Exhibit 10.7

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of April 23, 2013, by and
between Hannon Armstrong Sustainable Infrastructure Capital, Inc., a Maryland
corporation (the “Company”), and Jeffrey Eckel, residing at the address set
forth in the Company’s records (the “Executive”).

WHEREAS, Hannon Armstrong Capital, LLC, the entity through which the Company was
operating its business (“Hannon Armstrong”), and the Executive have previously
entered into that certain Employment Agreement dated May 31, 2007, under which
the Executive was employed as President and Chief Executive Officer (the “Prior
Employment Agreement”); and

WHEREAS, in connection with the initial public offering of the Company (the
“Company’s IPO”), the Company will engage in a series of transactions that will
enable the Company to qualify as a real estate investment trust for U.S. federal
income tax purposes and will result in Hannon Armstrong becoming a subsidiary of
the Company (collectively, the “Formation Transactions”); and

WHEREAS, the Company wishes to offer employment to the Executive, and the
Executive wishes to accept such offer on the terms set forth below, to be
effective as of the completion of the Company’s IPO and the Formation
Transactions, at which time the Prior Employment Agreement will automatically
terminate and this Agreement will become in effect; and

WHEREAS, the Company and the Executive are entering into an Indemnification
Agreement (the “Indemnification Agreement”) simultaneously herewith.

NOW THEREFORE, in consideration of the mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

1. Term. The Company hereby employs the Executive, and the Executive hereby
accepts such employment, for an initial term commencing as of the date on which
the Company’s IPO and the Formation Transactions are consummated (the
“Commencement Date”) and continuing for a four-year

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period (the “Initial Term”), unless sooner terminated in accordance with the
provisions of Section 4 or Section 5; with such employment to automatically
continue following the Initial Term for additional successive one-year periods
(each, a “Subsequent Term”) in accordance with the terms of this Agreement
(subject to termination as aforesaid) unless either party notifies the other
party in writing of its intention not to continue such employment at least 90
days prior to the expiration of the Initial Term or any Subsequent Term, as
applicable (the Initial Term, together with all Subsequent Terms hereunder,
shall hereinafter be referred to as the “Term”).

2. Duties. During the Term, the Executive shall be employed by the Company as
President and Chief Executive Officer of the Company, which shall be the
senior-most executive officer of the Company, and, as such, the Executive shall
have such responsibilities and authority as are customary for a President and
Chief Executive Officer of a company of similar size and nature as the Company
and shall faithfully perform for the Company the duties of each such office and
shall report directly to the Board of Directors of the Company (the “Board”).
During the Term, the Company shall nominate the Executive to serve as a member
of the Board and its Chairman. The Executive shall devote substantially all of
his business time and effort to the performance of his duties hereunder;
provided, however, that the Executive shall be permitted to continue service as
set forth in Exhibit A and, subject to the approval of the Board, that the
Executive may serve on the boards of directors or trustees of any business
corporations or charitable organizations and such service shall not be a
violation of this Agreement, provided that such other activities do not
materially interfere with the performance of the Executive’s duties hereunder.

3. Compensation.

3.1 Salary. The Company shall pay the Executive during the Term a salary at the
minimum rate of $495,000 per annum, in accordance with the customary payroll
practices of the Company applicable to senior executives from time to time. The
Compensation Committee of the Board (the “Compensation Committee”) shall review
the Executive’s Annual Salary in good faith on an annual basis and may provide
for increases therein as it may in its sole discretion deem appropriate (such
annual salary, as increased, the “Annual Salary”). Once increased, the Annual
Salary shall not thereafter be decreased.

 

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3.2 Bonus. For the Company’s 2013 fiscal year, the Executive shall be eligible
to receive a cash bonus with a target amount equal to 100% of his Annual Salary
(the “2013 Bonus”), subject to satisfaction of Company performance measures as
determined in the sole discretion of the Compensation Committee. For each fiscal
year during the Term following the 2013 fiscal year, the Executive shall be
eligible to receive a cash bonus with a target amount equal to at least 150% of
his Annual Salary, subject to satisfaction of both Company and individual
performance goals as determined by the Compensation Committee (each, an “Annual
Bonus”). The Compensation Committee may award the Executive a cash bonus in
excess of the target amount if warranted under the applicable performance
metrics. The 2013 Bonus and Annual Bonuses shall be paid in the fiscal year
following the fiscal year for which such bonuses are awarded, but in all events
shall be paid no later than March 15 of such following fiscal year.

3.3 Benefits - In General. Except with respect to benefits of a type otherwise
provided for under Section 3.4, the Executive shall be permitted during the Term
to participate in any group life, hospitalization or disability insurance plans,
health programs, equity incentive plans, long-term incentive programs, 401(k)
and other retirement plans, fringe benefit programs and similar benefits that
may be available (currently or in the future) to other senior executives of the
Company generally, in each case to the extent that the Executive is eligible
under the terms of such plans or programs.

3.4 Specific Benefits. Without limiting the generality of Section 3.3, the
Executive shall be entitled to paid vacation of not less than the greater of
(a) 20 business days per year or (b) the number of paid business vacation days
provided to other senior executives of the Company (to be taken at reasonable
times in accordance with the Company’s policies). Any accrued vacation not taken
during any year may be carried forward to subsequent years; provided, that the
Executive may not accrue more than ten business days of unused vacation in any
one year. During the Term (and, if Executive’s employment is terminated during
the Term due to his Disability or death, for the period after such termination
of

 

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employment due to Disability or death as is necessary for Executive’s Disability
or death to be covered by the applicable policy) (i) a long-term disability
insurance policy for the Executive which would provide benefits to the Executive
in an annual amount not less than 300% of the Executive’s Annual Salary (the
“L-T Disability Policy”); and (ii) a term life insurance policy in the amount of
$5,000,000 on the life of the Executive (the “Term Life Insurance Policy”). The
Executive shall be entitled to designate the beneficiaries of the L-T Disability
Policy and the Term Life Insurance Policy; provided, that in each case the
insurance policies are available and can be procured on reasonable commercial
terms. The Executive acknowledges and agrees that the benefits provided under
both the L-T Disability Policy and the Term Life Insurance Policy will be offset
by any similar insurance benefits provided under Sections 3.3, 4 or 5.

3.5 Equity Incentive Compensation. On the Commencement Date, the Executive shall
be granted an award consisting of 265,524 shares of restricted stock under the
Company’s 2013 equity incentive plan (the “Equity Incentive Plan”) and the
respective award agreement (the “Award Agreement”). The restricted stock granted
on the Commencement Date will vest based on continued service in four equal
annual installments following the Commencement Date, with the final tranche
vesting on the 4th anniversary of the Commencement Date. Dividends will be paid
to Executive on vested and unvested shares of restricted stock if and when
dividends are paid to holders of Company common stock generally. Following the
Company’s 2013 Fiscal Year, the Executive shall be eligible for regular annual
grants of restricted stock, stock options or other awards under the Equity
Incentive Plan on such terms and in such amounts (if any) as may be determined
by the Compensation Committee in its sole discretion. All (a) stock option,
restricted stock and other stock-settled equity-based awards granted to
Executive shall provide to Executive the right to direct the Company or an
affiliate to satisfy the minimum statutory tax withholding obligations arising
with respect to such awards by withholding from the shares that would otherwise
be delivered such number of shares having a fair market value equal to such
minimum statutory tax withholding obligation and (b) stock options granted to
Executive shall permit the Executive to “net exercise” the stock options by
directing the Company to withhold from the number of shares that would otherwise
be issued upon exercise of the stock option such number of shares having a fair
market value as of the date of exercise equal to the exercise price of the
option (or portion thereof that the Executive has elected to net exercise).

 

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3.6 Expenses. The Company shall promptly pay or reimburse the Executive for all
ordinary and reasonable out-of-pocket expenses actually incurred (and, in the
case of reimbursement, paid) by the Executive during the Term in the performance
of the Executive’s services under this Agreement; provided that the Executive
documents such expenses with the properly completed forms as prescribed from
time to time by the Company in accordance with the Company’s policies, plans
and/or programs. The Company shall also promptly reimburse the Executive for all
attorneys’ fees and expenses incurred by Executive in connection with the
Company’s IPO (including, without limitation, the negotiation of this Agreement,
the Indemnification Agreement, the agreements related to the Formation
Transactions, the Agreement of Limited Partnership of Hannon Armstrong
Sustainable Infrastructure, L.P., dated as of April 23, 2013 (the “Limited
Partnership Agreement”), the Registration Rights Agreement, dated as of
April 23, 2013, by and among the Company and the parties listed on Schedule I
thereto (“Registration Rights Agreement”), the Award Agreements and any other
documents or agreements contemplated hereby or thereby) in an aggregate amount
not to exceed $50,000.

4. Termination upon Death or Disability. If the Executive dies during the Term,
the Term shall terminate as of the date of death. If there is a good faith
determination by the Board that the Executive has become physically or mentally
incapable of performing his duties under the Agreement and such disability has
disabled the Executive for a cumulative period of 180 days within any 12-month
period (a “Disability”), the Company shall have the right, to the extent
permitted by law, to terminate the employment of the Executive upon notice in
writing to the Executive. Upon termination of employment due to death or
Disability, (i) the Executive (or the Executive’s estate or beneficiaries in the
case of the death of the Executive) shall be entitled to receive, in a lump sum
payment (subject to Section 7.16 of this Agreement) within 30 days following
Executive’s termination of employment: (x) Annual Salary, Annual Bonus and other
benefits earned and accrued under this Agreement but not yet paid prior to the
date of termination (and reimbursement under this Agreement for expenses
incurred prior to the date of

 

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termination) (the “Accrued Benefits”) and (y) a pro rata (based on the number of
days employed in the fiscal year of termination) target Annual Bonus for the
fiscal year in which his termination occurs; (ii) for a period of 24 months
after termination of employment, such continuing medical benefits under the
Company’s health plans and programs applicable to senior executives of the
Company generally as the Executive and/or the Executive’s eligible beneficiaries
would have received under this Agreement (and at such costs to the Executive or
the Executive’s estate, as applicable) in the absence of such termination (but
not taking into account any post-termination increases in Annual Salary that may
otherwise have occurred without regard to such termination and that may have
favorably affected such benefits) (or, if such continuation of subsidized
coverage would violate Section 105(h) of the Code, the Company will make monthly
payments to the Executive in an amount so that after payment of taxes on the
payments, the Executive retains an amount equal to the monthly premium he is
required to pay to continue the coverage); and (iii) all outstanding equity (or
equity-based) incentives and awards held by Executive (or, in the case of his
death, his estate and beneficiaries) shall vest and become free of restrictions
and all stock options shall be exercisable in accordance with their terms and
shall not expire prior to the first anniversary of the date of termination.

5. Certain Terminations of Employment.

5.1 Termination by the Company for Cause; Termination by the Executive without
Good Reason.

(a) For purposes of this Agreement, “Cause” shall mean, the Executive’s:

(i) conviction of, or plea of nolo contendere to, a felony involving moral
turpitude, deceit, dishonesty or fraud (but excluding traffic violations) that
is injurious to the business or reputation of the Company;

(ii) willful and material misconduct in connection with the performance of his
duties, including, without limitation, embezzlement or the misappropriation of
funds or property of the Company;

(iii) failure to adhere to the lawful directions of the Board, or to devote
substantially all of the Executive’s business time and efforts to the Company,
in either event, which continues for a period of 30 business days after written
demand for corrective action is delivered by the Company; or

(iv) material breach of (x) any covenant contained in Section 6 of this
Agreement; or (y) the other terms and provisions of this Agreement and, in each
case, failure to cure such breach within 10 days following written notice from
the Company specifying such breach;

 

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provided, that the Company shall not be permitted to terminate the Executive for
Cause except on written notice given to the Executive at any time within 30 days
following the occurrence of any of the events described above (or, if later, the
Company’s knowledge thereof). Notwithstanding anything herein to the contrary,
the Executive shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than a majority of the Board at
a meeting of the Board called and held for such purposes (after reasonable
notice to the Executive and an opportunity for him, together with his counsel,
to be heard before the Board), finding that in the good faith opinion of the
Board after reasonable investigation that the Executive has engaged in acts or
omissions constituting Cause.

(b) The Company may terminate the Executive’s employment hereunder for Cause on
at least 10 days’ notice, and the Executive may terminate his employment on at
least 30 days’ written notice. If the Company terminates the Executive for
Cause, or the Executive terminates his employment and the termination by the
Executive is not covered by Section 4 or 5.2, the Executive shall receive the
Accrued Benefits in a lump sum payment (subject to Section 7.16 of this
Agreement) within 30 days following Executive’s termination of employment.

5.2 Termination by the Company without Cause; Termination by the Executive for
Good Reason; Expiration/Non-Renewal by the Company.

(a) For purposes of this Agreement, “Good Reason” shall mean the following,
unless consented to by the Executive:

(i) any change in job title or material diminution in the Executive’s roles and
responsibilities from those set forth in this Agreement (including, without
limitation, the Executive no longer being the Chairman of the Board and the
senior-most executive of the Company or assignment of duties inconsistent with
such position);

(ii) a reduction in the Executive’s Annual Salary or Annual Bonus potential or
failure to promptly pay such amounts when due;

 

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(iii) a relocation of the Company’s headquarters outside a 30 mile radius of
Annapolis, MD or moving of the Executive’s office or place of performance from
the Company’s headquarters;

(iv) a material breach by the Company of this Agreement or any other material
agreement between the Executive and the Company; or

(v) there shall have occurred a Change in Control.

Notwithstanding the foregoing, (x) Good Reason shall not be deemed to exist
unless written notice of termination on account thereof is given by the
Executive no later than 60 days after the time at which the event or condition
purportedly giving rise to Good Reason first occurs or arises (or, if later, the
Executive’s knowledge thereof); and (y) if there exists (without regard to this
clause (y)) an event or condition that constitutes Good Reason (pursuant to
Section 5.2(a)(i), Section 5.2(a)(ii) or Section 5.2(a)(iv)), the Company shall
have 30 days from the date written notice of such a termination is given by the
Executive to cure such event or condition and, if the Company does so, such
event or condition shall not constitute Good Reason hereunder.

(b) The Company may terminate the Executive’s employment at any time for any
reason or no reason. The Executive may terminate the Executive’s employment with
the Company at any time for any reason or no reason, and for Good Reason under
this Section 5.2. If (x) the Company terminates the Executive’s employment and
the termination is not covered by Section 4 or 5.1, (y) the Executive terminates
his employment for Good Reason, or (z) the Executive’s termination of employment
results from the Company’s notice of non-renewal following the Initial Term or
any Subsequent Term in accordance with Section 1, (i) the Executive shall be
entitled to receive, in a lump sum payment (subject to Section 7.16 of this
Agreement) on the 30th day following the Executive’s termination of employment,
(A) the Accrued Benefits, (B) an amount equal to three times the sum of (x) the
Executive’s Annual Salary and (y) an amount equal to the greater of (1) the
Executive’s average Annual Bonus actually received in respect of the three
fiscal years (or such fewer number of fiscal years with respect to which
Executive received an Annual Bonus) prior to the year of termination and (2) the
Executive’s target Annual Bonus for the fiscal year in which such termination of
employment occurs and (C) a pro-rata

 

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(based on the maximum Annual Bonus that the Executive could have earned for the
fiscal year in which his termination occurs and the number of days employed in
the fiscal year of termination) Annual Bonus; (ii) for a period of 24 months
after termination of employment, such continuing medical benefits under the
Company’s health plans and programs applicable to senior executives of the
Company generally as the Executive would have received under this Agreement (and
at such costs to the Executive) in the absence of such termination (but not
taking into account any post-termination increases in Annual Salary that may
otherwise have occurred without regard to such termination and that may have
affected such benefits) (or, if such continuation of subsidized coverage would
violate Section 105(h) of the Code, the Company will make monthly payments to
the Executive in an amount so that after payment of taxes on the payments, the
Executive retains an amount equal to the monthly premium he is required to pay
to continue the coverage); (iii) all outstanding equity (or equity-based)
incentives and awards held by the Executive shall thereupon vest and become free
of restrictions and all stock options shall be exercisable in accordance with
their terms and shall not expire prior to the first anniversary after the date
of termination (or, in the case of a Change in Control, on the third anniversary
of the Change in Control); and (iv) for a period of 24 months after termination
of employment, the Company will continue to provide on a fully subsidized basis
the L-T Disability Policy and the Term Life Insurance Policy.

(c) Notwithstanding clause 5.2(b)(ii), (i) nothing herein shall restrict the
ability of the Company to amend or terminate the health and welfare plans and
programs referred to in such clause 5.2(b)(ii) from time to time in its sole
discretion, provided that any such amendments or termination are made applicable
generally on the same terms to all actively employed senior executives of the
Company and does not result in a proportionately greater reduction in the rights
of or benefits to the Executive compared with any other officers of the Company,
but the Company may not reduce benefits already earned and accrued by, but not
yet paid to, the Executive and (ii) the Company shall in no event be required to
provide any benefits otherwise required by such clause 5.2(b)(ii) after such
time as the Executive becomes entitled to receive benefits of the same type and
at least as favorable to the Executive from another employer or recipient of the
Executive’s services (such entitlement being determined without regard to any
individual waivers or other similar arrangements).

 

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(d) Notwithstanding any other provision of this Agreement, the Company shall not
be required to make the payments and provide the benefits provided for under
Section 5.2(b) unless the Executive executes and delivers to the Company a
waiver and release substantially in the form attached hereto as Exhibit B and
such waiver and release becomes effective and irrevocable within 21 days
following the date of termination; provided that the Company shall have provided
the Executive with such waiver and release within 10 business days following the
Executive’s termination of employment.

(e) For purposes of this Agreement, “Change in Control” shall have the same
meaning as prescribed in the Equity Incentive Plan.

(f) No Mitigation. The Company agrees that, if the Executive’s employment is
terminated during the Term, the Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to the
Executive by the Company.

 

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6. Covenants of the Executive.

6.1 Covenant Against Competition; Other Covenants. The Executive acknowledges
that (i) the principal business of the Company (which expressly includes for
purposes of this Section 6 (and any related enforcement provisions hereof), its
successors and assigns) is to provide debt and equity financing for sustainable
infrastructure projects that increase energy efficiency, provide cleaner energy
sources, positively impact the environment and make more efficient use of
natural resources (such businesses, and any and all other businesses in which,
at the time of the Executive’s termination, the Company is actively and
regularly engaged or actively pursuing, herein being collectively referred to as
the “Business”); (ii) the Company is one of the limited number of persons who
have developed such a business; (iii) the Company’s Business is national in
scope; (iv) the Executive’s work for the Company has given and will continue to
give him access to the confidential affairs and proprietary information of the
Company; (v) the covenants and agreements of the Executive contained in this
Section 6 are essential to the business and goodwill of the Company; and
(vi) the Company would not have entered into this Agreement but for the
covenants and agreements set forth in this Section 6. Accordingly, the Executive
covenants and agrees that:

(a) By and in consideration of the salary and benefits to be provided by the
Company hereunder, including the severance arrangements set forth herein, and
further in consideration of the Executive’s exposure to the proprietary
information of the Company, the Executive covenants and agrees that, during the
period commencing on the date hereof and ending 12 months following the date
upon which the Executive shall cease to be an employee of the Company and its
affiliates (the “Restricted Period”), he shall not in the Restricted Territory
(as defined below), directly or indirectly, whether as an owner, partner,
shareholder, principal, agent, employee, consultant or in any other relationship
or capacity, (i) engage in the Business (other than for the Company or its
affiliates) or otherwise compete with the Company or its affiliates in the
Business or (ii) render to a person, corporation, partnership or other entity
engaged in the Business the same services that the Executive renders to the
Company; provided, however, that, notwithstanding the foregoing, (A) the
Executive may invest in securities of any entity, solely for investment purposes
and without participating in the business thereof, if (x) such securities are
listed on any national securities exchange, (y) the Executive is not a
controlling person of, or a member of a group which controls, such entity, and
(z) the Executive does not, directly or indirectly, own 5% or more of any class
of securities of such entity; and (B) the Executive may continue to serve on any
board of directors on which the Executive was serving as of the date of the
Executive’s termination of employment; and (C) the Executive may be employed by
or provide services for a company (a “Conglomerate”) with multiple lines of
businesses, including a line of business competitive with the Company, so long
as the following conditions are satisfied: (w) the Conglomerate derives less
than ten percent (10%) of its total annual revenue from the line of business
that is competitive with the Company (the “Competitive Division”), (x) the
Executive is employed by or provides services to a line of business of
Conglomerate that is not competitive with the Company; and (y) the Executive
does not perform services for the Competitive Division; and (z) the Executive
(A) provides the Company with advance notice of such employment or service and
(B) informs the Conglomerate in writing of its obligations under this Section 6.

 

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For purposes of this Agreement, the “Restricted Territory” shall mean any
(i) state in the United States and (ii) foreign country or jurisdiction, in the
case of clause (i) or (ii), in which the Company (x) is actively conducting the
Business during the Term or (y) has initiated a plan adopted by the Board to
conduct the Business in the two years following the Term.

(b) During and after the Term, the Executive shall keep secret and retain in
strictest confidence, and shall not use for his benefit or the benefit of
others, except in connection with the business and affairs of the Company and
its affiliates, all non-public confidential matters relating to the Company’s
Business and the business of any of its affiliates and to the Company and any of
its affiliates, learned by the Executive heretofore or hereafter directly or
indirectly from the Company or any of its affiliates (the “Confidential Company
Information”), and shall not disclose such Confidential Company Information to
anyone outside of the Company except in the course of his duties as President
and Chief Executive Officer or with the Board’s express written consent and
except for Confidential Company Information which is at the time of receipt or
thereafter becomes publicly known through no wrongful act of the Executive or is
received from a third party not under an obligation to keep such information
confidential and without breach of this Agreement or which is independently
developed or obtained by the Executive without reliance upon any confidential
information of the Company or use of any Company resources. Notwithstanding
anything in this agreement to the contrary, the Executive may disclose
Confidential Company Information where the Executive is required to do so by
law, regulation, court order, subpoena, summons or other valid legal process;
provided, that the Executive first (i) promptly notifies the Company, (ii) uses
commercially reasonable efforts to consult with the Company with respect to and
in advance of the disclosure thereof, and (iii) reasonably cooperates with the
Company to narrow the scope of the disclosure required to be made, in each case,
solely at the Company’s expense.

(c) During the Restricted Period, the Executive shall not, without the Company’s
prior written consent, directly or indirectly, (i) solicit or encourage to leave
the employment or other

 

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service of the Company or any of its subsidiaries, any person or entity who is
or was during the six-month period preceding the Executive’s termination of
employment, an employee, agent or independent contractor of the Company or any
of its subsidiaries. During the Restricted Period, the Executive shall not,
whether for his own account or for the account of any other person, firm,
corporation or other business organization, solicit for a competing business or
intentionally interfere with the Company’s or any of its subsidiaries’
relationship with, or endeavor to entice away from the Company for a competing
business, any person who is or was during the six month period preceding the
Executive’s termination of employment, a customer, client, agent, or independent
contractor of the Company or any of its subsidiaries. For purposes hereof,
“customer” and “client,” as such terms relate to government customers, mean the
program office to which the Company is or was providing any goods or services as
of the date hereof or during the one-year period prior to the date hereof.

(d) All memoranda, notes, lists, records, property and any other tangible
product and documents (and all copies thereof), whether visually perceptible,
machine-readable or otherwise, made, produced or compiled by the Executive or
made available to the Executive containing Confidential Company Information
(i) shall at all times be the property of the Company (and, as applicable, any
affiliates) and shall be delivered to the Company at any time upon its request,
and (ii) upon the Executive’s termination of employment, shall be promptly
returned to the Company. This section shall not apply to materials that the
Executive possessed prior to his business relationship with the Company, to the
Executive’s personal effects and documents, and to materials prepared by the
Executive for the purposes of seeking legal or other professional advice.

(e) At no time during the Executive’s employment by the Company or at any time
thereafter shall the Executive, on one hand, or the Company or any of its
subsidiaries, on the other hand, publish any statement or make any statement
under circumstances reasonably likely to become public that is critical of the
other party, or in any way otherwise be materially injurious to the Business or
reputation of the other party, unless otherwise required by applicable law or
regulation or by judicial order.

 

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6.2 Rights and Remedies upon Breach.

(a) The parties hereto acknowledge and agree that any breach of any of the
provisions of Section 6.1 or any subparts thereof (individually or collectively,
the “Restrictive Covenants”) may result in irreparable injury and damage for
which money damages would not provide an adequate remedy. Therefore, if the
either party breaches, or threatens to commit a breach of, any of the provisions
of Section 6.1 or any subpart thereof, the other party and its affiliates, in
addition to, and not in lieu of, any other rights and remedies available to the
other party and its affiliates under law or in equity (including, without
limitation, the recovery of damages), shall have the right and remedy to seek to
have the Restrictive Covenants or other obligations herein specifically enforced
(without posting bond and without the need to prove damages) by any court having
equity jurisdiction, including, without limitation, the right to an entry of
restraining orders and injunctions (preliminary, mandatory, temporary and
permanent) against violations, threatened or actual, and whether or not then
continuing, of such covenants.

(b) The Executive agrees that the provisions of Section 6.1 of this Agreement
and each subsection thereof are reasonably necessary for the protection of the
Company’s legitimate business interests and if enforced, will not prevent the
Executive from obtaining gainful employment should his employment with the
Company end. The Executive agrees that in any action seeking specific
performance or other equitable relief, the Executive will not assert or contend
that any of the provisions of this Section 6 are unreasonable or otherwise
unenforceable as drafted. The existence of any claim or cause of action by the
Executive, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement of the Restrictive Covenants.

7. Other Provisions.

7.1 Severability. The Executive acknowledges and agrees that (i) he has had an
opportunity to seek advice of counsel in connection with this Agreement and
(ii) the Restrictive Covenants are reasonable in geographical and temporal scope
and in all other respects as drafted. If it is determined that any of the
provisions of this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable, the
remainder of the provisions of this Agreement shall not thereby be affected and
shall be given full effect, without regard to the invalid portions.

 

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7.2 Duration and Scope of Covenants. If any court or other decision-maker of
competent jurisdiction determines that any of the Executive’s covenants
contained in this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, then the duration or scope of
such provision, as the case may be, shall be reduced so that such provision
becomes enforceable and, in its reduced form, such provision shall then be
enforceable and shall be enforced.

7.3 Enforceability; Jurisdiction; Arbitration.

(a) The Company and the Executive intend to and hereby confer jurisdiction to
enforce the Restrictive Covenants set forth in Section 6 upon the courts of any
jurisdiction within the geographical scope of the Restrictive Covenants. If the
courts of any one or more of such jurisdictions hold the Restrictive Covenants
wholly unenforceable by reason of breadth of scope or otherwise it is the
intention of the Company and the Executive that such determination not bar or in
any way affect the Company’s right, or the right of any of its affiliates, to
the relief provided above in the courts of any other jurisdiction within the
geographical scope of such Restrictive Covenants, as to breaches of such
Restrictive Covenants in such other respective jurisdictions, such Restrictive
Covenants as they relate to each jurisdiction’s being, for this purpose,
severable, diverse and independent covenants, subject, where appropriate, to the
doctrine of res judicata. The parties hereby agree to waive any right to a trial
by jury for any and all disputes hereunder (whether or not relating to the
Restricted Covenants).

(b) Any controversy or claim arising out of or relating to this Agreement or the
breach of this Agreement (other than a controversy or claim arising under
Section 6, to the extent necessary for the Company (or its affiliates, where
applicable) to avail itself of the rights and remedies referred to in
Section 6.2) that is not resolved by the Executive and the Company (or its
affiliates, where applicable) shall be submitted to arbitration in Maryland in
accordance with Maryland law and the employment arbitration rules and procedures
of the American Arbitration Association, before an

 

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arbitrator experienced in employment disputes who is licensed to practice law in
the State of Maryland. The determination of the arbitrator shall be conclusive
and binding on the Company (or its affiliates, where applicable) and the
Executive and judgment may be entered on the arbitrator(s)’ award in any court
having jurisdiction. The arbitration shall be held in Annapolis, Maryland.

7.4 Notices. Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered personally, sent by facsimile
transmission or sent by certified, registered or express mail, or overnight
courier, postage prepaid. Any such notice shall be deemed given when so
delivered personally, sent by facsimile transmission or, if mailed, five days
after the date of deposit in the United States mails as follows:

(i) If to the Company, to:

Hannon Armstrong Sustainable Infrastructure Capital, Inc.

1906 Towne Centre Blvd

Suite 370

Annapolis, Maryland 21401

Attention: General Counsel

with a copy to:

Clifford Chance US LLP

31 West 52nd Street

New York, New York 10019-6131

Attention: Jay Bernstein

(ii) If to the Executive, to the address in the records of the Company

with a copy to:

Morrison & Foerster LLP

1650 Tysons Boulevard, Suite 400

McLean, Virginia 22102

Attention: Lawrence T. Yanowitch

Any such person may by notice given in accordance with this Section 7.4 to the
other parties hereto designate another address or person for receipt by such
person of notices hereunder.

7.5 Entire Agreement. This Agreement, together with the Indemnification
Agreement and the Award Agreements contain the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto, including, without
limitation, the Prior Employment Agreement.

 

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7.6 Waivers and Amendments. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by the parties or, in the case of a waiver, by the party
waiving compliance. Except as expressly provided herein, no delay on the part of
any party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof, nor shall any waiver on the part of any party of any such
right, power or privilege nor any single or partial exercise of any such right,
power or privilege, preclude any other or further exercise thereof or the
exercise of any other such right, power or privilege.

7.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND WITHOUT REGARD TO ANY
PRINCIPLES OF CONFLICTS OF LAW WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF
ANY JURISDICTION OTHER THAN THE STATE OF MARYLAND.

7.8 Assignment. This Agreement, and the Executive’s rights and obligations
hereunder, may not be assigned by the Executive; any purported assignment by the
Executive in violation hereof shall be null and void. Except as otherwise
provided by operation of law, in the event of any sale, transfer or other
disposition of all or substantially all of the Company’s assets or business,
whether by merger, consolidation or otherwise, the Company may assign this
Agreement and its rights hereunder, provided that the successor or purchaser
agrees, as a condition of such transaction, to assume all of the Company’s
obligations hereunder.

7.9 Withholding. The Company shall be entitled to withhold from any payments or
deemed payments any amount of tax withholding it determines to be required by
law.

7.10 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors, permitted assigns,
heirs, executors and legal representatives.

 

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7.11 Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original but all such counterparts together shall constitute one and the same
instrument. Each counterpart may consist of two copies hereof each signed by one
of the parties hereto.

7.12 Survival. Anything contained in this Agreement to the contrary
notwithstanding, the provisions of Sections 4, 5, 6, and 7, shall survive any
termination of the Executive’s employment hereunder and continue in full force
until performance of the obligations thereunder, if any, in accordance with
their respective terms.

7.13 Existing Agreements. The Executive represents to the Company that he is not
subject or a party to any employment or consulting agreement, non-competition
covenant or other agreement, covenant or understanding (excluding the Prior
Employment Agreement) which might prohibit him from executing this Agreement or
limit his ability to fulfill his responsibilities hereunder.

7.14 Headings. The headings in this Agreement are for reference only and shall
not affect the interpretation of this Agreement.

7.15 Parachute Payments. If there is a change in ownership or control of the
Company that would cause any payment or distribution by the Company or any other
person or entity to the Executive or for the Executive’s benefit (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise) (a “Payment”) to be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (such
excise tax, together with any interest or penalties incurred by the Executive
with respect to such excise tax, the “Excise Tax”), then the Executive will
receive the greatest of the following, whichever gives the Executive the highest
net after-tax amount (after taking into account federal, state, local and social
security taxes): (a) the Payments or (b) one dollar less than the amount of the
Payments that would subject the Executive to the Excise Tax (the “Safe Harbor
Amount”). If a reduction in the Payments is necessary so that the Payments equal
the Safe Harbor Amount and none of the Payments constitutes non-qualified
deferred compensation (within the meaning of Section 409A of the Code), then the
reduction shall occur

 

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in the manner the Executive elects in writing prior to the date of payment. If
any Payment constitutes non-qualified deferred compensation or if the Executive
fails to elect an order, then the Payments to be reduced will be determined in a
manner which has the least economic cost to the Executive and, to the extent the
economic cost is equivalent, will be reduced in the inverse order of when
payment would have been made to the Executive, until the reduction is achieved.
All determinations required to be made under this Section 7.15, including
whether and when the Safe Harbor Amount is required and the amount of the
reduction of the Payments and the assumptions to be utilized in arriving at such
determination, shall be made by a certified public accounting firm designated by
the Company (the “Accounting Firm”). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any determination by the Accounting
Firm shall be binding upon Company and the Executive.

7.16 Section 409A Compliance. Any payments under this Agreement that are deemed
to be deferred compensation subject to the requirements of Section 409A of the
Code are intended to comply with the requirements of Section 409A and this
Agreement shall be interpreted accordingly. To this end and notwithstanding any
other provision of this Agreement to the contrary, if at the time of the
Executive’s termination of employment with the Company, (i) the Company’s
securities are publicly traded on an established securities market;
(ii) Executive is a “specified employee” (as defined in Section 409A); and
(iii) the deferral of the commencement of any payments or benefits otherwise
payable pursuant to this Agreement as a result of such termination of employment
is necessary in order to prevent any accelerated or additional tax under
Section 409A, then the Company will defer the commencement of such payments
(without any reduction in amount ultimately paid or provided to the Executive)
that are not paid within the short-term deferral rule under Section 409A (and
any regulations thereunder) or within the “involuntary separation” exemption of
Treasury Regulation § 1.409A-1(b)(9)(iii). Such deferral shall last until the
date that is six months following the Executive’s termination of employment with
the Company (or the earliest date as is permitted under Section 409A). Any
amounts the payment of which are so deferred shall be paid in a lump sum payment
within 10 days after the end of such deferral period. If the Executive dies
during the deferral period prior to the payment of any deferred amount, then the
unpaid

 

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deferred amount shall be paid to the personal representative of the Executive’s
estate within 60 days after the date of the Executive’s death. For purposes of
Section 409A, the Executive’s right to receive installment payments pursuant to
this Agreement including, without limitation, each COBRA (Consolidated Omnibus
Budget Reconciliation Act) continuation reimbursement shall be treated as a
right to receive a series of separate and distinct payments. The Executive will
be deemed to have a date of termination for purposes of determining the timing
of any payments or benefits hereunder that are classified as deferred
compensation only upon a “separation from service” within the meaning of
Section 409A. Any amount that the Executive is entitled to be reimbursed under
this Agreement will be reimbursed to the Executive as promptly as practical and
in any event not later than the last day of the calendar year after the calendar
year in which the expenses are incurred, any right to reimbursement or in kind
benefits will not be subject to liquidation or exchange for another benefit, and
the amount of the expenses eligible for reimbursement during any taxable year
will not affect the amount of expenses eligible for reimbursement in any other
taxable year. Whenever a payment under this Agreement specifies a payment period
with reference to a number of days (e.g., “payment shall be made within 30 days
following the date of termination”), the actual date of payment within the
specified period shall be within the sole discretion of the Company.

The parties agree to consider any amendments or modifications to this Agreement
or any other compensation arrangement between the parties, as reasonably
requested by the other party, that is necessary to cause such agreement or
arrangement to comply with Section 409A (or an exception thereto), provided that
such proposed amendment or modification does not change the economics of the
agreement or arrangement and does not provide for any additional cost to either
party. Notwithstanding the foregoing, the parties will not be obligated to make
any amendment or modification and the Company makes no representation or
warranty with respect to compliance with Section 409A and shall have no
liability to the Executive or any other person if any provision of this
Agreement or such other arrangement are determined to constitute deferred
compensation subject to Section 409A that does not satisfy an exemption from, or
the conditions of, such Section.

 

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IN WITNESS WHEREOF, the parties hereto have signed their names as of the day and
year first above written.

 

HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. By:  

/s/ Steven L. Chuslo

Name:  

Steven L. Chuslo

Title:  

General Counsel

JEFFREY ECKEL

/s/ Jeffrey Eckel

 

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EXHIBIT A

[Intentionally left blank]

 

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EXHIBIT B

Form of Waiver and Release

This Waiver and General Release of all Claims (this “Agreement”) is entered into
by Jeffrey Eckel (the “Executive”) and Hannon Armstrong Sustainable
Infrastructure Capital, Inc., a Maryland corporation (the “Company”), effective
as of [DATE] (the “Effective Date”).

In consideration of the promises set forth in the Employment Agreement between
the Executive and the Company, dated [            ], 2013 (the “Employment
Agreement”), the Executive and the Company agree as follows:

1. General Releases and Waivers of Claims.

(a) Executive’s Release of Company. In consideration of the payments and
benefits provided to the Executive under Section 5.2(b) of the Employment
Agreement and after consultation with counsel, the Executive (or his estate, as
applicable) hereby irrevocably and unconditionally releases and forever
discharges the Company and its past, present and future parent entities,
subsidiaries, divisions, affiliates and related business entities, any of its or
their successors and assigns, assets, employee benefit plans or funds, and any
of its or their respective past, present and/or future directors, officers,
fiduciaries, agents, trustees, administrators, managers, supervisors,
stockholders, employees and assigns, whether acting on behalf of the Company or
in their individual capacities (collectively, “Company Parties”) from any and
all claims, actions, causes of action, rights, judgments, obligations, damages,
demands, accountings or liabilities of whatever kind or character (collectively,
“Claims”), including, without limitation, any Claims under any federal, state,
local or foreign law, that the Executive (or his estate, as applicable) may
have, or in the future may possess, arising out of the Executive’s employment
relationship with and service as an employee, officer or director of the
Company, and the termination of such relationship or service; provided, however,
that the Executive (or his estate, as applicable) does not release, discharge or
waive (A) any rights to payments and benefits provided under the Employment
Agreement, (B) any right the Executive (or his estate, as applicable) may have
to enforce this Agreement,

 

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the Award Agreements or the Employment Agreement, (C) the Executive’s rights
under the Indemnification Agreement and rights to indemnification and
advancement of expenses in accordance with the Company’s certificate of
incorporation, bylaws or other corporate governance document, or any applicable
insurance policy, (D) any claims for benefits under any employee benefit or
pension plan of the Company Parties subject to the terms and conditions of such
plan and applicable law including, without limitation, any such claims under the
Employee Retirement Income Security Act of 1974, or (E) any right or claim that
the Executive (or his estate, as applicable) may have to obtain contributions as
permitted by applicable law in an action in which both the Executive on the one
hand or any Company Party on the other hand are held jointly liable.

(b) Executive’s Specific Release of ADEA Claims. In further consideration of the
payments and benefits provided to the Executive under Section 5.2(b) of the
Employment Agreement, the Executive hereby unconditionally release and forever
discharge the Company Parties from any and all Claims that the Executive may
have as of the date the Executive signs this Agreement arising under the Federal
Age Discrimination in Employment Act of 1967, as amended, and the applicable
rules and regulations promulgated thereunder (“ADEA”). By signing this
Agreement, the Executive hereby acknowledges and confirms the following: (i) the
Executive was advised by the Company in connection with his termination to
consult with an attorney of his choice prior to signing this Agreement and to
have such attorney explain to the Executive the terms of this Agreement,
including, without limitation, the terms relating to the Executive’s release of
claims arising under ADEA, and the Executive has been given the opportunity to
do so; (ii) the Executive was given a period of not fewer than 21 days to
consider the terms of this Agreement and to consult with an attorney of his
choosing with respect thereto; and (iii) the Executive knowingly and voluntarily
accepts the terms of this Agreement. The Executive also understands that he has
seven days following the date on which he signs this Agreement within which to
revoke the release contained in this paragraph, by providing the Company a
written notice of his revocation of the release and waiver contained in this
paragraph.

 

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(c) No Assignment. The Executive (or his estate, as applicable) represents and
warrants that he has not assigned any of the Claims being released under this
Agreement.

2. Waiver of Relief. The Executive (or his estate, as applicable) acknowledges
and agrees that by virtue of the foregoing, the Executive (or his estate, as
applicable) has waived any relief available to him/it (including without
limitation, monetary damages and equitable relief, and reinstatement) under any
of the Claims waived in paragraph 2. Therefore the Executive (or his estate, as
applicable) agrees that he/it will not accept any award or settlement from any
source or proceeding (including but not limited to any proceeding brought by any
other person or by any government agency) with respect to any Claim or right
waived in this Agreement. Nothing in this Agreement shall be construed to
prevent the Executive (or his estate, as applicable) from cooperating with or
participating in an investigation conducted by, any governmental agency, to the
extent required or permitted by law.

3. Severability Clause. In the event any provision or part of this Agreement is
found to be invalid or unenforceable, only that particular provision or part so
found, and not the entire Agreement, will be inoperative.

4. Non-admission. Nothing contained in this Agreement will be deemed or
construed as an admission of wrongdoing or liability on the part of the Company
or any other Company Party or the Executive.

5. Governing Law. All matters affecting this Agreement, including the validity
thereof, are to be governed by, and interpreted and construed in accordance
with, the laws of the State of Maryland applicable to contracts executed in and
to be performed in that State.

6. Arbitration. Any dispute or controversy arising under or in connection with
this Agreement shall be resolved in accordance with Section 7.3 of the
Employment Agreement.

7. Notices. All notices or communications hereunder shall be made in accordance
with Section 7.4 of the Employment Agreement.

 

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THE EXECUTIVE (OR HIS ESTATE, AS APPLICABLE) ACKNOWLEDGES THAT HE HAS READ THIS
AGREEMENT AND THAT HE/IT FULLY KNOWS, UNDERSTANDS AND APPRECIATES ITS CONTENTS,
AND THAT HE/IT HEREBY EXECUTES THE SAME AND MAKES THIS AGREEMENT AND THE RELEASE
AND AGREEMENTS PROVIDED FOR HEREIN VOLUNTARILY AND OF HIS/ITS OWN FREE WILL.

 

JEFFREY W. ECKEL By:  

/s/ Jeffrey W. Eckel

Date: April 17, 2013

HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC.

 

By:  

/s/ Steven Chuslo

  Name:   Steven Chuslo   Title:   General Counsel

 

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