) may not exceed an amount equal to [***]% of the aggregate Commitments.
b.
That was or is being manufactured and was sold to Sponsor or Borrower pursuant to an Eligible Equipment Supply Agreement, and if applicable, immediately upon the acquisition thereof by Sponsor, contributed by Sponsor to Borrower pursuant to the Contribution Agreement.
c.
In respect of which (a) all payments then required to have been made pursuant to the related Eligible Equipment Supply Agreement have been made in full in cash in accordance with the terms of such Eligible Equipment Supply Agreement, and (b) no Person has asserted or may assert any reclamation rights.

Schedule 1.1(D)

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



d.
With respect to any Equipment that has been physically delivered to Borrower or to which title and risk of loss has passed to Borrower, that is owned by Borrower free and clear of all Liens (other than Permitted Liens).
e.
That is not on consignment from any consignor or to any consignee (other than if such Equipment is in transit).
f.
With respect to any Equipment that has been physically delivered to Borrower or to which title and risk of loss has passed to Borrower, in which the Administrative Agent (on behalf of the Secured Parties) has a perfected, first priority security interest (other than Permitted Liens).
g.
With respect to any Equipment that has been physically delivered to Borrower or to which title and risk of loss has passed to Borrower, that is not damaged, defective, is in good working order and condition, and if applicable, that is contributed to Borrower immediately upon the acquisition thereof by Sponsor
h.
That Borrower has not returned, attempted to return, or is in the process of returning to the applicable Approved Vendor under the Eligible Equipment Supply Agreement pursuant to which it was purchased.
i.
That is held for use by Borrower in the ordinary course of business and is projected to be installed during 2019 through 2023 in a manner that will permit the owner thereof to treat the costs of such Equipment as having been “incurred” in the year in which the purchase price of such Equipment is paid within the meaning of IRS Notice 2018-59 such that such Equipment can be used as a basis for claiming the Tax Credit.
j.
In respect of which no covenant, representation or warranty contained in any Loan Document has been breached or was not true when made.





Schedule 1.1(D)

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.



SCHEDULE 1.1(E)
to
Credit Agreement
ELIGIBLE EQUIPMENT SUPPLY AGREEMENT CRITERIA
Each Eligible Equipment Supply Agreement shall:

a.
be binding against Borrower under local law, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and by equitable principles (regardless of whether enforcement is sought in equity or at law);
b.
not (1) limit damages (other than consequential damages) payable to the Approved Vendor in the event of a default or termination thereunder and (2) limit damages payable by the Approved Vendor in the event of a default or termination thereunder to an amount less than 5% of the total purchase price under such Eligible Equipment Supply Agreement; provided that, notwithstanding this clause 2, an agreement with an Approved Vendor shall constitute an Eligible Equipment Supply Agreement if the Administrative Agent consents to such agreement in writing;
c.
require unconditional payment in cash of the purchase price for such Equipment to be made by Borrower to the applicable Approved Vendor no later than December 31 of the applicable year, and in no event shall such purchase price be financed by such Approved Vendor;
d.
require the payment of any down payment to be allocated to specified items of Equipment;
e.
require Borrower to pay any sales, use or value-added taxes due upon delivery of such Equipment;
f.
require transfer of title and risk of loss with respect to such Equipment to occur no later than the later of (i) December 31 of the applicable year and (ii) 3.5 months from the date actual payment is made (such later date, the “Guaranteed Delivery Date”);
g.
require physical delivery of such Equipment (in a manner that satisfies Eligible Equipment requirements) no later than the Guaranteed Delivery Date;
h.
require the Approved Vendor to pay liquidated damages (or otherwise be subject to contractual penalties) within a customary market range in the event that it fails to physically deliver, and transfer title and risk of loss to, the Equipment by the Guaranteed Delivery Date;
i.
require such Equipment to be in a state of completion as of the earlier of (x) the date of transfer of title and risk of loss and (y) physical delivery, such that such Equipment does not need to be returned to such Approved Vendor for further assembly or work; and

Schedule 1.1(E)

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.


j.
require such Approved Vendor to certify to Borrower, upon delivery and transfer of title and risk of the Equipment to Borrower, as to the date and amount of Borrower’s payment of the purchase price for the Equipment, a description of such Equipment, the date of transfer of title and risk of loss and the date and location of physical delivery.

Schedule 1.1(D)

[***] = Certain information has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the company if publicly disclosed.

Exhibit 10.36

PARENT GUARANTY
This PARENT GUARANTY (this “Guaranty”), dated as of December 30, 2019, is made by SUNNOVA ENERGY CORPORATION, a Delaware corporation (the “Parent Guarantor”), in favor of SUNNOVA TEP INVENTORY, LLC, a Delaware limited liability company (the “Borrower”), and CREDIT SUISSE AG, NEW YORK BRANCH (the “Administrative Agent”), as administrative agent under that certain Credit Agreement, dated as of even date herewith (including all annexes, exhibits and schedules thereto, and as from time to time amended, restated, supplemented or otherwise modified, the “Credit Agreement”), by and among the Borrower, the Administrative Agent, the financial institutions that become parties thereto as lenders (the “Lenders”), each funding agent representing a group of Lenders (the “Funding Agents” and each a “Funding Agent”), and Wells Fargo Bank, National Association, as paying agent (the “Paying Agent”). Capitalized terms used but not defined herein shall have the meanings specified in the Credit Agreement.
PRELIMINARY STATEMENT:
WHEREAS, the Parent Guarantor, the Borrower, the Administrative Agent and DeveloperCo (“DeveloperCo”) have agreed to enter into that certain Pipeline Exclusivity Agreement (the “Pipeline Exclusivity Agreement”), dated as of December 30, 2019;
WHEREAS, DeveloperCo and Sunnova TEP IV-A, LLC have entered into the Master Purchase Agreement, dated as of August 16, 2019, and DeveloperCo will, from time to time, enter into additional master purchase agreements with Project Companies in accordance with the Credit Agreement (each, a “Master Purchase Agreement”);
WHEREAS, the Borrower and DeveloperCo have agreed to enter into the Equipment Sourcing Agreement (the “Equipment Sourcing Agreement”), dated as of December 30, 2019;
WHEREAS, the Parent Guarantor, the Administrative Agent, the Borrower, DeveloperCo, and Sunnova Inventory Management, LLC (“Sunnova Inventory” and, together with Borrower and DeveloperCo, the “Affiliated Entities” and, each individually, an “Affiliated Entity” ) have agreed to enter into the Management Services Agreement (the “Management Services Agreement”), dated as of December 30, 2019;
WHEREAS, the Parent Guarantor, the Borrower and certain other Subsidiaries of the Parent Guarantor have agreed to enter into the Contribution Agreement (the “Contribution Agreement” and, together with the Pipeline Exclusivity Agreement, each Master Purchase Agreement, the Equipment Sourcing Agreement and the Management Services Agreement, the “Affiliate Transaction Documents” and, each individually, an “Affiliate Transaction Document”), dated as of December 30, 2019; and
WHEREAS, in order to induce the Borrower and the Lenders to enter into the Credit Agreement, the Parent Guarantor is entering into this Guaranty, pursuant to which the Parent Guarantor will (A) guaranty the performance and observance by each Affiliated Entity of its respective obligations under the Affiliate Transaction Documents, (B) guaranty the performance


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and observance by the Borrower with respect any indemnification Obligations resulting from breaches of representations and certifications contained in any Borrowing Base Certificate and (C) subject to the Obligations Guarantee Cap (defined below), guaranty the Obligations.
NOW, THEREFORE, in consideration of the premises and in order to induce the Borrower and the Administrative Agent to enter into the Credit Agreement, the Parent Guarantor hereby agrees as follows:
SECTION 1.Unconditional Undertaking. (a) The Parent Guarantor hereby unconditionally and irrevocably undertakes and agrees with and for the benefit of the Borrower and the Administrative Agent to:
(i)
cause the due and punctual performance and observance by each Affiliated Entity of all terms, covenants, conditions, agreements, undertakings, indemnities, and other obligations to be performed or observed by such Affiliated Entity under each Affiliate Transaction Document to which it is a party,
(ii)
upon the receipt of notice by the Administrative Agent, pay outstanding indemnification Obligations resulting from any breach of representations and certifications contained in any Borrowing Base Certificate,
(iii)
pay any unpaid, outstanding Obligations; provided that the aggregate Guaranteed Obligations (defined below) under this Section 1(a)(iii) shall not exceed $9,520,000 (the “Obligations Guarantee Cap”), and
(iv)
pay any and all expenses (including reasonable and documented counsel fees and expenses) incurred by the Borrower or the Administrative Agent in enforcing their respective rights under any applicable Affiliate Transaction Document and/or this Guaranty (in each case the “Guaranteed Obligations”).
(b)    If any Affiliated Entity fails in any manner whatsoever to perform or observe any of the Guaranteed Obligations applicable to it when the same shall be required to be performed or observed under any applicable Transaction Document, after giving effect to any applicable grace or cure period thereunder, the Parent Guarantor will itself, within three (3) Business Days of the earlier of (i) the Parent Guarantor’s knowledge of such failure or (ii) demand from the Administrative Agent, duly and punctually perform or observe, or cause to be duly and punctually performed or observed, such Guaranteed Obligations, and it shall not be a condition to the accrual of the obligation of the Parent Guarantor hereunder to perform or observe any Guaranteed Obligation (or to cause the same to be performed or observed) that the Borrower or the Administrative Agent shall have first made any request of or demand upon or given any notice to the Parent Guarantor, any Affiliated Entity, any other Obligor or any of their successors or assigns, or have instituted any action or proceeding against the Parent Guarantor, any Affiliated Entity, any other Obligor or any of their successors or assigns in respect thereof.

2

(c)    Upon the requirement to pay any amount in accordance with Section 1(a), the Borrower and the Administrative Agent hereby direct and the Parent Guarantor hereby agrees to pay all such amounts, if any, by remitting all such amounts in immediately available funds to the Paying Agent for deposit into the Proceeds Account.
SECTION 2.    Obligation Absolute. The Parent Guarantor agrees that, to the maximum extent permitted by Applicable Law, the Guaranteed Obligations not performed by any Affiliated Entity will be performed by the Parent Guarantor strictly in accordance with the terms of the applicable Transaction Document, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Affiliated Entity with respect thereto. The obligations of the Parent Guarantor under this Guaranty are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against the Parent Guarantor to enforce this Guaranty, to the maximum extent permitted by Applicable Law, irrespective of whether any action is brought against any Affiliated Entity or whether any Affiliated Entity is joined in any such action or actions. Except as provided in Section 10 hereof, to the maximum extent permitted by Applicable Law, the liability of the Parent Guarantor under this Guaranty shall be absolute and unconditional irrespective of:
(a)    any lack of validity or enforceability against any Affiliated Entity of any applicable Transaction Document or any other agreement or instrument relating thereto;
(b)    any change in the time, manner or place of performance of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from any Transaction Document;
(c)    any taking, exchange, release or non-perfection of any collateral, or any taking, release, amendment or waiver of, or consent to departure from, any guaranty, for all or any of the Guaranteed Obligations;
(d)    any manner of application of collateral, or proceeds thereof, to all or any of the Guaranteed Obligations (unless such application satisfies the Guaranteed Obligations in full), or any manner of sale or other disposition of any collateral or any other assets of any Affiliated Entity or any of their respective subsidiaries for all or any of the Guaranteed Obligations;
(e)    any change, restructuring or termination of the corporate structure or existence of any Affiliated Entity, the Parent Guarantor or any of their respective subsidiaries;
(f)    any other circumstance that might otherwise constitute a legal or equitable discharge or defense available to, or a discharge of, any Affiliated Entity or the Parent Guarantor, as applicable, or a guarantor;
(g)    the absence of any attempt by, or on behalf of, the Administrative Agent or any of the Lenders, to collect, or to take any other action to enforce, all or any part of the Loan Notes or the Guaranteed Obligations;

3

(h)    the election of any remedy by, or on behalf of, the Administrative Agent or any of the Lenders, in any proceeding of the Borrower or any other Obligor instituted under Chapter 11 of Title 11 of the United States Code (11 U.S.C. 101 et seq.) (the “Bankruptcy Code”), of the application of Section 1111(b)(2) of the Bankruptcy Code;
(i)    any borrowing or grant of a security interest by the Borrower or any other Obligor, as a debtor in possession, under Section 364 of the Bankruptcy Code;
(j)    the disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of the claims of the Administrative Agent or any of the Lenders against the Borrower or any other Obligor for repayment of all or any part of the Obligations (not as defined herein, but as defined in the Credit Agreement), including any amount due hereunder; or
(k)    any actual or alleged fraud by any party (other than the Administrative Agent, any of the Lenders or the Paying Agent).
This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the Borrower, any other Obligor or the Administrative Agent upon the insolvency, bankruptcy or reorganization of any Affiliated Entity or the Parent Guarantor, as applicable, or otherwise, to the maximum extent permitted by Applicable Law, all as though payment had not been made.
SECTION 3.    Waiver. The Parent Guarantor hereby waives, to the maximum extent permitted by Applicable Law, promptness, diligence, notice of acceptance and any other notice (except as specifically provided for in an Affiliate Transaction Document or, with respect to the guaranty of the Obligations (subject to the Obligations Guarantee Cap), the Credit Agreement) with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Borrower or the Administrative Agent protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against any person or entity or any collateral.
SECTION 4.    Subrogation. The Parent Guarantor will not exercise any rights that it may acquire by way of subrogation under this Guaranty, by any performance hereunder or otherwise, until all the Guaranteed Obligations and all other amounts payable under this Guaranty, each Affiliate Transaction Document and the Loan Documents shall have been performed in full. If any amount shall be paid to the Parent Guarantor on account of such subrogation rights at any time prior to the performance in full of the Guaranteed Obligations under this Guaranty and any applicable Transaction Document, such amount shall be held in trust for the benefit of the Borrower or the Administrative Agent, as the case may be, and shall forthwith be paid to the Borrower or the Administrative Agent, as the case may be, to be credited and applied to the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Credit Agreement or to be held by the Borrower or the Administrative Agent as the case may be, as collateral security for any Guaranteed Obligations thereafter existing. If all the Guaranteed Obligations under this Guaranty shall be performed in full, the Borrower or the Administrative Agent, as the case may be, will, at the Parent Guarantor’s request, execute and deliver to the Parent Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by

4

subrogation to the Parent Guarantor of any interest in the Guaranteed Obligations resulting from such payment by the Parent Guarantor.
SECTION 5.    Representations and Warranties and Covenants. Effective on, and as of, the Closing Date, unless otherwise specifically set forth in the applicable representation or warranty, the Parent Guarantor hereby represents, warrants and covenants that:
(a)    Existence. The Parent Guarantor (i) is, and at all times during the term of this Guaranty will be, an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) has, and at all times during the term of this Guaranty will have, all requisite corporate or other power, and all governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a material adverse effect on the ability of the Parent Guarantor to perform its obligations under this Guaranty or the business, operations, financial condition, or assets of the Parent Guarantor, and (iii) is qualified to do business and is in good standing in all other jurisdictions in which the nature of the business conducted by it makes such qualification necessary, except where failure so to qualify would not be reasonably likely (either individually or in the aggregate) to have a material adverse effect on the ability of the Parent Guarantor to perform its obligations under this Guaranty or the business, operations, financial condition, or assets of the Parent Guarantor.
(b)    Financial Condition. The Parent Guarantor has heretofore furnished to the Borrower and the Administrative Agent, a copy of:
(i)
the consolidated balance sheet of the Parent Guarantor and its consolidated subsidiaries for the fiscal year ended December 31, 2018, and the related consolidated statements of operations and of cash flows for the Parent Guarantor and its consolidated subsidiaries for such fiscal year, setting forth in each case in comparative form the figures for the previous year, with the opinion thereon by PricewaterhouseCoopers LLP; and
(ii)
the unaudited consolidated balance sheet of SEI and its consolidated subsidiaries for the fiscal quarter ended September 30, 2019 setting forth the related unaudited interim consolidated statements of operations for such fiscal quarter and cash flows for such period for SEI and its consolidated subsidiaries.
All such financial statements are complete and correct and fairly present, in all material respects, the consolidated financial condition of the Parent Guarantor or SEI, as applicable, and its subsidiaries and the consolidated results of their operations as at such dates and for such fiscal periods, all in accordance with generally accepted accounting principles applied on a consistent basis. Since December 31, 2018, through the date of this Guaranty, there has been no material adverse change in the consolidated business, operations or financial condition of the Parent Guarantor and its consolidated subsidiaries, as applicable, taken as a whole from that set forth in said financial statements.

5

(c)    Litigation. Other than the actions, suits, arbitrations or litigation disclosed in the Parent Guarantor’s or SEI’s quarterly or annual financial statements, there are no actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or threatened) or other legal or arbitrable proceedings affecting the Parent Guarantor or any of its Affiliates or affecting any of the property of any of them before any Governmental Authority (i) that questions or challenges the validity or enforceability of this Guaranty or any action to be taken in connection with the transactions contemplated hereby or (ii) which, individually or in the aggregate, if adversely determined, would reasonably be likely to have a material adverse effect on the ability of the Parent Guarantor to perform its obligations under this Guaranty or the business, operations, financial condition, or assets of the Parent Guarantor.
(d)    No Breach. Neither (i) the execution and delivery of this Guaranty nor (ii) the consummation of the transactions herein contemplated in compliance with the terms and provisions hereof will conflict with or result in a breach of the charter or by-laws of the Parent Guarantor, or any applicable law, rule or regulation, or any order, writ, injunction or decree of any Governmental Authority, or other material agreement or instrument to which the Parent Guarantor is a party or by which any of its property is bound or to which it is subject, or constitute a default under any such material agreement or instrument or result in the creation or imposition of any Lien upon any property of the Parent Guarantor or any of its subsidiaries pursuant to the terms of any such agreement or instrument.
(e)    No Defaults or Violations. The Parent Guarantor is not in default under any material agreement, contract or instrument, as applicable, to which the Parent Guarantor is a party or by which it is or its properties are bound, or subject to or in violation of any statute or of any order or regulation of any court, administrative agency, arbitrator or governmental body that would have a material adverse effect on the ability of the Parent Guarantor to perform its obligations under this Guaranty or the business, operations, financial condition, or assets of the Parent Guarantor; and no event has occurred which with notice or lapse of time or both would constitute such a default with respect to any such agreement, contract, instrument or indenture, or such a violation of any statute or of any order or regulation of any court, administrative agency, arbitrator or governmental body.
(f)    Action. The Parent Guarantor has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations hereunder; the execution, delivery and performance by the Parent Guarantor of this Guaranty has been duly authorized by all necessary corporate or other action on its part and this Guaranty has been duly and validly executed and delivered by the Parent Guarantor and constitutes a legal, valid and binding obligation of the Parent Guarantor, enforceable against the Parent Guarantor in accordance with its terms, except as may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting creditors’ rights and by general principles of equity.
(g)    Licenses. The Parent Guarantor holds, and at all times during the term of this Guaranty will hold, all material licenses, certificates, franchises and permits from all governmental authorities necessary for the conduct of its business and has received no notice of proceedings relating to the revocation of any such license, certificate, franchise or permit which individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would materially and

6

adversely affect its ability to perform its obligations under this Guaranty or any other documents or transactions contemplated hereunder.
(h)    Approvals. No authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority or any securities exchange are necessary for the execution, delivery or performance by the Parent Guarantor hereunder or for the legality, validity or enforceability hereof.
(i)    Conditions Precedent. There are no conditions precedent to the effectiveness of this Guaranty that have not been satisfied or waived.
(j)    Ownership. Effective on the Closing Date, the Parent Guarantor is the direct or indirect legal and beneficial owner of all of the outstanding equity interest in each Affiliated Entity.
(k)    Taxes. The Parent Guarantor and its subsidiaries have filed all U.S. federal income tax returns and all other material tax returns that are required to be filed by them and have paid, or have made provision for the payment of, all taxes due pursuant to such returns or pursuant to any assessment received by any of them, except for any such taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided. The charges, accruals and reserves on the books of the Parent Guarantor and its subsidiaries in respect of taxes and other governmental charges are, in the opinion of the Parent Guarantor, adequate.
(l)    [Reserved].
(m)    Investment Company Act. The Parent Guarantor is not an “investment company” or a company “controlled” by an “investment company” within the meaning of the 1940 Act.
(n)    True and Complete Disclosure. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of the Parent Guarantor to the Borrower and the Administrative Agent in connection with the negotiation, preparation or delivery of this Guaranty or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. All written information furnished after the date hereof by or on behalf of the Parent Guarantor to the Borrower and the Administrative Agent in connection with this Guaranty and the transactions contemplated hereby and thereby will be true, complete and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified.
(o)    ERISA. As of the Closing Date and at all times during the term of this Guaranty, (i) each “employee pension benefit plan,” as such term is defined in Section 3(2) of ERISA, that is sponsored, maintained, or contributed to by the Parent Guarantor or its subsidiaries, other than any such plan that is a “multiemployer plan,” as such term is defined in Section 3(37) of ERISA, (a “Sunnova Pension Plan”) and, to the knowledge of the Parent Guarantor, each “employee welfare benefit plan,” as such term is defined in Section 3(1) of ERISA, that is sponsored, maintained

7

or contributed to by the Parent Guarantor or its subsidiaries, is and will be in compliance in all material respects with, and has been and will be administered in all material respects in compliance with, the applicable provisions of ERISA, the Code and any other Federal or state law; (ii) with respect to any Sunnova Pension Plan that is subject to Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA or Section 412 of the Code), whether or not waived, exists with respect to any plan year beginning prior to January 1, 2008, and with respect to any plan year beginning after December 31, 2007, no unpaid “minimum required contribution” (as defined in Section 430 of the Code or Section 303 of ERISA), whether or not waived, exists and, to the knowledge of the Parent Guarantor, no event has occurred or circumstance exists that may result in an unpaid minimum required contribution as of the last day of the current plan year of any such plan; and (iii) the Parent Guarantor and each of its Commonly Controlled Affiliates has made and will make substantially all contributions required under each “multiemployer plan,” as such term is defined in Section 3(37) of ERISA, to which the Parent Guarantor or any of its Commonly Controlled Affiliates is obligated to contribute (a “Sunnova Multiemployer Plan”) and any required contribution that has not been paid would not, individually or in the aggregate, have a material adverse effect. As of the Closing Date, neither the Parent Guarantor nor any of its Commonly Controlled Affiliates has been notified by the sponsor of a Sunnova Multiemployer Plan that such Sunnova Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, except where such reorganization or termination would not have a material adverse effect. After the Closing Date and at all times during the term of this Guaranty, the aggregate outstanding liability of the Parent Guarantor and its Commonly Controlled Affiliates for any partial or complete withdrawal from any Multiemployer Plan collectively does not exceed $10 million, and, to the knowledge of the Parent Guarantor, no event has occurred or circumstance exists that presents a risk that the aggregate outstanding liability of the Parent Guarantor and its Commonly Controlled Affiliates for any partial or complete withdrawal from any Sunnova Multiemployer Plan could collectively exceed $10 million at any time during the term of this Guaranty. For purposes of this Section 5(o), “Commonly Controlled Affiliates” means those direct or indirect affiliates of the Parent Guarantor that would be considered a single employer with the Parent Guarantor under Section 414(b), (c), (m), or (o) of the Code.
(p)    Rank of Obligations. Its obligations under this Guaranty do rank and will rank at least pari passu in priority of payment and in all other respects with all of its unsecured indebtedness.
(q)    Borrowing Base Certificate; Financial Reporting. The Parent Guarantor shall furnish or cause to be furnished to the Borrower and the Administrative Agent:
(i)
Borrowing Base Certificate. Not later than two (2) Business Days prior to each Borrowing Date and each Payment Date, deliver a duly executed Borrowing Base Certificate in the form of Exhibit B-1 under the Credit Agreement;
(ii)
Annual Reporting. Within (a) the earlier of (x) one hundred eighty (180) days after the close of each fiscal year of SEI (beginning with the fiscal year ending December 31, 2019) and (y) such earlier period as required by Applicable

8

Law, the unqualified (provided, however explanatory language added to the auditor’s standard report shall not constitute a qualification) audited financial statements for such fiscal year that include the consolidated balance sheet of SEI and its consolidated subsidiaries as of the end of such fiscal year, the related consolidated statements of income, of stockholders’ equity and of cash flows for such fiscal year, in each case, setting forth comparative figures for the preceding fiscal year (it being acknowledged that such requirement with respect to SEI may be satisfied by the filing of the appropriate report on Form 10-K with the Securities and Exchange Commission), and, beginning with the fiscal year ending December 31, 2019, the assets and liabilities of the Parent Guarantor and the Borrower as of the end of such fiscal year presented in a note or schedule to such financial statements of SEI, and in each case prepared in accordance with GAAP, and audited by a Nationally Recognized Accounting Firm selected by SEI; and
(iii)
Quarterly Reporting. Within the earlier of (x) sixty (60) days after the end of each of the first three quarters of its fiscal year and (y) such earlier period as required by Applicable Law, the unaudited consolidated balance sheets and income statements for such fiscal quarter on a year-to-date basis for SEI and its consolidated subsidiaries (it being acknowledged that such requirement with respect to SEI may be satisfied by the filing of the appropriate report on Form 10-Q with the Securities and Exchange Commission).
(r)    Financial Covenants. As of the Closing Date and at all times during the term of this Guaranty, the following shall be true (collectively, the “Financial Covenants”):
(i)
the Parent Guarantor shall have and maintain as of the last day of each fiscal quarter ending after the Closing Date a Tangible Net Worth (as defined below) of at least the sum of (A) fifty percent (50%) of all positive quarterly net income (as determined in accordance with GAAP) earned for each fiscal quarter ending after the Closing Date as of such date plus (B) $185,000,000;
(ii)
the Parent Guarantor shall have and maintain as of the last day of each fiscal quarter ending after the Closing Date, Working Capital (as defined below) available to it in an amount at least equal to $20,000,000; and
(iii)
no distribution with respect to the equity of the Parent Guarantor shall be funded with the proceeds (directly or indirectly) any Advances made under the Credit Agreement
provided that for purposes of determining compliance with the Financial Covenants in this Section 5(r), on or prior to the date that is fifteen (15) Business Days after the date on which it is determined that the Parent Guarantor is not in compliance with any Financial Covenant (the “Equity Cure Period”), the Parent Guarantor’s equity holders or any of their Affiliates shall have the right to make and fund an equity investment in the Parent Guarantor in cash during such Equity Cure Period,

9

and such cash, if so designated by the Parent Guarantor, shall be included as unrestricted cash for purposes of calculating (A) “Tangible Net Worth” in clause (i) above, and (B) to the extent such amounts do not reduce undrawn capacity under equity or debt facilities included in the calculation, “Working Capital” in clause (ii) above (each such investment of cash, an “Equity Cure”); provided, further, that any actions taken by or with respect to the Parent Guarantor during the Equity Cure Period in an effort to have the Parent Guarantor comply with the Financial Covenants shall be promptly communicated to the Administrative Agent in writing and no more than (X) one (1) Equity Cure shall be permitted during each calendar year and (Y) two (2) Equity Cures shall be permitted during the term of Agreement, without advance notice to and consent of the Administrative Agent; provided, further, that so long as the Parent Guarantor has delivered prior written notice to the Administrative Agent of its intention to exercise an Equity Cure, during the Equity Cure Period no Default or Event of Default shall be deemed to have occurred and neither the Administrative Agent nor any Lender shall exercise any rights or remedies under or arising out of this Section 5(r) or any other Transaction Document on the basis of any failure to comply with those Financial Covenants as to which notice of intent to exercise an Equity Cure has been delivered; provided, further, that if the Parent Guarantor’s non-compliance with the Financial Covenants is cured by a permitted Equity Cure made within the Equity Cure Period, no Default or Event of Default shall be deemed to have occurred.
For purposes of this Section 5(r), the following terms shall have the meanings set forth below:
“Mezzanine Facility” shall mean any indebtedness incurred by the Parent Guarantor under any mezzanine financing facility or private high yield notes issuance, the proceeds of which are used for working capital purposes; provided that the Parent Guarantor shall deliver prior written notice of its intention to enter into such facility or issue such notes not later than ten (10) days prior to the closing of such facility or issuance of such notes.
“Tangible Net Worth” shall mean the amount which, in accordance with GAAP, would be set forth under the caption “Total Assets” (or any like caption) on a consolidated balance sheet of the Parent Guarantor, less all assets that are considered to be intangible assets under GAAP (including customer lists, goodwill, internal use software, copyrights, trade names, trademarks, patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs of the Parent Guarantor) less “Total Liabilities” in a consolidated balance sheet of the Parent Guarantor as reported in each set of quarterly financial statements delivered pursuant to Section 5(q)(ii) above; provided that the amount calculated in Section 5(q)(i) above and the term “Total Liabilities” shall carve out from the calculation thereof an aggregate principal amount of up to $50,000,000 then outstanding under any Mezzanine Facility as reported in each set of quarterly financial statements delivered pursuant to Section 5(r)(ii) above.
“Working Capital” shall mean, as of any date, the cumulative amount of unrestricted cash and undrawn capacity under any equity or debt financing arrangement of the Parent Guarantor or any Subsidiary of the Parent Guarantor which is available (taking into account the ability of Guarantor or its applicable Subsidiary to satisfy any conditions to such availability as demonstrated to the reasonable satisfaction of the Administrative Agent) to pay for the Parent Guarantor’s selling,

10

asset origination and general and administrative expenses. For the avoidance of doubt, Working Capital shall include any undrawn capacity available (taking into account the ability of Guarantor or its applicable Subsidiary to satisfy any conditions to such availability as demonstrated to the reasonable satisfaction of the Administrative Agent) for the Parent Guarantor’s general and administrative purposes under any other equity or debt financing arrangement of the Parent Guarantor or any Subsidiary (solely to the extent that, as of any time of determination, the applicable loan principal is not due and payable within the subsequent 30 days), but Working Capital shall exclude (i) any Advances under the Credit Agreement and (ii) as of any time of determination, any other debt financing arrangement of Parent Guarantor or any Subsidiary to the extent that any loan principal is due and payable within the subsequent 30 days.
SECTION 6.    Amendments, Etc. No amendment or waiver of any provision of this Guaranty, and no consent to any departure by the Parent Guarantor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Parent Guarantor (only with respect to amendments), the Borrower and the Administrative Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
SECTION 7.    Addresses for Notices. All notices and other communications hereunder shall be in writing (which shall include facsimile communication), shall be personally delivered, express couriered, electronically transmitted (in which case a hard copy shall also be sent by regular mail) or mailed by registered or certified mail, if to the Borrower, at the address set forth under its name on the signature page hereof, if to the Administrative Agent, at the address set forth under its name on the signature page hereof and, if to the Parent Guarantor, at the address set forth under its name on the signature page hereof or, as to any party, at such other address as shall be designated by such party in a written notice to each other party. Notices and communications by facsimile shall be effective when sent, and notices and communications sent by other means shall be effective when received.
SECTION 8.    No Waiver; Remedies. No failure on the part of the Borrower or the Administrative Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.    Continuing Guaranty. This Guaranty is a continuing agreement and shall, to the maximum extent permitted by Applicable Law:
(a)    remain in full force and effect until the performance in full of the Obligations and the payment of all other amounts payable under the other Transaction Documents;
(b)    be binding upon the Parent Guarantor, its successors and assigns; and
(c)    inure to the benefit of, and be enforceable by, the Borrower, the Administrative Agent and their successors and assigns.

11

SECTION 10.    Release of the Parent Guarantor. In the event that (a) the Parent Guarantor ceases to control (within the meaning of the Securities Act) the Affiliated Entities, (b) the new controlling person has agreed to assume the obligations of the Parent Guarantor hereunder, (c) the Parent Guarantor shall have received the written consent of the Administrative Agent, and (d) the Parent Guarantor and such new controlling person shall have executed documents and provided opinions of counsel reasonably requested by the Administrative Agent, then the Parent Guarantor shall be permitted to assign its obligations hereunder to such new controlling person, and upon such assignment, this Guaranty shall terminate with respect to the Parent Guarantor and the Parent Guarantor shall be released from its obligations hereunder without the necessity of any further action of the parties to this Guaranty.
SECTION 11.    GOVERNING LAW; WAIVER OF JURY TRIAL. THIS GUARANTY WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY AGREES TO THE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK, AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO SUCH PARTY AT THE ADDRESS SET FORTH ON THE SIGNATURE PAGE HEREOF, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED WHEN THE RETURN RECEIPT IS SIGNED. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN THE PARENT GUARANTOR AND THE BORROWER OR THE AGENT, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS GUARANTY. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY. WITH RESPECT TO THE FOREGOING CONSENT TO JURISDICTION, EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 11 SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE PARENT GUARANTOR, THE BORROWER OR THE ADMINISTRATIVE AGENT TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OTHER PARTY HERETO OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 12.    No Proceeding; Effects of Bankruptcy. The Parent Guarantor hereby agrees that it will not, directly or indirectly, institute or cause to be instituted, or join any Person in instituting, against the Borrower, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any federal or state bankruptcy or similar law so long as there shall not have elapsed one year plus one day after payment in full of the Obligations (not as defined herein, but as defined in the Credit Agreement). To the extent permitted by law, this Guaranty

12

shall survive the occurrence of any bankruptcy with respect to any Affiliated Entity or any other Person. To the extent permitted by law, no automatic stay under the Bankruptcy Code or other federal, state or other applicable bankruptcy, insolvency or reorganization statutes to which any Affiliated Entity is subject shall postpone the obligations of the Parent Guarantor under this Guaranty.
SECTION 13.    Counterparts. This Guaranty may be executed in counterparts, each of which when so executed shall be an original, but all of which together shall constitute but one and the same agreement. Delivery of an executed counterpart of this Guaranty by facsimile or other electronic transmission (i.e., “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart hereof and deemed an original.
[Signature Page Follows]


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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.
SUNNOVA ENERGY CORPORATION
By:
/s/ Robert Lane    
Name:     Robert Lane
Title:     Executive Vice President,
Chief Financial Officer
Address:
20 Greenway Plaza, Suite 475
Houston, TX 77046


[Signature Page to SEC Guaranty]



Acknowledged and Agreed:
SUNNOVA TEP INVENTORY, LLC, as Borrower
By:
/s/ Robert Lane    
Name:     Robert Lane
Title:     Executive Vice President,
Chief Financial Officer
Address:
20 Greenway Plaza, Suite 475
Houston, TX 77046


[Signature Page to SEC Guaranty]



CREDIT SUISSE AG, NEW YORK BRANCH,
as Administrative Agent
By:
/s/ Patrick J. Hart    
Name:     Patrick J. Hart
Title:     Director


By:
/s/ Jason Ruchelsman    
Name:     Jason Ruchelsman
Title:     Director
Address:
11 Madison Avenue, 4th Floor
New York, NY 10010
Attention: Asset Finance



[Signature Page to SEC Guaranty]

Exhibit 21.1
List of Subsidiaries of Sunnova Energy International Inc. as of February 25, 2020
 
 
 
Name of Subsidiary
 
Jurisdiction of Incorporation
Helios Depositor, LLC
 
Delaware
Helios Issuer, LLC
 
Delaware
Sunnova ABS Holdings III, LLC
 
Delaware
Sunnova ABS Holdings, LLC
 
Delaware
Sunnova ABS Management, LLC
 
Delaware
Sunnova AP5-A, LLC
 
Delaware
Sunnova AP 6 Warehouse II, LLC
 
Delaware
Sunnova Asset Portfolio 4, LLC
 
Delaware
Sunnova Asset Portfolio 4 Newco, LLC
 
Delaware
Sunnova Asset Portfolio 5 Holdings, LLC
 
Delaware
Sunnova Asset Portfolio 5, LLC
 
Delaware
Sunnova Asset Portfolio 6 Holdings, LLC
 
Delaware
Sunnova Asset Portfolio 6, LLC
 
Delaware
Sunnova Asset Portfolio 7 Holdings, LLC
 
Delaware
Sunnova Energy Corporation
 
Delaware
Sunnova Energy Guam, LLC
 
Delaware
Sunnova Energy Puerto Rico, LLC
 
Delaware
Sunnova EZ-Own Portfolio, LLC
 
Delaware
Sunnova Helios II Depositor, LLC
 
Delaware
Sunnova Helios II Issuer, LLC
 
Delaware
Sunnova Helios III Depositor, LLC
 
Delaware
Sunnova Helios III Issuer, LLC
 
Delaware
Sunnova Intermediate Holdings, LLC
 
Delaware
Sunnova Inventory Holdings, LLC
 
Delaware
Sunnova Inventory Management, LLC
 
Delaware
Sunnova Inventory Pledgor, LLC
 
Delaware
Sunnova LAP Holdings, LLC
 
Delaware
Sunnova LAP I, LLC
 
Delaware
Sunnova LAP II, LLC
 
Delaware
Sunnova Lease Vehicle 3-HI, LLC
 
Delaware
Sunnova Management, LLC
 
Delaware
Sunnova Protect Holdings, LLC
 
Delaware
Sunnova Protect Management, LLC
 
Delaware
Sunnova Protect OpCo, LLC
 
Delaware
Sunnova RAYS I Depositor, LLC
 
Delaware
Sunnova RAYS I Holdings, LLC
 
Delaware
Sunnova RAYS I Issuer, LLC
 
Delaware
Sunnova RAYS I Management, LLC
 
Delaware
Sunnova SAP I, LLC
 
Delaware
Sunnova SAP II, LLC
 
Delaware
Sunnova SAP IV, LLC
 
Delaware
Sunnova SLA Management, LLC
 
Delaware
Sunnova SSA Management, LLC
 
Delaware


Sunnova Sol Depositor, LLC
 
Delaware
Sunnova Sol Issuer, LLC
 
Delaware
Sunnova Sol Holdings, LLC
 
Delaware
Sunnova Sol Manager, LLC
 
Delaware
Sunnova Sol Owner, LLC
 
Delaware
Sunnova TE Management, LLC
 
Delaware
Sunnova TE Management I, LLC
 
Delaware
Sunnova TE Management II, LLC
 
Delaware
Sunnova TE Management III, LLC
 
Delaware
Sunnova TEP I Developer, LLC
 
Delaware
Sunnova TEP I Holdings, LLC
 
Delaware
Sunnova TEP I Manager, LLC
 
Delaware
Sunnova TEP I, LLC
 
Delaware
Sunnova TEP II Developer, LLC
 
Delaware
Sunnova TEP II Holdings, LLC
 
Delaware
Sunnova TEP II Manager, LLC
 
Delaware
Sunnova TEP II, LLC
 
Delaware
Sunnova TEP II-B, LLC
 
Delaware
Sunnova TEP Developer, LLC
 
Delaware
Sunnova TEP Holdings, LLC
 
Delaware
Sunnova TEP Inventory, LLC
 
Delaware
Sunnova TEP Resources, LLC
 
Delaware
Sunnova TEP III Manager, LLC
 
Delaware
Sunnova TEP III, LLC
 
Delaware
Sunnova TEP IV-A Manager, LLC
 
Delaware
Sunnova TEP IV-A, LLC
 
Delaware
Sunnova TEP IV-B Manager, LLC
 
Delaware
Sunnova TEP IV-B, LLC
 
Delaware
Sunnova TEP IV-C Manager, LLC
 
Delaware
Sunnova TEP IV-C, LLC
 
Delaware
 
 
 
 
 
 


Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-232878) of Sunnova Energy International Inc. of our report dated February 25, 2020 relating to the financial statements and financial statement schedule, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP
Houston, TX
February 25, 2020



Exhibit 31.1



CHIEF EXECUTIVE OFFICER CERTIFICATION PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, William J. Berger, certify that:

1. I have reviewed this Annual Report on Form 10-K of Sunnova Energy International Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date:
February 25, 2020
 
/s/ William J. Berger
 
 
 
 
William J. Berger
 
 
 
 
Chief Executive Officer
 



Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Robert L. Lane, certify that:

1. I have reviewed this Annual Report on Form 10-K of Sunnova Energy International Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date:
February 25, 2020
 
/s/ Robert L. Lane
 
 
 
 
Robert L. Lane
 
 
 
 
Chief Financial Officer
 



Exhibit 32.1

CHIEF EXECUTIVE OFFICER CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. §1350, the undersigned officer of Sunnova Energy International Inc. (the “Registrant”) hereby certifies that, to his knowledge, the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “Annual Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
 
Date:
February 25, 2020
 
/s/ William J. Berger
 
 
 
 
William J. Berger
 
 
 
 
Chief Executive Officer
 





Exhibit 32.2

CHIEF FINANCIAL OFFICER CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. §1350, the undersigned officer of Sunnova Energy International Inc. (the “Registrant”) hereby certifies that, to his knowledge, the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “Annual Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
 
Date:
February 25, 2020
 
/s/ Robert L. Lane
 
 
 
 
Robert L. Lane
 
 
 
 
Chief Financial Officer