Exhibit 10.7

EXECUTION VERSION

MT. SIGNAL

CONTRIBUTION AGREEMENT

BY AND AMONG

TERRAFORM POWER INC.

TERRAFORM POWER, LLC

AND

SILVER RIDGE POWER, LLC

JULY 23, 2014

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Table of Contents

 

ARTICLE I DEFINITIONS

     1   

1.1

   Certain Definitions      1   

1.2

   Other Definitional and Interpretive Matters      8   

1.3

   Joint Drafting      9   

ARTICLE II CONTRIBUTION OF SHARES

     9   

2.1

   Contribution and Consideration      9   

2.2

   Consideration      9   

2.3

   Closing      9   

2.4

   Transfer Taxes      10   

ARTICLE III REPRESENTATIONS AND WARRANTIES

     10   

3.1

   Organization      10   

3.2

   Authorization of Agreement      10   

3.3

   Non-Contravention; Consents of Third Parties      10   

3.4

   Legal Proceedings      11   

3.5

   Financial Advisors      11   

ARTICLE IV REPRESENTATIONS AND WARRANTIES BY SRP REGARDING THE COMPANY GROUP

     11   

4.1

   Organization and Existence      11   

4.2

   Capitalization and Subsidiaries      12   

4.3

   Governmental Consents      12   

4.4

   Noncontravention      12   

4.5

   Valid Issuance of Shares      12   

4.6

   Title to Subsidiaries      12   

4.7

   Financial Statements; Absence of Changes; No Undisclosed Liabilities      13
  

4.8

   Litigation      13   

4.9

   Intercompany Obligations; Affiliate Transactions      13   

4.10

   Anti-Corruption Matters      14   

4.11

   Solvency      14   

4.12

   Investment Intent      14   

4.13

   Investment Experience      15   

4.14

   Accredited Investor      15   

4.15

   No Other Representations or Warranties      15   

 

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ARTICLE V REPRESENTATIONS AND WARRANTIES BY THE YIELDCO ENTITIES

     15   

5.1

   Organization and Existence      15   

5.2

   Capitalization and Subsidiaries      16   

5.3

   Governmental Consents      16   

5.4

   Noncontravention      16   

5.5

   YieldCo Shares      17   

5.6

   Representations and Warranties in the Underwriting Agreement      17   

5.7

   Organizational Documents      17   

5.8

   Solvency      18   

5.9

   Investment Intent      18   

5.10

   No Material Misstatements or Omissions      18   

5.11

   Investment Experience      18   

5.12

   Accredited Investor      18   

5.13

   Stock Exchange Listing      18   

5.14

   Investment Company      19   

5.15

   Disqualified Person      19   

5.16

   Acknowledgements      19   

ARTICLE VI COVENANTS

     20   

6.1

   Tax Characterization      20   

6.2

   Purchase Price Allocation and Other Tax Matters      20   

6.3

   Transfer Restriction      20   

ARTICLE VII CLOSING

     20   

7.1

   Closing Deliverables      20   

ARTICLE VIII SURVIVAL; INDEMNIFICATION

     21   

8.1

   Survival      21   

8.2

   Indemnification      22   

8.3

   Indemnification Procedures      23   

8.4

   Certain Limitations on Indemnification      24   

8.5

   Calculation of Losses      25   

8.6

   Tax Treatment of Indemnity Payments      25   

ARTICLE IX MISCELLANEOUS

     26   

9.1

   Expenses      26   

 

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9.2

   Governing Law      26   

9.3

   Submission to Jurisdiction; Consent to Service of Process      26   

9.4

   Entire Agreement; Amendments and Waivers      26   

9.5

   Notices      27   

9.6

   Severability      28   

9.7

   Specific Performance      28   

9.8

   Binding Effect; No Third-Party Beneficiaries      28   

9.9

   Assignment      28   

9.10

   Counterparts      29   

 

Schedules and Annexes Schedule 1    Company Disclosure Schedule

 

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MT. SIGNAL CONTRIBUTION AGREEMENT

This CONTRIBUTION AGREEMENT (this “Agreement”) is entered into as of July 23,
2014 (the “Effective Date”) by and among Terraform Power Inc., a Delaware
corporation (“YieldCo”), Terraform Power, LLC, a Delaware limited liability
company (“YieldCo LLC”), and Silver Ridge Power, LLC, a Delaware limited
liability company (“SRP”).

R E C I T A L S

WHEREAS, SRP owns, directly or indirectly, one hundred percent (100%) of the
equity interests (the “Shares”) in Imperial Valley Solar 1 Holdings II, LLC (the
“Company”);

WHEREAS, SRP desires to contribute to YieldCo LLC, and YieldCo LLC desires to
accept from SRP, on the terms and conditions set forth herein, the Shares.

NOW, THEREFORE, in consideration of the premises and the agreements in this
Agreement, and for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound hereby, the
Parties hereto agree hereby as follows:

ARTICLE I

DEFINITIONS

1.1 Certain Definitions. Capitalized terms used in this Agreement shall have the
following meanings:

“Affiliate” of any Person means any other Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such first Person; provided, that, other than in connection
with Section 4.15, Section 5.16, Section 6.1 and Article VIII, no fund managed
by, advised by or otherwise affiliated with Riverstone Investment Group LLC or
any portfolio company in which any such fund owns an interest (other than any
Group Company) or any investors in or owners, directors, officers, employees,
representatives or agents of such fund or portfolio company, acting in their
capacity as such, shall be considered an Affiliate of SRP or any Group Company;
and provided, further, that no YieldCo Group Company nor SunEdison or any
Affiliate of SunEdison shall be considered an Affiliate of SRP or any Group
Company.

“Agreement” has the meaning set forth in the preamble.

“Anti-Corruption Laws” means, with respect to any Person, any Laws relating to
anti-bribery or anti-corruption (governmental or commercial) which apply to such
Person or any of its equityholders or Representatives, including the Foreign
Corrupt Practices Act of 1977, 15 USC 78dd-1, et seq., as amended, and the rules
and regulations thereunder; the U.K. Bribery Act of 2010; all national and
international Laws enacted to implement the Organization for Economic
Cooperation and Development Convention on Combating Bribery of Foreign Officials
in International Business Transactions; and any other comparable Laws of all
jurisdictions in which such Person or any of its equityholders conduct business.

 

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“A&R IVSI LLC Agreement” means the Amended and Restated Limited Liability
Company Agreement of Imperial Valley Solar 1 Holdings, LLC, a Delaware limited
liability company, dated October 9, 2013.

“A&R Mt. Signal Indemnity Agreement” has the meaning set forth in
Section 7.1(b)(iii).

“Business Day” means any day of the year on which national banking institutions
in New York are open to the public for conducting business and are not required
or authorized to close.

“Claim Notice” has the meaning set forth in Section 8.3(a).

“Closing” has the meaning set forth in Section 2.3.

“Closing Date” has the meaning set forth in Section 2.3.

“Code” means the Internal Revenue Code of 1986, as amended (or any corresponding
provision or provisions of succeeding law).

“Commission” means the United States Securities and Exchange Commission.

“Company” has the meaning set forth in the recitals.

“Company Disclosure Schedule” means the schedule attached hereto as Schedule 1.

“Company Financial Statements” means (a) the audited consolidated balance
sheets, together with the related consolidated statement of operations and
comprehensive income/loss, of the Company as of and for the fiscal year ended
December 31, 2013 and (b) the unaudited consolidated balance sheet, together
with related consolidated statement of operations and comprehensive income/loss,
of the Company as of and for the three months ended March 31, 2014.

“Company Group” means the Company and all of its Subsidiaries, if any.

“Company Material Contract” means a contract to which a Group Company is a party
or that is for the benefit of a Group Company, and that is material to the
business, operations, financing or conduct of the Company Group, taken as a
whole.

“Consideration” has the meaning set forth in Section 2.2.

“Contribution Transaction” has the meaning set forth in Section 2.2.

“De Minimis” has the meaning set forth in Section 8.4(a).

“Disqualified Person” means (a) any federal, state or local government
(including any political subdivision, agency or instrumentality thereof),
(b) any organization described in Section 501(c) of the Code and exempt from tax
under Section 501(a) of the Code, (c) any entity referred to in Section 54(j)(4)
of the Code, (d) any Person described in Section 50(d)(1) of the Code, (e) any
Person who is not a “United States Person” as defined in Section 7701(a)(30) of

 

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the Code (other than a foreign partnership or foreign passthrough entity),
unless such Person is a foreign person or entity that is subject to U.S. federal
income tax on more than fifty percent (50%) of the gross income for the taxable
year derived by such Person from the Mt. Signal Project Company and thus
qualifies for the exception of section 168(h)(2)(B) of the Code, or (f) any
partnership or other “pass-through entity” (within the meaning of
Section 1603(g)(4) of the American Recovery and Reinvestment Tax Act of 2009, as
amended, including a single-member disregarded entity and a foreign partnership
or foreign pass-through entity, but excluding a “real estate investment trust”
as defined in section 856(a) of the Code and a cooperative organization
described in section 1381(a) of the Code, neither of which shall constitute a
pass-through entity for purposes of this clause (f)) any direct or indirect
partner (or other holder of an equity or profits interest) of which is described
in clauses (a) through (e) above unless such person owns such direct or indirect
interest in the partnership or pass-through entity through a “taxable C
corporation”, as that term is used in the Section 1603 Program Guidance;
provided, that if and to the extent the definition of “disqualified person”
under Section 1603(g) of the American Recovery and Reinvestment Tax Act of 2009,
as amended, is amended after the date hereof, the definition of “Disqualified
Person” hereunder shall be interpreted to conform to such amendment and any
guidance issued by the U.S. Treasury Department with respect thereto.

“Effective Date” has the meaning set forth in the preamble.

“Enforceability Exceptions” has the meaning set forth in Section 3.2.

“FERC” means the Federal Energy Regulatory Commission and any successor agency
thereto.

“FERC Approval” means the approval of FERC pursuant to Section 203 of the
Federal Power Act of 1935, as amended by the Energy Policy Act of 2005.

“Final Determination” means (a) a decision, judgment, decree or other order by
any court of competent jurisdiction, which decision, judgment, decree or other
order has become final, (b) a closing agreement made under Section 7121 of the
Code (or a comparable agreement under the laws of a state, local, or foreign
taxing jurisdiction) with the relevant Governmental Entity or other
administrative settlement with or final administrative decision by the relevant
Governmental Entity, (c) a final disposition of a claim for refund, or (d) any
agreement between the parties hereto where they agree will have the same effect
as an item in (a), (b), or (c) for purposes of this Agreement.

“Fundamental Representations” has the meaning set forth in Section 8.1(a).

“GAAP” means United States generally accepted accounting principles.

“Governmental Entity” means any supra-national, national, state, provincial or
local governmental authority, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.

“Group Company” means any company within the Company Group.

 

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“HSR Approval” has the meaning given to such term in the Master Transaction
Agreement.

“IFRS” means means the International Financial Reporting Standards, as issued
and updated from time to time by the International Accounting Standards Board.

“Indebtedness” means, with respect to any Person, (a) any obligations or
indebtedness for money borrowed from others or in respect of loans or advances;
(b) liabilities evidenced by any note, bond, debenture or other debt security or
secured by a Lien on any of such Person’s assets; (c) purchase money
obligations; (d) capitalized lease obligations, conditional sales contracts and
other similar title retention instruments; (e) obligations to pay deferred
purchase price of assets, services or securities, including trade payables which
are past due; (f) reimbursement obligations for letters of credit or similar
instruments that have been drawn; (g) liabilities under any interest rate
protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement or other similar agreement; (h) any
obligations or indebtedness of the type described in subsections (a)-(g) above
that is guaranteed, directly or indirectly, in any manner by such Person or for
which such Person may be liable, but excluding endorsements of checks in the
ordinary course of business; (i) interest expense accrued but unpaid on or
relating to any of such obligations or indebtedness; and (j) any prepayment
penalties, premiums, late charges, penalties and collection fees relating to any
indebtedness described in subsections (a) through (i).

“Indemnification Claim” has the meaning set forth in Section 8.3(a).

“Indemnitees” has the meaning set forth in Section 8.2(c).

“Indemnitor” has the meaning set forth in Section 8.2(c).

“IPO” means the initial public offering by YieldCo of YieldCo Class A Shares.

“Law” means all foreign, federal, state and local laws, statutes, codes,
ordinances, rules, regulations, resolutions and Orders.

“Legal Proceeding” means any judicial, administrative or arbitral actions, suits
or proceedings (public or private) by or before a Governmental Entity or
arbiter.

“Liabilities” means any and all direct or indirect liability, Indebtedness,
obligation, commitment, losses, damages, expense, claim, deficiency, guaranty or
endorsement of any type, whether accrued, absolute, contingent, matured, or
unmatured.

“Lien” means any lien, encumbrance, pledge, mortgage, deed of trust, security
interest, claim, lease, charge, option, right of first refusal, easement,
servitude, transfer restriction, encroachment, reservation, municipal bond or
other restriction of any kind.

“Lock-Up Agreement” means a lock-up agreement (if any) entered into with
YieldCo’s underwriter in connection with the initial public offering by YieldCo.

“Losses” means any and all claims, injuries, lawsuits, liabilities, losses,
damages, judgments, fines, penalties, costs and expenses, including the
reasonable fees and disbursements

 

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of counsel (including fees of attorneys and paralegals, whether at the
pre-trial, trial, or appellate level, or in arbitration) and all amounts
reasonably paid in investigation, defense, or settlement of any of the
foregoing.

“Master Transaction Agreement” means that certain Master Transaction Agreement
by and among SunEdison, SRP and R/C US Solar Investment Partnership, L.P. dated
as of June 16, 2014.

“Material Adverse Effect” means, with respect to any Person, a material adverse
effect on (i) the business, assets, properties, results of operations, condition
(financial or otherwise) or performance of such Person and its Subsidiaries
(taken as a whole) or (ii) the ability of such Person to consummate the
Contribution Transaction.

“Mt. Signal Indemnity Agreement” has the meaning set forth in
Section 7.1(b)(iii).

“Mt. Signal Project Company” means Imperial Valley Solar 1, LLC, a Delaware
limited liability company, together with its successors and permitted assigns.

“Mt. Signal Property” means the property eligible for the Section 1603 Grants in
connection with the development by the Mt. Signal Project Company of the
photovoltaic power plant located on certain real property in Imperial County,
California.

“Order” means any order, injunction, judgment, decree, determination, ruling,
writ, assessment or other award of a Governmental Entity or arbiter.

“Organizational Documents” means, with respect to any Person, the articles or
certificate of incorporation or organization and by-laws, the limited
partnership agreement, the partnership agreement or the limited liability
company agreement, operating agreement or the trust agreement, or such other
organizational documents of such Person, including those that are required to be
registered or kept in the jurisdiction of incorporation, organization or
formation of such Person and which establish the legal personality of such
Person.

“Organizational Transactions” has the meaning set forth for such term in the
Registration Statement on Form S-1 (Registration No. 333-196345) initially
submitted by Yieldco to the Commission on February 14, 2014 and publicly filed
on May 29, 2014, as subsequently amended, including the contribution to YieldCo
LLC of certain solar energy projects developed by SunEdison and its Affiliates
and the completion by YieldCo LLC of the acquisition of certain solar energy
projects developed by third parties.

“Party” means each of YieldCo, YieldCo LLC and SRP individually, and “Parties”
means all of them collectively.

“Permits” means any approvals, authorizations, consents, licenses, permits or
certificates of a Governmental Entity.

“Permitted Liens” means, with respect to a Person, (a) imperfections of title,
easements, encumbrances, restrictions and other Liens that do not materially
interfere with the ability of the such Person to conduct its businesses or to
utilize its properties or assets for their intended

 

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purposes, (b) materialmen’s, mechanics’, carriers’, workmen’s, warehousemen’s,
repairmen’s and other like Liens arising in the ordinary course of business, or
deposits to obtain the release of such Liens, to the extent relating to amounts
not yet due and payable or being contested in good faith, (c) Liens for Taxes
not yet due and payable or being contested in good faith, (d) only with respect
to the Company, Liens that secure debt obligations and (e) zoning, entitlement
and other land use and environmental regulations promulgated by any Governmental
Entity that do not materially interfere with the ability of such Person to
conduct its businesses or to utilize its properties or assets for their intended
purposes.

“Person” means any individual, corporation, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization,
Governmental Entity or other entity.

“Purchase Price Allocation” has the meaning set forth in Section 6.2.

“Recapture Period” has the meaning set forth in the A&R IVSI LLC Agreement.

“Representatives” means, as to any Person, the officers, directors, managers,
employees, authorized agents, counsel, accountants, financial advisers and
consultants of such Person.

“Representing Party” has the meaning set forth in the preamble to Article III.

“SEC Disclosure” means any disclosure included in the SEC Documents, but
excluding (i) any risk factor disclosure contained in any such SEC Document
under the heading “Risk Factors” or “Cautionary Note Regarding Forward-Looking
Statements” or similar heading, (ii) any other statements that are predictive or
primarily cautionary in nature and (iii) any information set forth in any
exhibit to any such SEC Document.

“SEC Documents” has the meaning set forth in Section 5.10.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

“Shares” has the meaning set forth in the recitals.

“SRP” has the meaning set forth in the preamble.

“SRP Indemnitees” has the meaning set forth in Section 8.2(a).

“SRP Indemnitor” has the meaning set forth in Section 8.2(b).

“Subsidiary” means, with respect to any Person, (i) a corporation a majority of
whose capital stock with the general voting power under ordinary circumstances
to vote in the election of directors of such corporation (irrespective of
whether or not, at the time, any other class or classes of securities shall
have, or might have, voting power by reason of the happening of any contingency)
is, at the date of determination thereof, beneficially owned by such Person, by
one or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof or (ii) any other Person (other than a corporation),
including a joint venture, a general or limited partnership or a limited
liability company, in which such Person, one or more Subsidiaries

 

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thereof or such Person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof, beneficially own at least a
majority of the ownership interests entitled to vote in the election of
directors, managers or trustees thereof (or other Persons performing such
functions) or act as the general partner or managing member of such other
Person.

“SunEdison” means SunEdison, Inc., a Delaware corporation.

“Survival Period” has the meaning set forth in Section 8.1(d).

“Tax” means any foreign or United States federal, state, or local income,
profits, franchise, transfer, withholding, ad valorem, personal property
(tangible and intangible), employment, payroll, sales and use, value added
(VAT), social security, disability, occupation, real property, severance, or
excise tax and any other tax, charge, levy or other similar assessment imposed
by a Taxing Authority, including any interest, penalty or addition thereto.

“Tax Equity Partnership” means Imperial Valley Solar 1 Holdings, LLC.

“Tax Returns” means any return, report or similar statement required to be filed
with a Taxing Authority with respect to any Taxes (including any attached
schedules), including any information return, claim for refund, amended return
and declaration of estimated Tax.

“Taxing Authority” means, with respect to any Tax, the Governmental Entity or
political subdivision thereof that imposes such Tax, and the agency (if any)
charged with the collection of such Tax for such entity or subdivision.

“Third Party” has the meaning set forth in Section 8.3(a).

“Transaction Documents” means this Agreement and any other agreement,
certificate, or other document executed by one or more Parties and necessary for
the implementation of this Agreement and the consummation of the Contribution
Transaction.

“UA Reps” has the meaning set forth in Section 5.6.

“Underwriting Agreement” means that certain Equity Underwriting Agreement, dated
as of July 17, 2014, by and among the Yieldco Entities, SunEdison Holdings
Corporation and the Underwriters.

“Underwriters” means Goldman, Sachs & Co., Barclays Capital Inc. and Citigroup
Global Markets, Inc., as representatives of the several underwriters named in
Schedule I to the Underwriting Agreement.

“YieldCo” has the meaning set forth in the preamble.

“YieldCo Class B Shares” means shares of YieldCo Class B common stock, par value
$0.01.

“YieldCo Class B1 Shares” means shares of YieldCo Class B1 common stock, par
value $0.01.

 

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“YieldCo Entities” means YieldCo and YieldCo LLC.

“YieldCo Group” means, collectively, the YieldCo Entities and each of their
respective Subsidiaries, and “YieldCo Group Company” means, individually, any
member of the YieldCo Group.

“YieldCo Indemnitees” has the meaning set forth in Section 8.2(b).

“YieldCo Indemnitor” has the meaning set forth in Section 8.2(a).

“YieldCo LLC” has the meaning set forth in the preamble.

“YieldCo LLC B Units” means Class B Units of YieldCo LLC.

“YieldCo LLC B1 Units” means Class B1 Units of YieldCo LLC.

“YieldCo Material Contract” means a contract to which a YieldCo Group Company is
a party or that is for the benefit of a YieldCo Group Company, and that is
material to the business, operations, financing or conduct of the YieldCo Group,
taken as a whole.

“YieldCo Prospectus” has the meaning set forth in Section 5.10.

“YieldCo Registration Statement” has the meaning set forth in Section 5.10.

“YieldCo Shares” means, as applicable, the YieldCo LLC B Units, the YieldCo
Class B Shares, the YieldCo LLC B1 Units and the YieldCo Class B1 Shares.

“YieldCo Subsidiary” has the meaning set forth in Section 5.2(b).

1.2 Other Definitional and Interpretive Matters. Unless otherwise expressly
provided or the context otherwise requires, for purposes of this Agreement, the
following rules of interpretation shall apply:

(a) Calculation of Time Periods. 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 shall be excluded. If the last day of such period is a non-Business
Day, the period in question shall end on the next succeeding Business Day.

(b) Dollars. Any reference in this Agreement to “$” or dollars shall mean U.S.
dollars.

(c) Exhibits/Schedules. The Exhibits and Schedules to this Agreement are an
integral part of this Agreement and are hereby incorporated herein and made a
part hereof as if set forth herein. Any capitalized terms used in any Schedule
or Exhibit but not otherwise defined therein shall be defined as set forth in
this Agreement.

 

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(d) Gender and Number. Any reference in this Agreement to gender shall include
all genders, and words imparting the singular number only shall include the
plural and vice versa.

(e) Headings. The provision of the Table of Contents, the division of this
Agreement into Articles, Sections and other subdivisions and the insertion of
headings are for convenience of reference only and shall not affect or be
utilized in construing or interpreting this Agreement. All references in this
Agreement to any “Article”, “Section” or other subdivision are to the
corresponding Article, Section or other subdivision of this Agreement unless
otherwise specified.

(f) Herein. The words such as “herein,” “hereinafter,” “hereof,” “hereunder” and
“hereto” refer to this Agreement as a whole and not merely to a subdivision in
which such words appear unless the context otherwise requires.

(g) Including. The word “including” or any variation thereof means “including,
without limitation” and shall not be construed to limit any general statement
that it follows to the specific or similar items or matters immediately
following it.

1.3 Joint Drafting. The Parties hereto have participated jointly in the
negotiation and drafting of this Agreement and, in the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as jointly drafted by the Parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of any
provision of this Agreement.

ARTICLE II

CONTRIBUTION OF SHARES

2.1 Contribution and Consideration. Upon the terms and subject to the conditions
of this Agreement, at the Closing, SRP will contribute, or shall cause its
applicable Subsidiary to contribute as set forth in Section 2.2 below, to
YieldCo LLC, and YieldCo LLC will accept from SRP (or the applicable
Subsidiary), all of the Shares, free and clear of all Liens other than Permitted
Liens.

2.2 Consideration. The consideration to be paid by YieldCo LLC to SRP (or its
applicable Subsidiary) for the contribution of the Shares shall be 5,840,000
YieldCo Class B Shares, 5,840,000 YieldCo Class B1 Shares, 5,840,000 YieldCo LLC
B Units and 5,840,000 YieldCo LLC B1 Units (collectively, the “Consideration”).
At the Closing, (a) YieldCo shall deliver to YieldCo LLC the YieldCo Class B
Shares and the YieldCo Class B1 Shares portion of the Consideration and
(b) YieldCo LLC will deliver to SRP (or its applicable Subsidiary), and SRP (or
its applicable Subsidiary) will accept from YieldCo LLC, the Consideration, free
and clear of all Liens. The contribution of Shares described in Section 2.1 and
the payment of the Consideration described in this Section 2.2 are collectively
referred to herein as the “Contribution Transaction.”

2.3 Closing. Each of the Parties acknowledges that the consummation of the
Contribution Transaction (the “Closing”) is taking place as of the execution of
this Agreement, with legal effect as of 12:01 A.M. (Eastern time) on the
Effective Date (the “Closing Date”).

2.4 Transfer Taxes. YieldCo LLC shall be responsible for and pay any sales
Taxes, transfer Taxes or similar Taxes that may be payable with respect to the
Contribution Transaction.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each Party (in such capacity, the “Representing Party”) hereby represents and
warrants as of the Effective Date to the other Parties as follows:

3.1 Organization. The Representing Party is duly organized, validly existing and
in good standing under the Laws of its state of formation.

3.2 Authorization of Agreement. The Representing Party has all requisite
corporate or other entity power and authority to execute and deliver each
Transaction Document to which it is a party, to perform its obligations
thereunder and to consummate the Contribution Transaction. The execution and
delivery of the Transaction Documents and the consummation of the Contribution
Transaction have been duly authorized by all requisite corporate or other entity
action on the part of the Representing Party. This Agreement has been duly and
validly executed and delivered by the Representing Party and (assuming the due
authorization, execution and delivery by the other Parties) constitutes the
legal, valid and binding obligations of the Representing Party, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity) (the “Enforceability Exceptions”). Each of the
other Transaction Documents to which the Representing Party is a party has been
or shall be duly and validly executed and delivered by the Representing Party
and (assuming the due authorization, execution and delivery by the other parties
thereto), when so executed and delivered, will constitute the legal, valid and
binding obligations of the Representing Party, enforceable against it in
accordance with its terms, subject to the Enforceability Exceptions.

3.3 Non-Contravention; Consents of Third Parties.

(a) None of the execution and delivery by the Representing Party of this
Agreement or the other Transaction Documents, the consummation of the
Contribution Transaction, or compliance by the Representing Party with any of
the provisions hereof or thereof, contravenes or will contravene, or result in
any violation of or constitute a breach of or a default (with or without notice
or lapse of time, or both) under, or permit the acceleration of any obligation
under, or give rise to a right of termination, modification or cancellation
under (i) the Organizational Documents of the Representing Party; (ii) any
contract or Permit by which the Representing Party is bound or by which any of
the properties or assets of the Representing Party

 

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are bound; (iii) any Order of any Governmental Entity applicable to the
Representing Party or by which any of the properties or assets of the
Representing Party are bound; or (iv) any applicable Law; except, in the case of
clauses (ii), (iii) and (iv), for such contraventions, violations, breaches,
defaults, accelerations, terminations, modifications or cancellations, as
applicable, as could not, individually or in the aggregate, impair the ability
of the Representing Party to perform its obligations under the Transaction
Documents, or prevent or materially impede, interfere with, hinder or delay the
consummation of the Contribution Transaction.

(b) No consent, waiver, approval, Order, Permit or authorization of, or
declaration or filing with, or notification to, any Person or Governmental
Entity is required on the part of the Representing Party in connection with the
execution, delivery or performance of this Agreement or the other Transaction
Documents or the compliance by the Representing Party with any of the provisions
hereof or thereof, or the consummation the Contribution Transaction, other than
the HSR Approval and the FERC Approval and such other consents, waivers,
approvals, Permits, authorizations, declarations, filings or notifications that,
if not obtained, made or given, could not, individually or in the aggregate,
impair the ability of the Representing Party to perform its obligations under
the Transaction Documents, or prevent or materially impede, interfere with,
hinder or delay the consummation of the Contribution Transaction.

3.4 Legal Proceedings. None of the Representing Party or its Affiliates is a
party to any, and there are no pending or, to the knowledge of the Representing
Party, threatened Legal Proceedings of any nature that could have or could
reasonably be expected to have a Material Adverse Effect on the Representing
Party or that would prohibit the consummation of the Contribution Transaction.

3.5 Financial Advisors. No Person has been engaged by or on behalf of the
Representing Party to act, directly or indirectly, as a broker, finder or
financial advisor for the Representing Party and no Person is entitled to any
fee or commission or like payment from the Representing Party or any other
Person for so acting in connection with the Contribution Transaction.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES BY SRP REGARDING THE COMPANY

GROUP

Except as disclosed in, or qualified by any matter set forth in, the Company
Disclosure Schedule (it being understood by the Parties that any information
disclosed in one subsection of the Company Disclosure Schedule shall be deemed
disclosed for purposes of the other subsections of the Company Disclosure
Schedule if the relevance of such information to such other subsections of the
Company Disclosure Schedule is reasonably apparent on its face), SRP hereby
represents and warrants as of the Effective Date to YieldCo and YieldCo LLC as
follows:

4.1 Organization and Existence. Each Group Company (a) is duly organized and
validly existing and in good standing under the laws of its jurisdiction of
organization; (b) has the requisite corporate or other entity power and
authority to own, lease and operate its assets and to carry on its business as
currently conducted and planned to be

 

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conducted; and (c) is duly qualified or licensed to transact business in each
jurisdiction in which the properties owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary,
except, in the case of this clause (c), for those jurisdictions where the
failure to be so qualified could not have, or could not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company Group.

4.2 Capitalization and Subsidiaries. No Group Company owns any (a) direct or
indirect equity interest, participation or voting right in any other Person,
other than in any other Group Company, or (b) options, warrants, convertible
securities, exchangeable securities, subscription rights, conversion rights,
exchange rights, stock appreciation rights, phantom stock, profit participation
or other similar rights in or issued by any other Person other than a Group
Company, and no such interests, securities or rights are outstanding (other than
pursuant to this Agreement) in respect of any Group Company other than those
held by other Group Companies.

4.3 Governmental Consents. No consent, approval, order, license, authorization
or waiver of, or registration or filing with, any Governmental Entity which has
not been obtained or made by any Group Company is required to be obtained or
made by any Group Company in connection with the execution and delivery of this
Agreement by SRP and the consummation by SRP of the transactions contemplated
hereby other than HSR Approval and FERC Approval and such other consents,
approvals, orders, licenses, authorizations, waivers, registrations or filings
that, if not obtained or made, could not have, or could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company Group.

4.4 Noncontravention. The execution, delivery and performance of this Agreement
and the other Transaction Documents by SRP does not, and the consummation by SRP
of the Contribution Transaction will not, (a) contravene, violate or breach any
of the terms, conditions or provisions of the Organizational Documents of any
Group Company, (b) contravene, violate or breach any provision of, or result in
the termination or acceleration or default of, or entitle any party to
accelerate any obligation or Indebtedness under, any Company Material Contract
or result in the imposition or creation of any Lien (other than Permitted Liens)
on any assets material to the Company Group, or (c) contravene, or result in a
violation or breach of any Law applicable to any Group Company or any of its
assets material to the Company Group or require any consent or approval of any
third party under any applicable Law, except, in the case of clauses (b) and
(c), for such contraventions, violations, breaches, terminations, accelerations
or defaults which have not resulted in, or could not reasonably be expected to
result in, individually or in the aggregate, a Material Adverse Effect on the
Company Group.

4.5 Valid Issuance of Shares. The Shares have been duly authorized by the
Company and, when delivered to YieldCo LLC and paid for by YieldCo LLC as
provided herein, will be duly and validly issued, will be fully paid and
nonassessable, and will be delivered to YieldCo LLC free and clear of all Liens
and devoid of any preemptive or similar rights.

4.6 Title to Subsidiaries. Each Group Company is the direct legal and beneficial
owner of, and has good and marketable title to, the equity interests reflected
to be

 

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owned by such Person in Section 4.6 of the Company Disclosure Schedule, free and
clear of all Liens other than those arising pursuant to the express terms
(without any breach, violation or default thereof) of this Agreement, the
Organizational Documents of a Group Company, or applicable securities Laws or as
disclosed in Section 4.6 of the Company Disclosure Schedule, no Group Company
owns any direct or indirect equity interest, participation or voting right in
any other Person, other than in the Persons set forth in Section 4.6 of the
Company Disclosure Schedule. No Group Company is a party to any written or oral
agreement, and has not granted to any Person (other than a Group Company) any
option or any right or privilege capable of becoming an agreement or option for
the purchase of, or subscription by, or the allotment or issue to any Person
(other than a Group Company), any unissued interests, units or other securities
(including convertible securities, warrants or convertible obligations of any
nature) of any Group Company and no shares, membership interests or other equity
interests of any Group Company are subject to any voting trust, shareholder
agreement, pledge agreement, preemptive right, right of first refusal, right to
purchase, voting agreement, or similar contract in favor of any Person other
than a Group Company.

4.7 Financial Statements; Absence of Changes; No Undisclosed Liabilities.

(a) The Company Financial Statements have been prepared in accordance with GAAP
(or as applicable, IFRS to the extent consistently applied by the Company or
SRP), or is accompanied by GAAP (or IFRS) reconciliations, and fairly present
(subject, however, in the case of the any interim period financial statements,
to normal year-end audit adjustments and accruals and to the absence of notes
and other textual disclosures required by GAAP or IFRS, as applicable) in all
material respects the consolidated assets, financial position and consolidated
results of operations of the Company Group as of the date thereof or for the
period set forth therein.

(b) Except for Liabilities disclosed in Section 4.7(b) of the Company Disclosure
Schedule, the Company Group has no Liabilities that are required to be reflected
in the Company Financial Statements in accordance with GAAP (or IFRS), which
(i) are not reflected or reserved against in the Company Financial Statements,
(ii) were incurred outside of the ordinary course of business and (iii) are in
excess of $5,000,000 individually.

4.8 Litigation. There are no claims pending or, to the knowledge of SRP,
threatened, against any Group Company, or the officers, directors or managers of
any Group Company that (i) affect the Company Group or the assets of the Company
Group and have had, or could reasonably be expected to, cause, individually or
in the aggregate, a Material Adverse Effect on the Company Group or (ii) seek a
writ, judgment, order, injunction or decree restraining, enjoining or otherwise
prohibiting or making illegal or subjecting to any condition the use of the
assets of the Company Group or the Contribution Transaction.

4.9 Intercompany Obligations; Affiliate Transactions.

(a) Except for ordinary course trade payables, and except as set forth in
Section 4.9 of the Company Disclosure Schedule, there is no outstanding
Indebtedness between any Group Company, on the one hand, and any Affiliate of
SRP (other than a Group Company), on the other hand.

(b) Other than as a direct or indirect holder of an equity interest in a Group
Company, and except as set forth in Section 4.9 of the Company Disclosure
Schedule, neither SRP nor any Affiliate thereof (other than a Group Company)
(i) is a party to any contract or transaction with a Group Company or (ii) has
any interest in any real property or assets of any Group Company.

 

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4.10 Anti-Corruption Matters. Except as would not be material to any Group
Company in the past five years, neither any Group Company, nor, to the knowledge
of SRP, any of their respective owners, members, Subsidiaries, Affiliates,
partnerships, or Representatives (nor, to the knowledge of SRP, any director,
officer, employee, member or other third party acting directly or indirectly for
or on behalf of any such Persons), has taken any action in violation of any
Anti-Corruption Laws. Neither any Group Company, nor or any of their respective
owners, members, Subsidiaries, Affiliates, partnerships, or Representatives
(nor, to the knowledge of SRP, any director, officer, employee, member or other
third party acting directly or indirectly for or on behalf of any such Persons)
has been convicted of violating any Anti-Corruption Laws or been subjected to
any investigation or inquiry by a Governmental Entity relating to potential
corruption, fraud or violation of any Anti-Corruption Laws. Neither any Group
Company, nor any of their respective owners, members, Subsidiaries, Affiliates,
partnerships, or Representatives (nor, to the knowledge of SRP, any director,
officer, employee, member or other third party acting directly or indirectly for
or on behalf of any such Persons) has received, conducted an internal
investigation and/or been investigated for any claim or allegation, whether from
internal sources or outside sources, relating to any possible violation of any
Anti-Corruption Laws.

4.11 Solvency.

(a) No petition or notice has been presented, no order has been presented, no
order has been made and no resolution has been passed for the bankruptcy,
liquidation, winding-up or dissolution of any Group Company.

(b) No receiver, trustee, custodian or similar fiduciary has been appointed over
the whole or any part of the assets or the income of any Group Company.

(c) No Group Company has any plan or intention of filing, making or obtaining
any such petition, notice, order or resolution or of seeking the appointment of
a receiver, trustee, custodian or similar fiduciary.

4.12 Investment Intent. The YieldCo Shares to be received by SRP as
Consideration will be acquired for investment for SRP’s own account and not with
the view to, or for resale in connection with, any distribution thereof (except
a distribution to its own members), and SRP has no present intention of selling,
granting any participation in, or otherwise distributing the same (except for
any distribution to its own members). SRP further represents that it does not
have any contract, undertaking, agreement or arrangement with any person or
entity to sell, transfer or grant participation to such person or entity or to
any third person or entity with respect to any of YieldCo Shares (except for any
distribution to its own members). SRP has not been formed for the specific
purpose of acquiring the YieldCo Shares.

 

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4.13 Investment Experience. SRP has substantial experience in evaluating
transactions similar to the Contribution Transaction and acknowledges that it
can protect its own interests. SRP has such knowledge and experience in
financial and business matters so that SRP is capable of evaluating the merits
and risks of the Contribution Transaction.

4.14 Accredited Investor. SRP is an “accredited investor” within the meaning of
Regulation D, Rule 501(a), promulgated by the Commission under the Securities
Act.

4.15 No Other Representations or Warranties. Except for the representations and
warranties contained in this Article IV (as modified by the Company Disclosure
Schedule), neither SRP nor any of its Affiliates or Representatives makes any
other express or implied representation or warranty with respect to the Company
Group or the businesses, operations or assets of the Company Group or any other
assets, rights or obligations to be transferred hereunder or pursuant to this
Agreement, and SRP disclaims any other representations or warranties, whether
made by SRP or any of its Affiliates or its Representatives. The Parties agree
that neither SRP nor any other Person on behalf of SRP (i) makes any
representation or warranty or (ii) will have any or be subject to any liability
or obligation with respect to any projections or probable or future revenues,
expenses, profitability or financial results of the Company Group, any material
made available to Yieldco, Yieldco LLC or any of their Affiliates or
Representatives at any time in certain “data rooms”, management presentations,
“break-out” discussions, responses to questions submitted by or on behalf of
Yieldco, Yieldco LLC or its Affiliates, whether orally or in writing, or in any
other form in expectation or furtherance of the transactions contemplated by
this Agreement.

ARTICLE V

REPRESENTATIONS AND WARRANTIES BY THE YIELDCO ENTITIES

Except as disclosed in, or qualified by any matter set forth in any SEC
Disclosure contained in the SEC Documents, YieldCo and YieldCo LLC, jointly and
severally, hereby represent and warrant as of the Effective Date (assuming, for
the purposes of this Article V and Article VIII, that the IPO and all of the
Organizational Transactions have been consummated) to SRP as follows:

5.1 Organization and Existence. Each YieldCo Entity (a) is duly organized and
validly existing and in good standing under the laws of its jurisdiction of
organization; (b) has the requisite corporate or other entity power and
authority to own, lease and operate its assets and to carry on its business as
currently conducted and planned to be conducted; and (c) is duly qualified or
licensed to transact business in each jurisdiction in which the properties
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except, in the case of this clause (c), for
those jurisdictions where the failure to be so qualified could not have, or
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the YieldCo Group.

 

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5.2 Capitalization and Subsidiaries.

(a) The SEC Disclosure sets forth the number of shares, or partnership,
membership interests or other equity interests, of the authorized capital stock
of each of the YieldCo Entities and the number and class of shares, partnership,
membership or other equity interests, thereof duly issued and outstanding.

(b) Each Subsidiary of YieldCo and YieldCo LLC (each, other than with respect to
YieldCo, YieldCo LLC, a “YieldCo Subsidiary”) and its jurisdiction of formation
or organization is set forth on Exhibit 21.1 of the YieldCo Registration
Statement, other than certain YieldCo Subsidiaries that are being contributed to
YieldCo on or substantially concurrently with the Effective Date pursuant to the
Organizational Transactions and are not reflected on Exhibit 21.1 of the YieldCo
Registration Statement. No YieldCo Entity owns any interests (whether equity,
voting, participating or otherwise) in any Person other than the YieldCo
Subsidiaries. Each YieldCo Subsidiary is (i) duly organized and validly existing
and in good standing under the laws of its jurisdiction of organization,
(ii) has the requisite corporate or other entity authority to own, lease and
operate its assets and to carry on its business as currently conducted and
planned to be conducted and (iii) is duly qualified or authorized to do business
as a foreign corporation or entity and is in good standing under the laws of
each jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification or authorization, except, in the case of
this clause (iii), for those jurisdictions where the failure to be so qualified
could not have, or could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the YieldCo Group.

5.3 Governmental Consents. No consent, approval, order, license, authorization
or waiver of, or registration or filing with, any Governmental Entity which has
not been obtained or made by a YieldCo Entity is required to be obtained or made
by any YieldCo Entity in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby other
than such consents, approvals, orders, licenses, authorizations, waivers,
registrations or filings that, if not obtained or made, could not have, or could
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the YieldCo Group.

5.4 Noncontravention. The execution, delivery and performance of this Agreement
and the other Transaction Documents by YieldCo and YieldCo LLC do not, and the
consummation by YieldCo and YieldCo LLC of the Contribution Transaction will
not, (a) contravene, violate or breach any of the terms, conditions or
provisions of the Organizational Documents of any YieldCo Entity,
(b) contravene, violate or breach any provision of, or result in the termination
or acceleration or default of, or entitle any party to accelerate any obligation
or Indebtedness under, any YieldCo Material Contract or result in the imposition
or creation of any Lien (other than Permitted Liens) on any assets material to
the YieldCo Group, or (c) contravene, or result in a violation or breach of any
Law applicable to any YieldCo Entity or any material assets of the YieldCo Group
or require any consent or approval of any third party under any applicable Law,
except, in the case of clauses (b) and (c), for such contraventions, violations,
breaches, terminations, accelerations or defaults which have not resulted in, or
could not reasonably be expected to result in, individually or in the aggregate,
a Material Adverse Effect on the YieldCo Group.

 

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5.5 YieldCo Shares. The YieldCo Shares delivered pursuant to Section 2.2 have
been duly authorized by each of the YieldCo Entities, as applicable, and, when
delivered to SRP and paid for by SRP as provided herein, will be duly and
validly issued, will be fully paid and nonassessable, and will be delivered to
SRP free and clear of all Liens. Except as set forth in the Organizational
Documents of the applicable YieldCo Entity, no YieldCo Entity is a party to any
written or oral agreement, and has not granted to any Person any option, or any
right or privilege capable of becoming an agreement or option, for the purchase
of, or subscription by, or the allotment or issue to issue to any Person of, any
unissued interests, units or other securities (including convertible securities,
warrants or convertible obligations of any nature) of itself and no shares,
membership interests or other equity interests of the respective YieldCo Entity
are subject to any voting trust, shareholder agreement, pledge agreement,
preemptive right, right of first refusal, right to purchase, voting agreement,
or similar contract in favor of any Person. Other than the fact that the YieldCo
Class B Shares have a right to ten votes per share and the YieldCo Class B1
Shares have one vote per share, and except as disclosed on Amendment No. 1 to
the Form S-1 of YieldCo, as submitted to the Commission on June 16, 2014, there
are no material differences between the rights, obligations or liabilities of
holders of YieldCo Class B Shares and holders of YieldCo Class B1 Shares under
the Organizational Documents of YieldCo or otherwise. Except as disclosed on
Amendment No. 1 to the Form S-1 of YieldCo, as submitted to the Commission on
June 16, 2014, there are no material differences between the rights, obligations
or liabilities of holders of YieldCo LLC B Units and YieldCo LLC B1 Units under
the Organizational Documents of Yieldco LLC or otherwise.

5.6 Representations and Warranties in the Underwriting Agreement. As of the date
that the Underwriting Agreement is entered into by YieldCo and the Underwriters
and the Closing Date, YieldCo hereby makes the same representations and
warranties to SRP as the Company makes to the Underwriters in the following
sub-clauses of Section 1 of the Underwriting Agreement (subject to all
qualifications set forth in the Underwriting Agreement, with all defined terms
used in such provisions as defined in the Underwriting Agreement, and all
references to “you” or the “Underwriters” being read as a reference to SRP) (the
“UA Reps”): (c) (organization), (e) (Company stock), (f) (capitalization),
(l) (financial statements), (q) (agreements), (s) (litigation), (t) (title to
properties), (u) (tax returns), (v) (transfer taxes), (w) (no material adverse
change), (x) (no violation), (aa) (filings), (bb) (intellectual property), (cc)
(intellectual property), (ff) (internal control over financial reporting), (gg)
(disclosure controls and procedures), (ii) (compliance with anti-money
laundering laws), (jj) (sanctions), (kk) (anti-corruption), (ll) (insurance),
(mm) (employee benefits), (nn) (environmental), (pp) (related party
transactions), and (rr) (labor disturbances). For purposes of this Section 5.6,
each reference in such UA Reps to “this Agreement” shall be deemed to be a
reference to this Agreement, other than where appropriate cross references are
made to other provisions of the Underwriting Agreement, and the defined terms
used in the UA Reps shall have the same meaning as ascribed to them in the
Underwriting Agreement.

5.7 Organizational Documents. A true, complete and correct copy of the
Organizational Documents of each of the YieldCo Entities has been made available
to SRP.

 

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5.8 Solvency.

(a) No petition or notice has been presented, no order has been presented, no
order has been made and no resolution has been passed for the bankruptcy,
liquidation, winding-up or dissolution of any of the YieldCo Group Companies.

(b) No receiver, trustee, custodian or similar fiduciary has been appointed over
the whole or any part of the assets or the income of any of the YieldCo Group
Companies.

(c) No YieldCo Group Company has any plan or intention of filing, making or
obtaining any such petition, notice, order or resolution or of seeking the
appointment of a receiver, trustee, custodian or similar fiduciary.

5.9 Investment Intent. YieldCo LLC hereby confirms that the Shares to be
received by YieldCo LLC will be acquired for investment for its own account and
not with the view to, or for resale in connection with, any distribution
thereof, and YieldCo LLC does not have any present intention of selling,
granting any participation in, or otherwise distributing the same. YieldCo LLC
further represents that it does not have any contract, undertaking, agreement or
arrangement with any person or entity to sell, transfer or grant participation
to such person or entity or to any third person or entity with respect to any of
the Shares. YieldCo LLC has not been formed for the specific purpose of
acquiring the Shares.

5.10 No Material Misstatements or Omissions. The Registration Statement of
YieldCo on Form S-1 (Reg. No. 333-196345) (the “YieldCo Registration
Statement”), as of the date of it was declared effective and as of the date
hereof, did not and does not contain 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 and the prospectus of YieldCo filed with
the Commission on July 16, 2014 (the “YieldCo Prospectus” and, together with the
YieldCo Registration Statement, the “SEC Documents”), as of its date and as of
the date hereof, did not and does not contain any untrue statement of a material
fact or omit or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

5.11 Investment Experience. Each of the YieldCo Entities has substantial
experience in evaluating transactions similar to the Contribution Transaction
and acknowledges that it can protect its own interests. Each of the YieldCo
Entities has such knowledge and experience in financial and business matters so
that such Person is capable of evaluating the merits and risks of the
Contribution Transaction.

5.12 Accredited Investor. Each of the YieldCo Entities is an “accredited
investor” within the meaning of Regulation D, Rule 501(a), promulgated by the
Securities and Exchange Commission under the Securities Act.

5.13 Stock Exchange Listing. Neither of the YieldCo Entities has received any
notice of delisting. This Agreement will not contravene NASDAQ rules and
regulations.

 

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5.14 Investment Company. None of the YieldCo Entities is now, or after the
closing of this Agreement will be, an “investment company” or a company
“controlled by” an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

5.15 Disqualified Person. No YieldCo Group Company is a Disqualified Person.

5.16 Acknowledgements.

(a) IT IS UNDERSTOOD AND AGREED THAT, UNLESS EXPRESSLY STATED HEREIN, SRP IS NOT
MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY
KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE COMPANY GROUP OR THE
BUSINESSES, OPERATIONS OR ASSETS OF THE COMPANY GROUP, INCLUDING BUT NOT LIMITED
TO, ANY WARRANTIES OR REPRESENTATIONS AS TO MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OF ANY ASSETS OF THE COMPANY GROUP.

(b) YIELDCO AND YIELDCO LLC ACKNOWLEDGE AND AGREE THAT, UNLESS EXPRESSLY STATED
HEREIN, UPON CLOSING SRP SHALL CONTRIBUTE ALL OF ITS RIGHT, TITLE AND INTEREST
IN AND TO THE COMPANY TO YIELDCO LLC AND YIELDCO LLC SHALL ACCEPT THE COMPANY
GROUP AND THE ASSETS OF THE COMPANY GROUP “AS IS, WHERE IS, WITH ALL FAULTS.”
YIELDCO AND YIELDCO LLC HAVE NOT RELIED AND WILL NOT RELY ON, AND SRP IS NOT
LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTEES,
STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE COMPANY GROUP OR
ANY OF THE BUSINESSES, OPERATIONS OR ASSETS OF THE COMPANY GROUP OR RELATING
THERETO MADE OR FURNISHED BY SRP, ITS AFFILIATES OR ITS REPRESENTATIVES, TO
WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, IN EACH
CASE EXCEPT AS EXPRESSLY STATED HEREIN. YIELDCO AND YIELDCO LLC ALSO ACKNOWLEDGE
THAT THE CONSIDERATION REFLECTS AND TAKES INTO ACCOUNT THAT, EXCEPT AS EXPRESSLY
STATED HEREIN, THE COMPANY GROUP AND THE ASSETS OF THE COMPANY GROUP ARE BEING
SOLD “AS IS, WHERE IS, WITH ALL FAULTS.”

(c) YIELDCO AND YIELDCO LLC ACKNOWLEDGE TO SRP THAT YIELDCO AND YIELDCO LLC HAVE
HAD THE OPPORTUNITY TO CONDUCT, PRIOR TO THE EFFECTIVE DATE, SUCH INSPECTIONS
AND INVESTIGATIONS OF THE COMPANY, ANY GROUP COMPANY AND THEIR RESPECTIVE
BUSINESS, OPERATIONS AND ASSETS AS YIELDCO AND YIELDCO LLC DEEMED NECESSARY OR
DESIRABLE TO SATISFY THEMSELVES AS TO THE COMPANY, ANY GROUP COMPANY AND THEIR
RESPECTIVE BUSINESS, OPERATIONS AND ASSETS AND ITS ACQUISITION THEREOF. YIELDCO
AND YIELDCO LLC FURTHER WARRANT AND REPRESENT TO SRP THAT YIELDCO AND YIELDCO
LLC WILL RELY SOLELY ON THEIR OWN REVIEW, INSPECTIONS AND INVESTIGATIONS IN THIS
TRANSACTION AND NOT UPON THE INFORMATION PROVIDED BY OR ON BEHALF OF SRP, OR ITS
AGENTS, EMPLOYEES OR REPRESENTATIVES WITH RESPECT THERETO. YIELDCO AND YIELDCO
LLC HEREBY ASSUME THE RISK THAT ADVERSE MATTERS INCLUDING, BUT NOT LIMITED TO,
LATENT OR PATENT DEFECTS, ADVERSE PHYSICAL OR OTHER ADVERSE MATTERS, MAY NOT
HAVE BEEN REVEALED BY YIELDCO’S OR YIELDCO LLC’S REVIEW, INSPECTIONS AND
INVESTIGATIONS.

 

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ARTICLE VI

COVENANTS

6.1 Tax Characterization. For U.S. federal income tax purposes (and for purposes
of any applicable U.S. state or local tax purposes that follow the U.S. federal
income tax treatment), the Parties agree to treat the contribution of the Shares
by SRP to YieldCo LLC in exchange for YieldCo Shares as qualifying for
nonrecognition of gain or loss pursuant to Section 721 of the Code (including,
to the extent applicable, by reason of assumption of a qualified liability under
Treas. Reg. § 1.707-5 or a reimbursement of preformation capital expenditures
under Treas. Reg. § 707-4(d)). The Parties will prepare and file all Tax Returns
consistent with the foregoing and will not take any inconsistent position on any
Tax Return, or during the course of any audit, litigation, or other proceeding
with respect to Taxes, except as otherwise required by applicable Law following
a Final Determination.

6.2 Purchase Price Allocation and Other Tax Matters. Within sixty (60) days of
the Closing Date, SRP shall deliver to the YieldCo Entities a schedule
allocating the Consideration and any other amounts properly treated as
consideration for U.S. federal income tax purposes (to the extent known at such
time) among the assets of the Tax Equity Partnership in accordance, as
applicable, with Sections 755 and 1060 of the Code and the Treasury Regulations
thereunder. SRP and the YieldCo Entities will cooperate in good faith to
mutually agree upon such allocation within thirty (30) days after the date of
delivery of such allocation to the YieldCo Entities and will reduce such
agreement to writing (as agreed upon, the “Purchase Price Allocation”). The
Parties agree to revise the Purchase Price Allocation to take into account any
subsequent adjustments to the Consideration and any changes to any other
consideration required to be taken into account under applicable Law, in the
manner provided by Sections 755 and 1060 of the Code, as applicable, and the
Treasury Regulations thereunder. The Parties will not, and will cause their
Affiliates to not, file any Tax Return or otherwise take any position with
respect to Taxes (including during the course of any audit or other proceeding)
which is inconsistent with the Purchase Price Allocation, as finally determined,
except to the extent otherwise required by applicable Law following a Final
Determination. The Parties agree to cause the Tax Equity Partnership to allocate
its tax items for its taxable year which includes the Effective Date based on
the “closing of the books” method.

6.3 Transfer Restriction. From the Closing Date until the end of the Recapture
Period, YieldCo and YieldCo LLC shall not permit the Mt. Signal Property to be
owned by a Disqualified Person.

ARTICLE VII

CLOSING

7.1 Closing Deliverables.

(a) Upon the terms and subject to the conditions of this Agreement, at the
Closing, SRP has delivered, or caused to have been delivered, to YieldCo LLC or
YieldCo each of the following:

(i) the Lock-Up Agreement;

(ii) the Shares by delivering a written instrument of assignment and evidence of
the transfer thereof, free and clear of any Liens other than Permitted Liens.

 

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(b) Upon the terms and subject to the conditions of this Agreement, at the
Closing, YieldCo LLC or YieldCo has delivered, or caused to have been delivered,
to SRP, or its designee, each of the following:

(i) the Consideration by delivering a written instrument of assignment and
evidence of the transfer thereof, free and clear of any Liens or interests of
any Person; and

(ii) a certificate of Yield Co LLC’s or YieldCo’s transfer agent certifying as
to the book entry of the Consideration.

(iii) an executed Amendment No. 2 to Indemnity Agreement, which amends that
certain Indemnity Agreement dated as of November 9, 2012, by and among AES U.S.
Solar, LLC, AES Solar Power, LLC, Imperial Valley Solar 1, LLC and R/C US Solar
Investment Partnership, L.P., as amended by Amendment No. 1 to Indemnity
Agreement, dated August 8, 2013 (the “Mt. Signal Indemnity Agreement”) pursuant
to which YieldCo LLC will make representations and covenants with respect to
itself in substance similar to those set forth in Sections 3 and 4(a) and (b) of
the Mt. Signal Indemnity Agreement and which will remain in effect until the
second anniversary of the end of the Recapture Period (the “A&R Mt. Signal
Indemnity Agreement”).

ARTICLE VIII

SURVIVAL; INDEMNIFICATION

8.1 Survival.

(a) The representations and warranties contained in Sections 3.2 (Authorization
of Agreement), 3.5 (Financial Advisors), 4.5 (Valid Issuance of Shares), 4.6
(Title to Subsidiaries), 5.1 (Organization and Existence), 5.2 (Capitalization
and Subsidiaries), 5.4 (Noncontravention), 5.5 (YieldCo Shares) and 5.16
Acknowledgements (the “Fundamental Representations”) shall survive the Closing
without time limit. All other representations and warranties contained in this
Agreement or in any certificate delivered pursuant to this Agreement shall
survive the Closing until the date that is eighteen (18) months following the
Effective Date.

(b) All covenants, obligations and agreements of the Parties under this
Agreement which expressly contemplate performance after the Closing Date shall
survive the Closing Date for the period of time contemplated or specified
therein. Any covenants, obligations and agreements under this Agreement that are
performed in full pursuant to their terms prior to the Closing Date shall not
survive the Closing for any purpose.

(c) Each of the Parties acknowledges that, from and after the Closing Date, it
will not have any claims or causes of action or any right to indemnification
pursuant to this Article VIII or otherwise for a breach of any representation,
warranty, covenant or agreement which does not survive the Closing Date.

(d) The applicable survival period set forth above for each such representation,
warranty, covenant, obligation or agreement, is referred to herein as a
“Survival Period.”

 

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8.2 Indemnification.

(a) Subject to the limitations set forth in this Agreement, from and after the
Closing Date, YieldCo and YieldCo LLC (in such capacity, the “YieldCo
Indemnitor”) agrees to indemnify SRP and each of its respective Affiliates and
Representatives (collectively, “SRP Indemnitees”) and to hold each of them
harmless from and against any and all Losses suffered, paid or incurred by such
SRP Indemnitee (i) resulting from or relating to any breach of any of the
representations and warranties made by the YieldCo Indemnitor in this Agreement,
including pursuant to Article III and Article V, (ii) caused by any breach by
the YieldCo Indemnitor of any of its covenants, obligations or agreements
contained herein, or (iii) for any material misstatement or omission contained
in the SEC Documents, taken as a whole, as of the Closing Date; provided that
the indemnification obligations of each of the YieldCo Entities shall be joint
and several among the YieldCo Entities.

(b) Subject to the limitations set forth in this Agreement, from and after the
Closing Date, SRP (in such capacity, the “SRP Indemnitor”) agrees to indemnify
YieldCo and YieldCo LLC and each of their respective Affiliates and
Representatives (collectively, “YieldCo Indemnitees”) and to hold each of them
harmless from and against any and all Losses suffered, paid or incurred by such
YieldCo Indemnitee (i) resulting from or relating to any breach of any of the
representations and warranties made by the SRP Indemnitor in this Agreement,
including pursuant to Article III and Article IV, or (ii) caused by any breach
by the SRP Indemnitor of any of its covenants, obligations or agreements
contained herein.

(c) The YieldCo Indemnitors and the SRP Indemnitors are referred to in this
Article VIII generically as “Indemnitors” and the YieldCo Indemnitees and the
SRP Indemnitees are referred to in this Article VIII generically as
“Indemnitees”.

(d) Each of the Parties acknowledges and agrees that no Party shall have any
liability under any provision of this Agreement for any Loss to the extent that
such Loss relates to action taken by such Party or any other Person after the
Closing Date. Each of the Parties shall take and shall cause its Affiliates to
take all reasonable steps to mitigate any Loss upon becoming aware of any event
which would reasonably be expected to, or does, give rise thereto, including
incurring costs only to the minimum extent necessary to remedy the breach which
gives rise to the Loss.

(e) (i) SRP shall be fully and unconditionally released from, and YieldCo LLC
shall assume, all of the obligations of Imperial Valley Solar 1, LLC under the
Mt. Signal Indemnity Agreement arising after the Closing, and (ii) YieldCo and
YieldCo LLC shall jointly and severally indemnify SRP and its Affiliates for any
Losses incurred by SRP in connection with YieldCo LLC’s obligations under the
A&R Mt. Signal Indemnity Agreement, based on

 

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events, conditions or circumstances arising after the Closing and (iii) SRP
shall indemnify YieldCo and YieldCo LLC for one-half of any Losses incurred by
them in connection with YieldCo and YieldCo LLC’s obligations under the A&R Mt.
Signal Indemnity Agreement based on events, conditions or circumstances arising
prior to the Closing.

8.3 Indemnification Procedures.

(a) In the event that any Legal Proceedings shall be instituted or that any
claim or demand shall be asserted by any Person in respect of which payment may
be sought under Section 8.2, the Indemnitee shall assert its claim for
indemnification (an “Indemnification Claim”) by giving written notice thereof (a
“Claim Notice”) to the applicable Indemnitor (i) if the Indemnification Claim
is, or relates to, a claim brought by a Person not a Party or an Affiliate of a
Party (a “Third Party”), within 10 Business Days following receipt by Indemnitee
of notice of such claim, or (ii) if the Indemnification Claim is not, or does
not relate to, a claim brought by a Third Party, within 30 days after the
discovery by the Indemnitee of the facts, events or circumstances giving rise to
such Indemnification Claim; provided, that no delay on the part of an Indemnitee
in giving a Claim Notice shall relieve the Indemnitor of any indemnification
obligation hereunder unless the Indemnitor demonstrates that the defense of such
Indemnification Claim is materially and adversely prejudiced by such delay. Each
Claim Notice shall describe in reasonable detail the facts and circumstances
with respect to the subject matter of such claim.

(b) Upon receipt by an Indemnitor of a Claim Notice in respect of a claim of a
Third Party, the Indemnitor shall be entitled to (i) assume and have sole
control over the defense of such claim at its sole cost and expense and with its
own counsel if it gives notice of its intention to do so to the Indemnitee
within thirty (30) days of the receipt of the Claim Notice from the Indemnitee;
and (ii) negotiate a settlement or compromise of such claim; provided, that
(x) such settlement or compromise shall include a full and unconditional waiver
and release by the Third Party of all Indemnitees (without any cost or liability
of any nature whatsoever to such Indemnitees) and (y) any such settlement or
compromise shall be permitted hereunder only with the written consent of the
Indemnitee, which shall not be unreasonably withheld, conditioned or delayed.
Notwithstanding anything herein to the contrary, the Indemnitor shall not be
entitled to assume control of the defense and settlement of a claim of a Third
Party and shall pay the fees and expenses of counsel retained by the Indemnitee
if such claim of the Third Party relates to or arises in connection with any
criminal proceeding, action, indictment, allegation or claim or a primary
objective of such claim is to seek equitable or injunctive relief against the
Indemnitee. If, within 30 days of receipt from an Indemnitee of any Claim Notice
with respect to a Third Party claim, the Indemnitor (i) advises such Indemnitee
in writing that the Indemnitor shall not elect to defend, settle or compromise
such claim or (ii) fails to make such an election in writing, such Indemnitee
may, at its option, defend, settle or otherwise compromise or pay such claim;
provided, that any such settlement or compromise shall be permitted hereunder
only with the written consent of the Indemnitor, which consent shall not be
unreasonably withheld, conditioned or delayed. Unless and until the Indemnitor
makes an election in accordance with this Section 8.3 to defend, settle or
compromise such claim, all of the Indemnitee’s reasonable costs and expenses
arising out of the defense, settlement or compromise of any such claim shall be
considered Losses subject to indemnification hereunder and shall be borne by the
Indemnitor and payable monthly or as legal bills are received by the Indemnitee
and tendered to the

 

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Indemnitor. Each Indemnitee shall make available to the Indemnitor all
information reasonably available to such Indemnitee relating to such claim,
except as may be prohibited by applicable Law. In addition, the Parties shall
render to each other such assistance as may reasonably be requested in order to
ensure the proper and adequate defense, negotiation or settlement of any such
Indemnification Claim. The Party in charge of the defense shall keep the other
Parties fully apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. If the Indemnitor elects to defend
any such claim, then the Indemnitee shall be entitled to participate in such
defense with counsel reasonably acceptable to the Indemnitor, at such
Indemnitee’s sole cost and expense; provided, that such Indemnitee shall be
entitled to participate in any such defense with separate counsel at the
reasonable expense of the Indemnitor if (i) so requested by the Indemnitor, or
(ii) in the reasonable opinion of counsel to the Indemnitee, a conflict or
potential conflict of interests exists between the Indemnitee and the
Indemnitor; and provided, further, that the Indemnitor shall not be required to
pay for more than one such counsel for all Indemnitees in connection with any
Indemnification Claim. Notwithstanding the foregoing, if a settlement offer
solely for money damages is made by the applicable Third Party, and the
Indemnitor notifies the Indemnitee in writing of the Indemnitor’s willingness to
accept the settlement offer and, subject to the applicable limitations of
Sections 8.4 and 8.5, pay the amount called for by such offer, and the
Indemnitee declines to accept such offer, the Indemnitee may continue to contest
such Indemnification Claim, free of any participation by the Indemnitor, and the
amount of any ultimate liability with respect to such Indemnification Claim that
the Indemnitor has an obligation to pay hereunder shall be limited to the lesser
of (A) the amount of the settlement offer that the Indemnitee declined to accept
plus the Losses of the Indemnitee relating to such Indemnification Claim through
the date of its rejection of the settlement offer or (B) the aggregate Losses of
the Indemnitee with respect to such Indemnification Claim. If the Indemnitee
makes any payment on any Indemnification Claim, the Indemnitor shall be
subrogated, to the extent of such payment, to all rights and remedies of the
Indemnitee to any insurance benefits or other claims of the Indemnitee with
respect to such Indemnification Claim.

(c) After any final decision, judgment or award shall have been rendered by a
Governmental Entity and the expiration of the time in which to appeal therefrom,
or a settlement shall have been consummated, or the Indemnitee and the
Indemnitor shall have arrived at a mutually binding agreement with respect to an
Indemnification Claim hereunder, the Indemnitee shall forward to the Indemnitor
notice of any sums due and owing by the Indemnitor pursuant to this Agreement
with respect to such matter.

8.4 Certain Limitations on Indemnification.

(a) Notwithstanding the foregoing or anything to the contrary set forth herein,
no Party shall have any indemnification obligations under Section 8.2(a)(i) or
Section 8.2(b)(i), (i) for any individual item where the Loss relating thereto
is less than $500,000 (the “De Minimis”) and (ii) in respect of each individual
item where the Loss relating thereto is equal to or greater than the De Minimis,
unless the aggregate amount of all such Losses exceeds $1,500,000, in which case
all Losses shall be indemnified from the first dollar. In no event shall the
aggregate indemnification to be paid by any Party pursuant to Section 8.2(a)(i)
or Section 8.2(b)(i), as applicable, exceed $15,000,000. Notwithstanding the
foregoing, the limitations set forth in this Section 8.4(a) shall not apply to
any breaches of Fundamental Representations.

 

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(b) In no event shall the aggregate indemnification to be paid by any Party
pursuant to Article VIII exceed an amount in value equal to value of the
Consideration as of the Closing.

(c) No representation or warranty contained herein shall be deemed untrue or
incorrect, and a Party shall not be deemed to have breached a representation or
warranty, as a consequence of the existence of any fact, circumstance or event
of which the other Party is aware as of the Closing Date.

(d) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NO PARTY NOR ANY
OF ITS AFFILIATES SHALL BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES PURSUANT
TO THIS ARTICLE VIII FOR SPECIAL, PUNITIVE, EXEMPLARY, CONSEQUENTIAL, INCIDENTAL
OR INDIRECT DAMAGES, INCLUDING LOSS OF FUTURE REVENUE, INCOME OR PROFITS, LOSS
OF BUSINESS REPUTATION OR OPPORTUNITY RELATING TO THE BREACH OR ALLEGED BREACH
OF THIS AGREEMENT, OR DIMINUTION OF VALUE OR ANY DAMAGES BASED ON ANY TYPE OF
MULTIPLE, WHETHER BASED ON CONTRACT, TORT, STRICT LIABILITY, OTHER LAW OR
OTHERWISE AND WHETHER OR NOT ARISING FROM THE OTHER PARTY’S OR ANY OF ITS
AFFILIATES’ SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER
FAULT, EXCEPT TO THE EXTENT ONE OF THE PARTIES HERETO IS HELD LIABLE FOR SUCH
CONSEQUENTIAL DAMAGES TO A THIRD PARTY AND SUCH PARTY IS ENTITLED TO BE
INDEMNIFIED BY ANY OF THE OTHER PARTIES HERETO PURSUANT TO THIS ARTICLE VIII
(PROVIDED THAT SUCH LIMITATION WITH RESPECT TO LOST PROFITS SHALL NOT LIMIT
SRP’S RIGHT TO RECOVER CONTRACT DAMAGES IN CONNECTION WITH YIELDCO LLC’S OR
YIELDCO’S FAILURE TO CLOSE IN VIOLATION OF THIS AGREEMENT).

(e) From and after the Closing Date, the indemnities provided in this
Article VIII shall be the sole and exclusive remedy of any Party against any
other Party or its Affiliates at Law or in equity relating to the Transaction
Documents, any other document or certificate delivered in connection herewith or
therewith, or the assets and liabilities of SRP or any applicable Law or
otherwise; provided, that nothing in this Agreement shall prevent any Party from
seeking an injunction or injunctions to prevent breaches of this Agreement by
the other Parties and to enforce specifically the terms and provisions hereof
that expressly survive the Closing Date.

8.5 Calculation of Losses. The amount of any Losses for which indemnification is
provided under this Article VIII shall be net of any amounts actually recovered
or recoverable by the Indemnitee under insurance policies or otherwise with
respect to such Losses (net of any expenses incurred in connection with such
recovery).

8.6 Tax Treatment of Indemnity Payments. The Parties agree to treat any
indemnity payment made pursuant to this Article VIII as an adjustment to the
Consideration for U.S. federal, state, local and non-U.S. Tax purposes, except
to the extent required by applicable Law following a Final Determination.

 

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ARTICLE IX

MISCELLANEOUS

9.1 Expenses. Except as otherwise provided in this Agreement, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the Party incurring such costs and
expenses, including any fees, expenses or other payments incurred or owed by a
Party to any brokers, financial or legal advisors or comparable other Persons
retained or employed by such Party in connection with the Contribution
Transaction.

9.2 Governing Law. This Agreement shall be governed and construed in accordance
with the Laws of the State of New York, without giving regard to any conflict of
laws principles thereof that would result in the application of the Laws of
another jurisdiction.

9.3 Submission to Jurisdiction; Consent to Service of Process.

(a) The Parties hereby irrevocably submit to the exclusive jurisdiction of the
state and federal courts located in the Borough of Manhattan, New York City,
over any dispute arising out of or relating to this Agreement or the
Contribution Transaction and each party hereby irrevocably agrees that all
claims in respect of such dispute or any suit, action or proceeding related
thereto may be heard and determined in such courts. The Parties hereby
irrevocably waive, to the fullest extent permitted by applicable Law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum for the
maintenance of such dispute. Each of the Parties agrees that a judgment in any
such dispute may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by Law.

(b) Each of the Parties hereto hereby consents to process being served by any
Party to this Agreement in any suit, action or proceeding by delivery of a copy
thereof in accordance with the provisions of Section 9.5.

9.4 Entire Agreement; Amendments and Waivers. The Transaction Documents
(including the Schedules hereto) represent the entire understanding and
agreement between the Parties with respect to the subject matter hereof. This
Agreement and the other Transaction Documents can be amended, supplemented or
changed, and any provision hereof can be waived, only by written instrument
making specific reference to this Agreement signed by the Party against whom
enforcement of any such amendment, supplement, modification or waiver is sought;
provided, however, that SRP agrees it will not execute or consent to any
amendment to this Agreement without the written consent of at least one
Riverstone Director (as defined in the Amended and Restated Limited Liability
Company Agreement of Silver Ridge Power, LLC, dated as of July 2, 2014). No
action taken pursuant to this Agreement, including any investigation by or on
behalf of any Party, shall be deemed to constitute a waiver by the Party taking
such action of compliance with any representation, warranty, covenant or
agreement contained herein. The waiver by any Party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver

 

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of any other or subsequent breach. No failure on the part of any Party to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such Party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.

9.5 Notices. All notices, requests and other communications hereunder shall be
in writing and shall be sent, delivered or mailed, addressed:

if to YieldCo or YieldCo LLC, to:

TerraForm Power, Inc.

12500 Baltimore Avenue

Beltsville, Maryland 20705

Attn: General Counsel

Facsimile: (443) 909-7106

with a copy to:

Kirkland & Ellis LLP

300 North LaSalle

Chicago, Illinois 60654

Attn: Dennis M. Myers, P.C.

Facsimile: (312) 862-2200

if to SRP, to:

Silver Ridge Power, LLC

4301 N. Fairfax Drive, Suite 360

Arlington, VA 22203

Attention: Stephen Westwell

Facsimile: (571) 302-3501

with a copy, which shall not constitute notice, to:

R/C US Solar Investment Partnership, L.P.

c/o Riverstone Holdings LLC

712 Fifth Avenue, 36th Floor

New York, NY 10019

Attn: General Counsel

Facsimile: (888) 801-9301

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) upon
receipt of a confirmatory telephone call to the number specified in this
Section 9.5 (or in accordance with the latest unrevoked written direction from
the receiving Party), if sent by electronic mail; (c) five days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid; or (d) one Business Day

 

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after deposit with a nationally recognized overnight courier, freight prepaid,
specifying next business day delivery, with written verification of receipt;
provided, that notices received on a day that is not a Business Day or after
6:30 p.m. on a Business Day will be deemed to be effective on the next Business
Day.

9.6 Severability. If any term or other provision of this Agreement is invalid,
illegal, or incapable of being enforced by any law or public policy, all other
terms or provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the Contribution
Transaction is not affected in any manner materially adverse to any Party. Upon
such determination that any term or other provision is invalid, illegal, or
incapable of being enforced, the Parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the Parties as closely as
possible in an acceptable manner in order that the Contribution Transaction is
consummated as originally contemplated to the greatest extent possible. Except
as otherwise expressly provided for in this Agreement, nothing contained in any
representation or warranty, or the fact that any representation or warranty may
or may not be more specific than any other representation or warranty, shall in
any way limit or restrict the scope, applicability or meaning of any other
representation or warranty contained in this Agreement.

9.7 Specific Performance. Each Party acknowledges and agrees that any breach of
this Agreement would give rise to irreparable harm for which monetary damages
would not be an adequate remedy. Each Party accordingly agrees that, in addition
to any other remedies available under applicable Law or this Agreement, each
Party shall be entitled to enforce the terms of this Agreement by decree of
specific performance without the necessity of proving the inadequacy of monetary
damages as a remedy and to obtain injunctive relief against any breach or
threatened breach of this Agreement.

9.8 Binding Effect; No Third-Party Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns. Nothing in this Agreement shall create or be
deemed to create any third party beneficiary rights in any Person or entity not
a Party to this Agreement; provided, however, that R/C US Solar Investment
Partnership, L.P., a Delaware limited partnership, shall be a third party
beneficiary of the provisions of Section 9.4.

9.9 Assignment. No assignment of this Agreement or of any rights or obligations
hereunder may be made by any Party, directly or indirectly (by operation of Law
or otherwise), without the prior written consent of the other Parties and any
attempted assignment without the required consents shall be null, void and of no
effect; provided, that each Party may assign its rights, interests and
obligations hereunder to any of its direct or indirect Subsidiaries, and in the
case of SRP to any member of SRP (or an Affiliate of such member) to whom SRP
(or such member) distributes or otherwise transfers Consideration other than in
a transaction registered under the Securities Act; and provided, further, that
no assignment of any obligations hereunder shall relieve the Parties hereto of
any such obligations. Upon any such permitted assignment, the references in this
Agreement to a given Party shall also apply to any such assignee unless the
context otherwise requires.

 

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9.10 Counterparts. This Agreement may be executed in one or more counterparts,
including facsimile or PDF counterparts, each of which shall be deemed to be an
original copy of this Agreement and all of which, when taken together, shall be
deemed to constitute one and the same agreement.

[signature page follows]

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Contribution Agreement
to be executed by their duly authorized representatives as of the date first
written above.

 

TERRAFORM POWER, LLC By:   /s/ Carlos Domenech  

 

Name:   Carlos Domenech Title:   Authorized Representative TERRAFORM POWER, INC.
By:   /s/ Carlos Domenech  

 

Name:   Carlos Domenech Title:   Authorized Representative SILVER RIDGE POWER,
LLC By:  

/s/ Rebecca Cranna

Name:   Rebecca Cranna Title:   CFO

 

[Signature page to Contribution Agreement]

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Schedule 1

See attached

--------------------------------------------------------------------------------

 

DISCLOSURE SCHEDULE

to

MT. SIGNAL CONTRIBUTION AGREEMENT

by and among

TERRAFORM POWER INC.,

TERRAFORM POWER, LLC,

AND

SILVER RIDGE POWER, LLC

Dated as of July 23, 2014

 

 

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DISCLOSURE SCHEDULE TO MT. SIGNAL CONTRIBUTION AGREEMENT

This Disclosure Schedule (the “Mt. Signal Disclosure Schedule”) is made and
given pursuant to that certain Mt. Signal Contribution Agreement (the
“Agreement”), dated as of July 23, 2014, by and among Terraform Power Inc., a
Delaware corporation, Terraform Power, LLC, a Delaware limited liability
company, and Silver Ridge Power, LLC, a Delaware limited liability company
(“SRP”). Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Agreement.

This Mt. Signal Disclosure Schedule is qualified in its entirety by reference to
specific provisions of the Agreement, and is not intended to constitute, and
shall not be construed as constituting, representations or warranties of SRP or
any of SRP’s Affiliates, except as and to the extent provided in the Agreement.

The inclusion of any information (including dollar amounts) in any section of
this Mt. Signal Disclosure Schedule shall not be deemed to be an admission or
acknowledgment by SRP or any other Person that such information is required to
be listed on such section of the Mt. Signal Disclosure Schedule or is material
to or outside the ordinary course of business of SRP or the applicable Person to
which such disclosure relates.

Disclosure in any section of this Mt. Signal Disclosure Schedule shall be deemed
to be disclosed with respect to any other section of the Agreement to the extent
that it is reasonably apparent on the face of such disclosure that such
disclosure is applicable notwithstanding the omission of a reference or cross
reference thereto. The information contained in the Agreement and this Mt.
Signal Disclosure Schedule is disclosed solely for purposes of the Agreement and
shall not constitute an admission by SRP or any of its Affiliates to any third
party of any matter whatsoever (including any violation of a legal requirement
or breach of contract).

Headings have been inserted on the sections of this Mt. Signal Disclosure
Schedule for convenience of reference only and shall to no extent affect the
construction or interpretation of the sections as set forth in the Agreement.

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SECTION 4.2

CAPITALIZATION AND SUBSIDIARIES

(b) Javelin Solar CA, LLC holds a minority interest in Imperial Valley Solar 1
Holdings, LLC.

 

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SECTION 4.4

NONCONTRAVENTION

The following agreements require consents to be obtained:

 

  1. Note Purchase Agreement, dated November 9, 2012, by and between Imperial
Valley Solar 1, LLC, the Purchasers and The Bank of New York Mellon Trust
Company, N.A.

 

  2. Amended & Restated Limited Liability Company Agreement of Imperial Valley
Solar 1 Holdings LLC, dated October 9, 2013.

 

4

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SECTION 4.6

TITLE TO SUBSIDIARIES

 

  1. Javelin Solar CA, LLC holds a minority interest in Imperial Valley Solar 1
Holdings, LLC.

 

  2. The Second Amended and Restated Limited Liability Company Agreement of
Imperial Valley Solar 1 Holdings, LLC provides for transfer restrictions and a
right of first offer for Javelin Solar CA, LLC, a third party minority member.

 

  3. The Note Purchase Agreement, dated November 9, 2012, by and between
Imperial Valley Solar 1, LLC, the Purchasers and The Bank of New York Mellon
Trust Company, N.A. provides for certain transfer restrictions.

 

Group Company

  

Entity Owned

  

Units Held

   Ownership
Percentage

Imperial Valley Solar 1 Holdings II, LLC

   Imperial Valley Solar 1 Holdings, LLC    221,303,978 Class B Units   
100% of Class B Units

Imperial Valley Solar 1 Holdings, LLC

   Imperial Valley Solar 1 Intermediate Holdings, LLC    Sole Member    100%

Imperial Valley Solar 1 Intermediate Holdings, LLC

   Imperial Valley Solar 1, LLC    Sole Member    100%

 

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SECTION 4.7(B)

NO UNDISCLOSED LIABILITIES

NONE

 

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SECTION 4.9

INTERCOMPANY OBLIGATIONS; AFFILIATE TRANSACTIONS

 

(a) NONE

 

(b)     

 

  1. Industrial Space Lease, dated November 9, 2012, between Imperial Valley
Solar 1, LLC and U.S. Solar Services, LLC.

 

  2. Standard Large Generator Interconnection Agreement, dated August 5, 2009,
by and among Imperial Valley Solar, LLC (as s/i/i to SES Solar Two, LLC),
Imperial Valley Solar 1, LLC, Imperial Valley Solar 2, LLC, Imperial Valley
Solar 3, LLC, and Imperial Valley Solar 4, LLC, San Diego Gas & Electric Company
and California Independent System Operator Corporation (as amended by the First
Amendment, dated June 28, 2012, and the Second Amendment, dated October 1,
2012).

 

  3. LGIA Co-Tenancy Agreement, dated September 13, 2012, by and among Imperial
Valley Solar, LLC, Imperial Valley Solar 1, LLC, Imperial Valley Solar 2, LLC,
Imperial Valley Solar 3, LLC, and Imperial Valley Solar 4, LLC (as amended by
the First Amendment dated April 30, 2013).

 

  4. Affected System Agreement, dated October 25, 2012, by and among Imperial
Irrigation District, Imperial Valley Solar, LLC and Imperial Valley Solar 1,
LLC.

 

  5. Affected System Agreement Indemnity Agreement, dated as of November 9,
2012, by and between AES Solar Power, LLC and Imperial Valley Solar 1, LLC.

 

  6. Operations and Maintenance Agreement, dated August 1, 2012, between U.S.
Solar Services LLC and Imperial Valley Solar 1, LLC.

 

  7. Contractor Parent Guaranty, dated August 1, 2012, between AES Solar Power,
LLC and Imperial Valley Solar 1, LLC (as amended by the First Amendment, dated
February 18, 2014).

 

  8. Project Administration Agreement, dated August 1, 2012, between Imperial
Valley Solar 1, LLC and US Solar Services, LLC (as amended by the First
Amendment, dated as of October 31, 2012, and the Second Amendment, dated as of
October 9, 2013).

 

  9. Construction Management Agreement, dated August 1, 2012, between Imperial
Valley Solar 1, LLC and U.S. Solar Services LLC.

 

  10. Cash Grant Recapture Indemnity Agreement, dated November 9, 2012, by and
among AES U.S. Solar, LLC, AES Solar Power, LLC, Imperial Valley Solar 1, LLC
and R/C US Solar Investment Partnership, L.P. (as amended by the First
Amendment, dated August 8, 2013).

 

7

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  11. Sequestration Support Agreement, dated November 9, 2012, by and among AES
Solar Power, LLC, Imperial Valley Solar 1, LLC, the Bank of New York Mellon
Trust Company, N.A. and Morgan Stanley Senior Funding, Inc.

 

  12. Co-Tenancy and Shared Use Agreement, dated September 28, 2012, between
Imperial Valley Solar 1, LLC, Imperial Valley Solar, LLC and CSOLAR IV South,
LLC.

 

  13. Sponsor Module Contribution Agreement, dated November 9, 2012, between AES
Solar Power, LLC and Imperial Valley Solar 1, LLC.

 

8